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General Instructions – PLEASE READ THEM CAREFULLY
• Make your work clear and well presented, marks may be reduced for
poor presentation.
• You must mention question number clearly in your answer.
• Avoid plagiarism, the work should be in your own words, copying
from other resources without proper referencing will result in ZERO
marks. No exceptions.
Assignment No 2: Case Study
Learning Outcomes:
1. Develop critical and analytical thinking necessary to overcome challenges and issues
of marketing in the changing global environment. (Lo 4)
2. Use effective and collaborative interpersonal skills to carry out scientific analysis of
consumers’ needs and wants to formulate a marketing Plan.
Read the Chapter Case Study “Swim, Lift, Play—but also donate: Using marketing
research to redefine the YMCA” from Chapter 10 “Marketing Research” Page: – 323 given
in your textbook/E-book – “Marketing” (7th ed) by Dhruv. Grewal and Michael Levy
(2020) and answer the following Questions:
Assignment Question(s):
1. What kinds of market research has the Y conducted? Explain.
2. Which questions has the Y sought to answer with each different type of market
research it has conducted?
3. Who are the main stakeholders that the Y is attempting to reach with the
information it has gained through its market research?
4. Are there other types of market research that the Y could conduct in the future to
answer other important questions? Give some examples of both the questions it
still faces and the research methods it could use to answer them.
Notes:

Answer the questions based on the concepts discussed in the Chapters.
Your answers MUST include at least 2 outside references (other than the textbook)
using a proper referencing style (APA).
Using references from SDL will be highly valued.
https://portal.sdl.edu.sa/english/
Note:
You can answer without reading the chapters (1 to 4) since the questions are
Critical Thinking, but you may need it for references to support your
assumptions and to make strong argument. Other references will be from
other sources.
Answers
1. Answer2. Answer3. Answer4. Answer-
322
Section Three TARGETING THE MARKETPLACE
Vendor A
Vendor B
Vendor C
The vendor that Manuel has used in the
past estimates it can get the job done for
$200,000 and in two months. The vendor
plans to do a telephone-based survey
­analysis and use secondary data from the
U.S. Census.
Manuel’s key competitor has used this vendor,
which claims that it can get the job done for
$150,000 and in one month. This vendor plans to
do a telephone-based survey analysis and use
­secondary data. During a discussion pertaining to
its price and time estimates, the vendor indicates it
will draw on insights it has learned from a recent
report prepared for one of Manuel’s competitors.
This well-known vendor has recently
started to focus on the restaurant
­industry. It quotes a price of $180,000 and
a time of one month. The vendor plans to
conduct a web-based survey analysis and
use secondary data.
Quiz Yourself
1. What is the key advantage of primary data?
a. It is less expensive than secondary data.
b. It is readily available.
c. It is collected to address a specific research question.
d. It is recently collected.
e. It can be sold by firms.
2. Which step is considered crucial to the marketing research process because it identifies the questions that
must be answered?
a. Setting objectives and research needs
b. Designing the research project
c. Collecting data
d. Analyzing and interpreting the data
e. Developing and implementing the action plan
(Answers to these two questions can be found in the Quiz
Yourself Answer Key section.)
Chapter Case Study
SWIM, LIFT, PLAY—BUT ALSO DONATE: USING MARKETING
RESEARCH TO REDEFINE THE YMCA
Over the years, the YMCA has come to mean different things to different people. Depending on the meanings that people embrace, the charitable organization sometimes struggles
to achieve its mission and goals. Accordingly, a key element of its efforts, at both national
and local levels, is to conduct ongoing and persistent research into what people perceive
when they think of the Y.
Founded in the mid-19th century in response to the new challenges of an industrial society, the YMCA sought to give young men coming to the city for work a place where they
could stay safely and for a reasonable rate. In the United States, local YMCAs quickly became known as sources of assistance for new immigrants; though segregated, they also provided meeting places for African Americans and eventually emerged as important rallying
sites for the civil rights movement. Once barriers to race and gender fell, the Y embraced its
role as a place where every member of the family could find the resources, self-fulfillment,
and support that they needed.47
Many of those resources historically and still today have focused on exercise and health.
Different employees of YMCA facilities have contributed to exercise culture: one originated
the term body building; others invented games that we now know as volleyball, racquetball,
and basketball in Y gymnasiums; and its initiative to help everyone learn to swim led to the
vast expansion of public pools and swim classes throughout the nation.
This focus on exercise and health remains a primary element of the reputation of the Y
in most Americans’ minds. Approximately 13 million adults and 9 million children in the
United States turn to their local Y to lift weights, shoot hoops, swim laps, or jog around a
track.48 But the national organization also began to suspect that those purposes were all that
323
MARKETING RESEARCH CHAPTER TEN
Based on marketing research,
the YMCA has been rebranded
to the Y, and local branches
are encouraged to focus on its
core values: ­caring, honesty,
respect, and responsibility.
©Kevin Wolf/AP Images
members, and other stakeholders, were seeing. As the president of the national organization
explained, even as membership numbers were climbing, other data related to charitable donations suggested some concerns. That is, people were perceiving the Y “as a gym and swim
place. We’re also a charity, and that is the missing ingredient. We want people to realize that
we’re deserving of their charitable donations.”49
To make that case, the Y (which rebranded in 2010 to take the single-letter moniker,
though it also still relies on the longer YMCA acronym to maintain links to its historical
functions) relies substantially on research. The goal is to show, with data, facts, figures, and
graphics, how programs run by the Y and sponsored by charitable donations actually change
lives and improve communities.
For example, a vast survey of consumers across the nation showed that 98 percent of
people knew of the YMCA, and 92 percent of them had favorable impressions of it. But
only 50 percent indicated that they understood why the Y offered the ­programs that it
did.50 The national organization considered its mission—to give ­families resources that they
needed to build self-esteem and self-confidence, and thus build communities—evident, but
the marketing research showed that these notions were not widespread among people who
might use or contribute to their local organizations. In response, it encouraged the local
branches (each of which is run autonomously) to emphasize four core values: caring, honesty, respect, and responsibility. It also recommended that local branches consider conducting their own research projects to ensure they were providing the types of resources their
local members wanted and needed most.51
In other, more targeted, marketing research projects, the national and local arms of the
Y also have sought to determine which price points will attract the most members. For example, the Boston branch cited extensive marketing research that showed that if it cut membership fees by 11 percent, it could attract 10,000 new members. The research got it a little
bit wrong though: After it reduced the fees, the membership rolls swelled by more than
20,000 users.52
Research also has informed which initiatives the Y has made its primary focus for
the near future. First, noting extensive academic literature that shows that impoverished
students retain less of the education they have received during the summer months, the
324
Section Three TARGETING THE MARKETPLACE
Y is expanding a summer camp program in an effort to reduce the well-documented
“achievement gap” between children from poor and wealthy families.53 To support this
initiative, the Y also instituted its first national advertising campaign, in which one
televised advertisement highlights the various after-school, summer, and meal programs
available for children. It also ends with a clear call for contributions to support such
programs.54
Second, the Y cites national statistics about the number of people with diabetes or
prediabetes, as well as scientific evidence that shows that losing even 5 percent of their body
weight can help at-risk people avoid becoming diabetic. Accordingly, its second main initiative is to expand its diabetes prevention programs, in collaboration with national health care
organizations such as the Centers for Disease Control and Prevention and the “Let’s Move”
campaign.
Some evidence suggests its efforts are paying off. Visits to the Y’s website increased
in just the two months after it launched the national advertising campaigns.55 In addition, the new communications are attracting attention to the Y in various outlets and
sources, including a prominent role in a documentary about a swim team for people with
autism.56
So the Y means a lot of things to a lot of people. The national organization continues
to find out what people think of when they think of the Y. In addition, it seeks to learn how
it can convince them to think about the Y and its valuable programs as a destination for
their charitable donations.
Questions
1.
2.
3.
4.
What kinds of marketing research has the Y conducted?
Which questions has the Y sought to answer with each different type of marketing
­research it has conducted?
Who are the main stakeholders that the Y is attempting to reach with the information
it has gained through its marketing research?
Are there other types of marketing research that the Y could conduct in the future to
answer other important questions? Give some examples of both the questions it still
faces and the research methods it could use to answer them.
Endnotes
1. Thomas H. Davenport and Randy Bean, “How P&G and
­American Express Are Approaching AI,” Harvard Business
Review, March 31, 2017.
2. Ibid.
3. Eleanor O’Neill, “10 Companies That Are Using Big Data,” CA
Today, September 23, 2016, www.icas.com/ca-today-news/10companies-using-big-data.
4. Bernard Marr, “American Express Charges into the World of
Big Data,” Data Informed, January 16, 2016, http://datainformed.com/american-express-charges-into-world-big-data/.
5. Alexandra Levit, “Big Data Analytics Doesn’t Have to Be
­Intimidating,” American Express Open Forum, August 4,
2017, www.americanexpress.com/us/small-business/­
openforum/articles/big-data-analytics-doesnt-have-to-beintimidating/.
6. Marr, “American Express Charges into the World of Big Data.”
7. O’Neill, “10 Companies That Are Using Big Data.”
8. Marr, “American Express Charges into the World of Big Data.”
9. Ibid.
10. Davenport and Bean, “How P&G and American Express Are
Approaching AI.”
11. Nielsen Holding plc, “2015 10-K Annual Report,” The Nielsen
Company, February 19, 2016.
12. McDonald’s Corporation, “About Us,” www.mcdonalds.com/us/
en-us/about-us.html; McDonald’s Corporation, “2016 Annual
Report,” March 1, 2017.
13. The Wendy’s Company, “Wendy’s around the World,” www.
wendys.com/en-us/about-wendys/restaurants-around-theworld; The Wendy’s Company, “2016 Annual Report,”
March 2, 2017.
