Marketing Research

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Marketing Research That Won’t

Break the Bank

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Marketing Research

That Won’t

Break the Bank

A Practical Guide to Getting

the Information You Need

Alan R. Andreasen

Foreword by William A. Smith

The Second Edition of Cheap But Good

Marketing Research

Prepared with the assistance of the

Academy for Educational Development

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Copyright © 2002 by Alan R. Andreasen.

Published by Jossey-Bass

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Library of Congress Cataloging-in-Publication Data:

Andreasen, Alan R., date.

Marketing research that won’t break the bank: a practical guide to getting the information

you need/Alan R. Andreasen; foreword by William A. Smith.—1st ed.

p. cm.—(The Jossey-Bass nonprofit and public management series)

Includes bibliographical references and index.

ISBN 0-7879-6419-0 (alk. paper)

1. Marketing research. I. Title. II. Series.

HF5415.2 .A486 2002

658.8'3—dc21

2002010335

Printed in the United States of America

FIRST EDITION

HB Printing 10 9 8 7 6 5 4 3 2 1

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The Jossey-Bass

Nonprofit and Public Management Series

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Contents

Foreword

William A. Smith xiii

Preface xvii

Acknowledgments xxiii

The Author xxv

Part One: Planning a Low-Cost Research Program

1. Myths of Marketing Research 3

Research Priests and the Low-Budget Manager • Moving

Forward • Organization of the Book • Concluding Comments

2. Planning a Research Program 17

Framing the Research Problem • Looking for Opportunity

• Research Planning • Serendipitous Research: Recognizing

Research Opportunities as You Go • The Decision Opportunity

3. Evaluating Individual Research Projects 43

Setting Budgets • Decision-Based Research Budgeting

• When to Resist Research

ix

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4. Backward Marketing Research 60

How Research Goes Wrong • Turning the Process on Its Head

• Conclusion

Part Two: Alternative Low-Cost Research Techniques

5. Using Available Data 75

Archives • Internal Archives • External Archives

• Conclusion

6. Systematic Observation 107

Collecting Natural Observations • Controlling the Quality

of Natural Observations

7. Low-Cost Experimentation 119

Experimental Design • Types of Experiments • Conclusion

8. Low-Cost Survey Designs 142

Survey Design • Low-Cost Sampling • Other Alternatives

for Asking Questions

Part Three: Making Low-Cost Research Good Research

9. Producing Valid Data 181

Nonquestion Sources of Error • Asking Questions

• Questionnaire Design

10. All the Statistics You Need to Know (Initially) 198

Fear of Statistics • Input Data • Descriptive Statistics

• Statistical Analysis • Other Multivariate Techniques

Part Four: Organizing Low-Cost Research

11. Organization and Implementation on a Shoestring 235

Financial Assistance • Acquiring Knowledge • Acquiring

Personnel • Acquiring Equipment

x CONTENTS

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Notes 261

Recommended Reading 265

Index 269

CONTENTS xi

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For Seymour Sudman (in memoriam) and Jean Manning

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Foreword

Managers in a wide range of organizations with limited bud￾gets face daunting challenges in competitive marketplaces. Their

training and experience make it clear to them that to be successful,

their strategies and tactics must emerge from a clear, in-depth under￾standing of their target markets, their competitors, and the environ￾ment in which they all operate. Yet these managers lack the resources

to routinely hire the best researchers, contract for the latest data￾bases and information services, or staff a large research department.

This is true of thousands of managers in the private sector—the

start-up innovator, the niche marketer, the neighborhood entrepre￾neur. It is even truer in the nonprofit world, where budgets for almost

everyone are very limited but where managers have immense chal￾lenges set for them or that they set for themselves.

This book is designed to help such managers increase their effec￾tiveness through the creative and judicious use of low-cost sources

of information. It provides insight on how to use the Web, do low￾cost surveys and focus groups, be clever at observing customers and

competitors, use simple experiments to test tactics and strategies,

and create internal records that yield maximum creative insight.

