eLearning Session

After completing this chapter, you should be able to:

1. Describe the basics of consumer research and have an understanding of available consumer behavior research techniques.
2. Explain the complexities in doing international consumer research.
3. Outline the steps in the research process.
4. Describe generally how to ask consumers questions.
5. Identify some of the changes that the Internet brings to consumer behavior research and some of the problems of evaluating secondary research.
6. Appreciate the ethical issues raised by market research.

• Learning about consumers is the key to implementing the marketing concept and exercising marketing imagination. The aim of this chapter is to introduce you to consumer research.
• Consumer behavior research is the systematic and objective process of gathering, recording, and analyzing data for aid in understanding and predicting consumer thoughts, feelings, and behaviors.
• With the globalization of markets, consumer research has assumed a truly international character, and this trend is likely to continue.
• The practical problems addressed by consumer behavior research range widely from those of organizations seeking to increase their customers' purchase frequency (see chapter 12) to those of advocacy organizations seeking to enlist increased support from their constituents.

• Random sampling (introduced in the 1940s) and telephone interviewing (introduced in the 1970s) revolutionized consumer research during the twentieth century.
• The consumer researcher of the twenty-first century will be affected by four important factors: speed, the Internet, globalization, and data overload.

1. Speed
• Speed is becoming increasingly necessary to provide consumer insight more rapidly. Many technologies and services have speeded up delivery of information.
• Market research companies increasingly emphasize speed, combined with international research capabilities.
2. The Internet
• Consumers and professionals increasingly have access to the Internet. This represents a new data collection tool that consumer researchers must master to stay competitive. The unprecedented speed and low cost of the Internet make greater use inevitable.
• Leaders of the most prominent online marketing research firms predict that based on current growth rates the online research segment could account for 50% of all marketing research revenue.
• However, researchers' enthusiasm for the medium is lessened by their concerns for protecting respondent privacy and other potential misuses of the technology.
3. Globalization
• Globalization of business is so profound that it has been described as the second Industrial Revolution. Globalization demands that consumer researchers have experience and knowledge about individual countries and international conditions. Researchers must have the ability to synthesize data from different countries and interpret the factors on which they are based.
• Globalization and the Internet are dramatically changing the face of consumer research. A local mistake translates into a global blunder nearly instantly. Globalization and the Internet have combined to create increased interest in standardizing both technical and ethical research procedures and reporting.
• ESOMAR is the World Association of Opinion and Marketing Research Professionals. Exhibit 3.1 displays the screen produced in the spring of 2000. This association unifies more than 4,000 members in 100 countries and provides information about global research practices.

Exhibit 3.1: ESOMAR (50.0K)

4. Data Overload
• Data overload is a reality for both consumers and professionals. Historically, managers faced the problem of insufficient information. Much has changed with the information revolution that has been driven by dramatic developments in computer and telecommunications technology including the Internet.
• While some struggle with collecting information in transitional economies, most organizations are more concerned with the dissemination and effective use of information within their organizations.
• A database is a collection of data and information describing items of interest. Data mining, which essentially involves "fishing" in large data sets using statistical concepts to glean useful information, is not new.
• Extracting useful information from large databases is quickly becoming the next wave for consumer researchers to ride.
• Decision-makers must consider the purpose and objective of a data mining project, implementation and integration problems, the type of data mining tools available, what form the output should take, and ease of use.

• Trend research seeks to understand broad societal and cultural factors that influence customer behavior.
• Although there are many different ways of learning about consumers, the focus of our attention is on describing different types of consumer research.
• Based on expenditures, about 40% of all marketing research is conducted in Western Europe, 39% in the U.S., and 9% in Japan, and the rest in transitional economies or the developing world.
• International consumer research includes two different kinds of research. First, it includes single-country consumer research-research carried out in a country other than the country of the research-commissioning organization. Second, international consumer research includes multi-country research-research conducted in more than one country with the intent of making comparisons.
• International consumer research presents challenges that arise out of political, legal, economic, social, and cultural differences between nations.
• We distinguish two different types of consumer research. Both basic and applied consumer research can be conducted in domestic, foreign, or mulit-cultural contexts. Basic consumer research attempts to expand the limits of knowledge about consumers. It is not concerned with the solution to any particular pragmatic problem. Applied consumer research is conducted when a decision must be made about a specific real-life problem.

• Whether consumer researchers are doing basic or applied research in domestic or foreign cultures, they engage in a research process in order to ensure that the consumer intelligence or understanding gained from the research effort is relevant, timely, efficient, accurate and ethical. The research is considered relevant if it anticipates the kinds of information that will be required bydecision-makers, scientists, or policy advocates. This is information that improves the quality of exchanges between organizations and their customers or stakeholders. Timely research is completed in time to influence decisions. Research efficiency means getting the best quality of research for the minimum expenditure and making sure the study is appropriate to the research context. Research is considered accurate (or valid) when the interpretation can account for both consistencies and inconsistencies in the data. An important way to improve accuracy is to incorporate multiple methods and perspectives in the research effort. Finally, careful attention to the research process can ensure that it is ethical-that it promotes trust, exercises care, observes standards, and protects the rights of all the participants in the research process.

