The $30 million mistake... Ethics in market research

Market Research 

Market research is central to filling the gaps that decision makers have with regards to marketing decisions, it allows for insight into consumers needs, demands and wants, after which, if handled correctly organisations can convert this information with sound business sense to profits.

Ethics & Brand Image

Consumers are often angry if they believe that they were manipulated, used or taken advantage of to increase organisational profits; this is even more so relevant with big multinational organisations where consumers believe that they make too much profits at the expense of the consumer anyway.

It is therefore detrimental to a brand if market research was conducted unethically, the brand that is undertaking the research or the market research company that is conducting the research on behalf of the brand can in fact harm it in the way of boycotts and bad publicity. 

Today, where word of mouth can spread easily with social media; no longer are dissatisfied consumers contained easily, therefore every brand contact they have has to be satisfactory including market research. Today a dissatisfied customers can tell of their experience on Facebook, Twitter, blogs unto 20,000 or even 200,000 people (Safko, 2012 p.7).

Ethics, Legislation & Motivation

Market research is already subject to legislation that include the respect of participants’ privacy, if organisations use information illegally, they can face hefty fines. Citi group was fined $30 million for leaking market research material to some clients giving them a heads up to trade on iPhone ahead of other investors (Macdonald, 2013) effecting their bottom line and reputation. A further concern is the age of the participant, if the market research company cannot verify the age, then they could in fact be talking to children without parental consent opening a flood gates of lawsuits. Verifying the age of participants is of extreme importance to market research (Malhotra, Birks, Wills 2012 p.31).

If the industry continuously abuse their participants’ rights the whole industry can face more and more legislation that can eventually cripple their ability to conduct effective market research.

The motivation for consumers to engage in market research can be effected if they feel that their answers are being manipulated. They may come to resent the research and tailor make answers or refuse to engage in research completely (Malhotra, Birks, Wills 2012 p.30). They may decide to withhold information if they feel that the researcher has an agenda with regards to the outcome or if they feel that that the research is likely to be used for more than its intended purpose, i.e. for marketing directly to clients. Withholding information or giving the researcher wrong information can be to the detriment of the research as the results no longer give a true picture.

The research participant can begin the process and then disengage if they feel they are not being treated fairly and given all relevant information, this would mean that the organisation spends money and resources only for them to be wasted due to unethical conduct.

An example of this is, a market research personnel who stand in a shopping mall and ask people to take a survey, telling them it would take five minutes when it actually takes thirty minutes. Many people will excuse themselves after ten minutes and say “I’m sorry, I have to go now” leaving research half empty and irrelevant to the researcher and the company. Many people who have this experience will refuse to answer questions again, therefore if the market research company is operating in a small town, this could have enormous impact on their ability to conduct future research for their clients.

Conclusion

Unethical market research effects results disallowing them from painting a true picture and insight into consumer’s thoughts and motivations. Incorrect results  can have a negative impact on marketing decisions harming bottom line.

References: 

Macdonald, S. (2013), 'Citi fined $30m for market research leaks', Fundweb, [online]. Available from: http://search.ebscohost.com.ezproxy.liv.ac.uk/login.aspx?direct=true&db=bth&AN=90680383&site=eds-live&scope=site (Accessed 9th January 2015)

Malhotra, N., Birks, D. & Wills, P. (2012) Marketing Research: An Applied Approach. 4th ed. Harlow: Financial Times/Prentice Hall

Safko, L. (2012) 'The Social Media Bible: Tactics, Tools and Strategies for Business Success', 3rd Edition. Hoboken: John Wiley & Sons, Inc.