Essentials of Marketing Second Edition Joseph F. Hair, Jr. Kennesaw State University Mary F. Wolfinbarger California State University-Long Beach David J. Ortinau University of South Florida Robert P. Bush Louisiana State University at Alexandria Me Gravu Hill McGraw-Hill Irwin
Part 1 The Role and Value of Marketing Information 1 1 Marketing for Managerial Decision Making 2 AN EXPLOSION OF DATA COLLECTION TECHNIQUES 3 The Growing Complexity of Marketing Marketing Planning and Decision Making Marketing Situation Analysis Market Analysis Market Segmentation Competitive Analysis Marketing Strategy Design Target Marketing/Market Segmentation Positioning New-Product Planning Marketing Program Development Product Portfolio Analysis Distribution Decisions Pricing Decisions Integrated Marketing Communications Executive Dashboards The Marketing Industry Types of Marketing Firms Changing Skills for a Changing Industry Ethics in Marketing Practices Ethical Questions in General Business Practices Conducting Not Meeting Professional Standards Abuse of Respondents Unethical Activities of the Client/ User Unethical Activities by the Respondent Marketing Codes of Ethics 4 4 5 6 6 6 8 8 8 9 9 9 10 10 11 11 11 12 13 14 15 15 DASHBOARD: RESEARCH AND DATA PRIVACY: THE CHALLENGE 15 Emerging Trends 16 CONTINUING CASE STUDY THE SANTA FE GRILL MEXICAN RESTAURANT 1 IN ACTION: CONTINUING CASE: THE SANTA FE GRILL Appendix: Careers in Marketing with a Look at Federal Express 2 The Marketing Process and Proposals SOLVING MARKETING PROBLEMS USING A SYSTEMATIC PROCESS Value of the Process Changing View of the Marketing Process Determining the Need for Information/ DASHBOARD DECISION MAKERS AND RESEARCHERS: MANAGEMENT DECISION MAKERS... MARKETING RESEARCHERS... Overview of the Process Transforming Data into Knowledge Interrelatedness of the Steps and the Process Phase I: Determine the Problem Step 1: Identify and Clarify Information Needs 18 20 20 21 21 22 24 25 26 26 2 28 29 30 31 31 31
XIII Part 2 Step 2: Define the Problem and Questions 34 Step 3: Specify Objectives and Confirm the Information Value 35 Phase II: Select the Design 36 Step 4: Determine the Design and Data Sources 36 DASHBOARD MEASURING EFFECTIVENESS OF ONLINE ADVERTISING FORMATS 3 Step 5: Develop the Sampling- Design and Sample Size 3 Step 6: Examine Measurement Issues and Scales 38 Step : Design and Pretest the Questionnaire 38 Phase III: Execute the Design 39 Step 8: Collect and Prepare Data 39 Step 9: Analyze Data 39 Step 10: Interpret Data to Create Knowledge 39 Phase IV: Communicate the Results 40 Step 11: Prepare and Present the Final Report 40 Develop a Proposal 41 IN ACTION: WHAT DOES A RESEARCH PROPOSAL LOOK LIKE?, 42 ' 44 45 45 46 Designing the Marketing Project 4 3 Secondary Data, Literature Reviews, and Hypotheses 48 MAKING THE MOST OF AN INFORMATION-RICH ENVIRONMENT/ 49 Value of Secondary Data and Literature Reviews 50 Nature, Scope, and Role of Secondary Data 50 Conducting A Literature Review 51 Evaluating Secondary Data Sources 52 Secondary Data and the Marketing Process 53 Internal and External Sources of Secondary Data 54 Internal Sources of Secondary Data 55 External Sources of Secondary Data 56 CONTINUING CASE STUDY USING SECONDARY DATA WITH THE ' <- SANTA FE GRILL 58 DASHBOARD TRIANGULATING SECONDARY DATA SOURCES 63 Synthesizing Secondary for the Literature Review ' 64 Developing A Conceptual Model 64 Variables, Constructs and Relationships 64 Relationships and Hypotheses 65 CONTINUING CASE: SANTA FE GRILL: DEVELOPING RESEARCH QUESTIONS AND HYPOTHESES 6 Hypothesis Testing 6 IN ACTION: THE SANTA FE GRILL MEXICAN RESTAURANT ' J 69 0 1 1 1 4 Exploratory and Observational Designs and Data Collection Approaches 4 THE CULTURE CODES 5 Value of Qualitative 6 Overview of Designs 6 Overview of Qualitative and Quantitative Methods Quantitative Methods Qualitative Methods 8 Qualitative Data Collection Methods 80 In-Depth Interviews 80 Focus Group Interviews 82 Phase 1: Planning the Focus Group Study 84 Phase 2: Conducting the Focus Group Discussions 86 Phase 3: Analyzing and Reporting the Results 88 Advantages of Focus Group Interviews 88 Observation Methods Used in Marketing 89 Unique Characteristics of Observation Methods 89 Types of Observation Methods 89 Selecting the Observation Method 91
