The Handbook of Marketing Research: Uses, Misuses, and Future Advances

The Handbook of Marketing Research: Uses, Misuses, and Future Advances

Handbooks

Edited by: Rajiv Grover & Marco Vriens

Abstract

The Handbook of Marketing Research: Uses, Misuses, and Future Advances comprehensively explores the approaches for delivering market insights for fact-based decision making in a market-oriented firm. Divided into four parts, the Handbook addresses (1) the different nuances of delivering insights; (2) quantitative, qualitative, and online data gathering techniques; (3) basic and advanced data analysis methods; and (4) the substantial marketing issues that clients are interested in resolving through marketing research.

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  • Chapters
  • Front Matter
  • Back Matter
  • Subject Index
  • Part I: Foundational Design

    Part II: Data Collection

    Part III: Analysis and Modeling

    Part IV: Conceptual Applications

  • Introduction

    The Handbook of Marketing Research: Uses, Misuses, and Future Advances comprehensively explores the approaches for delivering market insights for fact-based decision making in a market-oriented firm. Divided into four parts, the Handbook addresses (1) the different nuances of delivering insights; (2) quantitative, qualitative, and online data gathering techniques; (3) basic and advanced data analysis methods; and (4) the substantial marketing issues that clients are interested in resolving through marketing research.

    Copyright

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    Dedication

    To the so many loving members of my extended family…

    —Rajiv

    To Annika, Aidan, and Erin

    —Marco

    Introduction: The Changing World of Marketing Research

    The Basis for the Book

    There is a growing sentiment in the business community as well as the academic field that to continue to fully satisfy the changing needs of clients, marketing research needs to be retooled. Innovative methodologies and more effective and efficient relationships between marketing researchers and clients need to be developed. The need for these changes in marketing research has been expressed by visionary academic researchers as well as professionals since more than a decade ago (“The Bloodbath,” 1991; Hodock, 1990; Lesh, 1999; “Surveys Proliferate,” 1990; “When Customer Research,” 1993).

    As businesses increasingly adopt fact-based decision-making approaches and embrace the concept of market orientation, they expect marketing research to deliver market insights. One way for marketing research to fulfill this expectation is to expand the marketing research function to incorporate the role of trusted advisers. Trusted advisers have broader knowledge base and skill sets than pure marketing researchers, thereby enhancing their capability of delivering high-quality, value-added information for decision making and market learning.

    The issue of market insights is fraught with challenging facets. It is not simple or easy for market researchers to uncover or deliver insights because insights are inherently subject to an individual client's idiosyncratic evaluations and perceptions that are, in turn, based on the client's needs and wants. The characteristics of insights that render them thus are as follows: They are not obvious or logically derived from existing knowledge; they are new in that they have not been previously recognized by the client; once identified for the client, they are perceived as credible and actionable by the client; they are generally about a complex phenomenon; they have to be stated in a manner that is clear and concise for the client; and they have not necessarily been thoroughly proven or tested.

    Though it is well acknowledged that insights result from creative data gathering and sophisticated data analysis, it is not adequately recognized that discovering market insights also requires that the right problems that need to be addressed by marketing research be identified and the right questions that need to be asked be posed. A problem that is right can be characterized as one that conceptually has the potential of resulting in different findings upon investigation, with each finding suggesting a different course of action for the firm—however, only the actual investigation by marketing research of the problem can reveal which one of the potential findings is true. In the practice of marketing research, enormous resources get wasted because wrong problems are selected for marketing research projects. One significant reason for this rampant lack of proper problem definition is the inadequate level of interaction of market researchers with clients and other individuals within the company with relevant important information for the problem definition process. A trusted adviser status of market researchers allows for such interaction and, hence, for better problem definition.

