in this unit you will find -...

In this unit you will find

• Chapter 28 Marketing Research

• Chapter 29 Conducting Marketing Research

This ad for Town & Country Surf Designs in Hawaii targets a very specific demographic group. How do the images and style of the ad relate to that demographic group? What does the ad communicate?

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BUDGET Cost of SalesCost of PromotionIncome and Expenses

IMPLEMENTATION OrganizationManagementStaffing

STRATEGY PromotionPlacePriceProduct

ANALYSISSWOT

Economic

Socio-Cultural

Technological

Competitive

CONTROLEvaluation

Performance Measures

Performance Analysis

In this unit

Marketing Core Functions Marketing Information Management

Marketing research can analyze results by demographic factors, including income, age, and ethnicity. Begin the activity by thinking of five questions to ask your friends about why they buy a certain brand of jeans.

PRINT AD IMAGES

Log on to glencoe.com and go to the Marketing Essentials Online Learning Center (OLC). Find the WebQuest for Unit 9.

Marketing Internship Your client, a cosmetics firm, needs a customer analysis and recommendations on how to market its new line of personal grooming products for men.As you read, use this checklist to prepare for the unit project:✓ Choose at least one personal grooming product used by men. ✓ Do online research about the male grooming industry.✓ Go to local stores that sell grooming products for men and observe their displays and customers.

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590 UNIT 9 — MARKETING INFORMATION MANAGEMENT

C H A P T E R 28

Chapter ObjectivesAfter reading this chapter, you should be able to:

• Describe the purpose of marketing research

• Explain the characteristics and purposes of a marketing information system

• Identify procedures for gathering information using technology

• Identify the methods of conducting marketing research

• Discuss trends and limitations in marketing research

Market Talk Market research is the process

of obtaining the information needed to

make sound marketing decisions. A well-

known market research company is Nielsen

Media Research. The company specializes in

television audience research. In other words,

Nielsen fi nds out who watches what show,

where, and when. The heart of the company’s

national ratings is the Nielsen People Meter, an

electronic device placed on television sets in

more than 5,100 U.S. households.

Quick Think Name two ways the Nielsen

ratings can be used in marketing.

Marketing Research

EXPLORE THE PHOTO

Veer/Blend Images Photography

Chapter 28 — Marketing Research 591

ROLE PLAY Check your understanding of DECA performance indicators with the DECA activity in this chapter’s review. For more information and DECA Prep practice, go to the Marketing Essentials OLC through glencoe.com.

glencoe.com

DECA Events These acronyms represent DECA com-petitive events that involve concepts in this chapter:AAMADCASMBMDMBSM

EMDMFMALFMML HLMHMDM

MMSQSRMRFSMRMSSEM

SMDMTMDM

Performance Indicators The performance indicators represent key skills and knowledge. Relating them to the concepts explained in this chapter is your key to success in DECA competitive events. Keep this in mind as you read, and write notes when you fi nd mate-rial that helps you master a key skill. In these DECA competitive events, you should follow these perfor-mance indicators:• Describe the need for marketing information• Explain the nature and scope of the marketing-

information management function• Explain the role of ethics in marketing-information

management• Explain the nature of marketing research in a

marketing-information management systemSome events include these performance indicators:ADC Explain the use of databases in

organizing marketing information Design a database for retrieval of

information Use database for information analysisASM Identify information monitored for

marketing decision-makingBSM Identify research methods used to

evaluate the quality of business services

EMDM Explain the nature of data miningQSRM/RFSM Develop marketing-information

management systemSEM/SMDM Explain the need for sport/event marketing information Explain sources of secondary sport/

event information



What?

Who?

How?

Why?

MarketingResearch


Defining Marketing ResearchOne of the largest American sports shoe manufacturers

wants to introduce its new, best-selling shoe in overseas mar-kets. A famous basketball player in the United States wears the shoe, and a commercial shows him shooting hoops in locations around the world. The commercial is aired in three European countries and translated into each country’s official language. However, sales are disappointingly low. What went wrong?

THE MAIN IDEAMarketing research provides information to create a business plan, solve problems, and make decisions about products.

GRAPHIC ORGANIZERDraw this chart for taking notes about the main concepts of marketing research.

Go to the OLC through glencoe.com for printable graphic organizers, Academic Vocabulary definitions, and more.