14. Detailed illustrations of scales are provided in two books:
­Gordon C. Bruner, Marketing Scales Handbook: A Compilation
of Multi-Item Measures, vol. 7 (Carbondale, IL/Fort Worth, TX:
GCBII Productions, 2013); William O. Bearden, Richard G.
­Netemeyer, and Kelly L. Haws, Handbook of Marketing Scales:
Multi-Item Measures for Marketing and Consumer Behavior
Research (Thousand Oaks, CA: Sage, 2011).
15. Jeff Kelly, “Big Data: Hadoop, Business, Analytics, and Beyond,”
Wikibon, February 5, 2014, http://wikibon.org.
©Nada Sertic/Shutterstock
LEARNING OBJECTIVES
After reading this chapter, you should be able to:
LO10-1
Identify the five steps in the marketing research process.
LO10-2
Describe the various secondary data sources.
LO10-3
Describe the various primary data collection techniques.
LO10-4
Summarize the differences between secondary data and primary data.
LO10-5
Examine the circumstances in which collecting information on
consumers is ethical.
CHAPTER 10
MARKETING
RESEARCH
T
o research a market, every company needs data
about it. Marketing research encompasses a
range of techniques and options, as this chapter
will make clear. But a key direction that modern
companies are taking involves leveraging what has come
to be known as “big data.” These are the data gathered
and integrated by advanced technology applications and
tools, and they allow even companies that have been
­researching their markets for literally centuries to gain
new insights and understanding of their customers.
Take American Express as an example. To appeal to
both customers and merchants, it has long investigated
what will make its offers valuable to them. For example, in
the 1980s, it relied on what was then called an “expert
system” to determine which transactions were most likely
to be fraudulent and issue recommendations to human
monitors about whether to approve big purchases.1
These human analysts also are a long-standing tradition for American Express, which over the years has established a staff of approximately 1,500 data scientists
to ensure that it can handle all the marketing research
data it gathers.2 These scientists have a lot more material to work with these days, though, especially as the
credit card company shifts its focus from assessments
of previous transactions to predictions of future ones.3 It
also is expanding its central offerings: Rather than just
providing credit for customers, American Express
­increasingly sees itself as a provider that facilitates
c­ onnections between customers and the merchants
from which they want to buy.4
It therefore gathers data from its customer relationship management systems, websites, and mobile apps to
predict what continued customers want. By leveraging
these data, American Express alters its offers and promotions virtually in real time, such that each contact with a
customer reflects his or her immediately previous activity.5 For example, it can review customers’ purchases and
then recommend a local restaurant that they are likely to
enjoy, where they can use their card. Location-based services in the American Express app also enable the company to issue real-time coupons according to customers’
locations.6 American Express asserts that it can anticipate the termination of nearly one-quarter of the accounts that will close in any particular quarter too,
meaning that it can engage in proactive efforts either to
retain the customer or to reduce its own expensive efforts if the customer appears destined to leave.7 Furthermore, because it inherently and constantly makes in-depth
contacts with merchants, as partners in serving their
shared customers, it can gather purchase data from their
systems. These resulting data span literally millions of
businesses and even more customers, meaning that
American Express overall makes billions of marketing-­
related decisions daily.8 For its merchant partners, the
company also offers support for their marketing research
analyses. For example, a benchmarking tool allows
c­ ompanies to determine how well they are performing
among millions of American Express customers, segmented in various ways, relative to their competitors.
Finally, in an effort that benefits both merchants and
customers, American Express leverages its advanced marketing research and data analysis capabilities to anticipate,
identify and avoid fraud. Such abilities are particularly valuable in the credit card industry because fraud threatens all
members of the market. Therefore, American Express’ proprietary machine learning model integrates data from a
wide range of sources, coming from both members and
merchants, to identify suspicious transactions within milliseconds. For this identification, it relies on comparisons
with its vast database of existing purchases. ­Because it can
do so nearly immediately, American Express has saved its
markets an estimated $2 billion by avoiding fraudulent
transactions.9 But in addition to saving them money, American Express has developed its fraud detection skills to such
an extent that it does not need to contact customers to
approve every purchase, which would risk annoying them.10
Although some of these applications entail the use of
advanced technologies and sophisticated algorithms, the
underlying goal is the same as it has always been. American Express seeks to learn all it can about its members, the
merchants who serve them, and the markets in which they
interact. Then it can be confident that it is offering exactly
what each of these actors needs and wants, because its
research has told it what those needs and wants are.
Marketing research is a prerequisite of successful decision making. It consists of a set of
techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers who are involved in marketing goods, services, or
ideas. When marketing managers attempt to develop their strategies, marketing research can
provide valuable information that will help them make segmentation, positioning, product,
price, place, and promotion decisions.
Firms invest billions of dollars in marketing research every year. The largest U.S.-based
marketing research firm, the Nielsen Company, earns annual worldwide revenues of more
than $6 billion.11 Why do marketers find this research valuable? First, it helps reduce some
of the uncertainty under which they currently operate. Successful managers know when
research might help their decision making and then take appropriate steps to acquire the
information they need. Second, marketing research provides a crucial link between firms
and their environments, which enables them to be customer oriented because they build
their strategies by using customer input and continual feedback. Third, by constantly monitoring their competitors, firms can anticipate and respond quickly to competitive moves.
If you think marketing research is applicable only to corporate ventures, though, think
again. Nonprofit organizations and governments also use research to serve their constituencies better. The political sector has been slicing and dicing the voting public for decades to
determine relevant messages for different demographics. Politicians desperately want to
understand who makes up the voting public to determine how to reach them. But they do
not want to know only your political views—they also want to understand your media habits,
such as what magazines you subscribe to, so they can target you more effectively.
To do so, they rely on the five-step marketing research process we outline in this chapter. We also discuss some of the ethical implications of using the information that these
databases can collect.
LO10-1
Identify the five steps
in the marketing
­research process.
THE MARKETING
RESEARCH PROCESS
Managers consider several factors before embarking on a marketing research project. First,
will the research be useful; will it provide insights beyond what the managers already know
and reduce uncertainty associated with the project? Second, is top management committed
to the project and willing to abide by the results of the research? Related to both of these
296
297
MARKETING RESEARCH CHAPTER TEN
questions is the value of the research. Marketing research
can be very expensive, and if the results won’t be useful or
management does not abide by the findings, it represents a
waste of money. Third, should the marketing research project
be small or large? A project might involve a simple analysis
of data that the firm already has, or it could be an in-depth
assessment that costs hundreds of thousands of dollars and
takes months to complete.
The marketing research process itself consists of five
steps (see Exhibit 10.1). Although we present the stages of
the marketing research process in a step-by-step progression,
of course research does not always, or even usually, happen
that way. Researchers go back and forth from one step to
another as the need arises. For example, marketers may
establish a specific research objective, which they follow with
data collection and preliminary analysis. If they uncover new
information during the collection step or if the findings of
the analysis spotlight new research needs, they might redefine their objectives and begin again from a new starting
point. Another important requirement before embarking on
a research project is to plan the entire project in advance. By
planning the entire research process prior to starting the
project, researchers can avoid unnecessary alterations to the
research plan as they move through the process.
Marketing Research Process Step 1:
Defining the ­Objectives and
Research Needs
EXHIBIT
10.1
The Marketing Research Process
Step 1:
Defining the
objectives
and research
needs
Step 2:
Designing
the
research
Step 3:
Collecting
the data
Because research is both expensive and time-consuming, it is
important to establish in advance exactly what problem
needs to be solved. For example, Marketing Analytics 10.1
details how film studios actively seek to predict potential
Oscar winners and thus turn to sophisticated research techAnalyzing
niques. In general, marketers must clearly define the objecthe
data and
tives of their marketing research project.
Step 4:
developing
Consider a scenario: McDonald’s is the global leader in
insights
the fast-food market, with more than 36,000 stores in over
100 countries, earning close to $25 billion in annual revenues.12 But it wants a better understanding of its customers’
experience. It also needs to understand how customers view
the experience at Wendy’s, a main competitor, operating in
30 countries and earning approximately $1.5 billion in annual
revenues, even after Wendy’s discontinued its breakfast
menu.13 Finally, McDonald’s hopes to gain some insight into
Developing and
how it should set a price for and market its latest combo meal
implementing
Step 5:
of a hamburger, fries, and drink. Any one of these questions
an action plan
could initiate a research project. The complexity of the project that the company eventually undertakes depends on how
much time and resources it has available, as well as the
amount of in-depth knowledge it needs.
Researchers assess the value of a project through a careful comparison of the benefits
of answering some of their questions and the costs associated with conducting the
research. When researchers have determined what information they need in order to
address a particular problem or issue, the next step is to design a research project to meet
those objectives.
298
Section Three TARGETING THE MARKETPLACE
If McDonald’s were to do research to better understand its ­customers’ experience, it would study both the McDonald’s
­experience (left) and that of its major competitors, like Wendy’s (right).
(Left): ©David Paul Morris/Getty Images; (right): ©Andrew Spear/The New York Times/Redux Pictures
Marketing Research Process Step 2: Designing the Research
The second step in the marketing research project involves design. In this step, researchers identify the type of data needed and determine the research necessary to collect
them. Recall that the objectives of the project drive the type of data needed, as outlined
in Step 1.
Let’s look at how this second step works, using the McDonald’s customer experience. McDonald’s needs to ask its customers about their McDonald’s experience. However, because people don’t always tell the whole truth in surveys, the company also may
want to observe customers to see how they actually enter the stores, interact with
employees, and consume the product. The project’s design might begin with available
data, such as information that shows that people with children
often come into the restaurants at lunchtime and order Happy
Meals. Then McDonald’s marketing researchers can start
to ask ­c ustomers specific questions about their McDonald’s
experience.
Marketing Research Process Step 3:
­Collecting the Data
McDonald’s assesses its customers’ market experience by examining available data and then asks customers about their experience with products
such as Value Meals.
