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Marketing Research

Lecture 4

Research Design

Research Design: Definition

• A research design is a framework or

blueprint for conducting the marketing

research project. It details the procedures

necessary for obtaining the information

needed to structure or solve marketing

research problems.

Tasks Involved in a Research Design

• Design the exploratory, descriptive, and/or causal phases of the research

• Specify the measurement and scaling procedures

• Construct and pretest a questionnaire (interviewing form) or an appropriate form for data collection

• Specify the sampling process and sample size

• Develop a plan of data analysis

A Classification of Marketing Research Designs

Single Cross-Sectional Design

Multiple Cross-Sectional Design

Research Design

Conclusive Research Design

Exploratory Research Design

Descriptive Research

Causal Research

Cross-Sectional Design

Longitudinal Design

Exploratory & Conclusive Research Differences

Objective:

Character-istics:

Findings/ Results:

Outcome:

To provide insights and understanding

Information needed is defined only loosely. Research process is flexible and unstructured. Sample is small and non-representative. Analysis of primary data is qualitative

Tentative

Generally followed by further exploratory or conclusive research

To test specific hypotheses and examine relationships

Information needed is clearly defined. Research process is formal and structured. Sample is large and representative. Data analysis is quantitative

Conclusive

Findings used as input into decision making

Exploratory Conclusive

A Comparison of Basic Research Designs

Objective:

Characteristics:

Methods:

Discovery of ideas and insights

Flexible, versatile

Often the front end of total research design

Expert surveysPilot surveysCase studiesSecondary data:qualitative analysisqualitative research

Describe market characteristics or functions

Marked by the prior formulation of specific hypotheses

Preplanned and structured design

Secondary data:quantitative analysisSurveysPanelsObservation and other data

Determine cause and effect relationships

Manipulation of independent variables Measure the effect on dependent variablesControl of othermediating variables

Experiments

Exploratory Descriptive Causal

Uses of Exploratory Research

• Formulate a problem or define a problem more precisely

• Identify alternative courses of action

• Develop hypotheses

• Isolate key variables and relationships for further examination

• Gain insights for developing an approach to the problem

• Establish priorities for further research

Methods of Exploratory Research

• Survey of experts

• Pilot surveys

• Secondary data analyzed in a qualitative way

• Qualitative research

Use of Descriptive Research

• To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas

• To estimate the percentage of units in a specified population exhibiting a certain behavior

• To determine the perceptions of product characteristics

• To determine the degree to which marketing variables are associated

• To make specific predictions

Methods of Descriptive Research

• Secondary data analyzed in a quantitative, as opposed to a qualitative, manner

• Surveys

• Panels

• Observational and other data

Cross-Sectional Designs

• Involve the collection of information from any given sample of population elements only once

• In single cross-sectional designs, there is only one sample of respondents and information is obtained from this sample only once.

• In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times.

• Cohort analysis consists of a series of surveys conducted at appropriate time intervals, where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the same event within the same time interval.

Consumption of Various Soft Drinks by Age Cohorts

8-1920-2930-3940-4950+

Age 1960 1969 19791950

52.945.233.923.218.1

62.660.746.640.828.8C1

73.276.067.758.650.0C2

81.075.871.467.851.9C3

C8C7C6C5C4

C1: cohort born prior to 1900C2: cohort born 1901-10C3: cohort born 1911-20C4: cohort born 1921-30

C5: cohort born 1931-40C6: cohort born 1940-49C7: cohort born 1950-59C8: cohort born 1960-69

Percentage consuming on a typical day

Longitudinal Designs

• A fixed sample (or samples) of population elements is measured repeatedly on the same variables

• A longitudinal design differs from a cross-sectional design in that the sample or samples remain the same over time

Cross-Sectional vs. Longitudinal

Sample Surveyed

at T1

Sample Surveyed

at T1

Same Sample

also Surveyed

at T2

T1 T2


Longitudinal Design

Time

Relative Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs

Evaluation Criteria


Longitudinal Design

Detecting ChangeLarge amount of data collectionAccuracyRepresentative SamplingResponse bias

---++

+++--

Note: A “+” indicates a relative advantage over the other design, whereas a “-” indicates a relative disadvantage.

Cross-Sectional Data May Not Show Change

Brand Purchased Time Period

Period 1 Period 2Survey Survey

Brand A 200 200Brand B 300 300Brand C 500 500Total 1000 1000

Longitudinal Data May Show Substantial Change

Brand Purchased in Period 1

Brand Purchased in Period 2

Brand A Brand B Brand C Total

Brand ABrand BBrand CTotal

1002575

200

50100150300

50175275500

2003005001000

Uses of Causal Research

• To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon

• To determine the nature of the relationship between the causal variables and the effect to be predicted

• METHOD: Experiments

Conditions for Causality

• Concomitant variation is the extent to which a cause, X, and an effect, Y, occur together or vary together in the way predicted by the hypothesis under consideration.

• The time order of occurrence condition states that the causing event must occur either before or simultaneously with the effect; it cannot occur afterwards.

