Best Buy Co., Inc. (NYSE: BBY) is a specialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Mexico, Canada, China, Turkey and the United Kingdom.[2] The company's subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these operate more than 1,150 stores in the United States, Puerto Rico, Canada, China,[3] Mexico, and Turkey. In addition, the company has rolled out over 100 Best Buy Express Automated Retail stores or "ZoomShops", operated by Zoom Systems, in airports and malls around the U.S.[4] The company's corporate headquarters are located in Richfield, Minnesota.
Best Buy was named "Company of the Year" by Forbes magazine in 2004,[5] "Specialty Retailer of the Decade" by Discount Store News in 2001,[6] ranked in the Top 10 of "America's Most Generous Corporations" by Forbes magazine in 2005 (based on 2004 giving),[7] and made Fortune magazine's List of Most Admired Companies in 2006.[8]
On March 9, 2009, Best Buy became the primary electronics retail store (online and bricks and mortar) in the eastern United States, after smaller rival Circuit City went out of business. Fry's Electronics remains a major competitor in the western United States. Many locations feature in-store pickup, which can be arranged through the company's website.[9]
Best Buy is also the largest retailer of cellular phones with phones from Verizon Wireless, AT&T Wireless, Sprint PCS, and T-Mobile. They also sell tablets such as the Dell Streak, Apple iPad, Huawei Ideos S7, and Samsung Galaxy Tab. Best Buy also has standalone Best Buy Mobile stores in shopping malls that only sell cellular phones, tablets, Apple iPods, laptops, notebooks, and wireless broadband cards. Best Buy Mobile is also the only cellular phone retailer to feature no mail-in rebates for all of their cellular phones.[citation needed]
In 2011, during the three-month period ended February 26, Best Buy saw its revenue and profits slide, but generated a profit of $651 million on revenue of $16.26 billion. In comparison to the same period in 2010, it tallied $16.55 billion in revenue and a $779 million profit.
■ Be familiar with the various stages of the marketing research process.
■ Highlight the importance of the problem/opportunity identification stage of
the research process.
■ Understand the issues related to hypotheses development.
■ Explain the concept of value of information, and its role in deciding when
marketing research is beneficial.
■ Introduce the international marketing research process.
How is the market research project conceived, planned, and executed? The
answer, in part, is through a research process, consisting of stages or steps that
guide the project from its conception through the final analysis, recommendation,
and ultimate action. The research process provides a systematic, planned
approach to the research project and ensures that all aspects of the research project
are consistent with each other. It is especially important that the research
design and implementation be consistent with the research purpose and objectives.
Otherwise, the results will not help the client.
The research process is described in this chapter and Chapter 4. This chapter
provides an overview of the research process, a discussion of the research
purpose and research objectives, and a consideration of the value of research
information. Negative findings are as valuable as positive ones. In fact, they are
often more revealing, as they provide valuable insight into customers’ psyches.
Today, the research process has evolved to encompass decision making. This
combined process transforms mundane marketing research to marketing intelligence.
Chapter 4 gives an overview of the research design and its implementation.
Together, these two chapters are the foundation for the rest of the book.
OVERVIEW OF THE MARKETING
RESEARCH PROCESS
Research studies evolve through a series of steps, each representing the answer
to a key question.
1. Why should we do research? This establishes the research purpose as seen by
the management team that will be using the results. This step requires understanding
the decisions to be made and the problems or opportunities to be
diagnosed.
2. What research should be done? Here the management purpose is translated into
objectives that tell the managers exactly what questions need to be answered
by the research study or project.
THE MARKETING
RESEARCH PROCESS 3
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 50
3. Is it worth doing the research? The decision has to be made here about whether
the value of the information that will likely be obtained is going to be greater
than the cost of collecting it.
4. How should the research be designed to achieve the research objectives? Design
issues include the choice of research approach—reliance on secondary data
versus conducting a survey or experiment—and the specifics of how to collect
the data. Chapter 4 deals with how to approach these issues.
5. What will we do with the research? Once the data have been collected, how will
it be analyzed, interpreted, and used to make recommendations for action?