©McGraw-Hill Education/Evelyn Nicole Kirksey, photographer
Data collection begins only after the research
design process. Based on the design of the project, data can be collected from secondary or primary data sources. Secondary data are pieces of
information that have been collected prior to the
start of the focal research project. Secondary data
include external as well as internal data sources.
­Primary data, in contrast, are those data collected
to address specific research needs. Some common primary data collection methods include
focus groups, in-depth interviews, and surveys.
For our hypothetical fast-food scenario,
McDonald’s may decide to get relevant ­secondary
data from external providers such as National Purchase Diary Panel and Nielsen. The data might
include the prices paid for menu items, sales
­figures, sales growth or decline in the category,
MARKETING RESEARCH CHAPTER TEN
Marketing Analytics 10.1
The success of The Revenant, starring Leonardo DiCaprio,
­became evident soon after its release, with big box office numbers and nominations for prestigious awards. But Fox Studios
could have told us that, well before its release, because it
­implemented a new form of data collection that showed it that
audiences found the gritty tale compelling, such that they could
barely move in their seats or take their eyes from the screen.
The studio obtained this detailed, specific information not by
asking audiences, exactly, but by adopting a method that allowed
audiences’ physical reactions to give the studio the information.
Test audiences in four cities watched a prerelease version of
the movie while wearing a fitness tracker that the data analytics
firm Lightwave had developed. The tracker gauged their heart
rates (10 times per second), bodily movements, body temperatures, and skin conductivity (which signals whether a person’s
nervous system has taken over, as an automatic response to a
stimulus suggesting the need to fight or flee).
The resulting “hundreds of millions of rows of data” revealed exactly when audiences experienced the most excitement, which was mostly when something—bear, arrows,
hanging, live burials—threatens the life of the main character.
But they also thrill to see icy rivers and chase scenes through
majestic landscapes. Thus Lightwave could inform Fox Studios
that it had 14 separate “heart-pounding” moments in the film.
Furthermore, the massive data revealed that for nearly half
of the film’s relatively long running time of 156 minutes, audiences sat quite still, implying that they were transfixed by the
story being told on the screens in front of them. That is, rather
than wiggling impatiently in their seats or leaving to get a popcorn refill, they kept their eyes glued to the screen.
Combining these data with various other insights, including
ratings on review sites, some prognosticators asserted that
the key to victory, in the form of both awards acclaim and box
office revenues, is sparking strong emotional reactions—even
if those emotions tend to be negative. One consultancy took
these data to predict, in advance of the Academy Awards, that
The Revenant had a 64 percent chance of winning the Best
Picture Oscar, whereas it gave the actual winner, Spotlight,
only a 7.2 percent chance.
As this example shows, even massive amounts of research
and data cannot predict the future with complete accuracy.
Yet the response-tracking technology also informs product
­development phases, enabling studios to reedit or revise films
that fail to capture people’s attention. Similar devices also might
299
Big Data and a Big Bear: The Use of Bioanalytics
to Predict Box Office Revenues and Award
Changesi
Film studios use sophisticated marketing analytics, such as
bioanalytics, to track audiences’ physical reactions to films
such as The Revenant. The collected data are expected to
predict films’ success.
©Moviestore collection Ltd/Alamy Stock Photo
be used in other entertainment settings, from television shows
to concerts to sporting events. The resulting data would give
providers vast new insights into what gets people excited—and
what doesn’t—to help them better meet their d
­ emands. And
maybe pick up an Oscar or two in the process.
and advertising and promotional spending. McDonald’s is likely to gather pertinent data
about sales from its franchisees. However, it also wants competitor data, overall food consumption data, and other information about the quick-­service restaurant category, which it
likely obtains from appropriate syndicated data providers. Based on the data, it might decide
to follow up with some primary data using a survey.
No company can ask every customer his or her opinion or observe every customer,
so researchers must choose a group of customers who represent the customers of
300
Section Three TARGETING THE MARKETPLACE
i­nterest, or a sample, and then generalize their opinions to describe all customers with
the same characteristics. They may choose the sample participants at random to represent the entire customer market. Or they may choose to select the sample on the basis of
some characteristic, such as their age, so they can research how Millennials experience
buying Value Meals.
Marketing researchers use various methods of asking questions to measure the issues
they are tackling. In our hypothetical McDonald’s scenario, assume the research team has
­developed a questionnaire (see Exhibit 10.2), using a few different types of questions.
­Section A measures the customer’s experience in McDonald’s, Section B measures the customer’s experience in Wendy’s, Section C measures the customer’s habits at McDonald’s,
and Section D ­measures customer demographics.14
EXHIBIT
10.2
A Hypothetical Fast-Food Survey
Please Evaluate Your Experience at McDonald’s
A.
McDonald’s
McDonald’s food tastes good.
Strongly
Disagree
1
Disagree
2
Neither Agree
nor Disagree
3
Agree
4
Strongly
Agree
5
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
McDonald’s is clean.
McDonald’s has low prices.
B. Wendy’s
Wendy’s food tastes good.
Wendy’s has low prices.
â–¡
â–¡
â–¡
Strongly
Disagree
1
Disagree
2
Neither Agree
nor Disagree
3
Agree
4
Strongly
Agree
5
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
Wendy’s is clean.
â–¡
â–¡
â–¡
â–¡
â–¡
C. McDonald’s
Never
1–2 times
3–4 times
More than 5 times
I n the last month, how often did you order
­breakfast items at McDonald’s?
â–¡
â–¡
â–¡
â–¡
I f McDonald’s offered breakfast items all the
time, how often would you order them outside
of normal breakfast times in a typical month?
â–¡
â–¡
â–¡
â–¡
16 and under
17–24
25–35
36+
Male
Female
I n the last month, how many times have you
been to McDonald’s?
n average, how much do you spend each
O
visit at McDonald’s?
â–¡
â–¡
â–¡
â–¡
$
hat is your favorite item at
W
McDonald’s?
D. Please tell us about yourself
What is your age?
What is your gender?
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
MARKETING RESEARCH CHAPTER TEN
Adding Value 10.1
301
Did You Hit the Weights or Swim a Lap Today? Your
University Wants to Know—For a Good Reasonii
When universities and colleges announce the opening of a
new sports facility or recreational center, students might feel
reassured that their “student activity fees” have gone to good
use. But to prove it, the schools are stepping up their efforts
to learn exactly how and when students use these services,
which enables them to offer the elements that students demand as well as justify their capital expenditures.
By tracking student usage, the schools gather a wealth
of valuable data that inform their next steps. For example,
students at the University of Florida had begun complaining
that their activity fee was too high. When the school reviewed the data showing who was using its health facilities,
it realized that graduate students came around 7:00 a.m.,
when the gym opened, but undergraduates did not. When it
moved the opening an hour earlier to 6:00 a.m., undergraduates flooded the facility because they still had enough time
to get in a workout, shower, and make their early morning
classes. In addition, complaints about the fees dropped
off because the students believed they were getting their
money’s worth.
For North Carolina State University in Raleigh, the usage
data showed that far more students were taking fitness classes
than were joining intramural sports teams. Thus, the rec center
cut back the resources it allocated to intramurals and tripled
the number of fitness classes, making sure that it offered what
its students wanted, when and where they wanted it.
The GymFlow app available through the University of
­California Los Angeles shows school administrators how many
people are using each section of its gym at different times. In
addition, it tabulates exactly how many students and
­employees—43,734—visited the center in a year. With this information, UCLA was able to show critics that its expenditures
were worthwhile. For students, the same app reveals when
their favorite piece of equipment is being used by lots of ­others,
as well as when the quiet times are at the facility.
Research at North Carolina State University showed that
more students were taking fitness classes than were joining
intramural sports teams, so the university tripled the number
of fitness classes offered.
©Phovoir/Shutterstock
Purdue went a step beyond tracking usage to link exercise
with scholastic performance. When it built a $98 million facility, not everyone thought it was a good idea. But the university
was able to demonstrate that students who swiped their
ID cards to access the gym also earned higher grade point
averages than did students who never came to work out. In a
parallel study, a professor investigated the attitudes of participants in one of the gym’s kickboxing classes and found that
regular participants indicated substantially lower stress levels.
It might seem strange that a school would keep track of when
its students are running around the track. But in truth, the information it gathers is valuable for justifying its resource allocations as
well as determining future investments in services for students.
Marketing Research Process Step 4: Analyzing the Data
and Developing Insights
The next step in the marketing research process—analyzing and interpreting the data—
should be both thorough and methodical. To generate meaningful information, researchers
analyze and make use of the collected data. Adding Value 10.1 details how universities
leverage the data they gain from students’ uses of on-campus gyms and facilities to discover
new insights into both what students want and how the schools can help them succeed. In
this context, data can be defined as raw numbers or other factual information that, on their
own, have limited value to marketers. However, when the data are interpreted, they become
information, which results from organizing, analyzing, and interpreting data and putting
them into a form that is useful to marketing decision makers. For example, a checkout
scanner in the grocery store collects sales data about individual consumer purchases. Not
until those data are categorized and examined do they provide information about which
products and services were purchased together or how an in-store promotional activity
translated into sales.
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Section Three TARGETING THE MARKETPLACE
EXHIBIT
10.3
Survey Results for McDonald’s and Wendy’s
5
4
Wendy’s
3
McDonald’s
2
1
Cleanliness
Taste
Low price
For the McDonald’s example, we can summarize the results of the survey (from Exhibit 10.2) in
Exhibit 10.3. Both McDonald’s and Wendy’s scored
the same on the cleanliness of their restaurants, but
McDonald’s had lower prices, whereas Wendy’s
food tasted better. McDonald’s may want to improve
the taste of its food, without raising prices too much,
to compete more effectively with Wendy’s.
