second edition. Alvin C. Burns Ronald F. Bush

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1 ^! * C second edition. 1 *. Alvin C. Burns Ronald F. Bush

2 Preface xxi CHAPTER1: INTRODUCING MARKETING RESEARCH 2 WhatSs Marketing? 4 The "Right Philosophy": The Marketing Concept 6 The "Right Marketing Strategy" 7 WhatSs Marketing Research? 8 What Is the Purpose of Marketing Research? 9 What Are the Uses of Marketang Research? 10 Identifying Market Opportunities and Problems 10 Generate, Refine, and Evaluate Potential Marketing Actions 11 Monitor Marketing Performance 12 Improve Marketing as a Process 13 Classifying Marketing Research Studies 13

3 VI Contents The Marketing information System 15 Components of an MIS 15 Internal Reports System 15 Marketing Intelligence System 15 Marketing Decision Support System (DSS) 16 Marketing Research System 16 Hot Topics in Marketing Research 17 Online Marketing Research 17 Growing Consumer/Respondent Resentment 18 Globalization 19 Summary 19, Key Terms 20 Review Questions 20 Application Questions 20 Interactive Learning 21 Case 1.1 Starlight Films 21 Case 1.2 Your Integrated Case 22 CHAPTER2: UNDERSTANDING THE MARKETING RESEARCH INDUSTRY 24 The Marketing Research Industry 26 Evolution of the Industry 26 The Beginnings 26 Growth of the Need 26 The Marketing Research Industry Today 27 World Revenues 27 The Honomichl Top Revenues of the U.S. Firms 28 Competition in the Industry Is Very Keen 28 Classifying Firms in the Marketing Research Industry 28 Internal Suppliers 28 How Do Internal Suppliers Organize the Research Function? 28 Organizing the Formal Department of Internal Suppliers 28 Organizing When There Is No Formal Department 30 External Suppliers 31 How Do External Suppliers Organize? 31 Classifying External Supplier Firms 31 Full-Service Supplier Firms 31 Syndicated Data Service Firms 32 Standardized Service Firms 32 Customized Service Firms 32 Online Research Services Firms 32 Limited-Service Supplier Firms 33

4 Contents VII Challenges to the Marketing Research industry 35 Marketing Researchers Should Focus on Diagnosing Problems 36 Marketing Researchers Should Speed Up Marketing Research by Using IT 36 Marketing Researchers Should Take an Integralive Approach 37 Marketing Researchers Should Expand Their Strategic Impact 37 Other Criticisms 37 Improvements: Certification, Auditing, and Education 38 Certification 38 Auditing 38 Education 41 Ethics and Marketing Research 42 Your Ethical Views Are Shaped by Your Philosophy: Deontology or Teleology 42 Ethical Behavior in Marketing Research 43 Codes of Ethics 45 Sugging and Frugging 45 Research Integrity 45 Treating Others Fairly 46 Respondents 47 Respondent Fairness 47 Summary 49 Key Terms 50 Review Questions 51 Application Questions 52 Interactive Learning 52 Case 2.1 Conducting an Survey 53 Case 2.2 Your Integrated Case 54 Appendix A 55 Marketing Research and Spam Surveys 55 Appendix B 57 Careers in Marketing Research 57 fi'^i'^ji^ CHAPTER3: STEPS IN THE MARKETING RESEARCH PROCESS INCLUDING DEFINING THE PROBLEM AND RESEARCH OBJECTIVES 60 The Marketing Research Process 62 An 11-Step Process 62 Caveats to a Step-by-Step Process 63 >V Why 11 Steps? 63 Not All Studies Use All 11Steps 64 Few Studies Follow the Steps in Order 64