The necessary steps are linked in a sequential process (see Figure 3-1).
Although the steps usually occur in this general order, we must emphasize that
Planning system Information system
• Strategic plans
• Tactical plans
• Databases
• DSS
MARKETING PLANNING AND INFORMATION SYSTEM
1. AGREE ON RESEARCH PROCESS
• Problems or opportunities
• Decision alternatives
• Research users
2. ESTABLISH RESEARCH OBJECTIVES
• Research questions
• Hypotheses
• Boundaries of study
4. DESIGN THE RESEARCH
• Choose among alternative research approaches
• Specify the sampling plan
• Design the experiment
• Design the questionnaire
3. ESTIMATE
THE VALUE OF
INFORMATION
Is benefit > cost?
5. COLLECT THE DATA
6. PREPARE AND ANALYZE THE DATA
7. REPORT THE RESEARCH RESULTS AND
PROVIDE STRATEGIC RECOMMENDATIONS
DO NOT CONDUCT
MARKETING RESEARCH
NO
YES
FIGURE 3-1
The marketing
research process.
OVERVIEW OF THE
MARKETING RESEARCH
PROCESS
51
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 51
“early” decisions are always made by looking ahead to “later” decisions. The
early decisions are constantly being modified to account for new insights and
possibilities presented by later decisions. Also, the steps do not function in isolation.
Rather, they are embedded in the ongoing planning process of the business,
which culminates in the development of strategies, programs, and action. This
planning process provides the purposes of the research. In turn, planning is supported
by the information system, which (1) anticipates the type of information
required by decision makers and (2) organizes data that have been collected to
ensure their availability when needed.
The development of a research purpose that links the research to decision
making, and the formulation of research objectives that serve to guide the
research, are unquestionably the most important steps in the research process. If
they are correct, the research stands a good chance of being both useful and
appropriate. If they are bypassed or wrong, the research almost surely will be
wasteful and irrelevant. These aspects of research, too often neglected by managers,
will be discussed in detail in this chapter. The next chapter deals with
research design; the chapters in Part II discuss the various methods to collect
data; and the chapters in Part III of the book deal with analysis and interpretation
of the data.
THE PRELIMINARY STAGES OF THE
MARKETING RESEARCH PROCESS
Step 1—Research Purpose
Research problems are more likely to be poorly defined, only partially understood,
and missing possible decision alternatives that should be analyzed. Defining
problems accurately is a combination of data and judgment that demands
real thought and effort. Problems, opportunities, and “nonproblem” situations
are closely related to structure. Together they make up a family of gaps. The concept
of analyzing the gaps as problems is based on:
1. Recognizing/understanding a problem. A problem is a gap between what was
supposed to happen and what did happen between our objective and our
accomplishment. Three elements are required to recognize a problem:
■ Something must be expected to happen.
■ Feedback must be received on what actually happens.
■ Expectations and feedback must be compared.
2. Knowing where and when the gap or problem occurred. Once a problem is
defined, it is easier to approach the cause and solution to the gap(s), in
accordance with the level of detail of the analysis. In the end, problem
definition is and will always be a creative act, a balance between thorough
research and intuition. Problem definition is best thought of as a solution
definition—the selection of a domain is likely to be rich in ideas to solve
the problem. Problem definition is a creative act. The payoff from good
marketing definition is enormous—nothing else we do has so much
leverage on profit.1
Seldom will research problems come neatly packaged with obvious information
requirements, clear-cut boundaries, and pure motives on the part of the
52 decision makers. Launching a research study with such shaky inputs is a recipe
CHAPTER 3
THE MARKETING
RESEARCH PROCESS
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 52
53
THE PRELIMINARY STAGES
OF THE MARKETING
RESEARCH PROCESS
for producing unusable findings and unhappy clients. It is in the best interest of
both the researcher and the managers paying for the research to be sure that the
research purpose is fully understood. One of the hallmarks of a competent
researcher is the ability to get to the heart of the management problem.