Marketing Research Process
Step 5: Developing and
­Implementing an Action Plan
In the final phase in the marketing research process, the analyst prepares the results and presents
them to the appropriate decision makers, who undertake appropriate marketing strategies. A typical marketing research presentation includes an executive summary, the
body of the report (which discusses the research objectives, methodology used,
and detailed findings), the conclusions, the limitations, and appropriate supplemental tables, figures, and appendixes.
In the McDonald’s hypothetical scenario, according to the research findings, the company is doing fine in terms of cleanliness (comparable to its competitors) and is perceived to have lower prices, but the taste of its food could be
improved. It also found that of those customers who purchased breakfast items
relatively frequently (at least three times per month), 35 percent would go for breakfast outside the normal breakfast times frequently. Also, of those who never
ordered breakfast items, 25 percent would order breakfast items outside the normal breakfast times occasionally (at least once a month). Using this analysis
and the related insights gained, McDonald’s might consider hiring some gourmet chefs as consultants to improve the menu and offerings. It then could highlight its efforts to improve the taste of the food and add desired offerings (e.g.,
breakfast items) through marketing communications and promotions. McDonald’s also should consider undertaking additional pricing research to determine
McDonald’s marketing research will show
whether its lower prices enhance sales and profits or whether it could increase
how to better compete against Wendy’s.
its prices and still compete effectively with Wendy’s.
©Michael Neelon/Alamy Stock Photo
Now let’s take a closer look at sources of secondary and primary data.
PROGRESS CHECK
1. What are the steps in the marketing research process?
2. What is the difference between data and information?
LO10-2
Describe the various
secondary data
sources.
SECONDARY DATA
A marketing research project often begins with a review of the relevant secondary data.
Secondary data might come from free or very inexpensive external sources such as census
data, information from trade associations, and reports published in magazines. Although
readily accessible, these inexpensive sources may not be specific or timely enough to solve
the marketer’s research needs and objectives. Firms also can purchase more specific or
applicable secondary data from specialized research firms. Finally, secondary sources can
be accessed through internal sources, including the company’s sales invoices, customer lists,
and other reports generated by the company itself.
MARKETING RESEARCH CHAPTER TEN
In political settings, such secondary data can be critical for candidates running for office. Both major political
parties thus have developed proprietary databases that
contain vast information about voters, broken down by
demographic and geographic information. Before a local
politician, canvasser, or poll taker even knocks on doors
in a neighborhood, he or she likely knows which houses
are inhabited by retirees, who has a subscription to The
Wall Street Journal or The New York Times, for whom the
residents said they voted in the last election, or whether
they served in the military. All these traits can give hints
about the voters’ likely concerns, which a good politician
can address immediately upon knocking on the door.
Such research also can dictate tactics for designing
broader campaign materials or to zero in on very specific
issues. Social media campaigns are a growing mechanism
used to interact with potential voters in a more timely
manner than is possible with more traditional methods.
Monitoring tweets after a major address by a candidate,
for instance, would provide instant feedback and direction
for future communications.
Secondary data are useful to politicians so they know who they
are talking to before they knock on any doors.
©Cathleen Allison/AP Photo
Inexpensive External Secondary Data
Some sources of external secondary data can be quickly accessed at a relatively low cost.
The U.S. Bureau of the Census (www.census.gov), for example, provides data about businesses by county and zip code. If you wanted to open a new location for a business you are
already operating, such data might help you determine the size of your potential market.
Often, however, inexpensive data sources are not adequate to meet researchers’ needs.
Because the data initially were acquired for some purpose other than the research question
at hand, they may not be completely relevant or timely. The U.S. Census is a great source of
demographic data about a particular market area, and it can be easily accessed at a low cost.
However, the data are collected only at the beginning of every decade, so they quickly
become outdated. If an entrepreneur wanted to open a retail flooring store in 2019, for
example, the data would already be nine years old, and the housing market likely would be
stronger than it was in 2010. Researchers must also pay careful attention to how other
sources of inexpensive secondary data were collected. Despite the great deal of data available on the Internet, easy access does not ensure that the data are trustworthy.
Syndicated External Secondary Data
303
Although the secondary data described previously are either free or inexpensively obtained,
marketers can purchase external secondary data called syndicated data, which are available
for a fee from commercial research firms such as IRI, the National Purchase Diary Panel, and
Nielsen. Exhibit 10.4 contains information about various firms that provide syndicated data.
Consumer packaged-goods firms that sell to wholesalers often lack the means to gather
pertinent data directly from the retailers that sell their products to consumers, which makes
syndicated data a valuable resource for them. Some syndicated data providers also offer information about shifting brand preferences and product usage in households, which they gather
from scanner data, consumer panels—and several other cutting-edge methods.
Scanner data are used in quantitative research obtained from scanner readings of Universal Product Code (UPC) labels at checkout counters. Whenever you go into your local
grocery store, your purchases are rung up using scanner systems. The data from these purchases are likely to be acquired by leading marketing research firms such as IRI or Nielsen,
which use this information to help leading consumer packaged-goods firms (e.g., ­Kellogg’s,
Pepsi, Kraft) assess what is happening in the marketplace. For example, a firm can use
­scanner data to determine what would happen to its sales if it reduced the price of its least
304
Section Three TARGETING THE MARKETPLACE
EXHIBIT
10.4
Syndicated Data Providers and Some of Their Services
Name
Services Provided
Nielsen
(www.nielsen.com)
With its Market Measurement Services, the company
tracks the sales of consumer packaged goods, gathered
at the point of sale in retail stores of all types and sizes.
IRI
(www.iriworldwide.com)
InfoScan store tracking provides detailed information
about sales, share, distribution, pricing, and promotion
across a wide ­variety of retail channels and accounts.
J.D. Power and ­Associates
(www.jdpower.com)
Widely known for its automotive ratings, it produces
quality and customer satisfaction research for a variety
of industries.
Mediamark Research Inc.
(www.mediamark.com)
Supplies multimedia audience research pertaining to
media and marketing planning for advertised brands.
National Purchase Diary Panel
(www.npd.com)
Based on detailed records consumers keep about their
purchases (i.e., a diary), it ­provides information about
product ­movement and consumer behavior in a variety
of industries.
NOP World
(www.nopworld.com)
The mKids US research study tracks mobile telephone
ownership and usage, brand affinities, and entertainment
habits of American youth between 12 and 19 years of age.
Research and Markets
(www.researchandmarkets.com)
Promotes itself as a one-stop shop for ­marketing research
and data from most leading publishers, consultants, and
analysts.
Roper Center for Public Opinion Research
(www.ropercenter.uconn.edu)
The General Social Survey is one of the nation’s
­longest running surveys of social, cultural, and political
indicators.
Simmons Market Research Bureau
(www.smrb.com)
Reports on the products American consumers buy, the
brands they prefer, and their lifestyles, attitudes, and
media preferences.
Yankelovich
(thefuturescompany.com/­products/us-­
yankelovich-monitor/)
The MONITOR tracks consumer attitudes, values, and
­lifestyles shaping the American marketplace.
popular product by 10 percent in a given month. In the test market in which it lowers the
price, do sales increase, decrease, or stay the same?
Panel data are information collected from a group of consumers, organized into panels,
over time. Data collected from panelists often include their records of what they have purchased (i.e., secondary data) as well as their responses to survey questions that the client
gives to the panel firm to ask the panelists (i.e., primary data). Secondary panel data thus
might show that when Diet Pepsi is offered at a deep discount, 80 percent of usual Diet
Coke consumers switch to Diet Pepsi. Primary panel data could give insights into what they
think of each option. We discuss further how marketing researchers use scanner and panel
data to answer specific research questions in the primary data section.
Overall, both panel and scanner data, as well as their more advanced methods gathered
through social media and online usage patterns, provide firms with a comprehensive picture
of what consumers are buying or not buying. The key difference between scanner research
and panel research is how the data are aggregated. Scanner research typically focuses on
weekly consumption of a particular product at a given unit of analysis (e.g., individual store,
chain, region); panel research focuses on the total weekly consumption by a particular person or household.
Internal Secondary Data
Internally, companies also generate a tremendous amount of secondary data from their
day-to-day operations. One of the most valuable resources such firms have at their disposal is their rich cache of customer information and purchase history. However, it can
MARKETING RESEARCH CHAPTER TEN
305
Syndicated external secondary data are acquired from scanner data obtained from scanner readings of UPC codes at checkout
counters (left) and from panel data collected from consumers that electronically record their purchases (right).
(Left): ©Glow Images/Getty Images; (right): ©Stephen Barnes/Bowline Images/Alamy Stock Photo
be difficult to make sense of the millions and even billions of pieces of individual data,
which are stored in large computer files called data warehouses. For this reason, firms
find it necessary to use data mining techniques to extract valuable information from their
databases.
Data mining uses a variety of statistical analysis tools to uncover previously unknown
patterns in the data or relationships among variables. Some retailers try to customize their
product and service offerings to match the needs of their customers. For instance, the UK
grocer Tesco uses its loyalty card to collect massive amounts of information about its individual ­customers. Every time a loyalty card member buys something, the card is scanned
and the store captures key purchase data specific to that member. But these specific data are
basically useless until Tesco mines and analyzes them to identify, for instance, three income
groups: upscale, middle income, and less affluent. With this mined information, Tesco has
been able to create appealing private-label product offerings for each group, according to
their preferences, and has begun targeting promotions to each customer according to his or
her income classification.
Data mining can also enable a home improvement retailer such as Lowe’s to learn that
25 percent of the time its customers buy a garden hose, they also purchase a sprinkler. With
such information, the retailer may decide to put the garden hoses next to the sprinklers in
the store. Outside the retail realm, an investment firm might use statistical techniques to
group clients according to their income, age, type of securities purchased, and prior investment experience. This categorization identifies different segments to which the firm can
offer valuable packages that meet their specific needs. The firm also can tailor separate
marketing programs to each of these segments.
