2014 (springer texts in business and economics) marko sarstedt, erik mooi (auth ) a concise guide to market research the process, data, and methods using IBM SPSS statistics springer verlag berlin heidelb

Springer Texts in Business and Economics

Marko Sarstedt
Erik Mooi

A Concise Guide to
Market Research
The Process, Data, and Methods
Using IBM SPSS Statistics
Second Edition


Springer Texts in Business and Economics

For further volumes:
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ThiS is a FM Blank Page


Marko Sarstedt • Erik Mooi

A Concise Guide to Market
Research
The Process, Data, and Methods
Using IBM SPSS Statistics
Second Edition


Marko Sarstedt
Faculty of Economics and Management

Otto-von-Guericke-Universita¨t
Magdeburg
Germany
and
Faculty of Business and Law
University of Newcastle
Callaghan
Australia

Erik Mooi
Faculty of Business and Economics
University of Melbourne
Parkville, Victoria
Australia
and
Aston Business School
University of Aston
Birmingham
The United Kingdom

1st Edition ISBN 978-3-642-12540-9
1st Edition ISBN 978-3-642-12541-6 (eBook)
1st Edition DOI 10.1007/978-3-642-12541-6
Springer Heidelberg Dordrecht London New York
ISSN 2192-4333
ISSN 2192-4341 (electronic)
ISBN 978-3-642-53964-0
ISBN 978-3-642-53965-7 (eBook)
DOI 10.1007/978-3-642-53965-7
Springer Heidelberg New York Dordrecht London

Library of Congress Control Number: 2014943446
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To Alexandra, Charlotte, and Maximilian
- Marko Sarstedt To Irma
- Erik Mooi -


.

Preface

Charmin is a 70-year-old brand of toilet paper that made Procter & Gamble a
key player in the US toilet paper market. In Germany, however, Charmin was
unknown to consumers, something Procter & Gamble decided to change in the
early 2000s. Acknowledging that European consumers have different needs and
wants than their US counterparts, the company conducted massive market
research efforts with hundreds of potential customers. The research included
focus group interviews, observational studies, and large-scale surveys. These
revealed considerable differences in usage habits. For example, 60% of Germans
also use toilet paper to clean their noses, 8% to remove make-up, 7% to clean
mirrors, and 3% to clean their childrens’ faces. Further research led Procter &
Gamble to believe that the optimal tissue color is blue/yellow and that the
package needed to be cubic. Advertising tests showed that the Charmin bear
worked well, giving the product an emotional appeal. In the end, Procter &
Gamble launched Charmin successfully in an already saturated market.
In order to gain useful consumer insights, which allowed the company to
optimize the product and position it successfully in the market, Procter & Gamble
had to plan a market research process. This process included asking market research
question(s), collecting data, and analyzing these using quantitative methods.
This book provides an introduction to the skills necessary for conducting or
commissioning such market research projects. It is written for two audiences:
– Undergraduate as well as postgraduate students in business and market research,
and
– Practitioners wishing to know more about market research, or those who need a
practical, yet theoretically sound, reference.
If you search for market(ing) research books on Google or Amazon, you will find
that there is no shortage of such books. However, this book differs in many

important ways:
– This book is a bridge between the theory of conducting quantitative research and
its execution, using the market research process as a framework. We discuss
market research, starting with identifying the research question, designing the
data collection process, collecting, and describing data. We also introduce
essential data analysis techniques, and the basics of communicating the results,
including a discussion on ethics. Each chapter on quantitative methods describes
vii


viii

Preface

key theoretical choices and how these are executed in IBM SPSS Statistics.
Unlike most other books, we do not discuss theory or SPSS, but link the two.
– This is a book for non-technical readers! All chapters are written in an accessible
and comprehensive way so that non-technical readers can also easily grasp the
data analysis methods that are introduced. Each chapter on research methods
includes examples to help the reader get a hands-on feel for the technique.
Each chapter concludes with an illustrated real-life case, demonstrating the
application of a quantitative method. We also provide additional real-life
cases, including datasets, thus allowing readers to practice what they have learnt.
Other pedagogical features such as key words, examples, and end-of-chapter
questions support the contents.
– This book is concise, focusing on the most important aspects that a market
researcher, or manager interpreting market research, should know.
– Many chapters provide links to further readings and other websites. Mobile tags
in the text allow readers to quickly browse related web content using a mobile
device (see section How to Use Mobile Tags). This unique merger of offline and

online content offers readers a broad spectrum of additional and readily accessible information. A comprehensive Web Appendix with further analysis
techniques, datasets, video files, and case studies is included.