1. Defining the Problem and Project Scope
• A general outline of the research process is shown in Exhibit 3.2. The research process begins by defining the problem and scope of the project. Very often it will require numerous conversations with decision makers, experts, and consumers before the problem can be precisely defined. An especially important part of problem definition is clarifying the boundaries of the study.

Exhibit 3.2: Outline of the Research Process (50.0K)

2. The Research Approach
• The second step of the research involves development of a research approach to the problem. This involves deciding what types of research are implied by the research objective.
• We can outline three basic types of research: exploratory (such as the basic research described above), descriptive, and casual. The three types of research have complementary roles; that is, each can contribute something to the overall research process.
• Casual research investigates a very specific relationship between two or more variables.
• Exploratory research seeks insights into the general nature of the problem, possible decision alternatives, or identification of relevant variables.
• Descriptive research is research designed to profile some aspect of the consumer environment.
3. The Research Design
• The third step in the research process is to formulate the researchdesign. A research design is a framework or blueprint for conducting the marketing research project. A research design includes deciding on the appropriate data collection method or methods. It also reports decisions about how to translate the research problem into specific measures (specific questions, observations, and stimuli), decisions about the sample plan, decisions about how to analyze the data, and a critical evaluation of what the payoff from the research is likely to be.
• Data collection methods can be divided into secondary and primary data collection approaches, and then each of these approaches can be further divided into several additional types.
• Secondary data are data that have already been collected for purposes other than the problem at hand. The data can be loaded quickly, easily, and inexpensively, and they should represent the starting point for any data collection effort. Because secondary data have been collected for purposes other than the problem at hand, they may lack accuracy, relevancy, and/or currency. Secondary data are especially important in the case of international consumer research because primary international research projects can work out to be very costly in terms of time and money.
• The United States Department of Commerce provides access to fast-breaking results related to trade and the economy. If you are trying to learn something about the United States a good place to start is. This site has links to 70 federal agencies that issue statistical data, and the site's search engine covers reports from the 14 major statistical agencies.

www.fedstats.com

• Of course, secondary data are collected in different formats in different countries and are in some cases not comparable. Using secondary data for multi-country research can be challenging if not impossible.
• Exhibit 3.4 outlines some primary data collection approaches, again including examples, uses, advantages, and disadvantages. Primary data collection is research carried out for a specific purpose. Compared to secondary data collection, primary data collection is difficult, expensive, and time-consuming. Primary data collection consists of both qualitative techniques and quantitative techniques.

Exhibit 3.4: Primary Data Collection Methods: Qualitative Techniques (50.0K)

• Qualitative techniques provide insights and understanding of a problem or topic rather than trying to quantify the data and apply some form of statistical analysis. Qualitative research typically relies on a small sample and should not be used to infer a population distribution. Analysis and interpretation of qualitative data is particularly challenging requiring skills of categorization, abstraction, comparison, integration, and so on. Qualitative techniques are gaining in popularity as consumer researchers attempt to stay in touch with global diversity and the demand for customization. Successful international consumer research is highly dependent on qualitative research.
• Observation, survey research, and experiments are other very important primary data collection techniques. They are overviewed in Exhibit 3.5. Observational techniquesrecord actual behavior (e.g., consumers eating spaghetti), or traces of actual behavior (e.g., an audit of spaghetti sauces, noodles and so on in the consumer's pantry). Observation may yield either qualitative or quantitative data.

Exhibit 3.5: Other Primary Data Collection Methods (50.0K)