By analyzing the enormous amount of information that they possess about customers,
companies have developed statistical models that help identify when a customer is dissatisfied with his or her service. Once the company identifies an unhappy customer, it can follow
up and proactively address that customer’s issues. By mining customer data and information, the company also reduces its churn levels. Churn is the number of participants who
306
Section Three TARGETING THE MARKETPLACE
discontinue use of a service, divided by the average number of total participants. With this knowledge, the company can focus on what it does best and improve potential
problem areas. Overall, firms hope to use data mining to
generate customer-based analytics that they can apply to
their strategic decision making and thereby make good
customers better and better customers their best. Adding
Value 10.2 examines how data mining is being used in the
restaurant industry.
Big Data
The field of marketing research has seen enormous changes
in the last few years because of (1) the increase in the
amounts of data to which retailers, service providers, and
manufacturers have access; (2) their ability to collect these
data from transactions, customer relationship management
(CRM) systems, websites, and social media platforms that
firms increasingly use to engage with their customers;15
(3) the ease of collecting and storing these data; (4) the
computing ability readily available to manipulate data in
real time; and (5) access to in-house or available software to
convert the data into valuable decision-­making insights
using analytic dashboards.
To specify this explosion of data, which firms have
access to but cannot handle using conventional data
­management and data mining software, the term big data
has arisen in the popular media. Leading firms such as
­Amazon, Netflix, Google, Nordstrom, Kroger, Tesco,
Macy’s, American Express, and Walmart already are conMarketers use data mining techniques to determine what items
verting their big data into customer insights—and the list
people buy at the same time so they can be promoted and
of firms keeps growing.16
­displayed together.
Amazon may be the poster child for big data. Any
©McGraw-Hill Education
Amazon shopper is familiar with its recommendation
engine, which notes what the consumer is purchasing,
analyzes purchase patterns by similar customers, suggests other items the customer might
enjoy, and indicates what other people who bought the focal item also added to their
­shopping carts.17 With more than 310 million active customers and billions of pieces
of shopping data,18 Amazon certainly qualifies as a big data user; its item-to-item collaborative filtering helps it determine which relevant products to suggest, generating almost onethird of its sales.19
The UK grocery retailer Tesco processes data for each of its products. With 3,500
stores, each stocked with an average of 40,000 products, that’s over 100 million data
points.20 Furthermore, each purchased product can feature up to 45 data attributes: Is it
Tesco’s own brand? An ethnic recipe? Exotic (e.g., star fruit) or basic (e.g., apple)? and so on.
On the basis of the attributes of the items customers purchase, Tesco filters them to define
who they are, who else lives in their household, and what hobbies they have, then provides
specific incentives that match these characteristics.21
To enable these efforts, firms such as SAP, Splunk, and GoodData offer a host of software solutions to help firms better integrate their data, visualize them, and then move from
data to real-time insights.22 The suite of options previously were available only to the largest
firms, but falling costs mean they are now more accessible to smaller firms.
The big data explosion also stems from the growth of online and social media. In
response, Google, Facebook, and Twitter all provide analytic dashboards designed to
help their customers understand their own web traffic. In particular, Google has developed ­tremendous marketing analytical capabilities that it makes available to partner
307
MARKETING RESEARCH CHAPTER TEN
Adding Value 10.2
A Big Meal and Some Big Data: The Expanding Uses of
Data Mining and Analytics in the Restaurant Industryiii
When Damian Mogavero, a restaurant group CFO, realized
the vast need for improved data analytics in the restaurant
sector, he decided to found a new kind of technology company, Avero. It is dedicated to helping approximately 40,000
restaurants around the world with their data needs. Specifically, Avero collects data from restaurants and provides them
with meaningful insights on everything from customer service
to menus. Its dedicated server mentoring program helps improve servers’ skills and ability. It also provides novel insights
into how weather might affect business, which food items are
selling the best, and which raw materials represent the most
expensive costs for each restaurant.
Although popular, Avero is just one of the many companies
offering advanced data analytics support for restaurants.
Other systems being developed for the restaurant industry
collect the vast information that diners provide with every
meal, including the types of food they prefer, with whom
they socialize, the time of day they like to eat, how often they
eat out rather than at home, and so on. Then they aim to make
recommendations for the restaurants to improve their service,
such as by ensuring a particular menu item is in stock on the
day and time that they can expect consumers to order it. By
also integrating information from consumers’ social media
pages, high-end restaurant managers and hosts can ensure
that they recognize diners on sight, and welcome them
­personally, even if they are not regular customers.
For consumers, such operations offer clear benefits. Being
known by restaurant staffers gives consumers a sense of importance. Furthermore, a vegetarian diner would not have to
listen to a long list of meat-oriented specials, for example, but
instead might receive information about alternative menu options that the chef could create. If the restaurant also uses
these data to enhance its operations, consumers likely would
enjoy shorter wait times and less chance of popular menu
items selling out before they can place their order. For the
restaurants, the benefits stem from their ability to provide
such services to customers. The results should include reduced operational costs, more streamlined service provision,
and increased sales.
But concerns persist, even among these benefits. For
consumers, these systems entail gathering substantial
amounts of data, with few means to opt out of providing that
information. If customers make a reservation and pay with a
credit card, the company has a lot of information already, and
they can do little to stop a restaurant manager from searching for their name online. Thus privacy concerns are paramount. For restaurants, in addition to being expensive, the
systems could lead to an overreliance on data, undermining
the personal touch that often leads to service success.
­Ultimately, personalized service requires a personal touch.
Yet that touch might become far more effective if it is underlain by advanced data analytics.
firms. Google helps firms attract ­c ustomer traffic to their sites through the use of
more relevant keywords, the purchase of Google AdWords, and better conversion
methods.23 Using Google Analytics, Puma has gained insights into which online content and products most engaged its web visitors, while also defining where these visitors lived. With these visitor behavioral data in hand, Puma has revised its website
(www.Puma.com) to be more dynamic and has created unique identifiers for its various product categories (e.g., PUMA Golf), targeting them in accordance with the
home region of the visitor.24
PROGRESS CHECK
1. What is the difference between internal and external secondary research?
PRIMARY DATA COLLECTION
TECHNIQUES
In many cases, the information researchers need is available only through primary data or
data collected to address specific research needs. Depending on the nature of the research
problem, the primary data collection method can employ a qualitative or a quantitative
research method. Marketing Analytics 10.2 highlights how Under Armour uses a variety of
quantitative data sources to inform its decisions.
LO10-3
Describe the various
primary data
­collection techniques.
308
Section Three TARGETING THE MARKETPLACE
The Under Armour Idea of “Connected
Fitness”iv
Marketing Analytics 10.2
With the goal of helping athletes—both professional and
weekend warriors—improve their performance, Under Armour seeks to leverage its extensive marketing research and
big data capabilities to track and suggest improvements to
people’s sleep, exercise, and eating habits. In this sense, it is
moving beyond functioning as a product company that sells
shoes and workout gear, to enter the marketing analytics
field to sell the promise of helping customers feel and perform better.
These options derive from a range of data that the company collects from consumers. For example, it purchased
several existing health tracking apps (e.g., Endomondo,
­
­MapMyFitness), integrating them under its in-house efforts. By
combining their capabilities, Under Armour allows its customers to track their sleep patterns, then combine that information with their precise performance on their runs the next
morning, for example. The combined data in turn can lead to
specific recommendations for how to maximize run time or
distance by altering the person’s approach to getting to sleep.
But these technology tools are not the only option Under
­Armour has for collecting customer data. It also uses extensive customer surveys that reveal notable insights. For example, a recent survey indicated that middle-aged male runners
(45–54 years) ran approximately 22 percent longer distances
than those between the ages of 18 and 24 years. But in addition, nearly half of the long-distance runners surveyed indicated that they struggled to motivate themselves to get started
on their runs.
Such research-based insights suggest new ways for Under Armour to interact with customers. For example, it can
encourage athletes to link their fitness apps with their
friends’, so that the running partners can encourage and
Under Armour is more than just an athletic clothing and
gear company. It adds customer value by using surveys and
data mining techniques to track and suggest improvements
to people’s sleep, exercise, and eating habits.
©Thearon W. Henderson/Getty Images
­ otivate each other. It can inspire more casual exercisers, by
m
showing them that even the most dedicated athletes sometimes struggle to get themselves out the door for an exercise
regimen. And it hopes to add location-based services soon,
such that it might recommend where people can stop on their
runs to grab a quick bite to eat or drink—establishing a kind
of motivation that sometimes is possible only through snacks.
The company firmly believes, based on its research, that
these sorts of services and benefits are what customers today are willing to pay for, and it’s betting its future on data,
rather than on sneakers.
As its name implies, qualitative research uses broad, open-ended questions to understand the phenomenon of interest. It provides initial information that helps the researcher
more clearly formulate the research objectives. Qualitative research is more informal than
quantitative research methods and includes observation, following social media sites,
­in-depth interviews, and focus groups (see Exhibit 10.5, left side).
Once the firm has gained insights from doing qualitative research, it is likely to engage in
quantitative research, which are structured responses that can be statistically tested. Quantitative research provides information needed to confirm insights and hypotheses generated via
EXHIBIT
10.5
Qualitative versus Quantitative Data Collection
Qualitative research
Observation
In-depth interviews
Focus groups
Social media
Quantitative research
Data
collection
research
Experiments
Survey
Scanner
Panel
309
MARKETING RESEARCH CHAPTER TEN
qualitative research or secondary data. It also helps managers pursue appropriate courses of
action. Formal studies such as specific experiments, surveys, scanner and panel data, or some
combination of these are quantitative in nature (see Exhibit 10.5, right side). We now examine each of these primary data collection techniques in order.