– Lastly, we have set up a Facebook community page called A Concise Guide to
Market Research. This page provides a platform for discussions and the
exchange of market research ideas. Just look for our book in the Facebook
groups and join.


Preface

ix

How to Use Mobile Tags
In this book, you will find numerous two-dimensional barcodes (so-called mobile
tags) which enable you to gather digital information immediately. Using your
mobile phone’s integrated camera plus a mobile tag reader, you can call up a
website directly on your mobile phone without having to enter it via the keypad.
For example, the following mobile tag links to this book’s website at http://www.
guide-market-research.com.

Several mobile phones have a mobile tag reader readily installed but you can
also download a reader for free. In this book, we use QR (quick response) codes
which can be accessed by means of the readers below. Simply visit one of the
following webpages or download the App from the iPhone App store or from
Google play:
– Kaywa: />– i-Nigma: />– Upcode:
Once you have a reader installed, just start it and point your camera at the
mobile tag and take a picture (with some readers, you don’t even have to take a
picture). This will open your mobile phone browser and direct you to the

associated website.


x

Preface

For Instructors
Besides those benefits described above, this book is also designed to make teaching
using this book as easy as possible. Each chapter comes with a set of detailed and
professionally designed instructors’ Microsoft PowerPoint slides for educators,
tailored for this book, which can be easily adjusted to fit a specific course’s
needs. These are available on the website’s instructor resources page at http://
www.guide-market-research.com. You can gain access to the instructor’s page by
requesting login information under Service ▸ Instructor Support.

The book’s web appendices are freely available on the accompanying website
and provide supplementary information on analysis techniques, datasets, video
files, and additional discussions of further methods not (entirely) covered in the
book. Moreover, at the end of each chapter, there is a set of questions that can be
used for in-class discussions.


Preface

xi

If you have any remarks, suggestions, or ideas about this book, please drop us a
line at (Marko Sarstedt) or at
(Erik Mooi). We appreciate any feedback on the book’s concept and contents!

What’s New in the Second Edition?
We’ve revised the second edition thoroughly. Some of the major changes in the
second edition are:
– The second edition extends the market research framework. The market
research process presented in the second chapter is fully integrated throughout
the book, offering a clear and comprehensive guideline for readers.
– We increased the number of pedagogical elements throughout the book. Every
chapter begins with a concise list of learning objectives, keywords, a short case
study, and a chapter preview, highlighting the chapter contents. Chapters are
organized in a more reader-friendly way, with more sections to facilitate navigation. Boxed features highlight additional contents on selected subjects.
– Learning market research vocabulary is essential for understanding the topic.
Keywords are therefore emphasized, are in italics, and are defined when they
first appear. An extended glossary at the end of the book is a handy reference of
the key terms.
– We have put considerable effort into simplifying and streamlining our
explanations of the techniques. More figures and graphs, and less emphasis on
formulas simplify the introduction of concepts. Furthermore, we have improved
the click-through sequences, which guide the reader through SPSS and the realworld examples at the end of each chapter.
– The second edition contains substantial new material on all subjects. Most
importantly, we extended the coverage of secondary data significantly, for
example, in terms of the assessment of validity. We provide an extensive
discussion of how secondary data can be made ready for analysis. Internet and
social networking data are emphasized even more, reflecting current market
research trends. Likewise, we have extended the description of the data
workflow (Chap. 5), which now includes detailed descriptions of outlier detection and missing value analysis. There is additional content in the context of
regression analysis (e.g., moderation), factor analysis (e.g., choosing between
principal components analysis and principal axis factoring), cluster analysis
(e.g., validating and interpreting the cluster solution), and many more.
– New Cases, taken from real-life situations, illustrate the market research

concepts discussed in each chapter. Almost all the cases draw on real-world
data from companies or organizations around the globe, which gives the readers
an opportunity to participate actively in the decision-making process.
– All the examples have been updated and now use SPSS 22. All the material
reflects this new version of the program.


.


