The Marketing Research Process

The Marketing Research Process

Step 1: Define the Problem, the Decision Alternatives, and the Research Objectives

Marketing managers must be careful not to define the problem too broadly or too narrowly for the marketing researcher. A marketing manager who says, “Find out everything you can about first-class air travelers’ needs,” will collect a lot of unnecessary information. One who says, “Find out whether enough passengers aboard a B747 flying direct between Chicago and Tokyo would be willing to pay $25 for an Internet connection for American Airlines to break even in one year on the cost of offering this service,” is taking too narrow a view of the problem. The marketing researcher might even ask, “Why does the Internet connection have to be priced at $25 as opposed to $15, $35, or some other price? Why does American have to break even on the cost of the service, especially if it attracts new customers?” Another relevant question to ask is, “How important is it to be first in the market, and how long can the company sustain its lead?” The marketing manager and marketing researcher agreed to define the problem as follows: “Will offering an in-flight Internet service create enough incremental preference and profit for American Airlines to justify its cost against other possible investments in service enhancements American might make?” To help in designing the research, management should first spell out the decisions it might face and then work backward. Suppose management outlines these decisions: (1) Should American offer an Internet connection? (2) If so, should we offer the service to first-class only, or

Step 2: Develop the Research Plan

The second stage of marketing research is where we develop the most efficient plan for gathering the needed information and what that will cost. Suppose American made a prior estimate that launching in-flight Internet service would yield a long-term profit of $50,000. If the manager believes that doing the marketing research will lead to an improved pricing and promotional plan and a long-term profit of $90,000, he should be willing to spend up to $40,000 on this research. If the research will cost more than $40,000, it’s not worth doing.10 To design a research plan, we need to make decisions about the data sources, research approaches, research instruments, sampling plan, and contact methods.

Step 3: RESEARCH APPROACHES

Marketers collect primary data in five main ways: through observation, focus groups, surveys, behavioral data, and experiments.

Observational Research Researchers can gather fresh data by observing the relevant actors and settings unobtrusively as they shop or consumer products.12 Sometimes they equip consumers with pagers and instruct them to write down what they’re doing whenever prompted, or they hold informal interview sessions at a café or bar. Photographs can also provide a wealth of detailed information. Ethnographic research is a particular observational research approach that uses concepts and tools from anthropology and other social science disciplines to provide a deep cultural understanding of how people live and work.13 The goal is to immerse the researcher into consumers’ lives to uncover unarticulated desires that might not surface in any other form of research.14 Firms such as Fujitsu Laboratories, Herman Miller, IBM, Intel, Steelcase, and Xerox have embraced ethnographic research to design breakthrough products