5 VIII Contents Step 1: Establish the Need for Marketing Research 64 Step 2: Define the Problem 64 Step 3: Establish Research Objectives 65 Step 4: Determine Research Design 65 Step 5: Identify Information Types and Sources 65 Step 6: Determine Methods of Accessing Data 66 Step 7: Design Data Collection Forms 66 Step 8: Determine Sample Plan and Size 66 Step 9: Collect Data 67 Step 10: Analyze Data 68 Step 11: Prepare and Present the Final Research Report 68 Establishing the Need for Marketing Research 69 When Is Marketing Research Not Needed? 69 The Information Is Already Available 69 The Timing Is Wrong to Conduct Marketing Research 69 Funds Are Not Available for Marketing Research 70 Costs Outweigh the Value of Marketing Research 70 The Impact of Online Research and Determining the Need to Conduct Marketing Research 70 v Define the Problem 71 The Importance of Properly Defining the Problem 71 How Can We Beat Burger King? 71 How Can We Win a Taste Test? 71 Two Sources of Problems 72 Recognizing the Problem 73 The Role of Symptoms in Problem Recognition 73 Types of Problems 74 The Role of the Researcher in Problem Definition 74 Impediments to Problem Definition 75 Failure to Change Behavior for Problem Definition Situations 75 Differences Between Managers and Researchers 75 The Role of ITBs and RFPs 76 A Process for Defining the Problem and Establishing the Research Objectives 77 Assess the Background and the Manager's Situation 78 Clarify the Symptoms of the Problem 78 Pinpoint Suspected Causes of the Symptom 78 University Estates: An Example of the Problem Definition Process 79 Specify Possible Solutions That May Alleviate the Symptom 80 Back to University Estates 80 Speculate on Anticipated Consequences of the Solutions 80 Back to University Estates 81 Identify the Manager's Assumptions About the Consequences of the Solutions 81

6 Contents IX The Role of Hypotheses in Defining the Problem 81 Back to University Estates 82 Assess the Adequacy of Information on Hand to Specify Research Objectives 82 Back to University Estates 82 The Role of the Action Standards 83 Formulate the Marketing Research Proposal 85 Problem Statement 86 Research Objectives 86 The Role of Constructs 86 Detail the Proposed Research Method 87 Putting It All Together Using the Integrated Case for This Textbook 88 Summary 95 *; Key Terms 97 Review Questions 97 Application Questions 98 Interactive Learning 98 Case 3.1 Washington Suites 99 Case 3.2 AJ Research 99 *. i CHAPTER4: RESEARCH DESIGN 100 Research Design 103 The Significance of Research Design 103 Three Types of Research Designs 103 Research Design: A Caution 104 Exploratory Research 104 Uses of Exploratory Research 105 Gain Background Information 105 Define Terms 105 Clarify Problems and Hypotheses 105 Establish Research Priorities 106 Methods of Conducting Exploratory Research 106 Secondary Data Analysis 106 Experience Surveys 107 Case Analysis 107 Focus Groups 107 Projective Techniques 111 Descriptive Research 112 Classification of Descriptive Research Studies 112 Causal Research 116

7 Contents Experiments 117 Experimental Design 118 After-Only Design 119 One-Group, Before-After Design 119 Before-After with Control Group 120 How Valid Are Experiments? 121 Types of Experiments 122 Test Marketing 124 Types of Test Markets 124 Consumer Versus Industrial Test Markets 126 "Lead Country" Test Markets 126 Selecting Test-Market Cities 127 Prosand Cons of Test Marketing 128 Summary 129 Key Terms 130 Review Questions 131 Application Questions 131 Interactive Learning 132 Case 4.1 Quality Research Associates 132 Case 4.2 Your Integrated Case 133 CHAPTERS: ACCESSING SECONDARY DATA AND ONLINE INFORMATION DATABASES 134 Secondary Data 137 Primary Versus Secondary Data 137 Uses of Secondary Data 137 Classification of Secondary Data 139 Internal Secondary Data 139 Internal Databases 139 External Secondary Data 140 Published Sources 140 Syndicated Services Data 143 External Databases 143 Advantages of Secondary Data 144 Secondary Data Can Be Obtained Quickly 144 Secondary Data Are Inexpensive Relative to Primary Data 144 Secondary Data Are Usually Available 144 Secondary Data Enhance Primary Data 144 Secondary Data May Achieve the Research Objective 145