Consider the seemingly straightforward request by the chairperson of an
association of community merchants for a research project. The objective of this
project was to help reduce the propensity of residents in the community to do
their shopping in two nearby communities. Clearly, the purpose of the research
was to identify and evaluate various ways to increase the local merchants’ share
of shopping by residents.
Further probing, however, revealed that the statement of the problem was at
least partially inaccurate. Only late in the research process was it learned by the
researcher that the chairperson was having real difficulty convincing the other
local merchants that there was a serious enough outflow of local trade to warrant
joint action to reverse the flow. This certainly changed the purpose of the
research. Now the researcher would have to measure the level of retail trade outflow,
in addition to finding the reasons for the outflow. This required a major
change in the research design, but had the change not been made the results
would have been of little value to the client.
The research purpose comprises a shared understanding between the manager
and the researcher of:
1. Problems or opportunities to be studied
■ Which problems or opportunities are anticipated?
■ What is the scope of the problems and the possible reasons?
2. Decision alternatives to be evaluated
■ What are the alternatives being studied?
■ What are the criteria for choosing among the alternatives?
■ What is the timing or importance of the decision?
3. Users of the research results
■ Who are the decision makers?
■ Are there any covert purposes?
Problem or Opportunity Analysis. In analyzing problems or studying opportunities,
identifying loyal customers and doing targeted marketing are very
important. Marketing Research in Action 3-1 reiterates the importance of market
research and databased marketing in creating “top of mind awareness” of their
products.
Research often is motivated by a problem or opportunity. The fact that sales
are below expectations in the East might be a problem requiring research. The
fact that people are consuming fewer sweets might be a problem or a potential
opportunity for a candy company. Increased leisure time might be viewed as an
opportunity by a recreation-oriented organization. In such cases the research purpose
should specify the problem or opportunity to be explored. Identifying and
defining the problem or opportunity is a crucial first step in the marketing
research process. Especially in situation analysis contexts, exploratory research
is needed to identify problems and opportunities. What sales areas are showing
weak performance? What segments represent opportunities because they are dissatisfied
with current products or because they are underusing the product? Even
in exploratory research, however, it will be helpful to identify the nature of the
problem or opportunity that is motivating the research. Further, the goal should
be to move from exploratory research to research more focused on a decision.
Marketing Research in Action 3-2 illustrates the process of changing marketing
approach by reacting to market situations.
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 53
The manager needs to make certain that the real problem is being addressed.
Sometimes the recognized problem is only a symptom, or perhaps merely a part
of a larger problem. A sobering illustration of this is the plight of Compton Corp.,2
a manufacturer of capital equipment costing between $10,000 and $25,000. The
company was dominant in its market, with a share as large as the next two biggest
competitors. All the companies sold their equipment through a network of independent
distributors, each of which sold the products of at least two competitors.
For several years this market leader had been losing share. In an attempt to reverse
the trend, the company changed advertising agencies. When the new agents
funded a study of end users, they found to their surprise that the previous agency
had done a superb job of creating awareness and favorable attitudes. However,
many of the equipment purchasers who favored Compton were actually buying
the competing brands. This problem had little to do with the performance of the
54
CHAPTER 3
THE MARKETING
RESEARCH PROCESS What Do Today’s Buyers Want?
Today’s buyers have created changes for all businesses. They are
■ Skeptical—their trust has been broken by every industry.
■ Cautious—they take a lot of time to weigh decisions.
■ Tired of selling and sales pressure—they are weary of spam and telephone sales.
■ Busy—they want everything quick and easy.
■ Confused—they are bewildered with the variety of offers.
Today’s buyers have access to information because of the Internet, and they can make
better decisions because of the global market available for choice. Marketers have to
create a “top of mind awareness” of their products. To do this, they have to constantly
inform buyers about their products without irritating them. This means they have to
identify their most loyal customers and do a great deal of targeted marketing. This is
possible only through marketing research and databased marketing.
Once marketers have identified their customers, it’s very easy to find buyers with
a similar profile and generate loyal, profit-generating customers.
SOURCE: findmorebuyers.com/page.cfm/11, January 2003.