XIV Contents Benefits and Limitations of Observation Methods 92 Other Qualitative Data Collection Methods 92 Ethnography 92 Netnography and Other Consumer- Generated Media 93 Case Study 93 CONTINUING CASE STUDY SANTA FE GRILL MEXICAN RESTAURANT 94 Projective Techniques 94 IN ACTION: AN ETHNOGRAPHY OF NEWS USAGE AMONG YOUNG ADULTS 96 9 98 99 99 5 Descriptive and Causal Designs 102 MAGNUM HOTEL'S LOYALTY PROGRAM 103 Value of Descriptive and Causal Survey Designs 104 Descriptive Designs and Surveys 104 Types of Errors in Surveys 105 Sampling Errors 105 Nonsampling Errors 106 Types of Survey Methods 106 Person-Administered Surveys 10 Telephone-Administered Surveys 108 Self-Administered Surveys 111 Selecting the Appropriate Survey Method 114 Situational Characteristics 114 Task Characteristics 115 Respondent Characteristics 116 Causal Designs 118 The Nature of Experimentation 119 DASHBOARD USING ELECTRIC SHOCK TO IMPROVE CUSTOMER SERVICE - 120 Validity Concerns with Experimental 120 Comparing Laboratory and Field Experiments 121 Test Marketing 121 DASHBOARD: RIDERS FITS NEW DATABASE INTO BRAND LAUNCH 122 124 Part 3 Gathering and Collecting Accurate Data 125 125 126 12 6 Sampling: Theory and Methods 128 MOBILE WEB INTERACTIONS EXPLODE 129 Value of Sampling in Marketing 130 Sampling as a Part of the Process 130 The Basics of Sampling Theory 131 Population 131 Sampling Frame 131 Factors Underlying Sampling Theory 131 Tools Used to Assess the Quality of Samples 132 CONTINUING CASE STUDY THE SANTA FE GRILL 132 Probability and Nonprobability Sampling 133 Probability Sampling Designs 133 DASHBOARD SELECTING A SYSTEMATIC RANDOM SAMPLE FOR THE SANTA FE GRILL 135 DASHBOARD WHICH IS BETTER PROPORTIONATELY OR DISPROPORTIONATELY STRATIFIED SAMPLES? 13 Nonprobability Sampling Designs 138 Determining the Appropriate./^ Sampling Design ' 139 Determining Sample Sizes 139 Probability Sample Sizes 140.CONTINUING CASE STUDY ' THE SANTA FE GRILL 140 Sampling from a Small Population 142 Nonprobability Sample Sizes 142 DASHBOARD USING SPSS TO SELECT A RANDOM SAMPLE 142 DASHBOARD SAMPLING AND ONLINE SURVEYS 143 Steps in Developing a Sampling Plan 143
xv IN ACTION: DEVELOPING A SAMPLING PLAN FOR A NEW MENU INITIATIVE SURVEY 145 146 14 14 14 Measurement and Scaling FAST FOOD, SIDE BY SIDE: RESTAURANT LOCATION AND LOYALTY Value of Measurement in Information Overview of the Measurement Process What Is a Construct? Construct Development Scale Measurement Nominal Scales ' Ordinal Scales Interval Scales Ratio Scales Evaluating Measurement Scales Scale Reliability Validity Developing Scale Measurements Criteria for Scale Development DASHBOARD BUSINESSES GET AN ATTITUDE ADJUSTMENT FROM GALLUP Scales to Measure Attitudes and Behaviors Likert Scale Semantic Differential Scale Behavioral Intention Scale Comparative and Noncomparative Rating Scales Other Scale Measurement Issues Single-Item and Multiple-Item Scales Clear Wording IN ACTION: WHAT CAN YOU LEARN FROM A CUSTOMER LOYALTY INDEX? 148 149 150 150 151 151 153 153 153 155 155 156 156 15 158.158 161 161 162 163 164 166 168 168 169 10 12 13 13 13 8 Designing the Questionnaire 16 CAN SURVEYS BE USED TO DEVELOP UNIVERSITY RESIDENCE LIFE PLANS? 1 Value of Questionnaires in Marketing ' ^ 18 Questionnaire Design 18 Step 1: Confirm Objectives 19 Step 2: Select Appropriate Data Collection Method 19 Step 3: Develop Questions and Scaling 180 DASHBOARD "FRAMING" YOUR QUESTIONS CAN INTRODUCE BIAS! 183 Step 4: Determine Layout and Evaluate Questionnaire 184 DASHBOARD SMART QUESTIONNAIRES ARE REVOLUTIONIZING SURVEYS 189 Step 5: Obtain Initial Client Approval 191 Step 6: Pretest, Revise, and Finalize the Questionnaire 191 Step : Implement the Survey 192 The Role of a Cover Letter 192 Other Considerations in Collecting Data 193 Supervisor Instructions 193 Interviewer Instructions 194 Screening Questions 194 Quotas 194 Call or Contact Records 194 IN ACTION: DESIGNING A QUESTIONNAIRE TO SURVEY SANTA FE GRILL CUSTOMERS 195 200 201? 201 202 Part 4 Data Preparation, Analysis, and Reporting the Results 203 9 Qualitative Data Analysis 204 WIRELESS COMMUNICATION'S IMPACT ON SOCIAL BEHAVIOR ' 205 Nature of Qualitative Data Analysis 206 Qualitative versus Quantitative Analysis 206 The Process of Analyzing Qualitative Data 208 Managing the Data Collection Effort 208 Step 1: Data Reduction 208 Step 2: Data Display 215