8 Contents XI Disadvantages of Secondary Data 145 Incompatible Reporting Units 145 Measurement Units Do Not Match 146 Class Definitions Are Not Usable 147 Data Are Outdated 147 Evaluating Secondary Data 147 What Was the Purpose of the Study? 148 Who Collected the Information? 148 What Information Was Collected? 149 How Was the Information Obtained? 149 How Consistent Is the Information with Other Information? 149 Locating Secondary Data Sources 150 Search Strategies Used for Searching Online Information Databases 153 Boolean Logic 154 Field Searching 154 Proximity Operators 155 Truncation 155 Nesting 155 Limiting 155 * Key Sources of Secondary Data for Marketers 156 Census 2000: Census of the Population 156 Other Government Publications 159 North American Industry Classification System (NAICS) 159 "Survey of Buying Power" 161 How to Calculate the Buying Power Index (BPI) 161 Demographics USA 162 The Lifestyle Market Analyst 163 Summary 163 > Key Terms 165 Review Questions 166 Application Questions 166 Interactive Learning 167 Case 5.1 Pure-Aqua Systems 167 Case 5.2 Apple Supermarkets, Inc. 168 T~<l CHAPTER6: STANDARDIZED INFORMATION SOURCES 170 What 8s Standardized Information? 173

9 XII Contents Advantages and Disadvantages of Standardized Information 173 Syndicated Data 173 Standardized Services 174 Application Areas of Standardized Information 175 Measuring Consumer Attitudes and Opinion Polls 175 Defining Market Segments 176 Providing Information on Members of the Industrial Market 176 Providing Information on Members of the Consumer Market 177 Conducting Market Tracking 178 MarketJracking at the Retail Level 180 Market Tracking at the Household Level 183 Turning Market Tracking Information into Intelligence 184 Monitoring Media Usage and Promotion Effectiveness 185 Tracking Downloaded Music, Videos, and Recorded Books 185 Television 185 > Radio 186 Print 187 Multimedia 188 Single-Source Data 189 Summary 190 Key Terms 191 Review Questions 192 Application Questions 192 Interactive Learning 193 Case 6.1 Premier Products, Inc. 193 Case 6.2 Maggie J's Dog Treats 194 CHAPTER7: DECIDING ON YOUR SURVEY DATA COLLECTION METHOD 196 Four Alternative Data Collection Modes 199 Person-Administered Surveys (Without Computer Assistance) 199 Advantages of Person-Administered Surveys 199 Disadvantages of Person-Administered Surveys 200 Computer-Administered Surveys 201 Advantages of Computer-Administered Surveys 202 Disadvantages of Computer-Administered Surveys 204 Self-Administered Surveys 205 Advantages of Self-Administered Surveys 205 Disadvantages of Self-Administered Surveys 205

10 Contents XIII Mixed-Mode Surveys 206 Advantage of Mixed-Mode Surveys 206 Disadvantages of Mixed-Mode Surveys 206 Descriptions of Data Collection Modes 208 Person-Administered Interviews 208 In-Home Interviews 208 Mall-Intercept Interviews 210 In-Office Interviews 211 { Telephone Interviews 211 Computer-Administered Interviews 214 Computer-Assisted Telephone Interviews (CATI) 214 Fully Computerized Interviews (Not Online) 216 Online and Other Internet-Based Interviews 216 Self-Administered Surveys 218 Group Self-Administered Surveys 218 Drop-Off Surveys Mail Surveys 219 Choice of the Survey Method 220 The Survey Data Collection Time Horizon 221 The Survey Data Collection Budget 223 Incidence Rate 223 Cultural/Infrastructure Considerations 223 Type of Respondent Interaction Required 224 -, Special Innovative Methods for Special Situations 224 Summary 225 Key Terms 226 Review Questions 226 Application Questions 227 Interactive Learning 228 Case 7.1 Steward Research, Inc. 228 Case 7.2 Your Integrated Case 229 CHAPTERS: USING MEASUREMENT SCALES I YOUR SURVEY 230 Question-Response Format Options 232 Open-Ended Response Format Questions 232 Categorical Response Format Questions 234 Metric Response Format Questions 235

11 XIV Contents Basic Measurement Concepts 235 Open-Ended Measurement 237 Categorical Measurement 237 Metric Measurement 238 Why the Level of a Scale Is Important 241 Commonly Used Synthetic Metric Scales 243 Symmetric Synthetic Scales 244 Nonsymmetric Synthetic Scales 250 Whether to Use a Symmetric or a Nonsymmetric Scale 254 Choosing Which Scale to Use 255 Summary 257 Key Terms 257 *- Review Questions 258 Application Questions 259 Interactive Learning 260 Case 8.1 Metro Toyota of Kalamazoo 260 _, Case 8.2 Extreme Exposure Rock Climbing Center Faces the Krag 261 CHAPTER9: DESIGNING YOUR QUESTIONNAIRE 262 What Ss a Questionnaire and What Steps Are Taken to Develop It? 264 Developing Questions 266 Four "Do's" of Question Wording 268 The Question Should Be Focused on a Single Issue or Topic 268 The Question Should Be Brief 268 The Question Should Be a Grammatically Simple Sentence If Possible 269 The Question Should Be Crystal Clear 269 Four "Do Nots" of Question Wording 269 The Question Should Not "Lead" the Respondent to a Particular Answer 269 The Question Should Not Have "Loaded" Wording or Phrasing 270 The Question Should Not Be "Double-Barreled" 270 The Question Should Not Use Words That Overstate the Condition 271 Questionnaire Organization 272 The Introduction 273 Question Flow 276 Preceding the Questionnaire 2S2

