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McGraw-Hill/Irwin Series in Marketing

Third Edition

Marketing Research

A Division of The McGraw-Hill Companies

MARKETING RESEARCH
Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americs, New York, NY, 10020. Copyright © 2003, 2000 by The McGraw-Hill Com-panies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other elec-tronic storage or transmission, or broadcast for distance learning. Some ancillaries, including elec-tronic and print components, may not be available to customers outside the United States.

Library of Congress Cataloging-in-Publication Data

Hair, Joseph F.

INTERNATIONAL EDITION ISBN 0-07-115119-2
Copyright © 2003. Exclusive rights by The McGraw-Hill Companies, Inc. for manufacture and export. This book cannot be re-exported from the country to which it is sold by McGraw-Hill. The International Edition is not available in North America.

www.mhhe.com

—J.F.H. Jr., Baton Rouge, LA

This book is dedicated to my wife, Donny, and my two boys, Robert Jr. and Michael.

Joseph F. Hair Jr. earned a B.A. in Economics and an M.A. and Ph.D. in Marketing at the University of Florida. He began his teaching career at the University of Mississippi and then moved to Louisiana State University in 1977. He continues to teach at LSU, where he is the Director of the Institute for Entrepreneurial Education and Family Business Studies, and where he holds the Alvin C. Copeland Endowed Chair of Franchising. He has acted as a management consultant and/or expert witness for a variety of industries and has served on the board of directors of numerous organizations. He has been an officer for a long list of academic organizations, and he is a past President and Chairman of the Board of Governors of the Academy of Marketing Science. He has been a regular contributor and reviewer, and occasionally a member of the editorial board, for such publications as The Journal of Marketing Research, The Journal of Business Research, and Marketing Education Review. The list of his scholarly publications runs to a dozen pages.

All marketing research books are designed to introduce students to the concepts and practices that make up the field of marketing research. Building on the success of our first edition of Marketing Research: Within a Changing Information Envrionment, this second edition goes well beyond that basic idea to show how marketing information research tools, skills, and understanding can be applied in solving marketing problems and creating business opportunities within a rapidly changing information environment. With the growing availability, acceptance, and use of (1) the Internet and its related advanced technologies and communication systems, (2) gatekeeper technologies such as caller ID, electronic answering devices, and voice messengers to protect people’s privacy, (3) continuous changing of internal organizational structures to improve the cross-functional sharing of information, and (4) the movement of both large and small businesses toward globalization of marketing practices, tomorrow’s information requirements will be more challenging than those of yesterday. Although the first edition was well received in the marketplace, it was the positive comments made by adopters of the book and reviewers (both adopters and nonadopters) as well as students which encouraged us to write this second edition. We sincerely believe that we have identified several critical learning needs that other marketing research textbooks are not addressing well or not addressing at all.

Hair et al.: Marketing Front Matter Preface © The McGraw−Hill Research, Second Edition Companies, 2002

viii Preface

• Clearly presented and informative exhibits, tables, and boxes that provide real business applications.

• Integrated examples that illustrate the links between various research concepts.

• A new interactive book website that links the students and instructors to additional exam- ples and discussions on many different research topics, databases, and software tools.

Content and Organization

Chapter 3 provides in-depth treatment of the most critical step in the process—determining the “right” information research problem and deciding on the appropriate research objectives. It also offers a discussion of the important ethical dilemmas and issues faced by both researchers and decision makers. Chapter 4 integrates strategic management and customer relationship issues involved in conducting secondary data gathering research. It places heavy emphasis on the search strategies needed to acquire, analyze, and use both traditional and online approaches. The original Chapter 5, which provided detailed coverage of the use of the Internet, has been completely moved to the book’s interactive website (www.mhhe.com/hair). The new Chapter 5 in this edition provides a detailed discussion of customer relationship management (CRM) and explores various research strategies using CRM software for data acquisition and for intraorganizational sharing of data and information.

Part 2 covers the various research designs used to collect accurate data and information and contains five chapters. Chapter 6 continues the integration of CRM activities and offers detailed information on the application of secondary data sources and databases for solving business problems. It places heavy emphasis on the importance of secondary data and on knowing how to develop and maintain databases as well as how to undertake data mining and conduct segmentation activities. Chapter 7 focuses uniquely on how research-driven decision support systems (RDSS) are created and used to support researchers and decision makers. Through the exclusive partnership with the Matrix Technology Group, Inc., a CRM software company in Clearwater, Florida, students and instructors can link to a variety of CRM software, tutorials and applications through the book’s new interactive website (www.mhhe.com/hair).