    Highlights of the Book

    This handbook of marketing research addresses the above issues of generating insights through creative data gathering, deep analytics, and right problem definition with the hope that marketing research will be able to meet client expectations. The book is organized in four sections, with each section dealing with a different aspect and ways of delivering insights. The first part of the book focuses on the insights topic. It talks about the kind of information that could be believed as insights by clients and that could be capable of eliciting “ahas” from clients. It addresses how such insights can be generated by individual marketing researchers at the project level and how they can be routinely produced at the marketing research organizational level.

    The second part of the book essentially discusses techniques of gathering accurate data that are capable of yielding insights. It presents traditional quantitative data-gathering techniques, innovative qualitative techniques, and emerging online methods. It also details how accuracy and representativeness of data can be ensured through minimization of response bias, utilization of proper sampling techniques, weighting of data, and appropriate treatment of missing data.

    Part III, the largest section, is devoted to data analysis. Starting with basic data analysis techniques, the section presents advanced analytics techniques that have a greater chance of producing market insights. These include models such as logit, Tobit, probit, conjoint, discrete choice, latent structure regression, structural equation, hazard/survival, hierarchical Bayes, and data mining. This section also includes a chapter on the basic philosophy of mathematical and statistical models and their use in marketing for decision support systems.

    The final part of the book slices the marketing research pie in a different manner. It is structured based on the substantial marketing issues that clients would be interested in resolving through marketing research. It presents testing and modeling of advertising and other marketing mix variables, as well as conceptualization and measurement of segments, brand equity, satisfaction, customer lifetime value, and marketing return on investment (ROI). The section concludes with chapters on international marketing research and marketing management support system.

    The book is targeted to users as well as to suppliers of marketing research. Given its broad target audience, efforts have been made, as far as was possible, to articulate and present the contents of the book in a reader-friendly and applications-oriented fashion. By better informing users on when and how market research should be used and suppliers on how to meet the needs of clients, the book seeks to not only prevent market research from being purchased under wrong expectations but also to elevate the level of expectations from marketing research and, thereby, of the actual performance of marketing research. By doing so, the book hopes to raise the level of satisfaction of all the stakeholders in marketing research.

    RajivGrover
    References
    The bloodbath in market research, (1991, February 11). Business Week, pp. 72–74.
    Hodock, C.(1990, September). The fall and decline of marketing research in corporate America. Paper presented at the 11th Annual Marketing Research Conference, American Marketing Association, Chicago.
    Lesh, D.(1999, March). Departments that provide information used by CEOs to make decisions. Paper presented at the 45th Annual Advertising Research Foundation Conference, New York.
    Surveys proliferate, but answers dwindle, (1990, October 5). New York Times, p. A1.
    When customer research is a lousy idea. (1993, March 8). Wall Street Journal, p. 12.

    Acknowledgments

    We sincerely thank all the authors of this book who so willingly committed to this project. Without their contributions, we would not have been able to take the book to print. Their individual standing and stature in the field can only add to the credibility of the contents.

    Our gratitude extends to the academic and practicing marketing researchers who reviewed the various chapters of the book without standing to gain anything in return for this painstaking task. Because of their indulgence, each chapter benefited from a second look by an expert. Our thanks go to Pascale Quester, Adelaide University, Patrick Quinlan, Adrian College, and Jo Sprague, San Jose University for their careful review of the manuscript.

    We also express our appreciation for the cooperation that Al Bruckner, Todd Armstrong, Camille Herrera, Gillian Dickens, Astrid Virding, and Mary Ann Vail at Sage Publications showed us at every step. Their unwavering support was valuable to us through the effort.

    Finally, we acknowledge the patience and understanding of our families, especially our spouses, in letting us take this enjoyable and rewarding ride.