12 Contents XV Computer-Assisted Questionnaire Design 284 Questionnaire Creation 284 Data Collection and Creation of Data Files 284 Data Analysis and Graphs 285 Performing the Pretest of the Questionnaire 285 Summary 286 Key Terms 286 Review Questions 287 Application Questions 287 Interactive Learning 288 Case 9.1 Moe's Wraps & Subs 289 Case 9.2 Your Integrated Case 289 CHAPTER10: DETERMINING SAMPLE SIZE AND THE SAMPLING METHOD 290 Basic Concepts in Samples and Sampling 292 Determining Size of a Sample 293 The Accuracy of a Sample 293 How to Calculate Sample Size 294 Variability: p times q 295 Level of Confidence: z 296 Desired Accuracy: e 296 Mow to Select a Representative Sample 300 Probability Sampling Methods 300 Simple Random Sampling 301 Systematic Sampling 303 Cluster Sampling 304 Stratified Sampling 304 Nonprobability Sampling Methods 307 Convenience Samples 309 judgment Samples 309 Referral Samples 310 Quota Samples 310 Online Sampling Techniques 311 Summary 312 Key Terms 313 Review Questions 313 Application Questions 314 Interactive Learning 316

13 -*--.. )> ",» XVI Contents Case 10.1 Peaceful Valley: Trouble in Suburbia 316 Case 10.2 Your Integrated Case 316 CHAPTER 11: COLLECTING DATA AND SUMMARIZING WHAT YOU FOUND IN YOUR SAMPLE 318 Errors Encountered in the Data Collection Stage 321 Data Collection Errors with Online Surveys 321 Multiple Submissions 321 Bogus Respondents and Responses 322 Population Misrepresentation 322 Types of Nonresponse 323 ; Refusals to Participate in the Survey 323 Break-Offs During the Interview 323 Refusals to Answer Specific Questions (Item Omission) 324 Completed Interview 324 Coding Data and the Data Code Book 325 Types of Data Analyses Used in Marketing Research 329 Summarizing the Sample Data 331 Generalizing the Findings 332 Seeking Meaningful Differences 332 Identifying Relationships 332 Summarizing Your Sample Findings 334 Summarizing Categorical Variables 334 Summarizing Metric Variables 337 The Six-Step Approach to Data Analysis and Presentation 342 Summary 344 Key Terms 345 Review Questions 345 Application Questions 346 Interactive Learning 347 Case 11.1 IHOP Improvement Survey 348 Case 11.2 Your Integrated Case 349 CHAPTER12: GENERALIZING YOUR SAMPLE FINDINGS TO THE POPULATION 350 The Concept of Generalization 352

14 Contents XVII Generalizing a Sample's Findings: Estimating the Population Value 354 How to Estimate a Population Percentage (Categorical Data) 354 Calculating a Confidence Interval 354 Interpreting a 95% Confidence Interval 357 How to Estimate a Population Average (Metric Data) 361 Calculating a Confidence Interval for an Average 361 Interpreting a Confidence Interval for an Average 363 Using the Six-Step Approach to Confidence Intervals Analysis 364 Testing Hypotheses About Percents or Averages 367 Testing a Hypothesis About a Percentage 369 What Significance Level to Use and Why 371 How Do We Know That We Have Made the Correct Decision? 371 Testing a Directional Hypothesis 372 Is It t or z? And Why You Do Not Need to Worry About It 374 Testing a Hypothesis About an Average 374 Interpreting Your Hypothesis Test 378 ; Using the Six-Step Approach to Test a Hypothesis 379 \ ; Summary 380 Key Terms 381 Review Questions 381 Application Questions 382 Interactive Learning 383 Case 12.1 The Auto Online Survey 383 Case 12.2 Your Integrated Case 385 CHAPTER13: COMPARING TO FIND DIFFERENCES IN YOUR DATA 388 Why Differences Are Important 390 Testing for Significant Differences Between Two Groups 392 Differences Between Percentages for Two Groups 392 Differences Between Averages for Two Groups 397 The Six-Step Process for Analyzing Differences Between Two Groups 402 Testing for Significant Differences Between More Than Two Group Averages 405 Why Analysis of Variance Is Preferred over Multiple Two-Group Averages Analyses 406 The Six-Step Process for Analyzing Differences Among Three or More Groups 411