Chapter 13 advances the concept of scale measurement to more complex attitude, emotional, and behavioral scale formats, and it goes on to provide a basic overview of other types of comparative and noncomparative specialty scales used in marketing research practices. More examples of scale measurements are provided through links on the book’s website. Chapter 14 offers a detailed treatment of how to develop and format a scientific-based survey instrument (i.e., questionnaire). Exclusive to this book, we use the“flowerpot” framework and demonstrate how this framework integrates and has an impact on the various procedural steps of the design process. In addition, there is a detailed treatment of how to develop cover letters and letters of introduction and their importance to increasing response rates. Discussions are also provided on the development of critical supplement documents associated with survey instrument designs and conducting field work (i.e., supervisor instructions, interviewer instructions, screening forms, quota sheets, rating cards, call record sheets). The book’s website offers students and instructors additional examples of good and bad questionnaires, cover letters, and pre- and posttest questionnaire design changes.

Part 4 covers data preparation, data analyses, and the communication of research findings and contains five chapters. Chapter 15 begins this section by offering an overview of the fundamental principles of coding requirements, the editing of data, and the preparing of raw data for statistical analysis. Chapter 16 builds on earlier discussions of basic sampling statistics and begins to illustrate how fundamental descriptive statistical analyses are used to transform raw data into more complex data structures. It provides the how, when, and whys for performing t-test and z-tests, and it explains the importance of means, standard deviations, and standard error values. Chapter 17 expands the discussion of data analysis to include testing for associations using correlation, covariance, regression, and analysis of variance (ANOVA) statistical procedures.

• Vignettes. Each chapter begins with an interesting story that describes a real-world business example that illustrates the focus and importance of the chapter’s material.

• Basic Concepts and Terms. These are boldface in the text and are also defined again in the page margins to make reviewing easier. They are also listed at the ends of chap- ters and included in a glossary at the back of the book.

• Global Insights. These boxes, scattered throughout the book, are intended to encour- age students to see the international implications of and opportunities for marketing research.

• Chapter Summaries. These detailed summations, organized by learning objectives, will help students remember key facts, concepts, and issues, and will serve as an excellent study guide in preparation for in-class discussions and exams.

• Instructor’s Resource CD-ROM. This CD includes a thoroughly revised Instructor’s Manual and PowerPoint slides prepared by Kevin Bittle. A wealth of extra student pro- jects and real-life examples provide additional classroom resources. The electronic test bank files, prepared by Tom Quirk of Webster University, are also thoroughly revised and included on the CD. Each chapter has 60 multiple choice, 15 true-false, and 4 essay questions.

• Videos. The video program contains two hours of material on marketing research from the McGraw-Hill/Irwin video library.

data for analysis and actual data analysis procedures (Chapters 16, 17, 18). The database is rich with data and covers topics that all students can easily identify with.

• SPSS Student Version. Through an arrangement with SPSS, we offer the option of purchasing the textbook packaged with a CD-ROM containing an SPSS Student Ver-sion 11.0 for Windows. This powerful software tool allows for the analysis of up to 50 variables and 1,500 cases. It contains the complete Back Yard Burgers data set and can be used in conjunction with the data analysis procedures covered in the text.

Reviewers and focus group participants who helped shape this edition:

Carol Anderson G. M. Naidu
Rollins College University of Wisconsin, Whitewater Sandy Bravo Rajan Natarajan
Boston College Auburn University
P. K. Cannon Lee Nordgren
University of Maryland Indiana University
Les Dlabay Radesh Palakurthi
Lake Forest College San Jose State University
Vicki Eveland Alan Sawyer
Mercer University University of Florida
James Gould K. Sivakumar
Pace University University of Illinois, Chicago
Janice Gygi Patrick Vargas
Utah Valley State College University of Illinois, Champaign-Urbana Rich Hanna Mark L. Wilson
Boston University University of Charleston
Arthur Money
Henley College