  • Author Index

    About the Editors

    Dr. Rajiv Grover is the Head of the Department of Marketing and holder of the Terry Chair of Marketing at the Terry College of Business, The University of Georgia in Athens, Georgia. The Department of Marketing houses the unique Master of Marketing Research program, and through the Department's Center of Marketing Studies, it conducts several executive programs in marketing research. Dr. Grover has received several honors for his research and teaching efforts, including the O'Dell award for the best paper in the Journal of Marketing Research and the Hugh O. Nourse Outstanding MBA Teacher Award. He received a Ph.D. degree in Marketing from the University of Massachusetts at Amherst; an MBA degree from Indian Institute of Management, Calcutta; and an Electronics Engineering BTech degree from IIT, Kharagpur.

    Dr. Marco Vriens is the Senior Marketing Manager of Audience Intelligence and Segmentation at Microsoft, Inc. Prior to Microsoft, he worked on the supplier side, and prior to that, he was Assistant Professor of Marketing at the University of Groningen. Dr. Vriens has consulted many leading companies such as IBM, Seagate, Philips, Dell, and others. He has published more than 50 articles, both in journals such as the Journal of Marketing Research and industry magazines such as Marketing Research, and he has also published a book, Conjoint Analysis in Marketing (1995). He received several “Best Paper” awards, including the David K. Hardin memorial award.

    About the Contributors

    Gerald S. Albaum is Research Professor at the Robert O. Anderson Schools of Management at the University of New Mexico, Professor Emeritus of Marketing at the University of Oregon, and a Senior Research Fellow at the IC2 Institute, University of Texas at Austin. His Ph.D. (1962) is from the University of Wisconsin-Madison.

    Greg M. Allenby is Kurtz Chair in Marketing at Ohio State University. He is a Fellow of the American Statistical Association and is coauthor of Bayesian Statistics and Marketing (2005). He has authored numerous publications that have appeared in leading marketing and statistics journals and serves on the editorial boards of many distinguished journals.

    Chad R. Allred earned an Electrical Engineering degree and M.B.A. from Brigham Young University (BYU). He became an Intel Product-Line Manager and Novell Marketing Director prior to earning a Ph.D. from Purdue University. He is currently an Assistant Professor of Marketing at BYU. His research interests include high-tech business-to-business exchange and marketing research technology.

    Eric J. Arnould, an anthropologist, is PETSMART Distinguished Professor in the Norton School of Family and Consumer Sciences at the University of Arizona. His research appears in the major U.S. marketing journals and many social science publications. Recent investigations focus on consumer resource theory, marketing clusters, households and consumption, and multi-method research.

    David Bakken is Senior Vice President and director of marketing science for Harris Interactive. He earned his doctorate in social psychology at Boston University.

    Allan L. Baldinger (M.B.A., Columbia University) has spent 37 years as a marketing research practitioner. His corporate career included Research Manager at Warner Lambert, Marketing Research Director positions at Mennen and at the Advertising Research Foundation, and then VP positions at NPD, Ipsos, and MarketTools. He is widely published in Advertising Research and in Brand Equity.

    Hans Baumgartner (Ph.D., Stanford University) is Professor of Marketing, Charles & Lillian Binder Faculty Fellow, and Director of Ph.D. Programs in the Smeal College of Business at the Pennsylvania State University. His research and teaching interests are in the areas of consumer behavior and research methodology.

    Peter M. Bentler is Distinguished Professor of Psychology and Statistics at UCLA. Past president of the Psychometric Society and other organizations, he received the Distinguished Scientific Contributions Award (Division 5, American Psychological Association) and the Sells Award for Outstanding Career Contributions to Multivariate Experimental Psychology (Society of Multivariate Experimental Psychology).

    Pradeep K. Chintagunta is the Robert Law Professor of Marketing at the Graduate School of Business, University of Chicago. His recent research focuses on factors influencing the sales of technology and pharmaceutical products. He is also interested in studying vertical and horizontal interactions among firms.

    William A. Cook (Ph.D., University of Florida) is SVP, Research and Standards for the ARF. He left academia to research DuPont's corporate image advertising. Subsequently, he worked on consumer product advertising strategy and research at DuPont and Kraft General Foods. At Simmons MRB and Equifax NDS, he developed tools for the integration of media and marketing planning.