Observation
Observation entails examining purchase and consumption behaviors through personal or
video camera scrutiny, or by tracking customers’ movements electronically as they move
through a store. For example, researchers might observe customers while they shop or when
they go about their daily lives, taking note of the variety of products they use. Observation
can last for a very brief period of time (e.g., two hours watching teenagers shop for clothing
in the mall), or it may take days or weeks (e.g., researchers live with families to observe their
use of products). When consumers are unable to articulate their experiences, observation
research becomes particularly useful; how else could researchers determine which educational toys babies choose to play with or confirm details of the buying process that consumers might not be able to recall accurately?
Although traditionally firms might videotape customers’ movements, Microsoft’s
Kinect sensors are providing a less intrusive option. Discreetly embedded in aisles of retail
stores, the sensors provide three-dimensional spatial recognition. Thus retailers and their
suppliers can unobtrusively track the amount of time people spend in front of a shelf, which
products they touch or pick up, the products they return to shelves, and finally what they
add to their carts and purchase.25 The data gathered can be used to improve store layouts
because they can identify causes of slow-selling merchandise, such as poor shelf placement.
Microsoft has also created smart signage with Kinect sensors that displays different information depending on how far away the customer is to the sign.26 By studying customers’
movements, marketers can also learn where customers pause or move quickly or where
there is congestion. This information can help them decide if the layout and merchandise
placement is operating as expected, such as whether new or promoted merchandise is getting the attention it deserves.27
Observation may be the best—and sometimes the only—method to determine how customers might use a product; therefore it is useful for designing and marketing products.
Unilever has found success in developing countries by requiring managers to spend a
month living in a village during their first year with the company. By watching customers in
rural Thailand, Unilever recognized the fallacy of its assumption that the poorest consumers were interested in buying only necessities. So it worked with retailers to develop stores
that offer a wide variety of Unilever products as well as other services such as “food
­corners” and washing machines. Furthermore, its Platinum store initiative offers an
Using Microsoft Kinect ­sensors,
firms such as Shopperception
create heatmaps of shopper
interactions with the products
(touches, pickups, and returns).
The red represents the hot
zones where shoppers touch
the most, yellow less, and blue
not at all.
Source: Shopperception
310
Section Three TARGETING THE MARKETPLACE
By watching customers in rural
Thailand, Unilever recognized
the poorest consumers were
interested in more than just buying necessities, so it ­introduced
Sunsilk hair ­products, which are
available in many countries
throughout the world.
©Agencja Fotograficzna Caro/Alamy
Stock Photo
urban shopping experience to rural customers by offering more products, better ­layouts,
and ATMs.28
Social Media
Social media sites are a booming source of data for marketers. Marketers have realized that
social media can provide valuable information that could aid their marketing research and
strategy endeavors. In particular, contributors to social media sites rarely are shy about providing their opinions about the firm’s own products or its competitors’ offerings. If companies can monitor, gather, and mine these vast social media data, they can learn a lot about
their customers’ likes, dislikes, and preferences. They then might cross-reference such social
media commentary with consumers’ past purchases to derive a better sense of what they
want. Customers also appear keen to submit their opinions about their friends’ purchases,
interests, polls, and blogs.
Blogs in particular represent valuable sources of marketing research insights. Marketers
are paying attention to online reviews about everything from restaurants to running shoes to
recycling. The Truth About Cars blog is known for its unflinchingly objective reviews of various makes and models as well as discussions about the industry as a whole, marketing tactics, and global competition, among other topics.29 Analyzing the content of this and similar
blogs provides an excellent source of ideas and information for auto industry executives.
Another creative use of social media for marketing research involves building online communities for companies. Sephora’s virtual community (an online network of people who
communicate about specific topics), Beauty Talk, is a massive beauty forum. It allows customers to ask questions, join groups, live chat with other customers, get advice, and post
pictures wearing products. Uploaded customer photos are then linked to the product pages
of the featured products. Customers can also filter information based on their interests. This
community gives Sephora a lot of data about customer preferences and where the customers
need help, and allows the company to address many customer service issues. Therefore, the
community lowers customer service costs and heightens customer engagement.30
Noting these various opportunities and marketing research sources online, many
­companies—including Ford Motor Co., PepsiCo, Coca-Cola, and Southwest Airlines—have
added heads of social media to their management teams. These managers take responsibility for scanning the web for blogs, postings, tweets, or Facebook posts in which customers
­mention their experience with a brand. By staying abreast of this continuous stream of
MARKETING RESEARCH CHAPTER TEN
Sephora’s blog, Beauty Talk, is a valuable source of marketing research insights. This virtual
community allows customers to ask questions, join groups, live chat with other customers, get
advice, and post pictures.
Source: Sephora USA, Inc.
information, companies can gather the most upto-date news about their company, products, and
services as well as their competitors. These
social media searches allow companies to learn
about customers’ perceptions and resolve customer complaints they may never have heard
about through other channels.
The data gathered through the searches
also undergo careful analyses: Are customer
sentiments generally positive, negative, or neutral? What sort of intensity or interest levels do When Kraft considered the launch of its South Beach product line, it
they imply? How many customers are talking ­created a virtual community of health and wellness opinion leaders and
about the firm’s products, and how many focus women who wanted to lose weight.
instead on competitors’? This data analysis is ©Michael J. Hruby
understandably challenging, considering the
amount of data available online. However, monitoring consumer sentiments has grown
easier with the development of social media monitoring platforms.
Using a technique known as sentiment mining, firms collect consumer comments about
companies and their products on social media sites such as Facebook, Twitter, and online
blogs. The data are then analyzed to distill customer attitudes toward and preferences for
products and advertising campaigns. Scouring millions of sites by combining automated
online search tools with text analysis techniques, sentiment mining yields qualitative data
that provide new insight into what consumers really think. Companies plugged into this realtime information can become more nimble, allowing for quick changes in a product rollout
or a new advertising campaign.31 Another novel use of social media to collect marketing
information is to encourage or even pay people to share their activities in selfies, as Social &
Mobile Marketing 10.1 explains.
311
312
Section Three TARGETING THE MARKETPLACE
Social & Mobile Marketing 10.1
When marketers search for insights into how and when consumers use their products, they face a few seemingly insurmountable challenges. It is hard to gauge what consumers do
in the privacy of their own homes, because it isn’t as if a marketer can place a hidden camera in someone’s bedroom. They
can ask questions, but people often don’t tell the full truth
about what they do, whether because they’re embarrassed to
admit what their late-night snacks really consist of, or because
they just plain don’t remember how they go about the mundane task of brushing their teeth.
But that sort of behavioral information is exactly what marketing researchers need to be able to design new products
that can meet people’s actual needs, as well as to communicate with those users in the most effective ways. And here’s
where the selfie—that ubiquitous, popular, seemingly silly form
of communication—is making all the difference.
By paying consumers small fees to take selfies as they perform basic, mundane tasks, several service companies are enabling product firms to gain a totally new and far more accurate
view of what their customers are doing. For example, Crest
asked users registered with the site Pay Your Selfie to take
shots of themselves using various Crest-branded products. The
collection of thousands of pictures revealed a notable insight
that was totally new to Crest: A lot of people brush their teeth
between 4:00 and 6:00 p.m. Through a little more analysis with
some additional data, the company realized they were getting
ready to go out for social events after work. They wanted fresh
breath for happy hour! The insight has prompted Crest to initiate a completely new campaign to target and emphasize the
benefits of several of its products for just such purposes.
Other selfie requests by other clients of the data gathering
service involve other basic tasks, such as cleaning a bathroom
or buying a particular brand of candy bar in a store. When a
Canadian healthy fast-food chain asked users to depict themselves eating healthy snacks on the go, it was a little surprised
by just how many people snapped shots as they ate Snickers
bars. This evidence of consumer behavior and consumer perceptions showed the company that people’s definitions of
healthy are broader than it might have assumed. Snickers
might take note of the information as well. Evidently, people
see this candy as somehow healthier than other candy bars, a
benefit that it could readily leverage in its advertising.
In addition to traditional marketing insights, the selfie-based
data can help companies decide appropriate new locations
In‐Depth Interviews
Selfies as Data: Relying on a New
Form of Self-Reporting to Gauge
Consumer Behaviorv
Paying consumers to take selfies of themselves using
products provides new insights into how products
are used.
©franckreporter/E+/Getty Images
and market segments for their stores and products. For example, if people mostly show themselves consuming the firm’s
products in their offices, the company likely should expand
into business districts rather than near residential neighborhoods. When a call for selfies of people eating breakfast
showed that Millennial contributors were eating a lot of Pop
Tarts and Froot Loops, it seems likely that Kellogg’s reoriented
its advertising budgets to target these older buyers, rather
than the young children who have traditionally constituted its
target ­market.
The users who upload their selfies receive a relatively nominal payment: from about 20 cents to $1 for each verified picture. To be verified, the shot needs to complete the assigned
task and be visible and appropriate. That last criterion has
been an interesting challenge for some companies. As selfietakers become more and more comfortable with the idea of
sharing pictures of themselves performing their everyday
tasks, many of them are providing pictures in which toothpaste is running down their chins or they are only partially
clothed. Of course, that’s information that marketers can use
too: 11 percent of the men who participated in the toothpaste
task were not wearing shirts in their selfies. What might toothpaste producers learn from that sort of intimate information?
In an in-depth interview, trained researchers ask questions and listen to and record the
answers and then pose additional questions to clarify or expand on a particular issue. For
instance, in addition to simply watching teenagers shop for apparel, interviewers might
stop them one at a time in the mall to ask them a few questions, such as: “We noticed that
you went into and came out of Abercrombie & Fitch very quickly without buying anything. Why was that?” If the subject responds that no one had bothered to wait on her, the
MARKETING RESEARCH CHAPTER TEN
interviewer might ask a follow-up question like, “Oh? Has that happened to
you before?” or “Do you expect more
sales assistance there?”