MARKETING RESEARCH IN ACTION 3-1
Best Buy Goes Lean
Best Buy, with intense competition from competitors, has slashed capital spending for
2009 budget by half along with buy outs and layoffs. Given Best Buy’s emphasis on
its personnel, the suggestion of layoffs demonstrates a change in long-held priorities.
Best Buy faces intense competition mainly from retailers such as Wal-Mart, Target,
and Costco coming after mainstay businesses including television, digital cameras and
gaming. For instance, television shoppers at Best Buy are going for less expensive sets,
especially for their second or third TVs. Further, consumers replacing their TVs are
settling for 34-inch screens from 42-inch screens. Best Buy’s competitors use fewer
employees to run the electronics business throughout and continue to figure out ways
to sell electronics right off the rack rather than through a sales clerk.
By becoming leaner, Best Buy is preparing itself for a competitive reality where
consumers are becoming more considered about spending and where discounters and
warehouse clubs are the major competition.
SOURCE: Mike Duff, “Best Buy Goes Leaner As Customers Waver, Competitors Press,” BNET Retail, December 19, 2008.
MARKETING RESEARCH IN ACTION 3-2
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 54
55
THE PRELIMINARY STAGES
OF THE MARKETING
RESEARCH PROCESS
advertising agency. A new study, oriented toward the distributors, found that
Compton’s distributor-relations program was very weak relative to its competitors.
One competitor emphasized sales contests, another offered cash bonuses
to salespeople, and a third was particularly effective with technical sales assistance
directed to difficult accounts. Not surprisingly, these factors influenced the distributors
when they were asked for advice, or when the prospective purchaser did
not have a firm commitment to Compton equipment.
In this case, the real problem ultimately was isolated, but only after much
time and energy had been directed toward the wrong problem. When defining
the problem, it is important to think broadly about the possible causes or influential
variables. This may justify a separate exploratory research study. Further,
what appears to be a genuine problem or opportunity may not be researchable.
For example, if a company that manufactures washing machines is interested in
determining the replacement rates for all machines sold within the last three
years, it may not be worthwhile to pursue the issue. Since most household washing
machines have a life span ranging from five to 10 years, the problem of identifying
the replacement rate for working machines sold within the last three years
may be a nonresearchable problem.
Decision Alternatives. For research to be effective, it must be associated with a
decision. Marketing research is committed to the principle of utility. In general,
if research is not going to have an effect on decisions, it is an exercise in futility.
The researcher should always be sensitive to the possibility that either there are
no decision alternatives—and therefore no decision—or that the research findings
will not affect the decision, usually because of resource or organizational
constraints. In such circumstances, the research will have no practical value and
probably should not be conducted.
When a decision potential does exist, it is important to identify it explicitly,
because the research then can be designed for maximum effectiveness. For example,
researchers frequently are asked to assess the potential of a market that is not
familiar to the company. But what are the decisions the manager faces? Is the manager
thinking of acquiring a company serving that market? Has the lab produced
a new product that might be sold as a component to the industry serving that market?
The answers will have a significant influence on the design of the research.
A most useful way to clarify the decision motivating the research is to ask:
(1) What alternative actions are being considered? (2) What actions would be
taken, given the various feasible outcomes of the research? This line of questioning
can be very enlightening for the decision maker, as well as for the
researcher, in terms of clarifying exactly what the research can accomplish. The
story in Marketing Research in Action 3-3 illustrates how both can learn from a
focus on decisions.
Sometimes the decision involved is highly specific. A copy test is used to
select a copy alternative. A concept test is employed to determine if a concept
should be developed further. Sometimes the decision can be very general. What
markets should be the primary targets of our organization? Should our marketing
program be changed? It is desirable to be as specific as possible, because the
research purpose then will be more effective in guiding the development of the
research design. However, even if the decision is necessarily general, it needs to
be stated clearly.
