MARKETING RESEARCH

Accelerating product cycles, easy access to information on
products and services, highly discerning consumers, and
fierce competition among companies are all a reality in the
world of business. Too many companies are chasing too
few consumers. Therefore, knowing, understanding, and
responding to one’s target market is more important than
ever. And this requires information—good information.
Good information can lead to successful products and
services. Good information is the result of market
research. Marketing gurus Kevin Clancy and Peter Krieg
in their book, Counterintuitive Marketing, wrote, “Marketing
research, we believe, poses many dangers and many
opportunities. Bad research can, and often does, lead
companies in the wrong direction. Good research, on the
other hand, is the sine qua non of the counterintuitive
approach to great marketing” (quoted in DeVries, 2005).
WHAT IS MARKETING RESEARCH?
According to the Marketing Research Association, “Marketing
research is a process used by businesses to collect,
analyze and interpret information used to make sound
business decisions and successfully manage the business”
(2005). Marketing research is a $6-billion-a-year industry.
Marketing research provides, analyzes, and interprets
information for manufacturers on how consumers view
their products and services and on how they can better
meet consumer needs. The ultimate goal is to please the
consumer in order to get, or keep, the consumer’s business.
HISTORY OF MARKETING
RESEARCH PIONEERS
Marketing research as an organized business activity began
between 1910 and 1920. The appointment of Charles
Collidge Parlin as manager of the Commercial Research
Division of the Advertising Department of the Curtis
Publishing Company in 1911 is generally noted to be the
beginning of marketing research. Parlin’s success led several
industrial firms and advertising media to establish
research divisions. In 1915 the U.S. Rubber Company
hired Dr. Paul H. Nystrom to manage a newly established
Department of Commercial Research. In 1917 Swift and
Company hired Dr. Louis D. H. Weld from Yale University
to become manager of their Commercial Research
Department.
In 1919 Professor C. S. Duncan of the University of
Chicago published Commercial Research: An Outline of
Working Principles, considered to be the first major book
on commercial research. In 1921 Percival White’s Market
Analysis was published; the first research book to gain a
large readership, it went through several editions. Market

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Research and Analysis by Lyndon O. Brown, published in
1937, became one of the most popular college textbooks
of the period, reflecting the growing interest in marketing
research on the college campus. After 1940, numerous
research textbooks were published and the number of
business schools offering research courses grew rapidly.
Following World War II (1939–1945), the growth of
marketing research increased dramatically. By 1948 more
than 200 marketing research organizations had been created
in the United States. An estimated $50 million was
spent on marketing research activities in 1947. Over the
next three decades this expenditure level increased more
than tenfold.
Methodological Development. Major advances in marketing
research methodology were made from 1910 to
1920. Questionnaires, or surveys, became a popular
method of data collection. With the growth of survey
research came improvements in questionnaire design and
question construction. During the 1930s sampling
became a serious methodological issue. Modern
approaches to probability sampling slowly gained acceptance
in this period.
From 1950 through the early 1960s, methodological
innovations occurred at a fairly steady pace. At this time,
a major development occurred: the commercial availability
of large-scale digital computers. The computer was
responsible for rapidly increasing the pace of methodological
innovation, especially in the area of quantitative marketing
research. As the field of marketing research
attracted increasing interest, two new journals began publication
in the 1960s: the Journal of Marketing Research
and the Journal of Advertising Research. Technological
advances have had a major impact on many aspects of the
marketing research profession. These innovations have
included checkout scanners in supermarkets, computerassisted
telephone interviewing, database marketing, data
analysis by computers, data collection on the Internet,
and Web-based surveys.
The second decade of the Internet age has confirmed
the Internet as a consumer and business communications
medium. In 2005 companies were projected to spend
Call center in Philadelphia, Pennsylvania, October 8, 2004. AP IMAGES

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more than $1.1 billion on online market research, a 16
percent increase over 2004. The advantages of online
research are self-evident: There is no need for data entry
or interviews, and responses are collected automatically,
saving time and money while eliminating coding errors
and interviewer bias. Also, respondents may feel more
comfortable in answering sensitive questions with their
anonymity ensured. Ultimately, the Internet, if used properly,
can provide the quickest path to valuable insight into
a customer’s mind.