In-depth interviews provide insights
that help managers better understand
the nature of their industry as well as
important trends and consumer preferences, which can be invaluable for developing marketing strategies. Specifically,
they can establish a historical context for
the phenomenon of interest, particularly
when they include industry experts or
experienced consumers. They also can
communicate how people really feel
about a product or service at the individual level. Finally, marketers can use
the results of in-depth interviews to
develop surveys.
In-depth interviews are, however, Although relatively expensive, in-depth interviews can reveal information that
would be difficult to obtain with other methods.
relatively expensive and time-consuming.
The interview cost depends on the ©wdstock/Getty Images
length of the interaction and the characteristics of the people included in the sample. If the
sample must feature medical doctors, for example, the costs of getting sufficient interviews will
be much higher than the costs associated with intercepting teenagers in a mall.
Focus Group Interviews
In focus group interviews, a small group of people (usually 8 to 12) come together for an intensive discussion about a particular topic. Using an unstructured method of inquiry, a trained
moderator guides the conversation according to a predetermined, general outline of topics of
interest. Researchers usually record the interactions by videotape or audiotape so they can
carefully comb through the interviews later to catch any patterns of verbal or nonverbal
responses. In particular, focus groups gather qualitative data about initial reactions to a new or
existing product or service, opinions about different competitive offerings, or reactions to marketing stimuli, such as a new ad campaign or point-of-purchase display materials.32
To obtain new information to help it continue its innovative success derived from its
introduction of low-sodium choices, Campbell Soup conducted extensive focus groups
with female shoppers who indicated they would buy ready-to-eat soups. The groups clearly
revealed the women’s top priorities: a nutritious soup that contained the ingredients they
would use if they made soup. They wanted, for example, white meat chicken, fresh vegetables, and sea salt. In addition, focus group participants were equally clear about what they
did not want, such as high ­fructose corn syrup, MSG, and other ingredients whose names
they could not even pronounce.33
The growth of online technology, as well as computer and video capabilities, have provided tremendous benefits for focus group research, which now often takes place online.
Online focus group firms offer a secure site as a platform for companies to listen in on focus
groups and even interact with consumers, without anyone having to travel. The client company not only saves costs but also gains access to a broader range of potential customers
who live in various neighborhoods, states, or even countries.
PROGRESS CHECK
1. What are the types of qualitative research?
313
314
Section Three TARGETING THE MARKETPLACE
EXHIBIT
10.6
Structured versus Unstructured Response
SHAMPOO STUDY
We are working for a consumer packaged-goods company and
are interested in understanding more about your shampoo usage.
1. What are the most important characteristics for choosing
a brand of shampoo?
Unstructured
Structured
Survey Research
2. Please
lease rate the importance of the following shampoo
attributes.
attributes
Very unimportant
Very important
Price
1
2
3
4
5
P
Fragrance
1
2
3
4
5
F
Ability
to clean
1
2
3
4
5
A
Dandruff control
1
2
3
4
5
Arguably the most popular type of quantitative primary collection method is a survey—a
systematic means of collecting information from people using a questionnaire. A
­questionnaire is a document that features a set of questions designed to gather information
from respondents and thereby accomplish the researchers’ objectives. Individual questions on a questionnaire can be either unstructured or structured. Unstructured questions
are open ended and allow respondents to answer in their own words. An unstructured
question like “What are the most important characteristics for choosing a brand of shampoo?” yields an unstructured response. However, the same question could be posed to
respondents in a structured format by providing a fixed set of response categories, such as
price, fragrance, ability to clean, or dandruff control, and then asking respondents to rate
the importance of each. Structured questions are closed-ended questions for which a discrete set of response alternatives, or ­specific answers, is provided for respondents to evaluate (see Exhibit 10.6).
Developing a questionnaire is part art and part science. The questions must be carefully designed to address the specific set of research questions. Moreover, for a questionnaire to produce meaningful results, its questions cannot be misleading in any fashion
(e.g., open to multiple interpretations), and they must address only one issue at a time.
They also must be worded in vocabulary that will be familiar
and comfortable to those being ­surveyed. The questions should
be sequenced appropriately: general questions first, more specific questions next, and demographic questions at the end.
Finally, the layout and appearance of the questionnaire must
be professional and easy to follow, with appropriate instructions in suitable places. For some tips on what to avoid when
designing a questionnaire, see Exhibit 10.7.34
Similar to focus groups, marketing surveys can be conducted
either online or offline, but online marketing surveys offer researchers the chance to develop a database quickly with many responses.
Web surveys have steadily grown as a percentage of all quantitative
surveys. Online surveys have a lot to offer marketers with tight
deadlines and small budgets.
Survey research uses questionnaires to collect primary
In particular, the response rates for online surveys are reladata. Questions can be either unstructured or structured.
tively high. Typical response rates run from 1 to 2 percent for
©Kayte Deioma/PhotoEdit
mail and 10 to 15 percent for phone surveys. For online surveys,
MARKETING RESEARCH CHAPTER TEN
EXHIBIT
10.7
315
What to Avoid When Designing a Questionnaire
Issue
Good Question
Bad Question
Avoid questions the respondent cannot easily or
accurately answer.
When was the last time you went to the
­grocery store?
How much money did you spend on
­groceries last month?
Avoid sensitive questions unless they are absolutely necessary.
Do you take vitamins?
Do you dye your gray hair?
Avoid double-barreled questions, which refer to
more than one issue with only one set of
responses.
1. Do you like to shop for clothing?
2. Do you like to shop for food?
Do you like to shop for clothing and
food?
Avoid leading questions, which steer respondents
to a particular response, irrespective of their true
beliefs.
Please rate how safe you believe a BMW is on
a scale of 1 to 10, with 1 being not safe and 10
being very safe.
BMW is the safest car on the road,
right?
Avoid one-sided questions that present only one
side of the issue.
To what extent do you believe fast food contributes to adult obesity using a five-point scale?
1: Does not contribute
5: Main cause
Fast food is responsible for adult obesity: Agree/Disagree
Source: Adapted from A. Parasuraman, Dhruv Grewal, and R. Krishnan, Marketing Research, 2nd ed. (Boston: Houghton
Mifflin, 2007), Ch. 10.
in ­contrast, the response rate can reach 30 to 35 percent or even higher in business-to-business research.35 It also is inexpensive. Costs likely will continue to fall as users become more
familiar with the online survey process. Results are processed and received quickly. Reports
and summaries can be developed in real time and delivered directly to managers in simple,
easy-to-digest reports, complete with color, graphics, and charts. Traditional phone or mail
surveys require laborious data collection, tabulation, summary, and distribution before anyone can grasp their results.
Diverse online survey software, such as Qualtrics, SurveyMonkey, and SurveyGizmo,
make it very easy to draft an online survey using questions from existing survey libraries. A
survey link can be sent easily in an e-mail to potential respondents or panelists as well as
posted on specific sites that are likely to attract the target audience or people who are willing
to perform online work. For example, ­Amazon’s Mechanical Turk website (www.mturk
.com/) offers a platform where developers can post surveys and connect them with workers
who will provide feedback.
Panel‐and Scanner‐Based Research
As noted previously, panel and scanner research can be either
secondary or primary. An example of the use of a panel to collect primary data would be Walmart’s subsidiary Asda, which
uses an online customer panel, called “Pulse of the Nation,” to
help determine which products to carry. Asda sends e-mails to
each participant with product images and descriptions of potential new products. The customers’ responses indicate whether
they think each product should be carried in stores. As an
incentive to participate, Asda enters respondents automatically
in a drawing for free prizes.36
Experimental Research
Experimental research (an experiment) is a type of quantitative research that systematically manipulates one or more
variables to determine which variables have a causal effect
on other variables. For example, in our earlier ­scenario, one
thing the hypothetical McDonald’s research team was trying
Walmart’s UK subsidiary Asda uses an 18,000-customer
panel, which it calls “Pulse of the Nation,” to help determine
which products to carry.
©David Levenson/Alamy Stock Photo
316
Section Three TARGETING THE MARKETPLACE
EXHIBIT
10.8
1
Hypothetical Pricing Experiment for McDonald’s
2
3
4
5
Total Cost of Units Sold
($300,000 Fixed Cost +
$2.00 Variable Cost)
Total ­Profits
(Col. 3 – Col. 4)
Market
Unit
Price
Market Demand
at Price (in Units)
Total ­Revenue
(Col. 1 × Col. 2)
1
$4
200,000
$800,000
$700,000
$100,000
2
5
150,000
750,000
  600,000
  150,000
3
6
100,000
600,000
500,000
100,000
4
7
50,000
   350,000
  400,000
   (50,000)
to determine was the most profitable price for a new menu combo item (hamburger,
fries, and drink). Assume that the fixed cost of developing the item is $300,000 and the
variable cost, which is primarily composed of the cost of the food itself, is $2. McDonald’s puts the item on the menu at four prices in four markets. (See Exhibit 10.8.)
In general, the more expensive the item, the less it will sell. But by running this experiment, the restaurant chain determines that the most profitable price is the second least
expensive ($5). These findings suggest some people may have believed that the most
expensive item ($7) was too expensive, so they refused to buy it. The least expensive
item ($4) sold fairly well, but McDonald’s did not make as much money on each item
sold. In this experiment, the changes in price likely caused the changes in quantities
sold and therefore affected the restaurant’s profitability.
Firms are also actively using experimental techniques on Facebook. Once a firm
has created its Facebook page, it can devise advertisements and rely on Facebook’s
targeting options to deliver those ads to the most appropriate customer segments. To
make sure the communication is just right, companies can experiment with alternative
versions and identify which advertisement is most effective. State Bicycle Co., a manufacturer in ­Arizona, similarly needed to determine what other interests its customers
had and who its main competitors were. Therefore, it tested a range of ads targeting
Using an experiment, McDonald’s would test the price of new menu items to determine which
is the most profitable.