 
Last edited:
Best Buy Co., Inc. (NYSE: BBY) is a specialty retailer of consumer electronics in the United States, accounting for 19% of the market. It also operates in Mexico, Canada, China, Turkey and the United Kingdom.[2] The company's subsidiaries include Geek Squad, Magnolia Audio Video, Pacific Sales, and, in Canada operates under both the Best Buy and Future Shop label. Together these operate more than 1,150 stores in the United States, Puerto Rico, Canada, China,[3] Mexico, and Turkey. In addition, the company has rolled out over 100 Best Buy Express Automated Retail stores or "ZoomShops", operated by Zoom Systems, in airports and malls around the U.S.[4] The company's corporate headquarters are located in Richfield, Minnesota.
Best Buy was named "Company of the Year" by Forbes magazine in 2004,[5] "Specialty Retailer of the Decade" by Discount Store News in 2001,[6] ranked in the Top 10 of "America's Most Generous Corporations" by Forbes magazine in 2005 (based on 2004 giving),[7] and made Fortune magazine's List of Most Admired Companies in 2006.[8]
On March 9, 2009, Best Buy became the primary electronics retail store (online and bricks and mortar) in the eastern United States, after smaller rival Circuit City went out of business. Fry's Electronics remains a major competitor in the western United States. Many locations feature in-store pickup, which can be arranged through the company's website.[9]
Best Buy is also the largest retailer of cellular phones with phones from Verizon Wireless, AT&T Wireless, Sprint PCS, and T-Mobile. They also sell tablets such as the Dell Streak, Apple iPad, Huawei Ideos S7, and Samsung Galaxy Tab. Best Buy also has standalone Best Buy Mobile stores in shopping malls that only sell cellular phones, tablets, Apple iPods, laptops, notebooks, and wireless broadband cards. Best Buy Mobile is also the only cellular phone retailer to feature no mail-in rebates for all of their cellular phones.[citation needed]
In 2011, during the three-month period ended February 26, Best Buy saw its revenue and profits slide, but generated a profit of $651 million on revenue of $16.26 billion. In comparison to the same period in 2010, it tallied $16.55 billion in revenue and a $779 million profit.
■ Be familiar with the various stages of the marketing research process.
■ Highlight the importance of the problem/opportunity identification stage of
the research process.
■ Understand the issues related to hypotheses development.
■ Explain the concept of value of information, and its role in deciding when
marketing research is beneficial.
■ Introduce the international marketing research process.
How is the market research project conceived, planned, and executed? The
answer, in part, is through a research process, consisting of stages or steps that
guide the project from its conception through the final analysis, recommendation,
and ultimate action. The research process provides a systematic, planned
approach to the research project and ensures that all aspects of the research project
are consistent with each other. It is especially important that the research
design and implementation be consistent with the research purpose and objectives.
Otherwise, the results will not help the client.
The research process is described in this chapter and Chapter 4. This chapter
provides an overview of the research process, a discussion of the research
purpose and research objectives, and a consideration of the value of research
information. Negative findings are as valuable as positive ones. In fact, they are
often more revealing, as they provide valuable insight into customers’ psyches.
Today, the research process has evolved to encompass decision making. This
combined process transforms mundane marketing research to marketing intelligence.
Chapter 4 gives an overview of the research design and its implementation.
Together, these two chapters are the foundation for the rest of the book.
OVERVIEW OF THE MARKETING
RESEARCH PROCESS
Research studies evolve through a series of steps, each representing the answer
to a key question.
1. Why should we do research? This establishes the research purpose as seen by
the management team that will be using the results. This step requires understanding
the decisions to be made and the problems or opportunities to be
diagnosed.
2. What research should be done? Here the management purpose is translated into
objectives that tell the managers exactly what questions need to be answered
by the research study or project.
THE MARKETING
RESEARCH PROCESS 3
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 50
3. Is it worth doing the research? The decision has to be made here about whether
the value of the information that will likely be obtained is going to be greater
than the cost of collecting it.
4. How should the research be designed to achieve the research objectives? Design
issues include the choice of research approach—reliance on secondary data
versus conducting a survey or experiment—and the specifics of how to collect
the data. Chapter 4 deals with how to approach these issues.
