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 C
H
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A
P Problem Definition,
T Research Objectives, and

897251 00000
E
3

1234 0001
R
Marketing Research
Ethics

3-2
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 The Value of Determining the Research Problem
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 There is a 75% failure rate among small businesses

during the first three years of existence.
 There was a 90% failure rate among dot-com
companies in 2001.
 An inability to incorrectly identify management
problems and/or opportunities can result in
product/services failures – even bankruptcy.
 The adage “Garbage in, garbage out” is alive and
well within the wonderful world of marketing
research.

3-3
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 Pragmatic Types of Information Used by Decision
Makers
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Types of Information Availability Factor Manipulation Factor

Subjective Very good availability, but Selectively interpreted

based on individual's own
experiences, feelings, or
assumptions

Secondary Good availability, but Information and data

extensive search time structures must be
required remanipulated and
reinterpreted for at least
a second time

Primary Does not initially exist, must Data structures must be

be created manipulated and interpreted
for first time

3-4
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 The Types of Information Used by Researchers
and Decision Makers
Types of Quality Factor Complexity Factor
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Information
Facts Very high quality; are Not complicated; easy to
observable and verifiable understand and use
bits of information; high
in accuracy and reliability

Estimates Degree of quality is based More complex than facts

on the representativeness due to the statistical
of the fact sources and the procedures used to derive
statistical procedures used them and the possibility
to create them of error

3-5a
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 The Types of Information Used by Researchers
and Decision Makers
Types of Quality Factor Complexity Factor
1995 7888 4320 000 000001

Information
Predictions Lower quality than Greater complexity,
estimates or facts due to forecasted estimates or
the perceived risk and projections into the future
uncertainty of future
conditions

Relationships Quality is dependent on Highest complexity;

the precision of the interrelationships of
researcher’s statements of several variables being
the interrelationship simultaneously analyzed
between sets of variables

3-5b
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 When Might Marketing Research Not Be Needed?
1995 7888 4320 000 000001

Marketing Research might not be worth pursuing when:

1) You already have the information you need.

2) Time isn’t on your side.
3) You lack the necessary resources to pull it off.
4) The cost of the information outweighs the
benefits.

3-6
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 When To Undertake The Information Research
Process?
Type of Information
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YES
Can the decision problem and/or opportunity be resolved using only subjective information?
(Decision maker’s responsibility) Do Not
Undertake the
Nature of Decision NO Information
Research
Is the problem/opportunity situation of strategic or tactical importance? Process
(Decision maker’s responsibility)
NO
YES
Decision maker should bring in the marketing researcher for advice
Availability of Data
Is existing secondary information inadequate for solving the decision problem situation or exploiting the opportunity?
NO
(Decision maker’s responsibility with researcher’s advice)
Time Constraints YES
Is there a sufficient time frame available for gathering the information before the final managerial decision must
NO
be made? (Decision maker’s responsibility with researcher’s advice)
Resource Requirements YES
Are there sufficient levels of money, staff, and skills to meet the costs and marketing research requirements?
NO
(Decision maker’s responsibility with researcher’s advice)
Benefits versus Costs YES
Does the expected value of the information exceed the cost of conducting research? NO
(Decision maker’s responsibility with researcher’s advice)
YES

3-7 Move on to Phase I of the

Information Research Process Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
 Some “Rules of Thumb” To Apply Before
Undertaking The Research Process
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Marketing Research is worth doing if:

 The information helps clear up the problem or identifies changes

in the market that can directly impact the company.
 The information helps the company develop a meaningful
competitive advantage within the landscape of the market.
 The information flows into marketing actions that result in
achieving marketing objectives.
 The information provides a “window” into the future of the
market in terms of trends and opportunities.
 The value of information is bigger than the costs of obtaining it.

