FM.

indd 09/15/2014 Page v

Marketing
Research
Tenth Edition

Carl McDaniel, Jr.

Professor Emeritus
University of Texas at Arlington

Roger Gates
DSS Research
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Contents

PREFACE vii Big Data Analytic Firms 24

Specialized Service Suppliers 24
1 The Role of Marketing Research in Management Consumer and Industrial Corporate Marketing
Decision Making 1 Research Departments 25
Nature of Marketing 1 Research Suppliers 26
The Marketing Concept 2 Consumer Watch 26
Opportunistic Nature of Marketing Research 2 Consumer Buy 27
External Marketing Environment 2 Using Marketing Research—A Corporate
Marketing Research and Decision Making 3 Perspective 28
Marketing Research Defined 3 External Clients 28
Importance of Marketing Research to Internal Clients 29
Management 4 The State of the Marketing Research Industry 31
Understanding the Ever-Changing Marketplace 6 Marketing Research Ethics 32
Social Media and User-Generated Content 6 Ethical Theories 32
Proactive Role of Marketing Research 6 Research Supplier Ethics 33
Applied Research versus Basic Research 7 Client Ethics 36
Nature of Applied Research 7 Field Service Ethics 38
Decision to Conduct Marketing Research 8 Respondents’ Rights 38
Development of Marketing Research 11 Ethics and Professionalism 40
Inception: Pre-1900 11 Summary 42
Early Growth: 1900–1920 11 Key Terms 42
Adolescent Years: 1920–1950 11 Questions For Review & Critical Thinking 42
Mature Years: 1950–2000 12 Working the Net 43
The Connected World: 2000–2010 13 REAL-LIFE RESEARCH 2.1: Respondent Recruiters—
ERA of Big Data: 2010–Present 14 Clean Up Your Act 43
Summary 15 REAL-LIFE RESEARCH 2.2: Coke Juices up a Market
Key Terms 16 Test 44
Questions For Review & Critical Thinking 16
REAL-LIFE RESEARCH 1.1: Give Me a Coupon That I 3. Problem Definition, Exploratory Research, and the
Can Use Online! 17 Research Process 46
REAL-LIFE RESEARCH 1.2: Can Anyone Be a Market Critical Importance of Correctly Defining the
Researcher? 18 Problem 46
Recognize the Problem or Opportunity 47
2 The Marketing Research Industry and Research Find Out Why the Information Is Being Sought 48
Ethics 19 Understand the Decision-Making Environment with
Evolving Structure of the Marketing Research Exploratory Research 48
Industry 20 Use the Symptoms to Clarify the Problem 50
Organizations Involved in Marketing Research 20 Translate the Management Problem into a Marketing
Consumer and Industrial Goods and Services Research Problem 51
Producers 20 Determine Whether the Information Already
Governments and Universities 22 Exists 51
Media Companies 22 Determine Whether the Question Can Be
Custom Research Firms 22 Answered 52
Syndicated Service Firms 22 State the Research Objectives 52
Limited-Function Research Firms 23 Research Objectives As Hypotheses 52
Online and Mobile Tracking Firms 23 Marketing Research Process 53
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Creating the Research Design 54 Working the Net 89