Acknowledgments

Thanks to all the students who have inspired us with their feedback and constantly
reinforce our choice to stay in academia. Special thanks to our colleagues and good
friends Joe F. Hair, Christian M. Ringle, Tobias Schu¨tz, and Manfred Schwaiger for
their continued support and help.
We have many people to thank for making this book possible. First, we would
like to thank Springer, and particularly Barbara Fess and Marion Kreisel, for all of
their help and for their willingness to publish this book. Second, Ilse Evertse has done
a wonderful job (again!) proofreading major parts of our revisions. She is a great
proofreader and we cannot recommend her enough! Drop her a line at
if you need proofreading help. Third, we would like to thank
Sebastian Lehmann, Janina Lettow, Doreen Neubert, Victor Schliwa, and Kati Zeller
for their support with finalizing the manuscript and the PowerPoint slides. Finally,
without the constant support and enduring patience of our families, friends, and
colleagues, this book would not have been possible—thank you so much!
Finally, a large number of people have contributed to this book by reading
chapters, providing examples, or datasets. For their insightful comments on the
second or the previous edition of A Concise Guide to Market Research, we would
like to thank those included in the “List of Contributors.”

xiii


.


Contents

1

Introduction to Market Research . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2 What Is Market and Marketing Research? . . . . . . . . . . . . . . . . .
1.3 Market Research by Practitioners and Academics . . . . . . . . . . . .
1.4 When Should Market Research (Not) Be Conducted? . . . . . . . . .
1.5 Who Provides Market Research? . . . . . . . . . . . . . . . . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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1
1
2
3
4
5
7
8
8

2

The Market Research Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2
Identify and Formulate the Problem . . . . . . . . . . . . . . . . . . . . . .
2.3
Determine the Research Design . . . . . . . . . . . . . . . . . . . . . . . . .
2.3.1 Exploratory Research . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3.2 Uses of Exploratory Research . . . . . . . . . . . . . . . . . . . . .
2.3.3 Descriptive Research . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3.4 Uses of Descriptive Research . . . . . . . . . . . . . . . . . . . . .
2.3.5 Causal Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3.6 Uses of Causal Research . . . . . . . . . . . . . . . . . . . . . . . .
2.4
Design the Sample and Method of Data Collection . . . . . . . . . . .
2.5
Collect the Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2.6
Analyze the Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.7
Interpret, Discuss, and Present the Findings . . . . . . . . . . . . . . . .
2.8
Follow-Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11
12
12
13
15
15
17
17
18
20
21
21
21
22
22
22
23
23

3

Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2
Types of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2.1 Primary and Secondary Data . . . . . . . . . . . . . . . . . . . . .
3.2.2 Quantitative and Qualitative Data . . . . . . . . . . . . . . . . . .
3.3
Unit of Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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25
26
28
30
30
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Contents

3.4
3.5
3.6
3.7

Dependence of Observations . . . . . . . . . . . . . . . . . . . . . . . . . . .

Dependent and Independent Variables . . . . . . . . . . . . . . . . . . . .
Measurement Scaling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Validity and Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.7.1 Types of Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.7.2 Types of Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8
Population and Sampling . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8.1 Probability Sampling . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8.2 Non-probability Sampling . . . . . . . . . . . . . . . . . . . . . . .
3.9
Sample Sizes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

32
32
32
34
36
37
38
40
42
43
44
44
45

4

Getting Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2 Secondary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2.1 Internal Secondary Data . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2.2 External Secondary Data . . . . . . . . . . . . . . . . . . . . . . . . .
4.3 Conducting Secondary Data Research . . . . . . . . . . . . . . . . . . . . .
4.3.1 Assess Availability of Secondary Data . . . . . . . . . . . . . . .
4.3.2 Assess Inclusion of Key Variables . . . . . . . . . . . . . . . . . .
4.3.3 Assess Construct Validity . . . . . . . . . . . . . . . . . . . . . . . .
4.3.4 Assess Sampling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4 Conducting Primary Data Research . . . . . . . . . . . . . . . . . . . . . . .
4.4.1 Collecting Primary Data Through Observations . . . . . . . . .
4.4.2 Collecting Quantitative Data: Designing Questionnaires . . .
4.5 Basic Qualitative Research . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.5.1 Depth Interviews . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.5.2 Projective Techniques . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.5.3 Focus Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.6 Collecting Primary Data Through Experimental Research . . . . . . .
4.6.1 Principles of Experimental Research . . . . . . . . . . . . . . . . .
4.6.2 Experimental Designs . . . . . . . . . . . . . . . . . . . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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48
48
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5