Barry Babin Molly Rapert
University of Southern Mississippi University of Arkansas
Joseph K. Ballanger John Rigney
Stephen F. Austin State University Golden State University
Kevin Bittle Jean Romeo
Johnson and Wales University Boston College
John R. Brooks Jr. Lawrence E. Ross
Houston Baptist University Florida Southern University
Mary L. Carsky Carl Saxby
University of Hartford University of Southern Indiana
Frank Franzak Bruce Stern
Virginia Commonwealth University Portland State University
Timothy Graeff Gail Tom
Middle Tennessee State University California State University at Sacramento Harry Harmon John Tsalikis
Central Missouri State University Florida International University
Karen Kolzow-Bowman Steve Vitucci

Morgan State University
Martin Meyers

Robert P. Bush
David J. Ortinau

chapter 4
Strategic Information Management: Secondary Data Sources 94

chapter 5
Customer Relationship Management and the Marketing

Hair et al.: Marketing Front Matter Preface © The McGraw−Hill Research, Second Edition Companies, 2002

brief contents xv

chapter 11
Sampling: Theory, Designs, and Issues in Marketing Research 330

chapter 12
Overview of Measurement: Construct Development and Scale Measurement 374

chapter 15
Coding, Editing, and Preparing Data for Analysis 490

Hair et al.: Marketing Front Matter Preface © The McGraw−Hill

Research, Second Edition Companies, 2002

chapter 1
The Role of Marketing Research in Strategic Planning 2

Value of Marketing Research Information 4 Customer Relationship Management
and the Marketing Research Process 5
Customer Relationship Management 6
Strategic Marketing Planning
7 Marketing Situation Analysis 7
Market Analysis 7
Market Segmentation 8
Competition Analysis
9 Marketing Strategy Design 9
Target Marketing 9
Positioning 10
New-Product Planning
10 Marketing Program Development 11
Product Portfolio Strategy 11
Distribution Strategy 11
Pricing Strategy
13 Integrated Marketing Communications 14 Strategy Implementation and Control 16
Strategy Control 16
Strategic Information Analysis
16 The Marketing Research Industry 17
Types of Marketing Research Firms 17
Changing Skills for a Changing Industry 19 Emerging Trends
20 Summary of Learning Objectives 20
Key Terms and Concepts 21
Review Questions 21
Discussion Questions
22 MARKETING RESEARCH ILLUSTRATION:
CAREERS IN MARKETING RESEARCH WITH A LOOK AT FEDERAL EXPRESS 23

Summary of Learning Objectives 49 MARKETING RESEARCH ILLUSTRATION:

Key Terms and Concepts 50 DEVELOPMENT OF RESEARCH OBJECTIVES

chapter 4
Strategic Information Management:

Relationship Management 129 Database Technology 156

Transforming Marketing Research What Is Data Warehousing? 158

Enterprisewide Approach to the Use Information 162

of Information 132 The Data Mining Procedure 162

Active Data 135 and the New Millennium 171

Directed Data 135 Summary of Learning Objectives 171

Review Questions 137 THE FUNCTION OF DATABASES WITHIN

Discussion Questions 137 THE FINANCIAL INDUSTRY 174

Effective Development of the Enhanced
Database 148
The Dynamics of Database Development 149 Determining the Value of Information 150 Evaluating Internal Data Sources
151 Evaluating External Data Sources 153
Evaluating Custom-Designed Data Sources 154 Evaluating the Source Data Mix 154
General Rules of Thumb in Database
Development 155

System 180

CRM and the Marketing Decision Support

Information Requirements 182

Environmental Information 183

Statistical Software Systems 189

Managerial Function Software Systems 189

Resource 194

Business Intelligence Programs 194

Contents xix

The Internet as a Business Intelligence Data Source 196
Summary of Learning Objectives 197
Key Terms and Concepts 198
Review Questions
199 Discussion Questions 199
MARKETING RESEARCH ILLUSTRATION: USING A GEOGRAPHIC INFORMATION SYSTEM 200

Methods and Errors 252

Value of Descriptive Survey Research Designs 254

Disadvantages of Survey Methods 257

Types of Survey Methods 258

Factors for Selecting the Appropriate

Survey Method 271

Research Methods 278

Random Sampling Error 279

Discussion Questions 283

MARKETING RESEARCH ILLUSTRATION:

and Test Markets 288

Value of Experimentation and Test Marketing 290

Techniques 293

Selecting the Appropriate Observation

Types of Variables Used in Experimental

Designs 300