Choosing a Basic Method of Research 55 REAL-LIFE RESEARCH 4.1: The Interesting and Curious
Selecting the Sampling Procedure 56 World of Nate Silver 90
Collecting the Data 56
Analyzing the Data 57 5. Qualitative Research 92
Writing and Presenting the Report 57 Nature of Qualitative Research 92
Following Up 58 Qualitative Research versus Quantitative Research 93
Managing the Research Process 58 Popularity of Qualitative Research 93
The Research Request 58 Limitations of Qualitative Research 94
Request for Proposal 59 Focus Groups 95
The Marketing Research Proposal 59 Popularity of Focus Groups 95
What to Look for in a Marketing Research Supplier 61 Conducting Focus Groups 96
What Motivates Decision Makers to Use Research Focus Group Trends 102
Information? 61 Benefits and Drawbacks of Focus Groups 104
Summary 62 Other Qualitative Methodologies 106
Key Terms 63 Individual Depth Interviews 106
Questions For Review & Critical Thinking 63 Projective Tests 110
Working the Net 64 Future of Qualitative Research 115
REAL-LIFE RESEARCH 3.1: Let’s Go Out to Eat! 64 Summary 116
APPENDIX 3A: A Marketing Research Proposal 69 Key Terms 116
Background 70 Questions for Review & Critical Thinking 117
Objectives 70 Working the Net 117
Study Design 70 REAL-LIFE RESEARCH 5.1: McDonald’s Listening Tour 117
Areas of Questioning 70
Data Analysis 71 6 Traditional Survey Research 119
Personnel Involved 71
Popularity of Survey Research 119
Specifications/Assumptions 71
Types of Errors in Survey Research 120
Services 71
Sampling Error 120
Cost 72
Systematic Error 121
Timing 72
Types of Surveys 125
Door-to-Door Interviews 125
4. Secondary Data and Big Data Analytics 73
Executive Interviews 125
Nature of Secondary Data 73 Mall-Intercept Interviews 125
Advantages of Secondary Data 74 Telephone Interviews 126
Limitations of Secondary Data 75 Self-Administered Questionnaires 128
Internal Databases 77 Mail Surveys 129
Creating an Internal Database 77 Determination of the Survey Method 131
Data Mining 77 Sampling Precision 131
Behavioral Targeting 78 Budget 133
Big Data Analytics 79 Requirements for Respondent Reactions 133
Defining Relationships 79 Quality of Data 133
The Big Data Breakthrough 79 Length of the Questionnaire 134
Making Big Data Actionable 81 Incidence Rate 134
Data Visualization 81 Structure of the Questionnaire 135
Battle over Privacy 81 Time Available to Complete the Survey 135
Geographic Information Systems 86 Summary 135
Decision Support Systems 87 Key Terms 136
Summary 88 Questions for Review & Critical Thinking 136
Key Terms & Definitions 89 REAL-LIFE RESEARCH 6.1: Pitney Bowes Places a
Questions For Review & Critical Thinking 89 Premium on Satisfaction 137
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7 Online Marketing Research—The Growth of Mobile One-Way Mirror Observations 175

and Social Media Research 139 Machine Observation 176
The Online World 140 Neuromarketing 176
Using the Internet for Secondary Data 140 Facial Action Coding Services (FACS) 179
Sites of Interest to Marketing Researchers 140 Gender and Age Recognition Systems 180
Newsgroups 140 In-Store Tracking 180
Blogs 143 Television Audience Measurement and Tracking 181
Online Qualitative Research 144 TiVo Targeting 182
Webcam Online Focus Groups 144 Cablevision Targeting 182
Improving Virtual Focus Groups with Symphony IRI Consumer Network 182
Telepresence 144 Tracking 183
Using Channel M2 to Conduct Online Your E-Reader Is Reading You 184
Focus Groups 145 Social Media Tracking 184
Using the Web to Find Focus Group Participants 146 Observation Research and Virtual Shopping 187
Online Individual Depth Interviews (IDI) 146 Summary 188
Marketing Research Online Communities Key Terms 189
(MROC) 147 Questions for Review & Critical Thinking 189
Online Survey Research 149 Working the Net 190
Advantages of Online Surveys 149 REAL-LIFE RESEARCH 8.1: Eating Well and Doing
Disadvantages of Online Surveys 150 Good 190
Methods of Conducting Online Surveys 152
Commercial Online Panels 154 9 Primary Data Collection: Experimentation and Test
Panel Recruitment 154 Markets 193
Respondent Participation 156 What Is an Experiment? 194
Panel Management 156 Demonstrating Causation 194
Mobile Internet Research— Concomitant Variation 194
The Future Is Now 157 Appropriate Time Order of Occurrence 195
Advantages of Mobile 157 Elimination of Other Possible Causal Factors 195
A Few Bumps at the Beginning 158 Experimental Setting 195
Designing a Mobile Survey 158 Laboratory Experiments 195
Social Media Marketing Research 159 Field Experiments 196
Conduction a Facebook Focus Group 160 Experimental Validity 196
Conducting Surveys 161 Experimental Notation 196
Summary 161 Extraneous Variables 197
Key Terms 162 Examples of Extraneous Variables 197
Questions For Review & Critical Thinking 162 Controlling Extraneous Variables 199
Woking the Net 163 Experimental Design, Treatment, and Effects 200
REAL-LIFE RESEARCH 7.1: Procter & Gamble Uses Its Limitations of Experimental Research 201
Online Community to Help Develop Scents for a New High Cost of Experiments 201
Product Line 163 Security Issues 201
Implementation Problems 202
8 Primary Data Collection: Observation 165 Selected Experimental Designs 202
Nature of Observation Research 165 Pre-Experimental Designs 202
Conditions for Using Observation 166 True Experimental Designs 204
Approaches to Observation Research 166 Quasi-Experiments 205
Advantages of Observation Research 168 Test Markets 207
Disadvantages of Observation Research 168 Types of Test Markets 210
Human Observation 169 Costs of Test Marketing 212
Ethnographic Research 169 Decision to Conduct Test Marketing 212
Mystery Shoppers 174 Steps in a Test Market Study 213
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Other Types of Product Tests 217 Considerations in Selecting a Scale 259