READING GUIDE

OBJECT IVES• Describe the purpose of

marketing research

• Explain the characteristics and purposes of a marketing information system

• Identify procedures for gathering information using technology

KEY TERMS• marketing research

• marketing information system

• database marketing

• database

ACADEMIC VOCABULARYYou will find these words in your reading and on your tests. Make sure you know their meanings.• obtain

• overall

Predict Why do some businesses have almost immediate success while others fail miserably?

SECTION 28.1

BEFORE YOU READ

Marketing Information Systems

ACADEMIC STANDARDSEnglish Language ArtsNCTE 1 Read texts to acquire new information.

English Language ArtsNCTE 3 Apply strategies to interpret texts.

Analysis Compare

and contrast the terms

market and marketing research.



Even though the ad has a global focus, it does not have global appeal, at least not in Europe. Careful marketing research would have shown that basketball is not as popu-lar in Europe as it is in the United States. Few people purchased the shoe because few people related to the associated sport.

According to the Marketing Research Association, marketing research involves the process and methods used to gather information, analyze it, and report findings related to marketing goods and services. Information obtained through market-ing research is used to identify marketing opportunities, solve marketing problems, implement marketing plans, and monitor marketing performance.

Marketing research is most often used by companies to:

• Determine consumers’ attitudes and preferences

• Test product features • Determine market size and growth

potential • Learn about competitive products • Determine buying cycles • Understand how the company is

perceived by the public

Before developing a product, marketers conduct research to determine the product that customers want. The research mini-mizes potential losses when introducing the new product. Consumers accept only one out of every ten new products introduced into the marketplace; therefore, gaining information about consumer likes and dis-likes is important.

Why Is Marketing Research Important?

Businesses that do not pay attention to what consumers are buying and why are likely to make costly marketing mistakes.

The information obtained from research helps businesses increase sales and profits. Research answers questions about what prod-ucts to produce, at what price to sell the prod-ucts, who will buy the products, and how the products will be promoted.

Research also helps businesses solve mar-keting problems and gauge the potential of new product ideas. For example, Stouffer’s spent almost 13 years doing marketing research and development before starting its Lean Cuisine product line. Stouffer’s studied consumers’ interest in health and dieting. They conducted consumer panels to find out what dieters liked and disliked about diet meals. Using the information, the company developed its product, tested its package design, and held pilot sales of the product in several large cities before national distribu-tion. The product was a tremendous success, with more than $125 million in sales after the first year of national distribution.

Research also helps a company keep track of what is happening with its current markets. Through research, a company can determine its major competitors, what its competitors are offering, which products consumers pre-fer, and if customers are are satisfied with those products.

Who Uses Marketing Research?Small businesses usually do not have

separate research specialists or departments. There, marketing research is done informally by the owners, managers, or employees, or they hire outside service providers who spe-cialize in market research. Larger companies often have in-house research departments and marketing personnel to plan and con-duct marketing research. But even larger companies sometimes contract with outside research companies because of their spe-cialized expertise. It is estimated that $6.2 billion was spent in 2001 on marketing research conducted in the United States by the largest 180 marketing research firms and in-house groups.

Defi ne What is marketing research?

594 UNIT 9 — MARKETING INFORMATION MANAGEMENT glencoe.com

Trade associations representing various man-ufacturers, wholesalers, and retailers conduct marketing research. Industry trade associations, such as the National Retail Federation, collect industry data to help their members under-stand the markets for their products.

Nonprofit organizations, such as hospi-tals, conduct patient satisfaction surveys to improve on programs and services.

Marketing Information Systems The data collected in marketing research

must be sorted and stored so that the results

can be put to good use. Many businesseshave sophisticated marketing information systems to organize, collect, and store mar-keting research data for future decisions. Amarketing information system is a set of procedures and methods that regularly gener-ates, stores, analyzes, and distributes informa-tion for use in making marketing and other business decisions. Most marketing informa-tion systems rely heavily on data about cur-rent customers, overall product sales reports, and inventory levels. Marketers use marketing information systems in many ways, including designing advertising campaigns, developing promotional plans, and selling directly to cus-tomers. Data that should be part of a market-ing information system include:

• Customer profile data, such as the results of previous marketing studies regarding buying behavior, shopping patterns, customer demographics, and lifestyles research

• Company records, such as sales results, expenses, supplier data, and production schedules

• Competitors’ records, such as their prices, products, and market share

• Government data, such as price trends, new regulations and laws, and future projections for the economy

• Marketing research reports that are produced and sold by research firms

Database Marketing Information technologies have made the

collection and analysis of data for decision making much easier. Database marketing, or customer relationship management (CRM), is a process of designing, creating, and man-aging customer lists. These customer lists contain information about individuals’ char-acteristics and transactions with a business. Customer lists are developed from customer touch points such as face-to-face sales, direct-mail responses, telephone or e-mail purchases, service requests, or Web site visits. Marketing lists can also be obtained through third-party companies that specialize in selling databases

Go to the Marketing Essentials OLC through glencoe.com to find an activity about ethics and marketing research.

Is Jason’s behavior ethical? If Manuel decides to keep telling the truth, what should he do when he and Jason submit their results to their bosses?

Fun Foods has hired Manuel’s marketing firm to learn what 20- to 30-year-old women want in a nutrition bar. Manuel’s bosses have written a 20-minute marketing survey and sent him and his colleague, Jason, to the mall to interview young women. But when Manuel tells shoppers how long the sur vey will take, they don’t want to participate.

Misleading RespondentsJason has had no trouble finding women to interview. When they take their lunch break, Manuel asks Jason the secret of his success. Jason says, “I say the survey will take only five minutes. When they realize more than ten minutes have gone by and they look uneasy, I tell them we’re almost done.”



Problem Solving: Percents A percent is a ratio that com-pares values to 100. A percent can also be thought of as a part of a whole. When figuring what percentage a value is of another value, divide the part by the whole. This gives the decimal equivalent of the percent.1. To solve this problem, divide $10.5

billion by the total amount spent on marketing research to get the deci-mal equivalent of the percent.

2. Multiply the decimal number by 100 to get the percent it represents.

For help, go to the Math Appendix located at the back of this book.

Chapter 28 — Marketing Research 595glencoe.com

of names and addresses to specific markets.Once a customer list is developed, it can be used for locating, selecting, and targeting cus-tomers with special programs and services.

Ways To Collect Data Many businesses create programs to assist

in data collection by furnishing “valued cus-tomer cards,” which add the customer’s infor-mation to the purchase. Customers complete an application, which entitles them to special rewards. Over time, the store collects data on purchases and analyzes it to better understand demographics and purchase behavior.

Consumer Databases Information about consumers and their

buying habits are stored in computer data-bases. A database is a collection of related information about a specific topic. For exam-ple, REI, an outdoor recreational products

retailer, has a database of people to whom it sends its catalogs. American Express main-tains a database of its card members and their addresses, plus what they buy, where they buy it, where they eat out, and how much money they spend. The company uses the informa-tion to send their card members special offers on products, hotels, restaurants, and travel.

Many companies that collect information about their customers often sell that informa-tion to others. Banks that provide mortgage loans often share the names and addresses of the borrowers with insurance companies that then send information about mortgage insurance to the borrower. This exchange of information among businesses has led to complaints of invasion of privacy.

Consumer Privacy The government has regulations regarding

protecting the privacy of consumers. Banks offer detailed privacy statements that ensure the protection of clients’ personal informa-tion. Other businesses offer clients the choice of being added to mailing lists.

Key Terms and Concepts 1. Why is marketing research important? 2. Besides individual businesses, who else conducts marketing research? 3. What is a marketing information system?

Check your answers at the Marketing Essentials OLC through glencoe.com.

Academic SkillsMath

4. According to the European Society for Opinion and Marketing Research, $16 billion was spent on marketing research in 2003. The world’s top 25 marketing research companies had total revenues of $10.5 billion. What percentage of the overall research dollars does this represent?

Social Studies/Communication

5. Use the Internet, school media center, or local library to investigate the concept of customer relationship management (CRM). Write a one-page paper on the benefits of business-to-consumer relationships and the specific strategies that can be used to establish them.



Quantitative Research1.2.

Quantitativeand

QualitativeResearch

Qualitative Research1. Attitude Research2.