Descriptive Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1
The Workflow of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2
Create Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3
Enter Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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xvii

5.4

6

Clean Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4.1 Interviewer Fraud . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4.2 Suspicious Response Patterns . . . . . . . . . . . . . . . . . . . . .
5.4.3 Data Entry Errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4.4 Outliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4.5 Missing Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.5
Describe Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.5.1 Univariate Graphs and Tables . . . . . . . . . . . . . . . . . . . . .
5.5.2 Univariate Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.5.3 Bivariate Graphs and Tables . . . . . . . . . . . . . . . . . . . . . .
5.5.4 Bivariate Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5.6
Transform Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.6.1 Variable Respecification . . . . . . . . . . . . . . . . . . . . . . . .
5.6.2 Scale Transformation . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.7
Create a Codebook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.8
Introduction to SPSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.8.1 Finding Your Way in SPSS . . . . . . . . . . . . . . . . . . . . . .
5.8.2 SPSS Statistics Data Editor . . . . . . . . . . . . . . . . . . . . . .
5.8.3 SPSS Statistics Viewer . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9
Data Management in SPSS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9.1 Split File . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9.2 Select Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9.3 Compute Variables . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.9.4 Recode Into Same/Different Variables . . . . . . . . . . . . . .
5.10 Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.10.1 Clean Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.10.2 Describe Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.11 Cadbury and the UK Chocolate Market (Case Study) . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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91
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99
100
102
105
106
109
109
110
111
112
113
115
117
119
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120
121
121
124
124
130
137
138
138
139

Hypothesis Testing & ANOVA . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6.2
Understanding Hypothesis Testing . . . . . . . . . . . . . . . . . . . . . .
6.3
Testing Hypotheses about One Mean . . . . . . . . . . . . . . . . . . . .
6.3.1 Formulate the Hypothesis . . . . . . . . . . . . . . . . . . . . . . .
6.3.2 Select an Appropriate Test . . . . . . . . . . . . . . . . . . . . . .
6.3.3 Choose the Significance Level . . . . . . . . . . . . . . . . . . .
6.3.4 Calculate the Test Statistic . . . . . . . . . . . . . . . . . . . . . .
6.3.5 Make the Test Decision . . . . . . . . . . . . . . . . . . . . . . . .
6.3.6 Interpret the Results . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.4
Comparing Two Means: Two-samples t-test . . . . . . . . . . . . . . .
6.4.1 Two Independent Samples . . . . . . . . . . . . . . . . . . . . .
6.4.2 Two Paired Samples . . . . . . . . . . . . . . . . . . . . . . . . . .

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145
145
148
150
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Contents

6.5

Comparing More Than Two Means: Analysis of Variance
(ANOVA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.5.1 Understanding One-Way ANOVA . . . . . . . . . . . . . . . .
6.5.2 Going Beyond One-way ANOVA: The Two-Way
ANOVA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.6
Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.7
Customer Analysis at Cre´dit Samouel (Case Study) . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

8

Regression Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2 Understanding Regression Analysis . . . . . . . . . . . . . . . . . . . . . .
7.3 Conducting a Regression Analysis . . . . . . . . . . . . . . . . . . . . . . .
7.3.1 Consider Data Requirements for Regression Analysis . . .
7.3.2 Specify and Estimate the Regression Model . . . . . . . . . .
7.3.3 Test the Assumptions of Regression Analysis . . . . . . . . .
7.3.4 Interpret the Regression Results . . . . . . . . . . . . . . . . . . .
7.3.5 Validate the Regression Model . . . . . . . . . . . . . . . . . . . .
7.3.6 Use the Regression Model . . . . . . . . . . . . . . . . . . . . . . .
7.4 Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4.1 Consider Data Requirements for Regression Analysis . . .
7.4.2 Specify and Estimate the Regression Model in SPSS . . . .
7.4.3 Test the Assumptions of Regression Analysis Using
SPSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4.4 Interpret the Regression Model Using SPSS . . . . . . . . . .
7.4.5 Validate the Regression Model Using SPSS . . . . . . . . . .
7.5 Farming with AgriPro (Case Study) . . . . . . . . . . . . . . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Factor Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.2
Understanding Principal Components Analysis . . . . . . . . . . . . .
8.3
Conducting a Principal Components Analysis . . . . . . . . . . . . .
8.3.1 Check Assumptions and Carry Out Preliminary
Analyses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3.2 Extract the Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.3.3 Determine the Number of Factors . . . . . . . . . . . . . . . . .
8.3.4 Interpret the Factor Solution . . . . . . . . . . . . . . . . . . . . .
8.3.5 Evaluate the Goodness-of-fit of the Factor Solution . . . .