Summary 218 The Nature of the Construct Being Measured 259
Key Terms 218 Type of Scale 259
Questions For Review & Critical Thinking 219 Balanced versus Nonbalanced Scale 260
Working the Net 220 Number of Scale Categories 260
REAL-LIFE RESEARCH 9.1: Texas Red Soft Drinks 220 Forced versus Nonforced Choice 260
REAL-LIFE RESEARCH 9.2: Alcon 221 Attitude Measures and Management
Decision Making 261
10 The Concept of Measurement 222 Direct Questioning 261
Measurement Process 222 Indirect Questioning 262
Step One: Identify the Concept of Interest 223 Observation 262
Step Two: Develop a Construct 224 Choosing a Method for Identifying
Step Three: Define the Concept Constitutively 224 Determinant Attitudes 262
Step Four: Define the Concept Operationally 224 Summary 264
Step Five: Develop a Measurement Scale 226 Key Terms 264
Nominal Level of Measurement 226 Questions For Review & Critical Thinking 265
Ordinal Level of Measurement 227 Working the Net 265
Interval Level of Measurement 228 REAL-LIFE RESEARCH 11.1: Improving the Long-Term
Ratio Level of Measurement 228 Prognosis of Pharmaceutical Brands 266
Step Six: Evaluate the Reliability
and Validity of the Measurement 229 12 Questionnaire Design 271
Reliability 232 Role of a Questionnaire 271
Validity 234 Criteria for a Good Questionnaire 272
Reliability and Validity—A Concluding Comment 238 Does It Provide the Necessary
Summary 238 Decision-Making Information? 272
Key Terms 239 Does It Consider the Respondent? 273
Questions for Review & Critical Thinking 239 Does It Meet Editing and Coding Requirements? 273
Working the Net 240 Does It Solicit Information In An Unbiased Manner:
REAL-LIFE RESEARCH 10.1: Profiles on Women Questionnaire Design Process 275
Shoppers 240 Step One: Determine Survey Objectives, Resources,
and Constraints 275
11 Using Measurement Scales to Build Marketing Step Two: Determine the Data-Collection
Effectiveness 241 Method 276
Attitudes, Behavior, and Marketing Effectiveness 241 Step Three: Determine the Question Response
Link between Attitudes and Behavior 242 Format 281
Enhancing Marketing Effectiveness 243 Step Four: Decide on the Question Wording 287
Scaling Defined 243 Step Five: Establish Questionnaire Flow and
Attitude Measurement Scales 244 Layout 290
Graphic Rating Scales 244 Model Introduction/Opening 292
Itemized Rating Scales 245 Model Closing 292
Traditional One-Stage Format 248 Step Six: Evaluate the Questionnaire 293
Two-Stage Format 248 Step Seven: Obtain Approval of All Relevant
Rank-Order Scales 248 Parties 293
Paired Comparisons 250 Step Eight: Pretest and Revise 294
Constant Sum Scales 250 Step Nine: Prepare Final Questionnaire Copy 294
Semantic Differential Scales 250 Step Ten: Implement the Survey 295
Stapel Scales 252 Field Management Companies 296
Likert Scales 253 Impact of the Internet on Questionnaire
Purchase-Intent Scales 254 Development 297
Scale Conversions 257 Adapting to Mobile Device Questionnaires 300
Net Promoter Score (NPS) 258 Costs, Profitability, and Questionnaires 302
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Summary 304 Sampling Distribution of the Mean 337