Types of Marketing ResearchThe type of research businesses conduct depends on the

problem that they are trying to solve. Quantitative research answers questions that start with “how many” or “how much.” This type of research usually gathers information from large numbers of people. Quantitative research relies heavily on sur-veys or questionnaires to obtain information.

THE MAIN IDEAUsing more than one type of research can improve a business’s ability to solve problems and successfully market a product.

GRAPHIC ORGANIZERDraw this chart to note the differences between quantitative research and qualitative research.

Go to the OLC through glencoe.com for printable graphic organizers, Academic Vocabulary definitions, and more.

READING GUIDE

OBJECT IVES• Identify the methods of

conducting marketing research

• Discuss trends and limitations in marketing research

KEY TERMS• quantitative research

• qualitative research

• attitude research

• market intelligence

• media research

• product research

ACADEMIC VOCABULARYYou will find these words in your reading and on your tests. Make sure you know their meanings.• anticipate

• associate

Predict What would happen if marketing research was not used in product development?

SECTION 28.2

BEFORE YOU READ

Types, Trends, and Limitations of Marketing Research

ACADEMIC STANDARDSEnglish Language ArtsNCTE 1 Read texts to acquire new information.

English Language ArtsNCTE 3 Apply strategies to interpret texts.

Predict What kinds

of marketing research

do successful

businesses conduct?



Qualitative research focuses on smaller numbers of people (usually fewer than 100) and tries to answer questions about “why” or “how.” This type of research relies heavily on in-depth interviews, rather than surveys that have been constructed ahead of time. Most marketing research combines quantitative and qualitative methods. (See Figure 28.1 for a breakdown of money spent on market research in the United States.)

Research is not limited to products; it is also conducted to answer questions about attitudes and behaviors, market segments, advertising media, brands, prices, employees, and every other aspect of marketing. (See Figure 28.2 on page 598.)

Attitude ResearchAttitude research, also known as opin-

ion research, is designed to obtain information on how people feel about certain products, ser-vices, companies, or ideas. Satisfaction studies conducted by mail surveys or telephone inter-views are the most common ways to get at individuals’ opinions. Customers are usually

asked to rate “how satisfied” they are with a product or service they purchased or used.

Opinion polls are another example of attitude research. The Gallup Organization conducts opinion polls on politics, elections, business and the economy, social issues, and public policy. Based on random samples of the population, opinion poll results can be generalized to the entire population. A busi-ness considering a major expansion might be interested in the attitude of the general population toward the economy.

Consumer panels, also called focus groups, are groups of people who are questioned to provide information on research issues.

Market IntelligenceMarket intelligence is concerned with

the size and location of a market, the compe-tition, and the segmentation within the mar-ket for a particular product or service. Existing market data and new research are used to assemble a profile of present and potential customers, competitors, and the overall indus-try. Market intelligence helps define potential

28.1 U.S. Market Research Spending by Category

Go to the Marketing Essentials OLC through glencoe.com to find a project on marketing research spending.

• How Marketing Research Dollars Are Spent In 2001, syndicated spending represented the largest segment of

U.S. marketing research expenditures.

What type of research is represented by the survey segment in this figure?

Source: Marketing News Supplement, June 11, 2002

SegmentAnnual Spending

($ million) Percent of TotalPercent Increase

Over Previous Year

Qualitative 1,120 18.2 +5.2

Syndicated 2,573 41.8 +9.2

Survey 2,466 40.0 –1.4

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28.2 Types of Marketing Research

Go to the Marketing Essentials OLC through glencoe.com to find a project on types of marketing research.

• What Do Marketers Need to Know? Marketing research covers all the activities used to gather, analyze, and report

information related to marketing. This broad field can be broken down by types of research and defined by the purpose

of the research.

How do you find out the kind of marketing information you need to know?

Research is used to gather information about

an existing or potential market for market

intelligence. It defines the size, location, and

makeup of the market. This type of research

is often done before a new product launch. It

is used to guide the marketing efforts for the

new product.

MARKET INTELLIGENCE

This type of research is used to determine the

effectiveness of the various media to advertise

a good or service. It can be conducted before or

after a media campaign.

MEDIA RESEARCH This type of research is used to gather

information about a product’s design,

packaging, and usage. It is used to discover

how customers react to a new product design

or packaging. It can also be used to gather

information about how a competing product is

designed and packaged.