    Wayne S. DeSarbo is the Mary Jean and Frank P. Smeal Distinguished Professor of Marketing at the Smeal College of Business at the Pennsylvania State University at University Park. His methodological interests lie in multidimensional scaling, classification, and multi-variate statistics. His marketing research interests lie in market segmentation, positioning, new product/service design, consumer choice, and strategy.

    William R. Dillon is the Herman W. Lay Professor of Marketing and Professor of Statistics at the Cox School of Business, Southern Methodist University, and the Senior Associate Dean. He has published numerous articles and books in the areas of segmentation, positioning, market structure, and issues related to the use of latent class/mixture models and covariance structure models.

    Xiaojing Dong is a doctoral student at Northwestern University, expecting to finish by June 2006. Her dissertation proposal, “Quantifying the Benefits of Individual Level Targeting in the Presence of Firm Strategic Behavior,” won the 2005 Clayton Award. Xiaojing is from China and got her M.S. degree in Transportation from MIT.

    Amber Epp is a doctoral student in the Marketing Department at the University of Nebraska-Lincoln (expected completion spring 2007). Her research examines family consumption behaviors, specifically centering on the intersection of individual, relational, and family identity enactments. Using multiple methods in her research, she works extensively with qualitative data analysis.

    Curtis L. Frazier is VP-Marketing Science, Millward Brown. Previously, he taught political science, where he focused on statistical methodology, American politics, comparative politics, and politics of the developing world. He holds a Ph.D. and master's degree from the University of Houston and a B.A. from the University of Texas.

    Sunil Gupta is Professor of Business at Harvard Business School. His research interests include choice models, cross-category purchase, and customer value. He has won several awards, including the O'Dell (1993, 2002) and the Paul Green (1998, 2005) awards for the Journal of Marketing Research. He serves on the editorial boards of six journals.

    Raghuram Iyengar is Assistant Professor at The Wharton School of the University of Pennsylvania in Philadelphia. He has an undergraduate degree in engineering from IIT Kanpur, India, and has a Ph.D. in Marketing from Columbia University, New York. His research interests are in pricing, structural models, and Bayesian methods.

    Wagner A. Kamakura is the Ford Motor Company Professor of Global Marketing at Duke University. He is a coauthor of Market Segmentation: Conceptual and Methodological Foundations, as well as numerous articles in academic journals. His current research interests are in market segmentation and market structure, CRM, and the modeling of customer satisfaction, retention, and profitability.

    Kevin Lane Keller is the E. B. Osborn Professor of Marketing at the Tuck School of Business at Dartmouth College. His academic resume includes degrees from Cornell, Duke, and Carnegie-Mellon universities and faculty positions at Berkeley, Stanford, and UNC. His textbook, Strategic Brand Management, has been adopted at top business schools and leading firms around the world.

    Warren F. Kuhfeld manages the multivariate models research and development group at SAS and specializes in experimental design and marketing research methods. He has developed SAS software since 1984 and has developed an extensive catalog of designs and design software. He earned his Ph.D. from the University of North Carolina at Chapel Hill.

    Ajith Kumar is Professor of Marketing at Arizona State University. His primary research interests are in the development of quantitative research methodologies and applications of statistical models to market segmentation problems. His publications include articles in the Journal of Marketing Research, Journal of Marketing, and Psychological Bulletin.

    V. Kumar (Ph.D., University of Texas, Austin) has received numerous teaching and research excellence awards and has published more than 75 articles in many scholarly journals in marketing. He was recently listed as one of the top five ranked scholars in marketing worldwide and has consulted for many global Fortune 500 firms.

    Donald R. Lehmann is Professor of Business at the Columbia University Graduate School of Business. His research interests include decision making, empirical generalizations, the adoption of new products and innovations, and the value of brands and customers. He has been Executive Director of MSI and President of ACR.