XVI Contents Step 3: Conclusion Drawing/ Verification 216 Writing the Report 220 Analysis of the Data/Findings 222 Conclusions and Recommendations 223 CONTINUING CASE STUDY- SANTA FE GRILL: USING QUALITATIVE RESEARCH 224 IN ACTION: HOTEL TRAVELERS' CHEERS AND JEERS AT THEIR EXPERIENCES 225 226 22 22 228 Appendix: Advertising's Second Audience: Employee Reactions to Organizational Communications 229 10 Preparing Data for Quantitative Analysis SCANNER DATA IMPROVES UNDERSTANDING OF PURCHASE BEHAVIOR Value of Preparing Data for Analysis Validation Editing and Coding Asking the Proper Questions Accurate Recording of Answers Correct Screening Questions Responses to Open-Ended Questions The Coding Process DASHBOARD DEALING WITH DATA FROM DATA WAREHOUSES Data Entry Error Detection Data Tabulation One-Way Tabulation Descriptive Statistics Graphical Illustration of Data INACTION: DELI DEPOT 11 Basic Data Analysis for Quantitative DATA ANALYSIS FACILITATES SMARTER DECISIONS 232 233 234 235 23 23 23 238 238 238 245 246 246 246 24 249 249 252 256 256 256 25 258 259 Value of Statistical Analysis 260 Measures of Central Tendency 260 DASHBOARD SPLITTING THE DATABASE INTO SANTA FE'S AND JOSE'S CUSTOMERS 262 SPSS Applications Measures of Central Tendency 262 Measures of Dispersion 263 SPSS Applications Measures of Dispersion 264 Preparation of Charts 265 How to Develop Hypotheses 266 DASHBOARD STEPS IN HYPOTHESIS DEVELOPMENT AND TESTING 268 Analyzing Relationships of Sample Data 268 Sample Statistics and Population Parameters 268 Choosing the Appropriate Statistical Technique 269 Univariate Statistical Tests 20 SPSS Application Univariate Hypothesis Test 21 DASHBOARD SELECTING THE SANTA FE GRILL CUSTOMERS FOR ANALYSIS 22 Bivariate Statistical Tests 22 Cross-Tabulation 23 Chi-Square Analysis 25 Calculating the Chi-Square Value 25 SPSS Application Chi-Square 26 Comparing Means: Independent. ''^ versus Related Samples 28 Using the t-test to Compare Two Means 29 SPSS Application Independent Samples t-test 29 SPSS Application Paired Samples t-test 280 Analysis of Variance (ANOVA) 281 SPSS Application ANOVA 282 n- Way ANOVA 284 SPSS Application n-way ANOVA 286 Perceptual Mapping 289 Perceptual Mapping Applications in Marketing 290
XVII CONTINUING CASE STUDY THE SANTA FE GRILL 290 IN ACTION: EXAMINING RESTAURANT IMAGE POSITIONS REMINGTON'S STEAK HOUSE 292 298 299 299 299 12 Examining Relationships in Quantitative 302 DATA MINING HELPS REBUILD PROCTER & GAMBLE AS A GLOBAL POWERHOUSE 303 Examining Relationships between Variables 304 Covariation and Variable Relationships 305 Correlation Analysis 308 Pearson Correlation Coefficient 309, SPSS Application Pearson Correlation 309 Substantive Significance of the Correlation Coefficient 311 Influence of Measurement Scales on Correlation Analysis 311 SPSS Application Spearman Rank Order Correlation 311 SPSS Application Calculating Median Rankings / 312 What Is Regression Analysis? 313 Fundamentals of Regression Analysis 314 Developing and Estimating the Regression Coefficients 315 SPSS Application Bivariate Regression 316 Significance 318 Multiple Regression Analysis 318 Statistical Significance 319 Substantive Significance 319 SPSS Application Multiple Regression 320 IN ACTION: THE ROLE OF EMPLOYEES IN DEVELOPING A CUSTOMER SATISFACTION PROGRAM 323 325 326 326 326 13 Communicating Marketing Findings 328 IT TAKES MORE THAN NUMBERS TO COMMUNICATE 329 Value of Communicating Findings 330 Marketing Reports 330 DASHBOARD CRITICAL THINKING AND 333 Format of The Marketing Report 333 Title Page 334 Table of Contents 334 Executive 334 Introduction. 335 Methods and Procedures 336 Data Analysis and Findings 33 Conclusions and Recommendations 348 Limitations 349 Appendixes 350 Common Problems in Preparing the Marketing Report 350 The Critical Nature of Presentations 351 Guidelines for Preparing the Visual Presentation 351 IN ACTION: WHO ARE THE EARLY ADOPTERS OF TECHNOLOGY? 352 355.y 355 review questions ' 356 356 Glossary Endnotes Indexes 35 33 3