PRODUCT RESEARCH

Marketers conduct this type of research to

discover how people feel about their products,

services, or ideas. Satisfaction surveys, such as

those sent after a visit to the hospital, and opinion

polls, such as those used by political campaigns,

are examples of this type of research.

ATTITUDE AND OPINION RESEARCH

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Sales Forecasting Sales forecasting is an attempt to estimate

the future sales of an existing product. A total estimate of a market is calculated, com-pany and competitor sales are analyzed, and then an individual share is estimated for abusiness.

The share that is assigned to a business is called its market share or sales penetration of

target markets for a particular product or ser-vice and how to reach potential customers.

A company’s existing and projected sales data are part of market intelligence. Sales data help businesses project the potential sales for a product and anticipate problems related to future sales. Sales trends for various products may also be compared to determine whether a product’s sales are increasing or declining.

• OBTAINING MARKET RESEARCH DATA Public and private organizations provide valuable information for exploring the market potential for products and services.

Why is data such as that found in this chart important for market research?


the market. Based on its research findings, the business can then try to increase its market share through changes in the product, pric-ing, promotion, or distribution strategies.

Market share estimation and market seg-mentation research studies are used for new products and services in both consumer and industrial markets. The goal of market share and segmentation studies is to investigate the potential markets for new products and to define characteristics of the target market.

Specialized software programs can assist with forecasting. These computer programs analyze current market data and use this information to predict future sales.

Economic Forecasting Economic forecasting is an attempt to pre-

dict the future economic conditions of a city, a region, a country, or other part of the world. This research requires extensive knowledge of economic statistics and trend indicators.

Ad Agency Launches a Video Game Unit

Young & Rubicam, a large, full-service advertising agency, teamed up with Bounce, an event marketing group, in 2004 to start a video game promotional unit called Bounce Interactive Gaming (BIG).

Ad agencies became more interested in video games in 2003, when Nielsen data showed that men aged 18 to 34—an appealing demographic group for advertisers—were watching less prime-time TV. Jupiter Research expected that 63 million people in the United States would spend at least five hours a week playing video games by 2009.

Target Audience

BIG markets products to fans of video games. The company signs deals with video game makers to embed products in the games in the form of a brand of beverage or car, for example. It also hosts video game events sponsored by its products. These events include tournaments for top players or live-satellite feeds to watch tournaments in action.

Captive Audience

Advertising through video games has advantages over advertising on TV. Gamers stay in the room during the course of the game, unlike TV watchers, who sometimes leave the room during commercial breaks. Gamers keep their attention focused on the screen, while TV watchers can lose their concentration. A gamer might also like a product just because it is used by the gamer’s onscreen character.

What are some strategic reasons for a large full-service advertising agency to establish a video game promotional unit?

Go to the Marketing Essentials OLC through glencoe.com to find an activity about advertising and market research.

David Y

oung-Wolff/P

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Several federal agencies collect informa-tion on key economic indicators, such as new building construction, inflation rates, money supply, and consumer and producer price indexes. Most businesses rely on govern-ment data to predict economic conditions, and then they adjust their business activities accordingly.

Businesses use research on general eco-nomic conditions to help plan for long-range expansion. This research helps to determine whether to cut costs when unfavorable eco-nomic conditions, such as higher interest rates or raw materials costs, are predicted.

Media ResearchMedia research, also known as adver-

tising research, focuses on issues of media effectiveness, selection, frequency, and rat-ings. Businesses often conduct research to determine which media are most effective for getting an advertising message to a particular market.

Media research studies brand awareness, advertising recall, brand image, effectiveness of advertising copy, and audience size for a particular type of advertising.

Media Advertising Measures Important statistics for media measure-

ment include audience, frequency, reach, and ratings. Audience is the number of homes or people exposed to a particular advertising medium. Frequency is the number of times a viewer in the audience sees or hears an ad. Reach is the percentage of the target audi-ence that will see or hear an ad at least once, while ratings are the total number of audi-ence impressions delivered over a set period of time.

To obtain these important media adver-tising measures, businesses often request information from the print, broadcast, and electronic media of interest to them. In most cases, the information received would include a rate card listing the advertising costs, its cir-culation or viewership figures, deadline dates, and other requirements for submission of an advertisement. Other information might

A New Local Rating System

Nielsen Media Research, Inc. is replacing all of its paper-based viewer diaries with a sample of viewers that use people meters in local television markets.

