A Discriminant Analysis of the Managers Perceptions of the Value of Marketing Research and Its Effect on Business Performance

By Ogunmokun, Gabriel; Chin, Iris et al. | International Journal of Management, March 2005 | Go to article overview

A Discriminant Analysis of the Managers Perceptions of the Value of Marketing Research and Its Effect on Business Performance


Ogunmokun, Gabriel, Chin, Iris, McPhail, Janelle, International Journal of Management


Although several studies have suggested that one of the fundamental reasons for the underutilization of marketing research among businesses is their negative perceptions of the potential benefits offered by marketing research, little or no research has examined whether managers perception of the value of marketing research will affect the level of business performance. This paper utilized discriminant analysis to determine whether a set of perceptions concerning the value of marketing research will differentiate organizations with a high level of business performance from organizations with a low level of business performance. The study also identified the perceptions that contributed the most to the discrimination.

Introduction

The importance of marketing research as an essential organizational activity is widely acknowledged in the prescriptive literature. For example, according to the literature the use of marketing research can reduce the risk and uncertainty involved in decision making, and thereby increase the chances of successful decision making (Deshpande and Zaltman 1982; Gross and Peterson 1987; McDaniel and Darden 1987; McDaniel and Gates 1991; Samli 1996; Smith 1991; Malhotra 2004; Parasuraman, Grewal and Krishnan. 2004; Zikmund 2003). Marketing research, as a major source of marketing information, plays an important role in improving marketing intelligence capability to enhance both strategic and tactical decision making (Parent 1986; Cravens and Piercy 2003; Cravens 2000; Von and Dolph 1986; Tomasino 1985). The strategic role of marketing research is not limited to the provision of strategic marketing information for corporate growth decisions, but also its role in guiding the strategic thinking that precedes strategic planning and decision making (Zabriskie and Huellmantel 1994). According to Samli (1996) without adequate market information, an organization lacks a sufficient understanding of its strengths and weaknesses and what its opportunities and threats are, and more importantly, what its priorities should be.

Some authors have even emphasized the importance of marketing research as a means for implementing the marketing concept (O'Neal 1985; Peterson 1988; Zikmund 2004). Marketing research is also viewed as a key to the adoption of the marketing concept, since according to Kheir-El-Din (1990), a genuine marketing orientation is reflected in extensive and regular marketing research studies about customers, competitors and environmental trends Kinnear and Taylor ( 1991 ), also claimed that marketing research helps in fulfilling the marketing concept, because as an organization adopts this concept, marketing research is seen as a way to integrate the organization's activities and focus them on the needs of the marketplace According to Crick et al. (1994), marketing research can also be seen as a major element of the "intelligence generation" component of market orientation, helps to focus an organization's efforts to actively seek and generate market pertinent information in order to satisfy the needs and wants of the consumer

Despite the widely acknowledged importance of marketing research as an essential organizational activity very little is known about how managers in Australia perceive the value of marketing research. Although overseas studies have suggested that one of the fundamental reasons for the underutilization of marketing research among business managers is their negative perceptions of the potential benefits offered by marketing research (e.g. Andreasen 1983, McDaniel and Parasuraman 1985; Callahan and Cassar 1995; Hills and Narayana 1989) little or no research has examined whether there are significant differences in the ways organizations with a high level versus low level of business performance perceive the value of marketing research. Other studies (e.g. Panigrahi et al. 1996) that examined the perceptions of users versus non-users of marketing research did not compare such perceptions in terms of organizational performance. …

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