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Contents

xix

8.4
8.5
8.6

Confirmatory Factor Analysis and Reliability Analysis . . . . . . .
Structural Equation Modeling . . . . . . . . . . . . . . . . . . . . . . . . .
Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6.1 Principal Components Analysis . . . . . . . . . . . . . . . . . .
8.6.2 Reliability Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.7
Customer Satisfaction at Haver & Boecker (Case Study) . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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269
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272

9

Cluster Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.2 Understanding Cluster Analysis . . . . . . . . . . . . . . . . . . . . . . . .
9.3 Conducting a Cluster Analysis . . . . . . . . . . . . . . . . . . . . . . . . .
9.3.1 Decide on the Clustering Variables . . . . . . . . . . . . . . . . .
9.3.2 Decide on the Clustering Procedure . . . . . . . . . . . . . . . .
9.3.3 Validate and Interpret the Cluster Solution . . . . . . . . . . .
9.4 Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.4.1 Pre-analysis: Collinearity Assessment . . . . . . . . . . . . . . .
9.4.2 Hierarchical Clustering . . . . . . . . . . . . . . . . . . . . . . . . .
9.4.3 k-means Clustering . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.4.4 Two-step Clustering . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.5 Shopping at Projekt 2 (Case Study) . . . . . . . . . . . . . . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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323

10

Communicating the Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.2
Identify the Audience . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.3
Guidelines for Written Reports . . . . . . . . . . . . . . . . . . . . . .
10.4
Structure the Written Report . . . . . . . . . . . . . . . . . . . . . . . .
10.4.1 Title Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.2 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . .
10.4.3 Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.4 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.5 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.6 Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.7 Conclusion and Recommendations . . . . . . . . . . . . .
10.4.8 Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.4.9 Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.5
Guidelines for Oral Presentations . . . . . . . . . . . . . . . . . . . . .
10.6

Visual Aids in Oral Presentations . . . . . . . . . . . . . . . . . . . . .
10.7
Structure the Oral Presentation . . . . . . . . . . . . . . . . . . . . . .

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xx

Contents

10.8
Follow-Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.9
Ethics in Research Reports . . . . . . . . . . . . . . . . . . . . . . . . .
Review Questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Further Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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342

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 343


List of Contributors

Feray Adıgu¨zel Erasmus Universiteit Rotterdam, Rotterdam, The Netherlands
Ralf Aigner Wishbird, Mexico City, Mexico
Carolin Bock Technische Universita¨t Mu¨nchen, Mu¨nchen, Germany
Cees J. P. M. de Bont Hong Kong Polytechnic, Hung Hom, Hong Kong
Bernd Erichson Otto-von-Guericke-Universita¨ t Magdeburg, Magdeburg,
Germany
Andrew M. Farrell Aston University, Birmingham, UK
Sebastian Fuchs thaltegos GmbH, Mu¨nchen, Germany
David I. Gilliland Colorado State University, Fort Collins, CO, USA
Joe F. Hair Jr. Kennesaw State University, Kennesaw, GA, USA
Jo¨rg Henseler University of Twente, Enschede, The Netherlands
Hester van Herk Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
Emile F. J. Lance´e Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
Arjen van Lin Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
Kobe Millet Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
Irma Mooi-Rec¸i The University of Melbourne, Parkville, VIC, Australia
Leonard J. Paas Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
Marcelo Gattermann Perin Pontifı´cia Universidade Cato´lica do Rio Grande do
Sul, Porto Alegre, Brazil
Wybe T. Popma University of Brighton, Brighton, UK