Key Terms 304 Basic Concepts 338
Questions for Review & Critical Thinking 304 Making Inferences on the Basis of a Single
Working the Net 305 Sample 341
REAL-LIFE RESEARCH 12.1: Understanding Buyer Point and Interval Estimates 341
Behavior 305 Sampling Distribution of the Proportion 343
REAL-LIFE RESEARCH 12.2: Sonic Goes Mobile 307 Determining Sample Size 343
Problems Involving Means 343
13 Basic Sampling Issues 308 Problems Involving Proportions 345
Concept of Sampling 308 Determining Sample Size for Stratified
Population 309 and Cluster Samples 346
Sample versus Census 309 Sample Size for Qualitative Research 346
Developing a Sampling Plan 309 Population Size and Sample Size 346
Step One: Define the Population of Interest 310 Determining How Many Sample Units Are
Step Two: Choose a Data-Collection Method 312 Needed 350
Step Three: Identify a Sampling Frame 313 Statistical Power 350
Step Four: Select a Sampling Method 314 Summary 351
Step Five: Determine Sample Size 316 Key Terms 352
Step Six: Develop Operational Procedures for Selecting Questions For Review & Critical Thinking 352
Sample Elements 316 Working the Net 353
Step Seven: Execute the Operational REAL-LIFE RESEARCH 14.1: Concomm 353
Sampling Plan 317 REAL-LIFE RESEARCH 14.2: Building a Village 354
Sampling and Nonsampling Errors 318 SPSS Jump Start For Chi-Square Text 355
Probability Sampling Methods 318
Simple Random Sampling 319 15 Data Processing and Fundamental
Systematic Sampling 320 Data Analysis 358
Stratified Sampling 321 Overview of the Data Analysis Procedure 358
Cluster Sampling 323 Step One: Validation and Editing 359
Nonprobability Sampling Methods 325 Validation 359
Convenience Samples 325 Editing 362
Judgment Samples 325 Step Two: Coding 366
Quota Samples 326 Coding Process 367
Snowball Samples 326 Automated Coding Systems and Text
Internet Sampling 326 Processing 368
Summary 328 Step Three: Data Entry 372
Key Terms 328 Intelligent Entry Systems 373
Questions for Review & Critical Thinking 328 The Data Entry Process 373
Working the Net 329 Scanning 374
REAL-LIFE RESEARCH 13.1: The Research Group 329 Step Four: Logical Cleaning of Data 374
REAL-LIFE RESEARCH 13.2: Community Bank 330 Step Five: Tabulation and Statistical
Analysis 375
14 Sample Size Determination 331 One-Way Frequency Tables 375
Determining Sample Size for Probability Samples 331 Cross Tabulations 377
Budget Available 334 Graphic Representations of Data 379
Rule of Thumb 334 Line Charts 380
Number of Subgroups Analyzed 334 Pie Charts 381
Traditional Statistical Methods 335 Bar Charts 381
Normal Distribution 335 Descriptive Statistics 383
General Properties 335 Measures of Central Tendency 383
Standard Normal Distribution 336 Measures of Dispersion 384
Population and Sample Distributions 337 Percentages and Statistical Tests 386
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Summary 386 REAL-LIFE RESEARCH 17.1: Axcis Athletic Shoes 460

