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Marketing managers often commission formal marketing studies of specific problems and opportunities. They may request a market survey, a product-preference test, a sales forecast by region, or an advertising evaluation. We define marketing research as follows:

■ Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.


A company can obtain marketing research in a number of ways. Most large companies have their own marketing research departments.10

■ P & Ga P&G assigns marketing researchers to each product operating division to conduct research for existing brands. There are two separate in-house research groups, one in charge of overall company advertising research and the other in charge of market testing. Each group's staff consists of marketing research managers, supporting specialists (survey designers, statisticians, behavioral scientists), and in-house field representatives to conduct and supervise interviewing. Each year, Procter & Gamble calls or visits over 1 million people in connection with about 1,000 research projects.

■ H -Pa a At HP, marketing research is handled by the Market Research & Information Center (MRIC), located at HP headquarters. The MRIC is a shared resource for all HP divisions worldwide and is divided into three

■ Using the Internet: A company can collect considerable information at very little cost by examining competitors' Web sites, monitoring chat rooms, and accessing published data.

■ Checking out rivals: Many small companies routinely visit their competitors. Tom Coohill, a chef who owns two Atlanta restaurants, gives managers a food allowance to dine out and bring back ideas. Atlanta jeweler Frank Maier Jr., who often visits out-of-town rivals, spotted and copied a dramatic way of lighting dis-plays.12

Companies normally budget marketing research at 1 percent to 2 percent of company sales. A large percentage is spent buying the services of outside firms. Marketing research firms fall into three categories:

■ Syndicated-service research firms: These firms gather consumer and trade information, which they sell for a fee. Examples: Nielsen Media Research, SAMI/Burke.

■ Custom marketing research firms: These firms are hired to carry out specific projects. They design the study and report the findings.

■ Specialty-line marketing research firms: These firms provide specialized research services. The best example is the field-service firm, which sells field interviewing services to other firms.


Effective marketing research involves the five steps shown in Figure 1-11. We will illustrate these steps with the following situation:

American Airlines is constantly looking for new ways to serve its passengers. One manager came up with the idea of offering phone service. The other managers got excited about this idea. The marketing manager volunteered to do some preliminary research. He contacted a major telecommunications company to find out the cost of providing this service on B747 coast-to-coast flights. The telecommunications company said that the equipment would cost the airline about $1,000 a flight. The airline could break even if it charged $25 a phone call and at least 40 passengers made calls during the flight. The marketing manager then asked the company's marketing research manager to find out how air travelers would respond to this new service.

Define the

problem and research


Develop the research plan


Collect the


Analyze the information

Present the


The Marketing Research Process

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