    Katherine (Kay) N. Lemon is Associate Professor of Marketing at Boston College's Carroll School of Management. Her research focuses on customer equity, customer asset management, and marketing strategy. Her research appears in leading marketing and management journals and has been implemented by top global firms in several industries.

    Gary L. Lilien is Distinguished Research Professor of Management Science at Penn State and cofounder and Research Director of the ISBM. He holds a doctorate from Columbia and three honorary degrees. He is author or coauthor of 12 books (including Marketing Models and Marketing Engineering) and more than 100 articles.

    Naresh K. Malhotra is Regents' Professor, Georgia Institute of Technology. Ranked number one based on articles published in the Journal of Marketing Research, Journal of Health Care Marketing, Journal of the Academy of Marketing Science, and International Marketing Review, he is also the recipient of the Academy of Marketing Science Distinguished Marketing Educator Award, 2005.

    Dan Mallett has been a statistical consultant in media and marketing research for 35 years. Prior to starting Daniel Mallett Associates in 1986, he was Managing Director of Marketmath, Inc. He has graduate degrees (M.B.A., M. Phil) from NYU and Columbia University.

    Jeff Miller is Senior Vice President of Burke, where he has overall responsibility for the Online Research practice and the Decision Sciences function at Burke, Inc. For the past 8 years, his research efforts have focused on the effective use of the Internet as a marketing research tool.

    Soumen Mukherjee is a Principal at Marketing & Planning Systems (MaPS), a Boston-based strategic marketing research and consulting firm. He has more than 15 years of research experience and has extensive experience with advanced statistical methods in marketing research. He has presented and published his research in leading marketing conferences and journals.

    Richard L. Oliver (Ph.D., University of Wisconsin) is Professor of Management at Vanderbilt University and has interests in consumer psychology, especially customer satisfaction, loyalty, and postpurchase processes. He is a Fellow of the American Psychological Association. Books include Satisfaction: A Behavioral Perspective on the Consumer and Service Quality: New Directions in Theory and Practice (coeditor).

    Arvind Rangaswamy (Ph.D., Northwestern University) is the Anchel Professor of Marketing at Penn State and cofounder and Research Director of the eBusiness Research Center (http://www.ebrc.org). He also holds an M.B.A. from the Indian Institute of Management, Calcutta; and a B. Tech from the Indian Institute of Technology, Madras. For further details visit http://www.arvind.info.

    Peter E. Rossi is the Joseph T and Bernice S. Lewis Professor of Marketing and Statistics at the Graduate School of Business, University of Chicago. His research interests include pricing and promotion, target marketing, direct marketing, micro-marketing, limited dependent variable models, and Bayesian statistical methods. He is the founding editor of Quantitative Marketing and Economics and is the Director of the Kilts Center for Marketing, GSB, University of Chicago.

    Roland T. Rust is Chair of the Marketing Department and Executive Director of the Center for Excellence in Service at the University of Maryland. He has won numerous awards for his contributions to marketing, various journal articles, and for his book Driving Customer Equity (with Valarie Zeithaml and Katherine Lemon). He has consulted with many leading companies worldwide.

    Victoria Savalei is an advanced graduate student in the Psychometrics Program at UCLA. Her research interests include structural equation modeling with incomplete and nonnormal data.

    Subhash Sharma is the James F. Kane Professor of Business in the Moore School of Business, The University of South Carolina. His research interests include CRM, data mining, and global marketing strategies. He has published in leading academic journals and has authored Applied Multivariate Techniques and coauthored Scaling Procedures: Issues and Applications.

    Sandip Sinharay received his Ph.D. in Statistics from Iowa State University in 2001 and is a research scientist at the Center of Statistical Theory and Practice in Educational Testing Service, Princeton, NJ. His research interests are Bayesian statistics, model checking and model selection methods, statistical computing, and educational statistics.

