29 Jun an essential role of market research is to provide decision makers
Question
Chapter 1 states that an essential role of market research is to provide decision makers with the information they require to make key decisions. In the case of Advanced Automobile Concepts, Nick Thomas requires reliable information about complex and unstable issues that might not be easy to come by, such as consumers’ perceptions of global warming and the future of alternative energies in the United States. As you learn in Case 1.2 and Case 2.2, Thomas also needs additional information that is not available through his company’s MIS and he is concerned about bringing in an outside firm for the project, primarily because he is worried about the confidentiality of his company’s information. For this assignment, do additional reading on the market research industry and write an essay (750-1,000 words) that assesses the validity of Thomas’ concerns. The essay should address the following:
What are the benefits and drawbacks or risks of utilizing the services of market research firms? Are Thomas’s concerns valid? Why or why not?
What codes and restrictions are in place to promote ethics within the industry? Are they sufficient in your opinion?
How has the advancement of online capabilities impacted the marketing industry, market research, and reporting practices?
What steps do you think Thomas could take in the design of his market research project to mitigate risk while increasing the quality and reliability of the information he receives?
Cite four secondary sources in your essay from reliable sources such as trade journals, academic journals, and websites from professional marketing associations.
Prepare this assignment according to the APA guidelines. An abstract is not required.
CASE 1.2
Automobile Concepts
Nick Thomas is CEO of Advanced Automobile Concepts (AAC), a new division of a
large automobile manufacturer, ZEN Motors. ZEN is a multinational manufacturer
headquartered in the United States. It has multiple divisions representing several auto and
truck brands. ZEN’s divisions have been slowly losing market share to other competitors.
AAC was created to revive the aging ZEN automobile brands by either reengineering
existing models or developing totally new models that are more in tune with today’s
changing automobile market. Nick is very familiar with the automobile industry, as his
entire adult life has been in the business. He follows trade publications carefully and
believes ZEN’s most significant losses are due to the growing popularity of several
foreign brands, particularly brands from Japan and Korea. As CEO, Nick has been given
the authority to do what he believes is needed to revive the company’s brands and help
return ZEN to prominence in automobile manufacturing. Nick has retrieved company
sales data for all ZEN models for the last decade from ZEN’s internal reports system, part
of ZEN’s management information system (MIS). He has accessed the intelligence
system to obtain trade industry articles written about the market, including evaluations of
top competitors’ models. He notices that several highly evaluated models are small and
fuel-efficient. He also has recognized that foreign competition has severely eroded ZEN’s
market share of their only large, luxury car brand. ZEN’s brand has been around for many
years and now fails to compete with the newer luxury car models on the market.
ZEN has been reluctant to move into the very small and highly fuel-efficient market for a
couple of reasons. First, historically, ZEN has earned higher profits on larger vehicles.
Every ZEN division has a large and extra-large model SUV. Historically these SUV
models, ZEN’s large trucks, and their larger family cars have been very profitable.
Secondly, as sales have eroded in recent years, ZEN has been reluctant to invest the funds
needed to develop radically different designs from those models that have been their
“bread and butter” cars for decades. However, in recent months ZEN’s sales have
plummeted as fuel prices have soared. ZEN management realizes they must innovate and
that is why they created the AAC division. Nick Thomas realizes that he must develop
innovations in automobile design and engineering, but he is not certain in which direction
he should guide his division. He realizes that, for now, oil prices are high and he
understands the increases in sales of fuel-efficient gasoline, diesel, and electric hybrids.
However, Nick has seen these environmental changes come and go. He tells his younger
vice presidents, “When the crises are over, the car buying public wants big vehicles and
we have earned our standing in the industry by giving the market what they want.” Nick
wonders to himself if this oil crisis is here to stay. He has also been concerned about the
prospects of real global warming. He’s read the reports on climate change and is confused
—he doesn’t know whether to believe Al Gore or Rush Limbaugh. Nick also isn’t certain
about the future of alternative fuels. Will the U.S. government really encourage the
reduction of the country’s dependence on foreign energy? He vividly recalls this being an
issue in the 1970s and President Carter calling for a switch to alternative fuels. He also
knows that the country didn’t follow through on this at the time. Nick wonders if today’s
promises by politicians of reducing foreign dependence on energy will be forgotten just as it has in the past. Nick is not sure what will happen but he knows that continued high
prices of fuel and increasing evidence of global warming will affect consumer behavior
with regard to automobiles.
1. Should Nick Thomas use marketing research?
2. What components of ZEN’s marketing information system will Nick Thomas need?
CASE 2.2
Advanced Automobile Concepts
In the last chapter we introduced you to Nick Thomas, CEO of Advanced Automobile
Concepts (AAC), a new division of a large automobile manufacturer, ZEN Motors. If you
have been assigned this case, you should briefly read over the information in Case 1.2
and in this case. You will recall that (1) AAC was created to revive the aging ZEN
automobile brands by either reengineering existing models or developing totally new
models that are more in tune with today’s changing automobile market, and (2) Nick
Thomas has searched the company’s MIS for information to help him make some major
decisions. After reviewing these materials, Nick believes he must develop new models
that will appeal to the market, but he is concerned that the recent interest in small, fuelefficient cars will go away as it has done in the past when oil prices drop. He also
wonders if consumers’ interest in global warming is real enough that it will affect what
they purchase. Nick knows he needs some help with additional information. ZEN Motors
has its own marketing research department and Nick is considering using professionals in
that department. Also, Nick has made several calls and learned that CMG Research has a
good reputation; however, Nick is concerned about talking with a research firm outside
ZEN Motors. Having never worked with a research firm before, Nick is afraid of sharing
information that is so vital to AAC. He is concerned that such information may be given
to competitors in the industry.
1. Why should Nick Thomas use the internal supplier, his own parent company’s
marketing research department? Why should he not use them?
2. Nick Thomas is concerned about using an external supplier of marketing research
services, CMG Research. Go to the MRA’s Code of Ethics and read what they have
to say about researchers sharing confidential information(at www.mra-net.org, go to
“Resources” and then “Codes, Forms and Guidelines”; then go to “(Expanded) Code of
Marketing Research Standards, Section A”).
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