Essentials of Marketing Research

Second Edition

Joseph F. Hair, Jr.

Kennesaw State University

Mary F. Wolfinbarger
California State University-Long Beach

David J. Ortinau
University o f South Florida

Robert P. Bush
Louisiana State University at Alexandria

Me McGraw-Hill
Gravu
Hill Irwin
Contents

Part 1 The Role and Value of Marketing MARKETING RESEARCH DASHBOARD:

Research Information 1 RESEARCH AND DATA PRIVACY:
THE CHALLENGE 15
1 Marketing Research for Managerial Emerging Trends 16
Decision Making 2 CONTINUING CASE STUDY—
AN EXPLOSION OF DATA COLLECTION THE SANTA FE GRILL MEXICAN
TECHNIQUES 3 RESTAURANT 17
The Growing Complexity of Marketing MARKETING RESEARCH IN ACTION:
Research 4 CONTINUING CASE: THE SANTA
Marketing Planning and Decision Making 4 FE GRILL 18
Marketing Situation Analysis 5 Summary 20
Market Analysis 6 Key Terms and Concepts 20
Market Segmentation 6 Review Questions 21
Competitive Analysis 6 Discussion Questions 21
Marketing Strategy Design 7 Appendix: Careers in Marketing
Target Marketing/Market Research with a Look at Federal
Segmentation 7 Express 22
Positioning 7
New-Product Planning 2 The Marketing Research Process
7 and Proposals 24
Marketing Program Development 8
Product Portfolio Analysis 8 SOLVING MARKETING PROBLEMS
Distribution Decisions 8 USING A SYSTEMATIC PROCESS 25
Pricing Decisions 9 Value of the Research Process 26
Integrated Marketing Communications 9 Changing View of the Marketing
Executive Dashboards 9 Research Process 26
The Marketing Research Industry 10 Determining the Need for Information/
Types of Marketing Research Firms 10 Research 27
Changing Skills for a Changing Industry 11 MARKETING RESEARCH
Ethics in Marketing Research Practices 11 DASHBOARD—DECISION MAKERS
Ethical Questions in General Business AND RESEARCHERS: MANAGEMENT
Practices 11 DECISION MAKERS . . . MARKETING
Conducting Research Not Meeting RESEARCHERS... 28
Professional Standards 12 Overview of the Research Process 29
Abuse of Respondents 13 Transforming Data into Knowledge 30
Unethical Activities of the Interrelatedness of the Steps and
Client/Research User 14 the Research Process 31
Unethical Activities by the Phase I: Determine the Research Problem 31
Respondent 15 Step 1: Identify and Clarify
Marketing Research Codes of Ethics 15 Information Needs 31
 Contents XIII

Step 2: Define the Research Problem Internal Sources of Secondary Data 55

and Questions 34 External Sources of Secondary Data 56
Step 3: Specify Research Objectives CONTINUING CASE STUDY—USING
and Confirm the Information Value 35 SECONDARY DATA WITH THE ' <-
Phase II: Select the Research Design 36 SANTA FE GRILL 58
Step 4: Determine the Research • MARKETING RESEARCH
Design and Data Sources 36 DASHBOARD—TRIANGULATING
MARKETING RESEARCH SECONDARY DATA SOURCES 63
DASHBOARD—MEASURING Synthesizing Secondary Research
EFFECTIVENESS OF ONLINE for the Literature Review ' 64
ADVERTISING FORMATS 37 Developing A Conceptual Model 64
Step 5: Develop the Sampling- Variables, Constructs and
Design and Sample Size 37 Relationships 64
Step 6: Examine Measurement Relationships and Hypotheses 65
Issues and Scales 38 CONTINUING CASE: SANTA FE GRILL:
Step 7: Design and Pretest DEVELOPING RESEARCH QUESTIONS
the Questionnaire 38 AND HYPOTHESES 67
Phase III: Execute the Research Design 39 Hypothesis Testing 67
Step 8: Collect and Prepare Data 39 MARKETING RESEARCH IN ACTION:
Step 9: Analyze Data 39 THE SANTA FE GRILL MEXICAN
Step 10: Interpret Data to Create J
RESTAURANT ' 69
Knowledge 39 Summary 70
Phase IV: Communicate the Results 40 Key Terms and Concepts 71
Step 11: Prepare and Present the Review Questions 71
Final Report 40 Discussion Questions 71
Develop a Research Proposal 41
4 Exploratory and Observational Research
MARKETING RESEARCH IN ACTION:
Designs and Data Collection Approaches 74
WHAT DOES A RESEARCH PROPOSAL
THE CULTURE CODES 75
LOOK LIKE? , 42
Value of Qualitative Research 76
Summary ' 44
Overview of Research Designs 76
Key Terms and Concepts 45
Overview of Qualitative and Quantitative
Review Questions 45
Research Methods 77
Discussion Questions 46
Quantitative Research Methods 77
Qualitative Research Methods 78
Part 2 Designing the Marketing
Qualitative Data Collection Methods 80
Research Project 47
In-Depth Interviews 80
3 Secondary Data, Literature Reviews, Focus Group Interviews 82
and Hypotheses 48 Phase 1: Planning the Focus Group Study 84
MAKING THE MOST OF AN „ Phase 2: Conducting the Focus Group
INFORMATION-RICH ENVIRONMENT/ 49 Discussions 86
Value of Secondary Data and Literature Phase 3: Analyzing and Reporting
Reviews 50 the Results 88
Nature, Scope, and Role of Secondary Data 50 Advantages of Focus Group Interviews 88
Conducting A Literature Review 51 Observation Methods Used in Marketing
Evaluating Secondary Data Sources 52 Research 89
Secondary Data and the Marketing Unique Characteristics of Observation
Research Process 53 Methods 89
Internal and External Sources of Types of Observation Methods 89
Secondary Data 54 Selecting the Observation Method 91
XIV Contents