• Plausible explanation of case-and-effect mechanismbased on previous studies, theory, qualitative research and common sense

• The absence of other possible causal factors means that the factor or variable being investigated should be the only possible causal explanation.

Evidence of Concomitant Variation betweenPurchase of Fashion Clothing and Education

High

High Low

363 (73%) 137 (27%)

322 (64%) 178 (36%)

Purchase of Fashion Clothing, Y

500 (100%)

500 (100%)LowEd

uca

tio

n,

X

Purchase of Fashion Clothing ByIncome and Education

Low IncomePurchase

High Low

High

LowEd

uca

tio

n

200 (100%)

300 (100%)

300

200

122 (61%)

171 (57%)

78 (39%)

129 (43%)

High IncomePurchase

High

High

Low

Low

241 (80%)

151 (76%)

59 (20%)

49 (24%)

Ed

uca

tio

n

Definitions and Concepts

• Independent variables are variables or alternatives that are manipulated and whose effects are measured and compared, e.g., price levels.

• Test units are individuals, organizations, or other entities whose response to the independent variables or treatments is being examined, e.g., consumers or stores.

• Dependent variables are the variables which measure the effect of the independent variables on the test units, e.g., sales, profits, and market shares.

• Extraneous variables are all variables other than the independent variables that affect the response of the test units, e.g., store size, store location, and competitive effort.

Experimental Design

An experimental design is a set of procedures specifying:

� the test units and how these units are to be divided into homogeneous subsamples,

� what independent variables or treatments are to be manipulated,

� what dependent variables are to be measured; and

� how the extraneous variables are to be controlled.

Validity in Experimentation

• Internal validity refers to whether the manipulation of the independent variables or treatments actually caused the observed effects on the dependent variables. Control of extraneous variables is a necessary condition for establishing internal validity.

• External validity refers to whether the cause-and-effect relationships found in the experiment can be generalized. To what populations, settings, times, independent variables, and dependent variables can the results be projected?

Extraneous Variables

• History refers to specific events that are external to the experiment but occur at the same time as the experiment.

• Maturation (MA) refers to changes in the test units themselves that occur with the passage of time.

• Testing effects are caused by the process of experimentation. Typically, these are the effects on the experiment of taking a measure on the dependent variable before and after the presentation of the treatment.

• The main testing effect (MT) occurs when a prior observation affects a latter observation.

Extraneous Variables

• In the interactive testing effect (IT), a prior measurement affects the test unit's response to the independent variable.

• Instrumentation (I) refers to changes in the measuring instrument, in the observers, or in the scores themselves.

• Statistical regression effects (SR) occur when test units with extreme scores move closer to the average score during the course of the experiment.

• Selection bias (SB) refers to the improper assignment of test units to treatment conditions.

• Mortality (MO) refers to the loss of test units while the experiment is in progress.

Controlling Extraneous Variables

• Randomization refers to the random assignment of test units to experimental groups by using random numbers. Treatment conditions are also randomly assigned to experimental groups.

• Matching involves comparing test units on a set of key background variables before assigning them to the treatment conditions.

• Statistical control involves measuring the extraneous variables and adjusting for their effects through statistical analysis.

• Design control involves the use of experiments designed to control specific extraneous variables.

A Classification of Experimental Designs

• Pre-experimental designs do not employ randomization procedures to control for extraneous factors: the one-shot case study, the one-group pretest-posttest design, and the static-group.

• In true experimental designs, the researcher can randomly assign test units to experimental groups and treatments to experimental groups: the pretest-posttest control group design, the posttest-only control group design, and the Solomon four-group design.

A Classification of Experimental Designs

• Quasi-experimental designs result when the researcher is unable to achieve full manipulation of scheduling or allocation of treatments to test units but can still apply part of the apparatus of true experimentation: time series and multiple time series designs.

• A statistical design is a series of basic experiments that allows for statistical control and analysis of external variables: randomized block design, Latin square design, and factorial designs.

Laboratory Versus Field Experiments

Factor Laboratory Field

Environment Artificial RealisticControl High Low Reactive Error High Low Demand Artifacts High Low Internal Validity High LowExternal Validity Low HighTime Short LongNumber of Units Small LargeEase of Implementation High LowCost Low High

Limitations of Experimentation

• Experiments can be time consuming, particularly if the researcher is interested in measuring the long-term effects.

• Experiments are often expensive. The requirements of experimental group, control group, and multiple measurements significantly add to the cost of research.

• Experiments can be difficult to administer. It may be impossible to control for the effects of the extraneous variables, particularly in a field environment.

• Competitors may deliberately contaminate the results of a field experiment.