• Survey research is probably the most popular way of collecting primary data. Surveys are usually conducted with the help of questionnaires, and question and responses are typically structured. There are a number of different ways surveys can be administrated including face to face, by telephone, mail and more recently fax, e-mail and the Internet. The advantages to the survey method are simple to administer, and coding, analysis, and statistical interpretation are relatively simple.
• Experiments are based on the principle of manipulating one or more variables (termed independent variables) and observing changes in some other variable or variables (termed dependent variables). Experiments are extremely useful for doing casual research, but they are extremely difficult to implement meaningfully in multi-country studies.
4. Fieldwork and Data Collection
• The fourth step in the research process is fieldwork or data collection employing some or all of the techniques outlined in Exhibits 3.5 and 3.6
• Proper selection, training, supervision, and evaluation of the field force helps to minimize data-collection errors.
• For example, research has found that inexperienced interviewers are more likely: to commit coding errors, mis-record responses, and fail to probe; have a difficult time filling respondent quotas; and have larger refusal rates and more "don't know" responses or unanswered questions.
5. Data Analysis and Interpretation
• The fifth step is data preparation and analysis or interpretation.
• In general, preparing data for interpretation includes editing, coding, transcription and verification of data.
• Analysis includes a broad range of techniques, both statistical and non-numerical.
• Organizations face the problem of drowning in data compiled from secondary sources, syndicated data, and exploratory, descriptive, and casual consumer research.
• Managers are often too busy to examine all the data available to them. In many cases, they lack the training that would enable them to interpret one or more of the specialized studies they receive.
• One response to this problem is to standardize formats. However, standardized formats make it difficult for managers to re-analyze data or modify reporting formats.
6. Report of Findings
• The final step of the project is generally a written and/or oral report describing the entire research process and presenting the results and major findings.
• Decision makers are likely to evaluate the report in terms of whether it addresses the problem, has a complete and understandable research design, uses appropriate research procedures and executes them correctly, provides a complete and objective interpretation, and clearly identifies the boundaries of the study and the generalizability of the findings.
• A marketing manager needs to know what the research means.
• Relevant decision-makers don't necessarily use even good research that is well reported. A major problem is the dissemination and use of the results of consumer research or "market intelligence," as it is sometimes called. Simplifying access, monitoring use of data sources by managers, and institutionalizing inter-functional teams of stakeholders to discuss how to use research results are just some of the ways organizations try to improve the dissemination and use of information.
7. Summary Features of the Research Process
• The research process is iterative.The initial research problem may be completely reformulated as the researcher learns more about the consumer from initial data collection efforts.
• The use of different methods and perspectives affects the research results.It is impossible to be completely objective. That's why it is so important to incorporate multiple approaches and perspectives in our research efforts. Very often researchers will find from observation that consumers behave in ways that are very different from how they report they behave in a questionnaire.
• No research is perfect.The researcher must constantly make trade-offs between the costs and benefits of conducting different types and amounts of research as well as different types of errors.

• One of the more important problems in data collection is the problem of how to ask research questions. Even if researchers collect data by observing behaviors, they generally want to be able to relate those behaviors to consumers' thoughts and feelings. To do this, they need to know how to ask questions.

1. The Importance of How You Ask the Question
• A critical principle of consumer research is "how you ask the question" that is very important.
2. Three Questions Researchers Should Ask About Research Questions
• First, can potential study participants understand the question?
• Researchers bring their own perspectives and biases to questions, and these perspectives can be very different from those of the respondent.
• Second, can potential study participants answer the question? Sometimes, the researcher will ask a question that the study participant can understand, but can't answer.
• Third, will potential study participants answer the question?Even if you ask a simple, non-sensitive question, you might not get an answer. More than a third of all Americans contacted routinely shut the door or hang up the phone on interviewer questions.
3. Specific Guidelines for Asking Questions
• Be Right Or Necessarily Suffer-the BRONS guideline for evaluating questionnaires. Brevity is the first important criterion. A good rule of thumb is to have questions contain 20 words or less (excluding answer categories). Relevancy is a second important criterion. Every question and every word in every question has a cost associated with it for all the participants. Relevancy in words and in questions is critical. Before including the question, the researcher needs to be sure that it's not just interesting, but it's interesting given the purpose and scope of the research. Objectivity is a third important criterion. There are three ways in which non-objectivity arises. First, questions may suggest an answer. Second, questions may have answer categories that are biased (unbalanced response categories). Finally, questions may be non-objective because they contain insufficient information so that respondents cannot make an informed choice. Nonambiguity is the fourth important criterion to insure good questions. Ambiguity can arise in two ways. Ambiguity arises when unfamiliar words are employed or when words have multiple meanings.
  Differences in familiarity and vocabulary are particularly relevant when study participants differ culturally from the researchers. Ambiguity also occurs in response categories. Avoiding ambiguous response categories is especially important for international consumer research. Qualitative research can help researchers understand what level and frequency of usage is normal. The fifth and final criterion is Specificity. The researcher wants to balance the information requirements of the manager with the abilities of study participants to answer a question.
• We have outlined only the essentials of how to ask questions. The researcher would also need to evaluate the research instrument or questionnaire to insure that it's appropriate in terms of sequencing, order, and other aspects of design.
4. Conducting International Consumer Research
• In developing theory, models, research questions and hypotheses it is important to remember that differences in the socio-cultural environment and other environmental factors may lead to differences in the formation of perceptions, attitudes, preferences, choices, and behaviors.
• Cross-national consumer research is especially difficult because the researcher is attempting to produce comparable data in two different countries. To collect comparable information, the researcher may have to use non-identical methods because of differences between the cultures. Good Practice 3.3 summarizes some important questions to ask when constructing a survey instrument for use in cross-cultural research.