Local People MeterPeople meters automatically track viewing

as people change channels. Since 1987, the company has used the method to determine national television ratings. Now, it is estab-lishing a similar system for local television ratings. While the old system provided ratings data only four times a year, the new local rat-ings will be available on a nightly basis. The new system will allow Nielsen to give demo-graphic data by age, race, and gender on a local television market.

Equal Measurement?The system is not without controversy.

Some politicians and the National Minority Business Council say the new system is flawed because it undercounts minority groups. However, Nielsen says that 21.6 percent of African Americans are being measured under the new rating system, compared to 19 percent with the old system.

Go to the Marketing Essentials OLC through glencoe.com to find an activity about technology and market research.

Why are local television ratings important?




concern the age, income, interests, hobbies, occupations, and attitudes of readers, sub-scribers, or viewers. Another way to measure advertising research on the various media is to subscribe to Standard Rate and Data Service (SRDS), which publishes rates and data for the advertising industry.

Researching Print Advertisements Marketing researchers can use different

techniques to get people’s reactions to an advertisement. To determine the ad’s effec-tiveness, readers are asked about the extent to which they noticed the ad, remembered it, and associated it with the advertised brand. The ad is also measured on its ability to change the consumer’s beliefs, attitudes, or intended behavior. Using consumer panels is another technique for measuring print adver-tising effectiveness.

Readership in print media is measured by surveys or estimated by circulation. The Audit Bureau of Circulations provides circulation data on more than 1,500 daily and weekly newspapers and 1,000 periodicals. Media-mark Research and Simmons Market Research Bureau provide audience data. They conduct recent reading studies to see if participants can recall a magazine logotype, have read the magazine, and can remember where they read it during in the past month.

Researching Broadcast Media Most broadcast ad testing research is done

on television commercials. Testing research can use quantitative or qualitative research techniques, such as personal interviews, the-ater tests, in-home testing, or focus groups, to get reaction to planned TV advertisements.

Nielsen Media Research, Inc. provides audi-ence measurement information for the televi-sion industry. Nielsen estimates the audience by measuring the viewing habits of 13,000 people in 5,000 homes. Nielsen’s measurement information is recorded by “people meters” on TV sets, VCRs, cable boxes, and satellitedishes that automatically monitor program viewing. Nielsen counts the number of view-ers in meter-equipped households to get the

number of households using TV, the share of the audience that is tuned to a particular sta-tion, and the rating, or percentage of viewers, for a particular television program at a par-ticular time. Broadcast and cable network pro-viders, program developers, distributors, and advertisers use this information to decide on which television programs to advertise.

The Arbitron Ratings Company assembles important data on radio advertising. Arbi-tron produces radio audience measurements and sells software that analyzes advertis-ing expenditure data. Continuous audiencemeasurement in 276 local markets serving 2,300 radio stations makes it the largest radio audience service in the world. Arbitron con-tacts more than two million consumers a year and collects more than one million diaries to compile its radio station rating reports. Dia-ries are records on which people report such viewer data as who is watching or listening to a station and what programs are tuned in.

Using the Internet The effectiveness of Internet advertising is

often measured with tracking studies. Track-ing studies can be either Web-centric or user-centric. The Web-centric method logs the total number of people who have visited a Web site and stores the results on the Internet provid-er’s network. The user-centric method involves metering software in a sample householdor business that tracks computer usage and Web sites that are visited. The information gained from user-centric tracking can be com-piled and analyzed to get an audience profile for a certain Web site.

Product ResearchProduct research centers on evaluat-

ing product design, package design, product usage, and consumer acceptance of new and existing products. Many new products and their packages are designed, tested, changed, and introduced each year. Product research is also conducted to collect information about competitive products. Concept testing is often used in the early stages of product

Problem Solving: Multi-Step Problems When solving prob-lems that require multiple steps, list the information given and the information for which you will be solving. This will clarify the relationship between the two.1. To solve this problem, determine the

percent of households you will be servicing by subtracting 25 percent from the total market of 100 percent.

2. Multiply the decimal equivalent of this percent by the total number of households to determine the number of households in the target market.