3-8
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 An Integrated Decision Problem Definition
Process
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Determine the
Decision Maker’s Understand the
Purpose for the Complete Problem Identify and Separate
Research Situation Out Measurable Symptoms

Marketing Business Decision Problem

Determine the Unit

of Analysis Determine the Relevant
Variables

3-9
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 TABLE 2.1
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Management Decision Problem Versus the Marketing Research Problem

______________________________________________________________
Management Decision Problem Marketing Research Problem
_________________________________________________________ _____

Asks what the decision maker Asks what information is needed

needs to do and how it should be obtained

Action oriented Information oriented

Focuses on symptoms Focuses on the underlying causes

___________________________________________ ___________________

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 Figure 2.9 Development of Research Questions & Hypothesis

Components of
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the Marketing
Research Problem

Analytical
Framework
Research
and
Questions
Models

Hypotheses

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 Research Questions Vs Hypothesis
1995 7888 4320 000 000001

 RQ: Is there an overlap between the features sought by station

wagon buyer and buyers of SUV’s.
 Possible Hypothesis:
 H1: The buyers of station wagon rate certain features of SUV’s
as important.
 H2: The buyers of SUV’s rate certain features of station wagons
as important.
 H3: The buyers of SUV’s and station wagon rate certain features
as similar to each other.

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 The Iceberg Principle
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Decision Maker Researchers

Unhappy Customers Performance of Sales Force
Decreased market Share Unethical Treatment of Customers
Loss of Sales Inappropriate Delivery System
Low Traffic Poor Image
Low Quality Products

 Understanding Problem Situation:

 Decision Maker’s Needs
 Complexity of the problem
 The types of factors involved

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 Examples of Popular Constructs
Constructs Operational Description
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Brand awareness Percentage of respondents having heard of a designated

brand; awareness could be either unaided or aided.
Attitudes toward a brand The number of respondents and their intensity of feeling
positive or negative toward a specific brand.
Intentions to purchase The number of people who are planning to buy the
specified object (e.g., product or service) within a
designated time period.
Importance of factors What factors and their intensity influence a person’s
purchase choice.
Demographic The age, gender, occupation status, income level, and so
characteristics forth of individuals providing the information.
Satisfaction of experience How people evaluate their post purchase consumption
experience of a specified object.
3-11 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
 Management and Researchers: Fundamental and
Philosophical Differences
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Attribute Differences Decision Makers Researchers

Research motivation To make symptoms To discover the true facts
disappear and relationships
Disposition toward Want answers to questions Want to ask questions
knowledge
Orientation Pragmatic, subjective Scientific, objective
Responsibility To make profits To generate information
Use of the research Political Answer questions
Organizational position Line/middle/top management Supportive staff, specialist

Level of involvement Highly involved, emotional Detached, analytical

Training General decision making Scientific/technique
application
3-12
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 Management Problems in Term of Research
Questions and Hypothesis-Exhibit 3-8
Initial Decision Problem
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Should any current store/product/service operations strategies be

evaluated and possible modifies to increase store’s revenue.
Redefined As Research Question
What are the shopping habits and purchasing patterns of men who
buys casual wear?
Redefined as Research Hypothesis
There is positive relationship between quality of merchandise
offered and store loyalty among customers.
Research Objectives
To collect specific attitudinal and behavioral data for identifying
consumers’ shopping behavior, preferences, and purchasing habits
toward men’s casual wear.

Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved

 Other Subjective Criteria for a “NO-GO” Decision
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Marketing Research should not be given a “green light” if:

 Doing the research would give valuable information to
your competitors.
 The outcomes can’t or won’t be implemented.
 The research design doesn’t match up with reality.
 The outcomes are going to be used as legal fodder.
 The key variables can’t be designed or measured due to
circumstances beyond your control or quirks in the
market.
 The research is motivated by a political agenda.
3-13
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 The Value of the Proposed Research Endeavor
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Value of the Proposed Research Endeavor

Projected Costs Data

Confidentiality
and Time Frame Validation

Objectivity Inaccurate
Data

3-14
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 The Research Activities Normally Itemized to
Reflect Total Research Project Costs
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1. Internal secondary data search

2. External secondary data search
3. Preliminary questionnaire design
4. Pretesting of questionnaire
5. Designing analysis procedures
6. Coding questionnaires for data analysis
7. Fees for data entry
8. Conducting data analysis
9. Outbound/inbound postage