Good Practice 3.3: Questions to Ask in Constructing Cross-Cultural Research Instruments (50.0K)

• Finding comparable words is an important problem is cross-cultural research and can lead to significant problems.
• Suggested, implied, or hinted meanings of words (connotative meanings) may differ between cultures. Differences in the connotative meaning of words can cause confusion about how to interpret responses to questions as well.
• Some very interesting cross-cultural research shows significant patterns of difference in reported customer satisfaction across cultures.
• Another problem is that respondents in various cultures may have different experiences with and fluency in research techniques.
• An even more profound problem is that most research techniques rely on collecting verbal information.
• Methods for collecting data and sampling techniques have to be carefully matched to the cultures. This means using data collection methods that have comparable levels of reliability.
• Sophisticated levels of cultural awareness become crucial when trying to conduct focus groups in a foreign culture.
5. Conducting Research on the Internet
• The Internet is a revolutionary tool that has the potential to change the nature of human interactions.
• Internet technology can change research in three major ways: Automate,Inform, and Transform (see Exhibit 3.6)."Automate" means that paper and pencil methods are replaced with electronic transactions or communications. Of course, it is also possible for organizations to try to solve consumer problems online, either with a cleverly designed web site or through e-mail communications. "Inform" means that the organization finds new ways to communicate (e.g., with customers). A researcher could include a "pop-up window" in a web-based survey to provide definitions and explanations for respondents who request such information. As a result of this information transfer, there should be less confusion, and consumers have a better chance of understanding the meaning of the words and concepts that appear on a data collection instrument. "Transform" means that a new industry is created or that the organization finds a completely new way to transact business. Virtual focus group interviews have the potential to revolutionize the research industry. A major advantage of the virtual (online) focus group is that the limitations of geography can be overcome.

EXHIBIT 3.6 INTERNET TECHNOLOGY AND CONSUMER BEHAVIOR RESEARCH
Image A (50.0K)
Image B (47.0K)

• Automation applications are usually the easiest changes to implement.
  Quite often this type of application results in considerable cost savings, as paper-and-pencil methods are replaced by electronic data storage. Nonetheless, these transforming opportunities are what make the Internet such a potentially revolutionary force in society. If a transforming application is successful, then the entire industry changes for good.
• In Exhibit 3.6, we also differentiate between three types of communication networks: Internet, Intranet, and Extranet. The Internet is well suited for communicating with a wide variety of stakeholders (e.g., customers, business partners, and stockholders). An organization can establish an Intranet to establish an intra-organizational network that enables people within the organization to communicate and cooperate with each other. Thus, the Intranet is essentially a fenced-off, mini-Internet within an organization. A firewall is used to restrict access so that people outside the organization cannot access the Intranet. An Extranet is designed to link buyer and supplier to facilitate greater coordination of common activities. Thus, an Extranet could link an organization with its alliance partners. It could link an organization with its suppliers or business customers. Communication is confined to the computers linking the two organizations. The Extranet is specialized to support partnership coordination.
• Thus, A. C. Nielsen could use an Extranet to send status reports to Ford Motor Company to describe the progress of a research project that has just gotten underway in California. Managers at Ford Motor could examine an electronic database as it accumulates.
6. Ethics in Consumer Research
• Globalization and technology have also contributed to increased attention to ethnical issues. When companies operate abroad they run up against all sorts of new moral issues and ethical standards that differ among countries.
• Today, big businesses normally have a corporate ethics officer, although such a job description barely existed a decade ago.
• Collecting, analyzing and using the results of consumer research raises a number of ethical issues. Many people are concerned that marketing is essentially a manipulative profession that collects information in order to induce consumers to buy things they neither want nor need. Others are concerned by researchers' erosion of privacy and corporate control of huge quantities of information about the private lives of individuals.
• As a result of these concerns, people around the world increasingly refuse to respond to requests for a information from polling organizations, market research firms, corporations and individual researchers.
• A number of unprofessional practices can be identified. Participants in research have a right to confidentiality unless they specifically waive this right.
• Another general obligation researchers owe people is that they not be deceived. Limited deception is a part of most consumer research. Several types of unacceptable lapses in the obligation to avoid deception can be identified. Perhaps the least of these problems concerns deceiving participants about the length of a research task.
• More serious is misidentification of the researcher or research sponsor. Worse still is sales prospecting and fund raising under the guise of surveys.
• Emerging technology creates ethical dilemmas. The creators of web sites may want to remember facts about a customer's visit to that site. Thus, many web sites include a feature called, "cookies"-a mechanism for remembering details of a single visit or storing facts between visits. A cookie is a small file (not more than 4k) stored on the consumer's hard disk by a web application. Thus, a cookie is a kind of instant (and automated) research that records details about consumer behavior. Some consumers do not like the fact that the creators of web sites are secretly monitoring their behavior. Such an intrusion is viewed as an invasion of privacy.