Benefits and Limitations of Key Terms and Concepts 125

Observation Methods 92 Review Questions 125
Other Qualitative Data Collection Methods 92 Discussion Questions 126
Ethnography 92
Netnography and Other Consumer-
Generated Media Research 93 Part 3 Gathering and Collecting
Case Study 93 Accurate Data 127
CONTINUING CASE STUDY—SANTA
FE GRILL MEXICAN RESTAURANT 94 6 Sampling: Theory and Methods 128
Projective Techniques 94 MOBILE WEB INTERACTIONS
MARKETING RESEARCH IN ACTION: EXPLODE 129
AN ETHNOGRAPHY OF NEWS USAGE Value of Sampling in Marketing
AMONG YOUNG ADULTS 96 Research 130
Summary 97 Sampling as a Part of the Research
Key Terms and Concepts 98 Process 130
Review Questions 99 The Basics of Sampling Theory 131
Discussion Questions 99 Population 131
Sampling Frame 131
5 Descriptive and Causal Research Designs 102 Factors Underlying Sampling Theory 131
MAGNUM HOTEL'S LOYALTY Tools Used to Assess the Quality
PROGRAM 103 of Samples • 132
Value of Descriptive and Causal CONTINUING CASE STUDY—
Survey Research Designs 104 THE SANTA FE GRILL 132
Descriptive Research Designs and Surveys 104 Probability and Nonprobability Sampling 133
Types of Errors in Surveys 105 Probability Sampling Designs 133
Sampling Errors 105 MARKETING RESEARCH
Nonsampling Errors 106 DASHBOARD—SELECTING A
Types of Survey Methods 106 SYSTEMATIC RANDOM SAMPLE
Person-Administered Surveys 107 FOR THE SANTA FE GRILL 135
Telephone-Administered Surveys 108 MARKETING RESEARCH
Self-Administered Surveys 111 DASHBOARD—WHICH IS
Selecting the Appropriate Survey Method 114 BETTER—PROPORTIONATELY OR
Situational Characteristics 114 DISPROPORTIONATELY STRATIFIED
Task Characteristics 115 SAMPLES? 137
Respondent Characteristics 116 Nonprobability Sampling Designs 138
Causal Research Designs 118 Determining the Appropriate ./^
The Nature of Experimentation 119 Sampling Design ' 139
MARKETING RESEARCH Determining Sample Sizes 139
DASHBOARD—USING ELECTRIC Probability Sample Sizes 140
SHOCK TO IMPROVE CUSTOMER .CONTINUING CASE STUDY—
SERVICE - 120 ' THE SANTA FE GRILL 140
Validity Concerns with Sampling from a Small Population 142
Experimental Research 120 Nonprobability Sample Sizes 142
Comparing Laboratory and Field MARKETING RESEARCH
Experiments 121 DASHBOARD—USING SPSS TO
Test Marketing 121 SELECT A RANDOM SAMPLE 142
MARKETING RESEARCH DASHBOARD: MARKETING RESEARCH
RIDERS FITS NEW DATABASE INTO DASHBOARD—SAMPLING
BRAND LAUNCH 122 AND ONLINE SURVEYS 143
Summary 124 Steps in Developing a Sampling Plan 143
 Contents xv