Sascha Raithel Ludwig-Maximilians-Universita¨t Mu¨nchen, Mu¨nchen, Germany
Edward E. Rigdon Georgia State University, Atlanta, GA, USA
Christian M. Ringle Technische Universita¨t Hamburg-Harburg, Hamburg,
Germany
xxi


xxii

List of Contributors

John Rudd Aston University, Birmingham, UK
Sebastian Scharf Campus M21, Mu¨nchen, Germany
Tobias Schu¨tz ESB Business School Reutlingen, Reutlingen, Germany
Philip Sugai International University of Japan, Minami-Uonuma, Niigata, Japan
Charles R. Taylor Villanova University, Philadelphia, PA, USA
Stefan Wagner ESMT European School of Management and Technology,
Berlin, Germany
Eelke Wiersma Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
Caroline Wiertz Cass Business School, London, UK


1

Introduction to Market Research

Learning Objectives

After reading this chapter, you should understand:
À What market and marketing research are and how they differ.

À How practitioner and academic market(ing) research differ and where they are
similar.
À When market research should be conducted.
À Who provides market research and the importance of the market research
industry.
Keywords

Full service and limited service providers • Market and marketing research •
Syndicated data

1.1

Introduction

When Toyota developed the Prius À a highly fuel-efficient car using a hybrid
petrol/electric engine À it took a gamble on a grand scale. Honda and General
Motors’ previous attempts to develop frugal (electric) cars had not worked well.
Just like Honda and General Motors, Toyota had also been working on developing a
frugal car but focused on a system integrating a petrol and electric engine. These
development efforts led Toyota to start a project called Global Twenty-first Century
aimed at developing a car with a fuel economy that was at least 50% better than
similar-sized cars. This project nearly came to a halt in 1995 when Toyota encountered substantial technological problems. The company solved these problems,
using nearly a thousand engineers, and launched the car, called the Prius, in
Japan in 1997. Internal Toyota predictions suggested that the car was either going
to be an instant hit, or that the take-up of the product would be slow, as it takes time

M. Sarstedt and E. Mooi, A Concise Guide to Market Research,
Springer Texts in Business and Economics, DOI 10.1007/978-3-642-53965-7_1,
# Springer-Verlag Berlin Heidelberg 2014

1


2

1 Introduction to Market Research

to teach dealers and consumers about the technology. In 1999, Toyota made the
decision to start working on launching the Prius in the US. Initial market research
showed that it was going to be a difficult task. Some consumers thought it was too
small for the US and some thought the positioning of the controls was poor for US
drivers. There were other issues too, such as the design, which many thought was
too strongly geared toward Japanese drivers.
While preparing for the launch, Toyota conducted further market research,
which could, however, not reveal who the potential buyers of the car would be.
Initially, Toyota thought the car might be tempting for people concerned with the
environment but market research dispelled this belief. Environmentalists dislike
technology in general and money is a big issue for this group. A technologically
complex and expensive car such as the Prius was therefore unlikely to appeal to
them. Further market research did little to identify any other good market segment.
Despite the lack of conclusive findings, Toyota decided to sell the car anyway and
to await public reactions. Before the launch, Toyota put a market research system in
place to track the initial sales and identify where customers bought the car. After the
formal launch in 2000, this system quickly found that the car was being bought by
celebrities to demonstrate their concern for the environment. Somewhat later,
Toyota noticed substantially increased sales figures when ordinary consumers
became aware of the car’s appeal to celebrities. It appeared that consumers were
willing to purchase cars endorsed by celebrities.
CNW Market Research, a market research company specialized in the automotive industry, attributed part of the Prius’s success to its unique design, which
clearly demonstrated that Prius owners were driving a different car. After substantial increases in the petrol price, and changes to the car (based on extensive market

research) to increase its appeal, Toyota reached total sales of over three million and
is now the market leader in hybrid petrol/electric cars.
This example shows that while market research occasionally helps, sometimes it
contributes little or even fails. There are many reasons why the success of market
research varies. These reasons include the budget available for research, support for
market research in the organization, implementation, and the research skills of the
market researchers. In this book, we will guide you through the practicalities of the
basic market research process step by step. These discussions, explanations, facts,
and methods will help you carry out market research successfully.

1.2

What Is Market and Marketing Research?

Market research can mean several things. It can be the process by which we gain
insight into how markets work, a function in an organization, or it can refer to the
outcomes of research, such as a database of customer purchases or a report
including recommendations. In this book, we focus on the market research process,
starting by identifying and formulating the problem, continuing by determining the
research design, determining the sample and method of data collection, collecting