5. What will we do with the research? Once the data have been collected, how will
it be analyzed, interpreted, and used to make recommendations for action?
The necessary steps are linked in a sequential process (see Figure 3-1).
Although the steps usually occur in this general order, we must emphasize that
Planning system Information system
• Strategic plans
• Tactical plans
• Databases
• DSS
MARKETING PLANNING AND INFORMATION SYSTEM
1. AGREE ON RESEARCH PROCESS
• Problems or opportunities
• Decision alternatives
• Research users
2. ESTABLISH RESEARCH OBJECTIVES
• Research questions
• Hypotheses
• Boundaries of study
4. DESIGN THE RESEARCH
• Choose among alternative research approaches
• Specify the sampling plan
• Design the experiment
• Design the questionnaire
3. ESTIMATE
THE VALUE OF
INFORMATION
Is benefit > cost?
5. COLLECT THE DATA
6. PREPARE AND ANALYZE THE DATA
7. REPORT THE RESEARCH RESULTS AND
PROVIDE STRATEGIC RECOMMENDATIONS
DO NOT CONDUCT
MARKETING RESEARCH
NO
YES
FIGURE 3-1
The marketing
research process.
OVERVIEW OF THE
MARKETING RESEARCH
PROCESS
51
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 51
“early” decisions are always made by looking ahead to “later” decisions. The
early decisions are constantly being modified to account for new insights and
possibilities presented by later decisions. Also, the steps do not function in isolation.
Rather, they are embedded in the ongoing planning process of the business,
which culminates in the development of strategies, programs, and action. This
planning process provides the purposes of the research. In turn, planning is supported
by the information system, which (1) anticipates the type of information
required by decision makers and (2) organizes data that have been collected to
ensure their availability when needed.
The development of a research purpose that links the research to decision
making, and the formulation of research objectives that serve to guide the
research, are unquestionably the most important steps in the research process. If
they are correct, the research stands a good chance of being both useful and
appropriate. If they are bypassed or wrong, the research almost surely will be
wasteful and irrelevant. These aspects of research, too often neglected by managers,
will be discussed in detail in this chapter. The next chapter deals with
research design; the chapters in Part II discuss the various methods to collect
data; and the chapters in Part III of the book deal with analysis and interpretation
of the data.
THE PRELIMINARY STAGES OF THE
MARKETING RESEARCH PROCESS
Step 1—Research Purpose
Research problems are more likely to be poorly defined, only partially understood,
and missing possible decision alternatives that should be analyzed. Defining
problems accurately is a combination of data and judgment that demands
real thought and effort. Problems, opportunities, and “nonproblem” situations
are closely related to structure. Together they make up a family of gaps. The concept
of analyzing the gaps as problems is based on:
1. Recognizing/understanding a problem. A problem is a gap between what was
supposed to happen and what did happen between our objective and our
accomplishment. Three elements are required to recognize a problem:
■ Something must be expected to happen.
■ Feedback must be received on what actually happens.
■ Expectations and feedback must be compared.
2. Knowing where and when the gap or problem occurred. Once a problem is
defined, it is easier to approach the cause and solution to the gap(s), in
accordance with the level of detail of the analysis. In the end, problem
definition is and will always be a creative act, a balance between thorough
research and intuition. Problem definition is best thought of as a solution
definition—the selection of a domain is likely to be rich in ideas to solve
the problem. Problem definition is a creative act. The payoff from good
marketing definition is enormous—nothing else we do has so much
leverage on profit.1
Seldom will research problems come neatly packaged with obvious information
requirements, clear-cut boundaries, and pure motives on the part of the
52 decision makers. Launching a research study with such shaky inputs is a recipe
CHAPTER 3
THE MARKETING
RESEARCH PROCESS
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 52
53
THE PRELIMINARY STAGES
OF THE MARKETING
RESEARCH PROCESS
for producing unusable findings and unhappy clients. It is in the best interest of
both the researcher and the managers paying for the research to be sure that the
research purpose is fully understood. One of the hallmarks of a competent
researcher is the ability to get to the heart of the management problem.
