CHAPTER NO.

01:
ROLE AND VALUE OF MARKETING RESEARCH IN MARKETING RESEARCH

The Nature and Scope of Marketing Research: The whole approach of marketing pivots around the tenet of meeting the consumer wants. It is essential to understand what the consumer wants, how he/she perceives the product (service), what exactly (ideally) does he/she wants to derive out of the product (service), how does he/she make the brand choice decision, what are the sources of information and influence processes? etc. In order to take decisions any marketer would constantly monitor such information and obtain a continuous feedback of the trends in the market. As such, marketing research is an effective tool for measuring the consumers aspirations, trade channel behaviour, competitive actions etc. It provides a linkage between the corporate environment and the marketing organization. Marketing research, thus, may be viewed as an important tool used as an aid for tackling problems in marketing. MARKETING RESEARCH DEFINITION Marketing research is defined as the objective and formal process of systematically obtaining analyzing and interpreting data for actionable decision making in marketing. This definition lays stress on two aspects, namely, objectivity and systematic process in the collection and analysis of data. In fact, marketing research should not be allowed to be influenced by personal views and considerations. Before undertaking any research study it is essential to delimit the primary objectives of the project and define the methodology of undertaking the project in as much details as possible. Also, there is an implicit assumption that the ultimate findings should have the actionable quality. That is, the user must be able to utilize the results for marketing decision making purpose. Otherwise, its utility is considerably undermined. That is to say, any marketing research done on an arbitrary basis (i.e. lack of objectivity) or applying ones personal convenience in the data collection and interpretation (i.e. no systematic search) will certainly be of no use. 1.1 COMMON USES OF RESEARCH IN MARKETING DECISION MAKING The following paragraph highlights some of the marketing decision areas where marketing research is commonly used. These activities are divided into seven categories for illustration purposes. Sales Management Marketing research is popularly used to determine market demand and supply. As such, estimation of demand and supply include many more detailed analysis. For example, an analysis of demand side of the market includes (i) a delineation of market boundary and how they are changing. (ii) assessment of present and future buyer concentration. (iii) projections of demand for the total market and for major market segments. Market Boundary Theoretically, a market may be defined as being bounded by all the closely substitutable offerings that may satisfy a given consumer need. However, here the problem of precise

definition begins. What is closely substitutable? How broadly the consumer need be defined? (For example, does tea and coffee serve the similar consumer need? Do consumers perceive fresh juices in tetrapacks a substitute for bottled soft drinks? Is mechanical watches perceived to be similar as digital watches? Does cotton and polyester fibre serve common need for hosiery? How many consumers should be included in the market definition when different offerings are targeted at different groups of consumers? The question becomes particularly pertinent when consumer needs arc varied. The cc11 kp that r,f pvel1vjn market segments through suitable bases which may differentiate Buyer Concentration Marketing research is made use of to measure-4iow many buyers exist in the nT and how sales are distributed among them (i.e., estimation of market share by brand purchased, geographical position of the buyer, type of industry, user industrys technology adopted etc.) Demand Projections Demand may be estimated in units or value terms and also, the overall growth rates in key market segments are often estimated for better sales management. Supply An analysis of the supply side of the market is also similarly carried out by marketing research studies. It includes (i) assessment of present supply structure (in terms of concentration of competition, product differentiation and entry barriers). Supply structure refers to the study of how many companies operate in the market and how are sales distributed among them? Secondly, study how differentiated are the products offered? What barriers exist to enter into the market by new firms? (entry barriers may arise because this particular item is in the exclusive domain of small scale sector, special manufacturing skills required as noticeable in case of high technology products, specialised marketing network required to market a product in the total Indian market). (ii) a description of the character of competition, competitors strategies is most sought after topic of investigation of marketing research today. It includes comparative evaluation of such issues as Market share analysis of brands Positioning of each brand Distribution channels adopted and method of selling Prices charged and how they are changing with time Advertising campaigns and promotion programmes adopted Corporate image and capabilities. In other words, it tries to ascertain how the competitors are defining their business in terms of consumer groups, segments being pursued as reflected by their marketing mix portfolios. Consumer Behaviour Analysis Large number of marketing research studies are undertaken to understand consumer behaviour.