3-15a
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 The Research Activities Normally Itemized to
Reflect Total Research Project Costs
1995 7888 4320 000 000001

10. Telephone/personal interview fees

11. Computer time charges
12. Copying and duplication
13. Word processing charges
14. Charge for graphics and overheads in final
presentation
15. Mileage and travel expenses
16. Respondent incentives (if any)
17. Long distance tolls

3-15b
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 Sizing Up a Research Provider
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Quality of a Research Provider

Research
Technical Reliability of Provider’s
Competency Service Reputation

Marketing Conformance to
Knowledge Standards

3-16
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 Ethics in Marketing Research: The Researcher
1995 7888 4320 000 000001

Here are some “nasties” to keep a sharp eye out for:

 Manipulating “soft” costs to increase the project price.
 Breaking promises made – “The check’s in the mail!”.
 Respondent abuse and misrepresentation.
 Selling services that aren’t needed or wanted.
 Falsified data.
 Duplicating data.
 Manipulating data structures to ensure a “biased” result.
 Not reporting selected findings at all

3-17
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 Ethics In Marketing Research: The Client
1995 7888 4320 000 000001

Believe it or not, corporations can be unethical too!

 Asking for a “detailed proposal” from several providers

with no intention of awarding any of them a contract.
 Claiming that marketing isn’t a “line item” in their
budget in order to set the stage for low-balling in terms
of price.
 Promising a long term commitment and future business
in order to get a reduced price on the first go-round –
then failing to honor the commitment.

3-18
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 Ethics in Marketing Research: The Respondent
1995 7888 4320 000 000001

“And just when you thought it was safe to go back into the water”
Ask yourself: How many times have I…

 Provided dishonest answers to an interviewer?

 Alluded to and/or faked behavior I would never engage
in?
 Been purposely inconsistent in my responses to mess
up the research endeavor?
 Been purposely “extreme” in my responses to a survey?
 Been purposely rude and/or crude in providing my
responses to a research endeavor?
3-19 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
 Codes of Ethics in Marketing Research
The Code of Professional Ethics and Practices of the
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MARKETING RESEARCH ASSOCIATION, INC.

is subscribed to as follows:
1. To maintain high standards of competence and integrity in marketing and
survey research.
2. To exercise all reasonable care and to observe the best standards of
objectivity and accuracy in the development, collection, processing and
reporting of marketing and survey research information.
3. To protect the anonymity of respondents and hold all information
concerning an individual respondent privileged, such that this information is
used only within the context of the particular study.
4. To thoroughly instruct and supervise all persons for whose work I am
responsible in accordance with study specifications and general research
techniques.
5. To observe the rights of ownership of all materials received from and/or
developed for clients, and to keep in confidence all research techniques, data
and other information considered confidential by their owners.
3-20a Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
 Codes of Ethics in Marketing Research
The Code of Professional Ethics and Practices of the
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MARKETING RESEARCH ASSOCIATION, INC.

is subscribed to as follows:
6. To make available to clients such details on the research methods and
techniques of an assignments may be reasonably required for proper
interpretation of the data, providing this reporting does not violate the
confidence of respondents or clients.
7. To promote the trust of the public for marketing and survey research
activities and to avoid any procedure which misrepresents the activities of a
respondent, the rewards of cooperation or the uses of the data.
8. To refrain from referring to membership in this organization as proof of
competence, since the organization does not so certify any person or
organization.
9. To encourage the observance of the principles of this code among all people
engaged in marketing and survey research.
3-20b Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved
 Summary of Learning Objectives
 Distinguish types of pragmatic and scientific information needed
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to determine and resolve information problems or questions.

 Describe the nature and purpose of a marketing research project.
 Illustrate and explain the critical elements of problem definition in
marketing research.
 Determine the expected value of information obtainable through
marketing research.
 Identify and discuss both the procedural and methodological
factors used in evaluating a marketing research project.
 Discuss how price is determined and how it affects marketing
research.
 Identify and explain the characteristics used to evaluate a supplier
of marketing research.
 Discuss ethics in the marketing research industry.
3-21 Copyright © 2003 by The McGraw-Hill Companies, Inc. All rights reserved