    Jared Smith is the Manager of Online Technical Operations for Google and was the founding product manager for Novell Directory Services (NDS), where he oversaw the installed base of 19 million users worldwide. As a product manager in the Consumer Products Division of WordPerfect Corporation, his international portfolio consisted of 12 different software products in 22 countries.

    Scott M. Smith, Ph.D., is the James Passey Professor of Marketing, Marriott School of Management, Brigham Young University, and founded several online survey software and research companies. Author of research methodology and modeling books, his research interests include Internet research and methodology and the development of online computer applications employing real-time data collection techniques for marketing research.

    Jan-Benedict E. M. Steenkamp is the C. Knox Massey Professor of Marketing and Marketing Area Chair, Kenan-Flagler Business School, University of North Carolina at Chapel Hill. His research focuses on global marketing, effectiveness of marketing instruments, interorganizational relationships, and marketing research techniques. He has written and edited five books and published articles in Journal of Marketing, Journal of Marketing Research, Journal of Conflict Resolution, International Journal of Research in Marketing, Marketing Science, and other journals.

    Christopher R. Stephens has worked in areas from theoretical physics, with Nobel laureate Gerard't Hooft, to artificial intelligence, biology, and finance. Among his honors are the Jorge Lomnitz Prize of the Mexican Academy of Sciences, a Leverhulme Professorship at the University of Essex, and member of the editorial board of Genetic Programming and Evolvable Hardware.

    R. Sukumar has served as a faculty member in Marketing at business schools, including Thunderbird and the University of Maryland, and also served as Vice President, Research Sciences for IPSOS-Vantis. He has a degree in Mechanical Engineering and an M.B.A. and Ph.D. from the University of Pittsburgh.

    Gerard J. Tellis (Ph.D., Michigan) is Professor of Marketing and Neely Chair of American Enterprise at Marshall School of Business, University of Southern California. He was Visiting Chair at Cambridge University, United Kingdom, and Distinguished Visitor, Erasmus University, Rotterdam. He has published more than 70 papers and books, which have won numerous awards (http://www-rcf.usc.edu/~tellis/).

    Gerrit H. Van Bruggen is Professor of Marketing at RSM Erasmus University in the Netherlands. Most of his research deals with the application of information technology in marketing. His articles have appeared in journals such as the Journal of Marketing, Journal of Marketing Research, Marketing Science, Management Science, and Information Systems Research.

    Michel Wedel has an MS.C. in Biomathe-mathics (1981), an MS.C. in Statistics (1986), and a Ph.D. in Marketing (1990). He is the Dwight F. Benton Professor of Marketing at the Ross School of Business at the University of Michigan. His research interests are in the application of statistical and econometric methods to marketing problems.

    Berend Wierenga is Professor of Marketing at RSM Erasmus University in Rotterdam. His research focuses on marketing decision making and marketing decision support, and his articles have been published in the Journal of Marketing, Marketing Science, Management Science, and other journals. He is also the coauthor of Marketing Management Support Systems (2000).

    Gerald Zaltman is a senior partner in Olson Zaltman Associates, a market research and consulting firm specializing in developing deep understandings of consumers for use in developing marketing and corporate strategy. He is also the Joseph C. Wilson Professor of Business Administration at the Harvard Business School and codirector of the Mind of the Market Laboratory and has received several awards for his work.

    Lindsay Zaltman is a Managing Director at Olson Zaltman Associates, a marketing research firm. He lectures extensively at various Fortune 500 companies and conferences within and outside of the United States. He earned a master's degree in Marketing Research from the University of Georgia and a B.A. in Anthropology from the University of Maine.

    Valarie A. Zeithaml (Ph.D., Maryland) is the Roy and Alice H. Richards Bicentennial Professor and M.B.A. Associate Dean at the Kenan-Flagler Business School of the University of North Carolina, Chapel Hill. Coauthor of Delivering Quality Service (1990), Driving Customer Equity (2000), and Services Marketing (2006), she has won numerous awards for teaching journal articles, andDriving Customer Equity.


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