Alternative Research Designs

Exploratory Research•Secondary Data Analysis

•Focus Groups

Conclusive Research•Descriptive/Causal


Exploratory Research

•Secondary Data Analysis

•Focus Groups


(a)

(b)

(c)

Potential Sources of Error in Research Designs

Surrogate Information ErrorMeasurement ErrorPopulation Definition ErrorSampling Frame ErrorData Analysis Error

Respondent Selection ErrorQuestioning ErrorRecording ErrorCheating Error

Inability ErrorUnwillingness Error

Total Error

Non-sampling Error

Random Sampling Error

Non-response Error

Response Error

Interviewer Error

Respondent Error

Researcher Error

Errors in Marketing Research

• The total error is the variation between the true mean value in the population of the variable of interest and the observed mean value obtained in the marketing research project.

• Random sampling error is the variation between the true mean value for the population and the true mean value for the original sample.

• Non-sampling errors can be attributed to sources other than sampling, and they may be random or nonrandom: including errors in problem definition, approach, scales, questionnaire design, interviewing methods, and data preparation and analysis. Non-sampling errors consist of non-response errors and response errors.

Errors in Marketing Research

• Non-response error arises when some of the respondents included in the sample do not respond.

• Response error arises when respondents give inaccurate answers or their answers are misrecorded or misanalyzed.

Marketing Research at Citicorp is typical in that it is used tomeasure consumer awareness of products, monitor theirsatisfaction and attitudes associated with the product, trackproduct usage and diagnose problems as they occur. Toaccomplish these tasks Citicorp makes extensive use ofexploratory, descriptive, and causal research. Often it isadvantageous to offer special financial packages to specificgroups of customers. In this case, a financial package isbeing designed for senior citizens.

The following seven-step process was taken by marketingresearch to help in the design.

Citicorp Banks on Exploratory, Descriptive, and Causal Research


1) A taskforce was created to better define the marketparameters to include all the needs of the many Citicorpbranches. A final decision was made to include Americans55 years of age or older, retired, and in the upper half ofthe financial strata of that market.

2) Exploratory research in the form of secondary data analysis of the mature or older market was then performed and a study of competitive products was conducted. Exploratory qualitative research involving focus groups was also carried out in order to determine the needs and desires of the market and the level of satisfaction with the current products.

In the case of senior citizens, a great deal of diversity was found in the market. This was determined to be due to such factors as affluence, relative age, and the absence or presence of a spouse.


3) The next stage of research was brainstorming. Thisinvolved the formation of many different financial packagesaimed at the target market. In this case, a total of 10 ideaswere generated.


4) The feasibility of the 10 ideas generated in step 3 was then tested. The ideas were tested on the basis of whether they were possible in relation to the business. The following list of questions was used as a series of hurdles that the ideas had to pass to continue on to the next step.

• Can the idea be explained in a manner that the target market will be easily understand?

• Does the idea fit into the overall strategy of Citicorp?


� Is there an available description of a specific target market for the proposed product?

� Does the research conducted so far indicate a potential match for target market needs, and is the idea perceived to have appeal to this market?

� Is there a feasible outline of the tactics and strategies for implementing the program?

� Have the financial impact and cost of the program been thoroughly evaluated and determined to be in line with company practices?

In this study, only one idea generated from the brainstormingsession made it past all the listed hurdles and on to step 5.


5) A creative work-plan was then generated. This plan was to emphasizethe competitive advantage of the proposed product as well as betterdelineate the specific features of the product.

6) The previous exploratory research was now followed up withdescriptive research in the form of mall intercept surveys of people inthe target market range. The survey showed that the list of specialfeatures was too long and it was decided to drop the features morecommonly offered by competitors.


7) Finally, the product was test marketed in six ofthe Citicorp branches within the target market.Test marketing is a form of causal research.Given successful test marketing results, theproduct is introduced nationally.


Marketing Research Proposal

• Executive Summary

• Background

• Problem Definition/Objectives of the Research

• Approach to the Problem

• Research Design

• Fieldwork/Data Collection

• Data Analysis

• Reporting

• Cost and Time

• Appendices

The Greenfield of Online Research

Greenfield Online Research Center, Inc.(http://www.greenfieldonline.com), based in Westport,Connecticut, is a subsidiary of the Greenfield ConsultingGroup. The Online Research Center conducts focusgroups, surveys, and polls over the Internet. Thecompany has built up a “panel” of several thousandInternet users, from which it draws survey samples. Thesamples may be used for descriptive research designslike single or multiple cross-sectional designs, as well aslongitudinal designs. Causal designs can also beimplemented. Respondents may also be chosen fromthe registered Internet users.

Internet users wishing to take part in surveys and otherprojects begin by registering online at the company’s Website. The registration consists of a “sign-up survey” that asksfor e-mail address, type of computer used, personalinterests and information about the respondent’s household.Once an Internet user is registered, Greenfield Onlinematches the user with research studies that are well-suitedto his or her interests.

Incentives to take part in focus groups or special surveys areoffered by the companies whose products or services arebeing researched. This incentive is cash or valuable prizes.Incentives are also offered to Internet users to encouragethem to register with Greenfield’s Internet panel. Newregistrants automatically qualify for prizes that are awardedin monthly drawings.

The Greenfield of Online Research

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