Consider the seemingly straightforward request by the chairperson of an
association of community merchants for a research project. The objective of this
project was to help reduce the propensity of residents in the community to do
their shopping in two nearby communities. Clearly, the purpose of the research
was to identify and evaluate various ways to increase the local merchants’ share
of shopping by residents.
Further probing, however, revealed that the statement of the problem was at
least partially inaccurate. Only late in the research process was it learned by the
researcher that the chairperson was having real difficulty convincing the other
local merchants that there was a serious enough outflow of local trade to warrant
joint action to reverse the flow. This certainly changed the purpose of the
research. Now the researcher would have to measure the level of retail trade outflow,
in addition to finding the reasons for the outflow. This required a major
change in the research design, but had the change not been made the results
would have been of little value to the client.
The research purpose comprises a shared understanding between the manager
and the researcher of:
1. Problems or opportunities to be studied
■ Which problems or opportunities are anticipated?
■ What is the scope of the problems and the possible reasons?
2. Decision alternatives to be evaluated
■ What are the alternatives being studied?
■ What are the criteria for choosing among the alternatives?
■ What is the timing or importance of the decision?
3. Users of the research results
■ Who are the decision makers?
■ Are there any covert purposes?
Problem or Opportunity Analysis. In analyzing problems or studying opportunities,
identifying loyal customers and doing targeted marketing are very
important. Marketing Research in Action 3-1 reiterates the importance of market
research and databased marketing in creating “top of mind awareness” of their
products.
Research often is motivated by a problem or opportunity. The fact that sales
are below expectations in the East might be a problem requiring research. The
fact that people are consuming fewer sweets might be a problem or a potential
opportunity for a candy company. Increased leisure time might be viewed as an
opportunity by a recreation-oriented organization. In such cases the research purpose
should specify the problem or opportunity to be explored. Identifying and
defining the problem or opportunity is a crucial first step in the marketing
research process. Especially in situation analysis contexts, exploratory research
is needed to identify problems and opportunities. What sales areas are showing
weak performance? What segments represent opportunities because they are dissatisfied
with current products or because they are underusing the product? Even
in exploratory research, however, it will be helpful to identify the nature of the
problem or opportunity that is motivating the research. Further, the goal should
be to move from exploratory research to research more focused on a decision.
Marketing Research in Action 3-2 illustrates the process of changing marketing
approach by reacting to market situations.
JWCL214_c03_050-078.qxd 9/19/09 11:40 AM Page 53
The manager needs to make certain that the real problem is being addressed.
Sometimes the recognized problem is only a symptom, or perhaps merely a part
of a larger problem. A sobering illustration of this is the plight of Compton Corp.,2
a manufacturer of capital equipment costing between $10,000 and $25,000. The
company was dominant in its market, with a share as large as the next two biggest
competitors. All the companies sold their equipment through a network of independent
distributors, each of which sold the products of at least two competitors.
For several years this market leader had been losing share. In an attempt to reverse
the trend, the company changed advertising agencies. When the new agents
funded a study of end users, they found to their surprise that the previous agency
had done a superb job of creating awareness and favorable attitudes. However,
many of the equipment purchasers who favored Compton were actually buying
the competing brands. This problem had little to do with the performance of the
54
CHAPTER 3
THE MARKETING
RESEARCH PROCESS What Do Today’s Buyers Want?
Today’s buyers have created changes for all businesses. They are
■ Skeptical—their trust has been broken by every industry.
■ Cautious—they take a lot of time to weigh decisions.
■ Tired of selling and sales pressure—they are weary of spam and telephone sales.
■ Busy—they want everything quick and easy.
■ Confused—they are bewildered with the variety of offers.
Today’s buyers have access to information because of the Internet, and they can make
better decisions because of the global market available for choice. Marketers have to
create a “top of mind awareness” of their products. To do this, they have to constantly
inform buyers about their products without irritating them. This means they have to
identify their most loyal customers and do a great deal of targeted marketing. This is
possible only through marketing research and databased marketing.