TYPES OF MARKETING RESEARCH
Marketing research can be classified as exploratory
research, conclusive research, and performance-monitoring
research. The stage in the decision-making process for
which the information is needed determines the type of
research required.
Exploratory Research. Exploratory research is appropriate
for the early stages of the decision-making process. This
research is usually designed to provide a preliminary investigation
of the situation with a minimum expenditure of
cost and time. A variety of approaches to this research are
used, including use of secondary data sources, observation,
interviews with experts, and case histories.
Conclusive Research. Conclusive research provides information
that helps the manager evaluate and select a course
of action. This involves clearly defined research objectives
and information needs. Some approaches to this research
include surveys, experiments, observations, and simulation.
Conclusive research can be subclassified into descriptive
research and causal research.
Descriptive research, as its name suggests, is designed
to describe something—for example, the characteristics of
consumers of a certain product; the degree to which the
use of a product varies with age, income, or sex; or the
number of people who saw a specific television commercial.
Causal research is designed to gather evidence regarding
the cause-and-effect relationships that exist in the
marketing system. For example, if a company reduces the
price of a product and then unit sales of the product
increase, causal research would show whether this effect
was due to the price reduction or some other reason.
Causal research must be designed in such a way that the
evidence regarding causality is clear. The main sources of
data for causal research are interrogating respondents
through surveys and conducting experiments.
Performance-Monitoring Research. Performance-monitoring
research provides information regarding the status
of the marketing system; it signals the presence of potential
problems or opportunities. This is an essential element
in the control of a business’s marketing programs. The
data sources for performance-monitoring research include
interrogation of respondents, secondary data, and observation.
THE MARKETING RESEARCH
PROCESS
The marketing research process is comprised of a series of
steps called the research process. To conduct a research
project effectively, it is important to anticipate all the steps
and recognize their interdependence.
Need for Information. The first step in the research
process is establishing the need for marketing research
information. The researcher must thoroughly understand
why the information is needed. The manager is responsible
for explaining the situation surrounding the request
for information and establishing that the research information
will assist in the decision-making process. Establishing
the need for research information is a critical and
difficult phase of the research process. Too often the
importance of this initial step is overlooked, which results
in research findings that are not decision-oriented.
Research Objectives. Once the need for research information
has been clearly defined, the researcher must specify
the objectives of the proposed research and develop a specific
list of information needs. Research objectives answer
the question “Why is this project being conducted?” The
answer could be as broad as the determination of the
amount of effort needed to increase the company’s market
share by 5 percent or as specific as the determination of
the most preferred of five moisturizers by women in
southern California. Only when the researcher knows the
problem that management wants to solve can the research
project be designed to provide the pertinent information.
The difficult part of establishing research objectives is
the conflict that often exists between the value of information
and the research budget. Because each piece of information
has some cost associated with it, whether it is the
cost of the account manager’s travel expenses or the cost of
having an outside agency perform a telephone survey, each
piece must be evaluated in terms of its value with respect
to the needed decision.
Research Design and Data Sources. The next step in the
research process is to design the formal research project
and identify the appropriate sources of data for the study.
A research design is the framework that specifies the type
of information to be collected, the sources of the data, and

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the data-collection procedures. Although there are many
different ways to classify designs, one that gives a clear
overview of the various procedures is based on three methods
of generating primary data: experimentation, observation,
and survey.
Experimentation involves establishing a controlled
experiment or model that simulates the real-world marketing
situation being investigated. In the observation
method, the primary data result from observing the
respondents doing something. The survey method
involves collecting the primary data by questioning a certain
number of people. Survey questioning may be done
in-person, over the phone, through the mail, or online.
To determine the data sources for the research project,
an assessment must first be made of the amount and
type of data currently available. These data are called secondary
data—data already gathered and available, having
been accumulated previously for a different purpose.