3. Multiply the number of households in the target market by the amount they spend on fitness equipment each year to determine the annual sales forecast.



development (see Chapter 30). Concept test-ing, product positioning, and pricing studies are frequently done with focus groups or in-depth interviews to get initial consumer reac-tion to a product or service idea.

Trends in Marketing ResearchThe nature and scope of marketing research

is rapidly changing to keep pace with a chang-ing marketplace. The trend toward a global marketplace means increased international competition for U.S. companies, which must improve or change products frequently to hold on to their customers. In this environ-ment, product quality and customer satisfac-tion are the keys to business success. Research

that measures these qualities has become the fastest growing form of marketing research.

Another important trend is the use of both internal and external information in man-aging a business. Total quality management (TQM) programs place a premium on gather-ing and using database research in improving business operations.

Limitations of Marketing ResearchThe amount of information that can be

gathered is limited by the amount of money and time a company can afford to spend on the equipment and by the number of person-nel needed to conduct the research.

Marketing research information also has its limitations. Customers in a test marketsituation may say they want a particular prod-uct, but there is no guarantee they will actually buy the product when it is sold.

Key Terms and Concepts 1. What are the two types of marketing research? 2. What are the four major areas within market-

ing research? 3. List at least two trends facing marketing

researchers today.

Check your answers at the Marketing Essentials OLC through glencoe.com.

Academic SkillsMath

4. Assume that you are planning to purchase an exercise and fitness center targeted to women aged 21 to 49 in your city. By doing market research using results from the Consumer Expenditure Surveys and the U.S. Census Bureau, you learn that 1,550 households in your target market spend $475 a year on fitness and recreation. There is one other fitness center that serves 25 percent of your target market. What would be your annual sales forecast for the center?

Social Studies/Geography

5. Investigate a country of your choice and develop a two-page paper on its location, demographics, and culture. Indicate recommendations for conducting marketing research in the country.




MICHELLE DAYSENIOR RESEARCH ANALYSTTHE STEVENSON COMPANY

What do you do at work?

Clients and I work together to develop a survey tool to question current or potential customers. We implement this survey and analyze the results to gain a better understanding of customers’ opinions of the question at hand. This information is compiled into

a format that is presented to clients, who are then able to meet the needs of their customers and make better business decisions based on the results.

What skills are most important to you?

Computer skills and communication skills are critical to this job. Other important skills are analyzing, organizing, and time management. Communication is also very important, both effective oral communication with the client to under-stand their questions and objectives, and written com-munication to draft the surveys and present the results to the client in a clear and logical format.

What is your key to success?

Both continuing to learn and receiving constructive criticism have helped me succeed in my job. I have continued to learn by completing an MBA, attending applicable training seminars, and asking questions of those who are more experienced than I am. I welcome constructive criticism from these more experienced professionals, who can help me improve upon the skills I have.

Courses marketing, communication, research, general business

Degrees BA, masters degree

A successful career path can begin with an assistant position in a marketing department, and continue with responsibilities as market research data analyst.

Growth to increase faster than average for the next ten years

Source: Occupational Outlook Handbook

Computer skills, communicat-ion skills, time management, an analytical mind

Go to the Marketing Essentials OLC through glencoe.com to fi nd a career-related activity.

How are market surveys useful to a business?




C H A P T E R 28 R E V I E W

SECTION 28.1• Marketing research involves the marketing function that links the consumer, customer,

and public to the marketer through information. Marketing information is used to identify

marketing opportunities, solve marketing problems, implement marketing plans, and

monitor marketing performance. A marketing information system is a set of procedures

and methods that regularly generates, stores, analyzes, and distributes marketing

information for use in making marketing decisions.

SECTION 28.2• Marketing research is usually divided into two broad types of research: quantitative

and qualitative. Marketing research involves the process and methods used to gather

information, analyze it, and report fi ndings related to marketing goods and services.

The nature and scope of marketing research are rapidly changing to keep pace with a

changing marketplace. Marketing research information provides much information but

does have limitations.