MARKETING RESEARCH IN ACTION: 8 Designing the Questionnaire 176

DEVELOPING A SAMPLING PLAN CAN SURVEYS BE USED TO DEVELOP
FOR A NEW MENU INITIATIVE UNIVERSITY RESIDENCE LIFE PLANS? 177
SURVEY 145 Value of Questionnaires in Marketing ' ^
Summary 146 Research 178
Key Terms and Concepts 147 Questionnaire Design 178
Review Questions 147 Step 1: Confirm Research Objectives 179
Discussion Questions 147 Step 2: Select Appropriate Data
Collection Method 179
7 Measurement and Scaling 148 Step 3: Develop Questions and Scaling 180
FAST FOOD, SIDE BY SIDE: MARKETING RESEARCH
RESTAURANT LOCATION DASHBOARD—"FRAMING" YOUR
AND LOYALTY 149 QUESTIONS CAN INTRODUCE BIAS! 183
Value of Measurement in Information Step 4: Determine Layout
Research 150 and Evaluate Questionnaire 184
Overview of the Measurement Process 150 MARKETING RESEARCH
What Is a Construct? 151 DASHBOARD—SMART
Construct Development 151 QUESTIONNAIRES ARE
Scale Measurement 153 REVOLUTIONIZING SURVEYS 189
Nominal Scales 153 Step 5: Obtain Initial Client Approval 191
' Ordinal Scales 153 Step 6: Pretest, Revise, and Finalize
Interval Scales 155 the Questionnaire 191
Ratio Scales 155 Step 7: Implement the Survey 192
Evaluating Measurement Scales 156 The Role of a Cover Letter 192
Scale Reliability 156 Other Considerations in Collecting Data 193
Validity 157 Supervisor Instructions 193
Developing Scale Measurements 158 Interviewer Instructions 194
Criteria for Scale Development .158 Screening Questions 194
MARKETING RESEARCH Quotas 194
DASHBOARD—BUSINESSES GET Call or Contact Records 194
AN ATTITUDE ADJUSTMENT MARKETING RESEARCH IN ACTION:
FROM GALLUP 161 DESIGNING A QUESTIONNAIRE TO
Scales to Measure Attitudes SURVEY SANTA FE GRILL CUSTOMERS 195
and Behaviors 161 Summary 200
Likert Scale 162 Key Terms and Concepts „ 201
Semantic Differential Scale 163 Review Questions •? 201
Behavioral Intention Scale 164 Discussion Questions 202
Comparative and Noncomparative
Rating Scales 166 Part 4 Data Preparation, Analysis,
Other Scale Measurement Issues •• 168 and Reporting the Results 203
Single-Item and Multiple-Item
Scales 168 9 Qualitative Data Analysis 204
Clear Wording 169 WIRELESS COMMUNICATION'S
MARKETING RESEARCH IN ACTION: IMPACT ON SOCIAL BEHAVIOR ' 205
WHAT CAN YOU LEARN FROM A Nature of Qualitative Data Analysis 206
CUSTOMER LOYALTY INDEX? 170 Qualitative versus Quantitative Analysis 206
Summary 172 The Process of Analyzing Qualitative Data 208
Key Terms and Concepts 173 Managing the Data Collection Effort 208
Review Questions 173 Step 1: Data Reduction 208
Discussion Questions 173 Step 2: Data Display 215
XVI Contents