Although these data are assembled quickly and often at a
low cost, sometimes they do not satisfy the research objectives.
There are two types of secondary data: internal (data
originating within the firm) and external (published data
originating outside the firm). Internal secondary data are
all the data originating within the firm that were collected
for some purpose other than the objective currently being
addressed. Two of the most important types of internal
data are sales and cost data.
After the internal secondary data have been examined,
additional information can be obtained from published
external secondary data. The main sources of
external data are the Internet; the government; trade,
business, and professional associations; the media; trade
journals; universities and foundations; corporate annual
reports; and commercial data services. Information
obtained from any of these sources must be examined
carefully to make sure that it fits the particular needs of
the researcher.
• Internet—The Internet can provide links to many
sources of information, quickly and easily. Searching
the Web or visiting a business library’s Web site are
ways to become familiar with the types of resources
available. Two Web sites that are useful in evaluating
potential research resources are the New York Public
Library’s Science, Industry, and Business Library
(http://www.nypl.org/research/sibl/index.html) and
the University of Michigan’s Documents Center
(http://www.lib.umich.edu/govdocs).
• Government—The federal government is by far the
largest source of marketing data. Although the data
are available at a very low price, if any, once they are
located there is often a cost and time commitment
in obtaining the data. Some government publications
are highly specialized, referring to specific
studies of products. Other data are more general in
nature. State and local governments also provide
information. Data such as birth and death records
and information on real estate sales and assessed values
are public information and can be obtained
from the specific state or local agency.
• Associations—Trade, business, and professional associations
also have general data on the various activities
and sales of their constituency. For example, the
National Kitchen & Bath Association has general
information on kitchen and bath design professionals,
research design strategies, and remodeling.
Although such data will not be company-specific,
they are useful in gaining an overall perspective on
the industry. Address and membership information
for all associations can be found in the Encyclopedia
of Associations, updated annually.
• Media—Most magazines, newspapers, and radio and
television stations have marketing data available on
their audience. Also, media perform periodic market
surveys of buying patterns and demographic information
in their market area. For example, the
Boston Globe does a demographic study of its readers
in order to give advertisers a better understanding of
the marketing potential of their area.
• Trade journals—Trade journals also provide a wide
variety of marketing and sales data on the areas they
cover. For example, if market research were needed
in the area of computers, then trade journals such as
Computerworld, InfoWorld, and ZDNet should be
checked for any pertinent information.
• Universities and foundations—Universities and foundations
perform a variety of research projects. In
addition to special studies supported by grants from
the government, universities publish general research
Steps in the marketing research process
Need
for
Information
Research
Design &
Data Sources
Research
Objectives
Data
Collection
Data
Processing
& Analysis
Presentation
of
Results
Sample
Design
Figure 1

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findings of interest to the business community
through their research bureaus and institutes.
• Corporate annual reports—Corporate annual and 10-
K reports are also useful sources of information on
specific companies or general industry trends. These
reports may not provide great detail; nevertheless, a
general picture of the nature and scope of the firms
in an industry as well as their general direction can
be constructed.
• Commercial data services—Many firms offer marketing
research and commercial data services. Some
provide custom research; they design the research
project specifically to meet the client’s needs. This
can be expensive. Others, such as Nielsen Media
Research, offer standardized information, compiled
regularly and made available to clients on a subscription
basis.
After all the secondary data sources have been
checked and the needed data have not been found, the
third aspect of a research projected begins—the collection
of data through primary research. Primary research can be
best looked at in terms of three areas: data collection, sample
design, and data processing and analysis.
Data Collection. If it has been determined that the
required data are not currently available, then the next
step is to collect new data. To develop the data-collection
procedure, the researcher must establish an effective link
between the information needs and the questions to be
asked or the observations to be recorded. The process of
collecting data is critical because it typically involves a
large proportion of the research budget. The most widely
used methods of data collection are focus groups, surveys,
or interviews.
Focus groups are often used to collect primary data.