15 XVIII Contents Testing for Significant Differences Between the Averages of Two Variables 413 The Six-Step Process for Analyzing Differences Between Two Variables 415 Summary 417 Key Terms 417 Review Questions 417 Application Questions 418 Interactive Learning 419 Case 13.1 The Daily Advocate Lost Subscribers Survey 419 Case 13.2 Your Integrated Case 420 CHAPTER14: DETERMINING RELATIONSHIPS AMONG YOUR VARIABLES 422 What Is a Relationship Between Two Variables? 425 Boolean Relationships and Cross-Tabulation Analysis 425 Boolean Relationships 425 Characterizing a Boolean Relationship with a Graph 426 Cross-Tabulation Analysis 427 Types of Frequencies and Percentages in a Cross-Tabulation Table 428 Chi-Square Analysis of a Cross-Tabulation Table 429 How to Interpret a Significant Cross-Tabulation Finding,431 The Six-Step Approach to Analyzing Categorical Variables with Cross- < Tabulation 434 Linear Relationships and Correlation Analysis 435 Correlation Coefficients and Covariation 437 Statistical Significance of a Correlation 439 Rules of Thumb for Correlation Strength 439 The Pearson Product Moment Correlation Coefficient 440 The Six-Step Approach to Analyzing a Possible Linear Relationship Between Two Metric Variables 443 Linear Relationships and Regression Analysis 444 Computing the Intercept and Slope for Bivariate Regression 445 Testing for Statistical Significance of the Intercept and the Slope 446 Making a Prediction with Bivariate Regression Analysis 446 i Multiple Regression 449 Working with Multiple Regression 449 Using "Dummy" Independent Variables 451 Three Uses of Multiple Regression 451

16 Contents XIX The Six-Step Process for Regression Analysis 456 Final Comments on Multiple Regression Analysis 457 Summary 458 Key Terms 458 Review Questions 459 Application Questions 460 Interactive Learning 463 Case 14.1 Friendly Market Versus Circle K 463 Case 14.2 Your Integrated Case 464 CHAPTER15: PREPARING AND PRESENTING THE RESEARCH RESULTS 466 The Importance of the Marketing Research Report 467 Organizing the Written Report 468 Front Matter 469 Title Page 469 Letter of Authorization 470 Letter/Memo of Transmittal 470 Table of Contents 471 List of Illustrations 472 Abstract/Executive Summary 472 Body 472 Introduction 472 Methodology 473 Results 473 Limitations 474 Conclusions and Recommendations 474 " End Matter 474 Following Guidelines and Principles for the Written Report 475 Form and Format 475, Headings and Subheadings 475 Visuals 475 Style 475 Using Visuals: Tables and Figures 478 Tables 479 Pie Charts 479 Bar Charts 481 Ethical Visuals 483

17 XX Contents Presenting Your Research Orally 483 Summary 484 Key Terms 485 Review Questions 486 Application Questions 486 Interactive Learning 487 Case 15.1 Your Integrated Case 487 Case 15.2 Your Integrated Case 487 Case 15.3 Your Integrated Case 488 Endnotes 489 Credits 499 Indexes 501 Name 501 Subject 502

International Edition. Alvin C. Burns. Ronald F. Bush. Nilanjana Sinha NSHM Business School, Kolkata PEARSON. Louisiana State University

International Edition. Alvin C. Burns. Ronald F. Bush. Nilanjana Sinha NSHM Business School, Kolkata PEARSON. Louisiana State University EDITION International Edition Alvin C. Burns Louisiana State University Ronald F. Bush University of West Florida International Edition contributions by Nilanjana Sinha NSHM Business School, Kolkata PEARSON