Once marketers have identified their customers, it’s very easy to find buyers with
a similar profile and generate loyal, profit-generating customers.
SOURCE: findmorebuyers.com/page.cfm/11, January 2003.
MARKETING RESEARCH IN ACTION 3-1
Best Buy Goes Lean
Best Buy, with intense competition from competitors, has slashed capital spending for
2009 budget by half along with buy outs and layoffs. Given Best Buy’s emphasis on
its personnel, the suggestion of layoffs demonstrates a change in long-held priorities.
Best Buy faces intense competition mainly from retailers such as Wal-Mart, Target,
and Costco coming after mainstay businesses including television, digital cameras and
gaming. For instance, television shoppers at Best Buy are going for less expensive sets,
especially for their second or third TVs. Further, consumers replacing their TVs are
settling for 34-inch screens from 42-inch screens. Best Buy’s competitors use fewer
employees to run the electronics business throughout and continue to figure out ways
to sell electronics right off the rack rather than through a sales clerk.
By becoming leaner, Best Buy is preparing itself for a competitive reality where
consumers are becoming more considered about spending and where discounters and
warehouse clubs are the major competition.
SOURCE: Mike Duff, “Best Buy Goes Leaner As Customers Waver, Competitors Press,” BNET Retail, December 19, 2008.
MARKETING RESEARCH IN ACTION 3-2
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55
THE PRELIMINARY STAGES
OF THE MARKETING
RESEARCH PROCESS
advertising agency. A new study, oriented toward the distributors, found that
Compton’s distributor-relations program was very weak relative to its competitors.
One competitor emphasized sales contests, another offered cash bonuses
to salespeople, and a third was particularly effective with technical sales assistance
directed to difficult accounts. Not surprisingly, these factors influenced the distributors
when they were asked for advice, or when the prospective purchaser did
not have a firm commitment to Compton equipment.
In this case, the real problem ultimately was isolated, but only after much
time and energy had been directed toward the wrong problem. When defining
the problem, it is important to think broadly about the possible causes or influential
variables. This may justify a separate exploratory research study. Further,
what appears to be a genuine problem or opportunity may not be researchable.
For example, if a company that manufactures washing machines is interested in
determining the replacement rates for all machines sold within the last three
years, it may not be worthwhile to pursue the issue. Since most household washing
machines have a life span ranging from five to 10 years, the problem of identifying
the replacement rate for working machines sold within the last three years
may be a nonresearchable problem.
Decision Alternatives. For research to be effective, it must be associated with a
decision. Marketing research is committed to the principle of utility. In general,
if research is not going to have an effect on decisions, it is an exercise in futility.
The researcher should always be sensitive to the possibility that either there are
no decision alternatives—and therefore no decision—or that the research findings
will not affect the decision, usually because of resource or organizational
constraints. In such circumstances, the research will have no practical value and
probably should not be conducted.
When a decision potential does exist, it is important to identify it explicitly,
because the research then can be designed for maximum effectiveness. For example,
researchers frequently are asked to assess the potential of a market that is not
familiar to the company. But what are the decisions the manager faces? Is the manager
thinking of acquiring a company serving that market? Has the lab produced
a new product that might be sold as a component to the industry serving that market?
The answers will have a significant influence on the design of the research.
A most useful way to clarify the decision motivating the research is to ask:
(1) What alternative actions are being considered? (2) What actions would be
taken, given the various feasible outcomes of the research? This line of questioning
can be very enlightening for the decision maker, as well as for the
researcher, in terms of clarifying exactly what the research can accomplish. The
story in Marketing Research in Action 3-3 illustrates how both can learn from a
focus on decisions.
Sometimes the decision involved is highly specific. A copy test is used to
select a copy alternative. A concept test is employed to determine if a concept
should be developed further. Sometimes the decision can be very general. What
markets should be the primary targets of our organization? Should our marketing
program be changed? It is desirable to be as specific as possible, because the
research purpose then will be more effective in guiding the development of the
research design. However, even if the decision is necessarily general, it needs to
be stated clearly.

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