Key Terms 387 REAL-LIFE RESEARCH 17.2: Lambda Social Hotspot 461
Questions For Review & Critical Thinking 387 SPSS Exercises For Chapter 17 462
Working the Net 389
REAL-LIFE RESEARCH 15.1: Waffle World 389 18 Multivariate Data Analysis 464
REAL-LIFE RESEARCH 15.2: Tico Taco 390 Multivariate Analysis Procedures 464
SPSS Exercises for Chapter 15 391 Multivariate Software 466
Multiple Regression Analysis 468
16 Statistical Testing of Differences and Applications of Multiple Regression Analysis 469
Relationships 395 Multiple Regression Analysis Measures 470
Evaluating Differences and Changes 395 Dummy Variables 470
Statistical Significance 396 Potential Use and Interpretation Problems 471
Hypothesis Testing 398 Multiple Discriminant Analysis 472
Steps in Hypothesis Testing 399 Applications of Multiple Discriminant Analysis 473
Types of Errors in Hypothesis Testing 402 Cluster Analysis 473
Accepting H0 versus Failing to Reject (FTR) H0 403 Procedures for Clustering 473
One-Tailed versus Two-Tailed Test 403 Factor Analysis 476
Example of Performing a Statistical Test 404 Factor Scores 477
Commonly Used Statistical Hypothesis Tests 408 Factor Loadings 478
Independent versus Related Samples 408 Naming Factors 479
Degrees of Freedom 409 Number of Factors to Retain 479
Goodness of Fit 409 Conjoint Analysis 479
Chi-Square Test 409 Example of Conjoint Analysis 479
Hypotheses about One Mean 416 Considering Features Conjointly 480
Z Test 416 Estimating Utilities 481
t Test 417 Simulating Buyer Choice 482
Hypotheses about Two Means 421 Limitations of Conjoint Analysis 484
Hypotheses about Proportions 422 Big Data and Hadoop 484
Proportion in One Sample 422 Predictive Analytics 484
Two Proportions in Independent Samples 423 Using Predictive Analytics 485
Analysis of Variance (ANOVA) 425 Privacy Concerns and Ethics 487
P Values and Significance Testing 428 Commercial Predictive Modeling Software
Summary 429 and Applications 487
Key Terms 430 Summary 488
Questions For Review & Critical Thinking 430 Key Terms 488
Working the Net 432 Questions for Review & Critical Thinking 489
REAL-LIFE RESEARCH 16.1: Analyzing Global Bazaar Working the Net 490
Segmentation Results 432 REAL-LIFE RESEARCH 18.1: Satisfaction Research for Pizza
REAL-LIFE RESEARCH 16.2: AT &T Wireless 433 Quik 491
SPSS Exercises For Chapter 16 434 REAL-LIFE RESEARCH 18.2: Gibson’s Uses Predictive
Analytics 492
17 Bivariate Correlation and Regression 438 APPENDIX: Role of Marketing Research in the Organiza-
Bivariate Analysis of Association 438 tion and Ethical Issues 494
Bivariate Regression 439 SPSS Exercises For Chapter 18 496
Nature of the Relationship 439
Example of Bivariate Regression 441 19 Communicating the Research Results 499
Correlation for Metric Data: Pearson’s Product–Moment The Research Report 499
Correlation 452 Organizing the Report 501
Summary 458 Interpreting the Findings 502
Key Terms 458 Format of the Report 504
Questions For Review & Critical Thinking 458 Formulating Recommendations 504
Working the Net 460 The Presentation 505
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Making a Presentation 508 Measuring Marketing Research’s Return on Investment

Presentations by Internet 513 (ROI) 546
Summary 514 Summary 549
Key Terms 514 Key Terms 549
Questions For Review & Critical Thinking 514 Questions for Review & Critical Thinking 550
Working the Net 514 Working the Net 550
REAL-LIFE RESEARCH 19.1: The United Way 515 REAL-LIFE RESEARCH 20.1: Walther Research Deals with
REAL-LIFE RESEARCH 19.2: TouchWell Storefront Con- Managing Project Managers 550
cept and Naming Research 516 REAL-LIFE RESEARCH 20.2: Johnny Jets Drive-Ins 551

20 Managing Marketing Research 522

Marketing Research Supplier Management 523 APPENDIX ONE: Statistical Tables A-1
What Do Clients Want? 523
APPENDIX TWO: Considerations in Creating a
Consolidating the Number of Acceptable
Marketing Plan (Online)
Suppliers 525
Communication 525 APPENDIX THREE: Comprehensive Cases (Online)
The Key Role of the Project Manager 526
A Biff Targets an Online Dating Service for College
Managing the Research Process 527
Students A-14
Organizing the Supplier Firm 527
Data Quality Management 529 B Freddy Favors Fast Food and Convenience for College
Time Management 530 Students A-17
Cost Management 531
C Superior Online Student Travel—A Cut Above A-21
Client Profitability Management 532
Staff Management and Development 533 D Rockingham National Bank Visa Card Survey A-25
Managing a Marketing Research Department 535
ENDNOTES E-1
Allocating the Research Department Budget 535
Prioritizing Projects 536 GLOSSARY G-1
Retaining Skilled Staff 537
QSR SURVEY QSR-1
Selecting the Right Marketing Research Suppliers 538
Moving Marketing Research into a INDEX I-1
Decision-Making Role 540