Step 3: Conclusion Drawing/ Value of Statistical Analysis 260

Verification 216 Measures of Central Tendency 260
Writing the Report 220 MARKETING RESEARCH
Analysis of the Data/Findings 222 DASHBOARD—SPLITTING
Conclusions and Recommendations 223 THE DATABASE INTO SANTA FE'S
CONTINUING CASE STUDY- AND JOSE'S CUSTOMERS 262
SANTA FE GRILL: USING SPSS Applications—Measures
QUALITATIVE RESEARCH 224 of Central Tendency 262
MARKETING RESEARCH IN ACTION: Measures of Dispersion 263
HOTEL TRAVELERS' CHEERS AND SPSS Applications—Measures
JEERS AT THEIR EXPERIENCES 225 of Dispersion 264
Summary 226 Preparation of Charts 265
Key Terms and Concepts 227 How to Develop Hypotheses 266
Review Questions 227 MARKETING RESEARCH
Discussion Questions 228 DASHBOARD—STEPS IN
Appendix: Advertising's Second Audience: HYPOTHESIS DEVELOPMENT
Employee Reactions to Organizational AND TESTING 268
Communications 229 Analyzing Relationships of Sample
Data 268
10 Preparing Data for Quantitative Analysis 232
SCANNER DATA IMPROVES Sample Statistics and Population
UNDERSTANDING OF PURCHASE Parameters 268
BEHAVIOR 233 Choosing the Appropriate Statistical
Value of Preparing Data for Analysis 234 Technique 269
Validation 235 Univariate Statistical Tests 270
Editing and Coding 237 SPSS Application—Univariate
Asking the Proper Questions 237 Hypothesis Test 271
Accurate Recording ofAnswers 237 MARKETING RESEARCH
DASHBOARD—SELECTING
Correct Screening Questions 238
THE SANTA FE GRILL CUSTOMERS
Responses to Open-Ended Questions 238
The Coding Process 238 FOR ANALYSIS 272
MARKETING RESEARCH Bivariate Statistical Tests 272
DASHBOARD—DEALING WITH Cross-Tabulation 273
DATA FROM DATA WAREHOUSES 245 Chi-Square Analysis 275
Data Entry 246 Calculating the Chi-Square Value 275
Error Detection 246 SPSS Application—Chi-Square 276
Data Tabulation 246 Comparing Means: Independent . ''^
One-Way Tabulation 247 versus Related Samples 278
Descriptive Statistics 249 Using the t-Test to Compare
Graphical Illustration of Data 249 Two Means 279
MARKETING RESEARCH INACTION: SPSS Application—Independent
DELI DEPOT 252 Samples t-Test 279
Summary 256 SPSS Application—Paired
Key Terms and Concepts 256 Samples t-Test 280
Analysis of Variance (ANOVA) 281
Review Questions 256
SPSS Application—ANOVA 282
Discussion Questions 257
n- Way ANOVA 284
11 Basic Data Analysis for Quantitative SPSS Application—n-Way ANOVA 286
Research 258 Perceptual Mapping 289
DATA ANALYSIS FACILITATES Perceptual Mapping Applications in
SMARTER DECISIONS 259 Marketing Research 290
 Contents XVII

CONTINUING CASE STUDY— Summary 325

THE SANTA FE GRILL 290 Key Terms and Concepts 326
MARKETING RESEARCH IN ACTION: Review Questions 326
EXAMINING RESTAURANT IMAGE Discussion Questions 326
POSITIONS—REMINGTON'S
STEAK HOUSE 292 13 Communicating Marketing Research
Summary 298 Findings 328
Key Terms and Concepts 299 IT TAKES MORE THAN NUMBERS
Review Questions 299 TO COMMUNICATE 329
Discussion Questions 299 Value of Communicating Research
Findings 330
12 Examining Relationships
Marketing Research Reports 330
in Quantitative Research 302
MARKETING RESEARCH
DATA MINING HELPS REBUILD
DASHBOARD—CRITICAL THINKING
PROCTER & GAMBLE AS A GLOBAL
AND MARKETING RESEARCH 333
POWERHOUSE 303
Format of The Marketing Research
Examining Relationships between Variables 304
Report 333
Covariation and Variable Relationships 305
Title Page 334
Correlation Analysis 308
Table of Contents 334
Pearson Correlation Coefficient 309
Executive Summary 334
, SPSS Application—Pearson
Introduction • . 335
Correlation 309
Research Methods and Procedures 336
• Substantive Significance of the
Data Analysis and Findings 337
Correlation Coefficient 311
Conclusions and Recommendations 348
Influence of Measurement Scales
Limitations 349
on Correlation Analysis 311
Appendixes 350
SPSS Application—Spearman Common Problems in Preparing
Rank Order Correlation 311 the Marketing Research Report 350
SPSS Application—Calculating The Critical Nature of Presentations 351
Median Rankings / 312 Guidelines for Preparing the Visual
What Is Regression Analysis? 313 Presentation 351
Fundamentals of Regression Analysis 314 MARKETING RESEARCH IN ACTION:
Developing and Estimating the WHO ARE THE EARLY ADOPTERS
Regression Coefficients 315
OF TECHNOLOGY? 352
SPSS Application—Bivariate Regression 316 Summary 355
Significance 318 Key Terms and Concepts .y 355
Multiple Regression Analysis 318 review questions •' 356
Statistical Significance 319
Discussion Questions 356
Substantive Significance 319
SPSS Application—Multiple Regression 320 Glossary 357
MARKETING RESEARCH IN ACTION: Endnotes 373
THE ROLE OF EMPLOYEES IN Indexes 377
DEVELOPING A CUSTOMER
SATISFACTION PROGRAM 323