©Mary Altaffer/AP Images
317
MARKETING RESEARCH CHAPTER TEN
10.9
EXHIBIT
Advantages and Disadvantages of Secondary and Primary Data
Type
Examples
Advantages
Disadvantages
Secondary
research
â–¡
â–¡
â–¡
â–¡
â–¡
â–¡
Census data
Sales invoices
Internet information
Books
Journal articles
Syndicated data
â–¡ S
aves time in collecting data because
they are readily available
â–¡ Free or inexpensive (except for
­syndicated data)
Primary
research
â–¡
â–¡
â–¡
â–¡
Observed consumer behavior
Focus group interviews
Surveys
Experiments
â–¡ S
pecific to the immediate data needs
and topic at hand
□ Offers behavioral insights ­generally not
available from ­secondary research
□ 
May not be precisely relevant to information
needs
â–¡ Information may not be timely
â–¡ Sources may not be original, and therefore
usefulness is an issue
□ 
Methodologies for collecting data may not
be appropriate
â–¡ Data sources may be biased
â–¡ Costly
â–¡ Time-consuming
â–¡ Requires more sophisticated training and
experience to design study and collect data
customers who searched for different bands (e.g., did more Arcade Fire or Passion Pit
fans click their link?) and other bicycle manufacturers. With this information, it devised
new contests and offerings on its own home page to attract more of the visitors who
were likely to buy. 37 Facebook tries to help its
­c orporate clients enhance their own customers’
engagement and inf luence through a variety of
options: check-ins, asking for customer comments,
sharing information with friends, and so on.38 It
measures all these forms of data, contributing even
further to the information businesses have about
their page ­visitors.
Advantages and Disadvantages of
Primary and ­Secondary Research
Now that we have discussed the various secondary
and primary data collection methods, think back
over our discussion and ask yourself what seem to be
the best applications of each and when you would
want to go to secondary sources or use primary collection methods. We can see that both primary data
and secondary data have certain inherent and distinct advantages and disadvantages. For a summary
of the advantages and disadvantages of each type of
research, see Exhibit 10.9.
PROGRESS CHECK
1. What are the types of quantitative research?
2. What are the advantages and
disadvantages of primary and
secondary ­research?
Facebook analytics help firms increase customer
­engagement.
Courtesy of True Digital Communications, www.truedigitalcom.com
LO10-4
Summarize the
­differences between
secondary data and
primary data.
318
LO10-5
Section Three TARGETING THE MARKETPLACE
Examine the
­circumstances in
which collecting
­information on
­consumers is ethical.
THE ETHICS OF USING
CUSTOMER INFORMATION
As we noted in Chapter 4, upholding strong business ethics requires more than a token
nod to ethics in the mission statement. A strong ethical orientation must be an integral
part of a firm’s marketing strategy and decision making. It is particularly important for
marketers to adhere to ethical practices when conducting marketing research. The American Marketing Association provides three guidelines for conducting marketing research:
(1) It prohibits selling or fund-raising under the guise of conducting research, (2) it supports maintaining research integrity by avoiding misrepresentation or the omission of
pertinent research data, and (3) it encourages the fair treatment of clients and suppliers.39 Numerous codes of conduct written by various marketing research societies all
reinforce the duty of researchers to respect the rights of the subjects in the course of
their research. The bottom line: Marketing research should be used only to produce
unbiased, factual information.
As technology continues to advance, the potential threats to consumers’ personal
information grow in number and intensity. Marketing researchers must be vigilant to
avoid abusing their access to these data. From charitable giving to medical records to
Internet tracking, consumers are more anxious than ever about preserving their fundamental right to privacy. They also demand increasing control over the information that
has been collected about them. A potentially troubling ethical issue is how the Roomba
robotic vacuums can collect information inside people’s homes, as discussed in Ethical &
Societal Dilemma 10.1.
Many firms voluntarily notify their customers that any information provided to
them will be kept confidential and not given or sold to any other firm. As more firms
adopt advanced marketing research technology, such as facial recognition software, they
also are working to ensure they receive permission from consumers. Facial recognition
software is used to detect individuals from a video frame or digital images.40 For example, Kellogg’s used facial recognition software to record participants’ faces as they
watched three different ads for its Crunchy Nut cereal. It then assessed when they
smiled or frowned and their overall positive versus negative response—but only after
those participants had agreed to be recorded. Kellogg’s was then able to promote the ad
that was most widely liked.41
Going even deeper than using facial recognition software, neuromarketing is the process of examining consumers’ brain patterns to determine their responses to marketing
communications, products, or services for the purpose of developing marketing tactics or
strategies.42 Such insights would be invaluable for marketers to discover what truly appeals
to consumers. For example, based on results of a series of neuromarketing studies, FritoLay discovered that shiny potato chip bags invoked feelings of guilt. Therefore, it switched
Pepsico
For PepsiCo’s Frito-Lay division, NeuroFocus tested women’s responses to Baked
Lay’s. The research helped shape an ad
campaign and new single-serve packaging.
Intel
To analyze the tech giant’s global
image, NeuroFocus tapped Chinese
and American brains.
California
Olive Ranch
CBS
NeuroFocus measured viewers’
responses to pilots and new
shows; of course its corporate
parent, Nielsen, measures how
many people are watching.
ESPN
Findings from neuromarketing
studies by NeuroFocus.
Advertisers want the best on-air
display they can get; NeuroFocus
helped the cable network make
its sponsor splashes more
noteworthy.
Which olive oil label
appealed most to consumers?
NeuroFocus tested several
options to find one
that set brains afire.
eBay
NeuroFocus helped its PayPal
division find a more refined
corporate identity than “safe,
simple, wow!”
MARKETING RESEARCH CHAPTER TEN
Ethical & Societal Dilemma 10.1
Many consumers leave their house in the morning to go to
work or school with their automatic vacuum turned on so that
when they arrive home, their floors are pleasantly clean and
dirt-free. But to function effectively, these robotic vacuums,
such as those sold by iRobot under the brand name Roomba,
must develop maps of the layout of people’s homes, so that
they can avoid bumping into walls or propel themselves down
hallways. Is there a privacy concern associated with devices
that “vacuum up” that sort of information?
The question became particularly salient when the chief executive of iRobot allegedly noted that the company was working on a
deal to share information about consumers’ homes with outside
companies such as Amazon or Google. The company quickly retracted the assertion, claiming that what the executive really
meant was that it may be possible, in the future and only with
customers’ consent, to share such information. But the genie was
out of the proverbial bottle. In response, observers expressed
their concerns that as a Roomba learns the layout of the house, it
can gather all sorts of other information too. It knows if there are
pets in the house, based on the amount of animal hair it encounters; it likely learns if there are children, according to whether it
bumps into a lot of toys. With such information, marketers could
target specific pet- or child-related offerings to customers. A
­ nother
opportunity could arise if the Roomba were able to discern that,
say, the dining room contained only two chairs. Marketers likely
would be very interested in such information because it could
prompt them to issue a good deal on a new dining room suite.
The overall layout of the home also might provide information about other consumer characteristics, such as an estimated income level. Combined with location information, these
data draw a quite accurate and detailed picture of the
­consumer—more detailed than some users might be comfortable sharing, whether with iRobot or the marketing partners
with which it might someday share the data.
319
Vacuuming Up More Than Dirt: The Information
Collected by Roomba and Its Potential Usesvi
Would you allow a Roomba vacuum cleaner to collect
information about the layout of your home, and then sell that
information to other companies?
©David Gabis/Alamy Stock Photo
Although iRobot is quick to assure users that it would
never share these data without permission, external observers note that the concerns go beyond immediate owners. If a
homeowner agrees to share her or his house’s layout, but
then sells the home, the information already has been shared.
The new owner may not agree to such dispersion of the information, but it already has taken place.
In response to such concerns, some customers are deciding to disconnect their vacuum from the Internet altogether.
But in turning off the Wi-Fi, they lose the ability to leverage
certain features offered by the app, such as remotely scheduling when it runs, customizing cleaning features, or being able
to control it through a smart home assistant.
Legal precedent has established that U.S. citizens have a
legitimate expectation of privacy within their own homes. But
what happens when they invite a robot to make a map of those
homes? Are their claims to privacy automatically subverted?
its packaging to matte bags and its potato chips sales grew.43 But as
anyone who has ever seen a science fiction movie can imagine, the
potential for abuses of such tools are immense. And a key question
remains: Do any consumers want marketers reading their brain waves
and marketing goods and services to them in a manner that bypasses
their conscious thoughts?
Several organizations, including the Center for Democracy &
Technology (CDT) and the Electronic Privacy Information Center
(EPIC), have emerged as watchdogs over data mining of consumer
information. In addition, the Federal Trade Commission plays an
important part in protecting privacy and requires companies to disclose their privacy practices to customers on an annual basis.44 However, as the U.S. federal government has failed to enact comprehensive
privacy laws for the Internet, ­several states are starting to consider
legislation. For example, 48 states, the District of Columbia, and several U.S. territories have laws requiring companies to notify customers in cases of security breaches.45 Although this may be good for the
consumer, companies will have to deal with adherence to a complex
patchwork of different privacy regulations across the country, making
business on the Internet harder to conduct.46
Using neuromarketing studies, Frito-Lay ­discovered
that shiny potato chip bags (right) invoked feelings of
guilt. Therefore, it switched its packaging to matte
bags (left) and its potato chips sales grew.
©McGraw-Hill Education/Evelyn Nicole Kirksey, photographer
320
Section Three TARGETING THE MARKETPLACE
PROGRESS CHECK
1. Under what circumstances is it ethical to use consumer information in
­marketing research?
2. What challenges do technological advances pose for the ethics of marketing
research?
bchsu_tt
Reviewing
Learning Objectives
LO10-1
LO10-2
Identify the five steps in the marketing research ­process.
The first step is to define objectives and research
ne…
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