A focus group consists of a discussion, usually lasting one
and a half to two hours, with eight to twelve individuals
and a moderator who is intent on encouraging in-depth
discussion of a topic or product. The discussion allows for
flexibility and provides broad, in-depth knowledge that
cannot be obtained through any other research method.
Surveys, also known as questionnaires, are the most
common instrument for data collection. A survey consists
of a set of questions presented to respondents for their
answers. Surveys need to be carefully developed, tested,
and debugged before they are used; they can be administered
over the phone, through the mail, via e-mail, or
online. Web-based surveys and other forms of online
research are popular choices because of their many advantages—
timely, reliable data collection providing real-time,
instant access to target audiences’ opinions at reduced
costs. Web surveys do not replace the traditional techniques,
but they can be an effective choice for companies
big and small.
Primary research data are often obtained by interviews,
either in person or over the telephone. For example,
one might personally interview consumers to determine
their opinions of a new line of low-fat foods or personally
interview a few executives to determine their opinions of
a nationally known advertising agency. An advantage of
personal interviews is that the interviewer can adapt the
question to the specific situation at hand. A limitation to
this method is that the interviewer can introduce bias into
the process by asking leading questions or by giving some
indication of the preferred answer. A lot of time, supervision,
and interviewer training are needed to implement
personal interviews successfully.
Sample Design. When research is being conducted, it is
important to determine the appropriate target population
of the research—the group of people possessing characteristics
relevant to the research problem from whom information
will be obtained. Although this may appear to be
easy, it is often one of the most difficult tasks in a marketing
research project because of the wide variety of factors
entering into the determination. For example, it might be
important that only recent users of the product be surveyed.
Or perhaps the purchasers of the product, not the
users, should be the focus of the research.
Once the target population is determined, a decision
is needed on how best to represent this population within
the time and cost constraints of the research budget.
Because there are many different methods used to draw
this sample—the group of units composed of nonoverlapping
elements that are representative of the population
from which it is drawn—the best one needs to be chosen
for the specific research project.
Data Processing and Analysis. After the data are collected,
the processing begins, which includes the functions
of editing and coding. Editing involves reviewing
the data forms to ensure legibility, consistency, and completeness.
Coding involves establishing categories for
responses or groups of responses so that numerals can be
used to represent the categories.
It is important that the data analysis be consistent
with the requirements of the information needs identified
when the research objectives were defined. Data analysis is
usually performed with an appropriate software application.
This data analysis, whether done by simple numeric
counting or by complex computer-assisted analytical techniques,
should provide meaningful information appropriate
for managerial decisions.

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Presentation of Results. After the data have been collected
and analyzed, the final aspect of the research project
can be generated—the development of the appropriate
conclusions and recommendations. This is the most
important part of the project, but it does not always
receive the proper attention. The research results are typically
communicated to the manager through a written
report and oral presentation. The research findings should
be presented in a clear, simple format and be accompanied
by appropriate support material. The best research
methodology in the world will be useless to managers if
they cannot understand the research report. Some preparation
guidelines for the written and oral reports are:
• Consider the audience
• Be concise, yet complete
• Be objective, yet effective
The findings should address the information needs of the
decision situation. The final measure of the value of the
research project is whether the findings are successfully
implemented in the company.
THE VALUE OF MARKETING
RESEARCH
Marketing research has, in a way, pioneered the move
toward the broader view of marketing. Marketing research
serves as a coordinating factor between marketing and the
other functions of a business, such as engineering, manufacturing,
accounting, and finance. This integration has
the effect of enhancing the importance of marketing
research to the corporation as a whole.
Marketing research continues to play a key role in
organizations in the twenty-first century. Technology does
and will continue to enable marketing research to take the
lead in providing useful information for effective business
decisions. The Internet’s role in marketing research will
continue to grow because it provides a quick, cost-effective
way of collecting and disseminating data. Market
researchers will continue their evolution from supplying
“market and opinion research” to a more strategic position
of supplying information, consulting, and exchanging
information with consumers. Companies that take advantage
of marketing research and view it as a valuable business
component will be the companies that survive and
thrive.