Key Terms• marketing research (p. 593)• marketing information system

(p. 594)• database marketing (p. 594)• database (p. 595)• quantitative research (p. 596)

• qualitative research (p. 597)• attitude research (p. 597)• market intelligence (p. 597)• media research (p. 601)• product research (p. 602)

Academic Vocabulary• obtain (p. 593)• overall (p. 594)• anticipate (p. 599)• associate (p. 602)

1. On a sheet of paper, use each of these key terms and academic vocabulary words in a written sentence.

2. What is marketing research? (28.1)

3. What is the primary function of a marketing

information system? (28.1)

4. What is a marketing database? (28.1)

5. How does quantitative research differ from

qualitative research? (28.2)

6. What is attitude research? (28.2)

7. What is market intelligence? (28.2

8. What is the purpose of media research?

(28.2)

9. Give an example of one research technique

used for new product development and one

for product usage research. (28.2)

10. Name one trend and one limitation of

marketing research. (28.2)

11. Explain how economic forecasting relates to

market research. (28.2)


12. Workplace Skills Human Relations You have a part-time job

in the marketing research department of a

large corporation. You and three coworkers

are gathering information through mailed

surveys. Your supervisor wants each of you

to complete at least 30 surveys a day, which

can be diffi cult. One coworker makes changes

to incomplete or missing responses on some

surveys that have been returned. What should

you do?

13. Technology ApplicationsAnalyzing International Trends Use

presentation software to present an

oral report on the international trends

affecting marketing research efforts in the

pharmaceuticals market.

14. Math Practice The Cost of Direct Mail Research Assume

that your company plans to send a marketing

questionnaire to 30 percent of the names on

a mailing list of 5,000 people. The mailing

list was purchased from another company

for $0.30 per name. Each questionnaire

costs $0.10 to print; mailing costs are $0.36

(including the envelope and return envelope)

each; and the cost of writing the questionnaire,

analyzing the information, and preparing the

report is $15,000. What is the total cost?

Problem Solving: Multi-Step Problems When solving problems

that require multiple steps, make a list of

the information given in the problem and

information for which you are solving. This will

clarify the relationship between the two.


15. English Language Arts Compare and Contrast Skim the chapter

identifying two different types of marketing

research. Write a paragraph describing each

type. Explain their differences and similarities

and give examples of types of companies

best suited for each type of research.

16. Press Review

Review current business publications such

as the Wall Street Journal, Business Week, Forbes, Money, Advertising Age, Brandweek, and Sales & Marketing Management. Find

one current research activity and write a

one-page report on the nature and scope

of the research activity.

17. Identifying Market Factors Use the Internet to fi nd the U.S. Census

Bureau Web site and research your city

or state’s population, income, education,

trading area, and purchasing power. Consult

city or state offi ces for additional market

information. For example, you may contact

your area’s chamber of commerce.

Activity Using presentation software, create

an oral report highlighting these factors.



For more information and DECA Prep practice, go to the Marketing Essentials OLC through glencoe.com.

18. Researching Market Researchers

Visit the Web site for the American Marketing

Association to fi nd Marketing Research

Services. Investigate one of the listed

companies.

Develop a company profi le in 100 to 150

words, describing the company’s history,

number of employees, and the marketing

research that it conducts.

To control the stress of test-taking, view the test as an opportunity to show how much you have studied and to receive a reward for the studying you have done.

1. Directions Choose the letter of the best answer. Write the letter for the answer on a separate piece of paper.

What is the total amount spent on market research if $537 is spent on each of 2,400 households?

A $1,288,800 B $1,500,300 C $2,280,800 D $2,550,344

2. Directions Choose either True or False as the answer. Write the letter for the answer on a separate piece of paper.

Qualitative market research relies heavily on surveys.

T F

Role PlayMarketing Research StudentSituation Assume the role of a student

preparing to work on a marketing research

project in a competition for your state DECA

conference. This project is a class assign-

ment; all students must conduct a marketing

research project with a local business. You

must prepare a presentation for the partici-

pating local business owners that explains the

project and its potential benefi ts to them.

Activity You are to outline and explain the

reasons businesses use marketing research.

Begin by explaining marketing research and

its potential benefi ts to local businesses. You

will review your presentation outline with your

DECA advisor (judge).

Evaluation You will be evaluated on how well

you meet the following performance indicators:

• Describe the need for marketing research.

• Identify information monitored for marketing

decision making.

• Explain the

nature of mar-

keting research

in a marketing

information

management

system.

• Make oral

presentations. Test-Taking Tip




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