This book is valuable also for the frameworks it offers to help

managers with limited budgets in two other ways. First, it helps

those who may be reluctant to entertain the idea of conducting a

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xiv FOREWORD

significant amount of research by addressing head-on the myths

that may be unnecessarily holding them back. It confronts such

misconceptions as “research is only for big decisions” or “most re￾search is a waste” or, the most important myth, “market research is

too expensive.” The simple truths that put the lie to these myths go

a long way toward helping the reluctant investigator move out of

the marketplace fog to crisp, clear insights into what is transpiring

with key target groups, major competitors, regulators, and others

whose perceptions, attitudes, actions, and future plans will have

major impact on the marketer’s success.

The second source of help is what the author calls backward

marketing research. This simple concept has been proved to reduce

the waste and increase the impact of research significantly in a wide

range of organizations, including some very large ones, such as the

DDB Needham advertising agency. It starts with a simple premise:

if research does not help managers make decisions, it is not useful

and a waste of resources (including the manager’s time). The proper

approach, the author argues, is to spend a significant amount of

time thinking about how the research will be used to help the man￾ager choose among options and that this should be done long before

any attempt is made to collect data. This strict regimen requires the

manager and the research supplier (someone in the manager’s own

organization or an outside supplier) to spend significant time think￾ing about what is to be done with the data. This conversation leads

to a rough outline of the final report and then to decisions about data

requirements, possible analysis options, and the presentation format.

Only then do questions about how to get the information arise. The

result of this careful preplanning process is that when the report ar￾rives, the manager is primed and eager to act on what he or she has

already been anticipating.

Thus, this book is not only a primer on how to do research when

one has limited resources; it is also a guidebook to how to organize

and implement that process in ways that will maximize its value.

Great managers thrive on information and insight. If you have

fewer dollars and less staff than the corporate and nonprofit giants

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does not mean that you must act on instinct. The tools are here. The

approach is here. It takes only commitment and diligence to turn

marketplace fog into acute perceptions that make managerial choices

grounded, inevitable, and effective.

July 2002 William A. Smith

Academy for Educational Development

Washington, D.C.

FOREWORD xv

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Preface

This book is designed for managers who want to do marketing

research but think they cannot afford it. It shows them how to get

the information they need to be a better manager and how to do it

at low cost.

The basic message of the book is that research need not be ex￾pensive, overly complex, or highly statistical to be extremely help￾ful to managers in a wide range of organizations. The marketing

research community is sometimes guilty of making the research

process seem so subtle and complicated that it scares off too many

people who could make valuable use of low-cost techniques. Any￾one can do perfectly decent and useful research without fancy prob￾ability samples, complex questionnaires, highly trained interviewers,

or the latest in computerized statistical software. This book tells how

and gets motivated readers started.

I believe there is a true need for this kind of treatment. Con￾ventional textbooks give only passing reference to the potential of

many useful low-cost techniques and seem barely interested in the

problems of those who are not working in large corporations or ma￾jor marketing research agencies. And although there are a few books

on practical marketing research techniques, they tend to be how-to￾do-it manuals primarily for those who want to do field surveys.

This book, then, is a heartfelt response to the cries for help I

have heard from practicing and would-be marketing managers of

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xviii PREFACE

small and medium-sized organizations in the business, government,

and nonprofit sectors—a group I call low-budget researchers. For

them, the pages that follow are designed to achieve four basic ob￾jectives:

1. Demythologize marketing research and do away with miscon￾ceptions that keep too many managers from doing any kind

of marketing research

2. Offer a basic approach that will ensure that any research that

is done is needed and useful to the managers for whom it is

designed

3. Describe in a systematic fashion a wide variety of specific

research techniques that are low cost and, if carried out with

care and appropriate attention to issues of bias, can provide

management with crucial market insights to improve market￾ing decision making

4. Motivate readers to get started—to begin to do the research

outlined here and see how it can lead to better and better

decisions

This book is also written for students. The techniques discussed

typically take up only a brief chapter or so of most basic marketing re￾search texts. The treatment is usually cursory, and one senses that

many textbook writers see these topics as preliminary approaches be￾fore getting on to a really serious study: the major field study or the

complex experiment. They seldom recognize that many of the stu￾dents who read such books or take marketing research courses will go

on to hold jobs or to advise organizations where they will be able to

carry out only low-cost studies. This book is also addressed to these

future managers and advisers and to those who would teach them.

Outline of the Book

Consonant with its twin objectives of motivating and tutoring, the

book is divided into four parts. The first and last parts focus on the

larger issues of getting started, adopting appropriate philosophies,

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