Specially for each product/service studies are widely conducted to know issues like WHAT factors are influencing demand? benefits does the consumer seek? functions does the product (service) perform? are the important buying criteria? risk does the consumer perceive before the purchase and how to reduce dissonance after the purchase? special services does the consumer require? is the consumer awareness about the alternative ofrerings available? is the extent of pre-purchase deliberation made by the consumer? are the roles of different members if the purchase follows a joint decision making pattern? is the source of information for the consumer? The above list is just illustrative. It simply highlights that a marketer requires to know what a typical consumer expects in a product (service). Also, it tries to identify differences among consumers. Similarly, studies are conducted to know. HOW do consumers buy? do consumers use the product (service)? much do they buy? does the product fit into the consumers life style (or operation if it is an industrial product)? does the consumer evaluate alternative product offerings? WHERE do consumers seek information about the product (service)? do consumers buy the product? WHO are involved in the decision making? actually does the buying? WHEN is the product first purchased? is the product likely to be repurchased? WHY do consumers buy one brand in preference to another? (i.e. ascertain cpnsumers tangible vis-a-vis intangible motivations). Marketing research is undertaken specifically to answer such questions about consumer motiva tion, perceptions which facilitate decision making. It is not enough just to ask how do consumers use the product? Instead the question must ascertain the significance of the answer so far as marketing decision making concerned. For example, what does it mean for product strategy, advertising message, physical distribution, pricing strategy etc.?

Market Segmentation Faced with a heterogeneous composition of markets, every marketer tries to utilize marketing research input to form market segments. Segmentation research specifically helps in (i) designing the product that truly matches the demands of the market. (ii) directing the appropriate advertising appeals and promotional packages to the most potential profitable segments of the market. Segment Descriptors In practice different bases have been used for segmenting a market. For example, marketing research is continually done to evolve suitable bases of the segmentation like Geographic segments defined by where potential customers are located. Demographic descriptors such as age, sex, occupation, education, income, size of household, marital status etc., are often used to segment the potential market for a product. Psychographics. This form of segmentation research tries to portray the market segments in terms of many psychological concepts such as attitudes, interests, opinions or life style of the people. Benefits. The segments are developed on the basis of similarity of benefits sought by the consumers in a segment. Usage patterns. Consumers are segmented in terms of amounts of consumption (light, average and heavy usage). Loyalty. Sometimes segments have been formed through descriptor like degree of loyalty of the consumers. operating variables. In case of industrial products segmentation research has utilized the nature of technology used, financial capabilities, purchasing policies as bases to know the possible difference in market characteristics. Depending on the product-market peculiarities, it is required to utilize a combination of above mentioned segment descriptors to form suitable segments. New Product Launch and Product Positioning Consumer goods companies make maximum use of marketing research to identify possible gaps in the existing offerings and suitably position their brands. For example, in the two-wheeler business 100 c.c. motor bike was introduced after conducting some marketing research. The research study revealed that there existed a need for trendy, light weight sports vehicle which was viewed as status bike, perceived different from heavy vehicle like Bullet, Yezdi etc., or light vehicle like Luna etc. In recent times in India many consumer products like instant food (Maggi), detergents (Nirma, Sunlight Powder), Soaps (Fresca, Vigil), Toothpaste (Promise) etc., have been launched into the market after rigorous amount of marketing research. Likewise, companies make extensive use of marketing research to position its brand through careful evaluation of different combination of product attributes and even psychological dimensions among different cross-section of consumers. In general, marketing research is used to find out how consumers attach importance to various complex attributes and

accordingly, manufacturers may develop or eliminate some product, modify the positioning of an existing brand on the basis of the feedback obtained. Research in Sales Methods and Policies Nowadays companies are found to put substantial efforts in analysing their sales methods and distribution policies. Studies are being carried out with a view to evaluate effectiveness of present distribution system. Marketing research is found useful in establishing/revising sales territories. Sometimes studies are conducted to examine alternative appeals and/or methods of sales presentation. Such studies are often referred to as sales analysis, quota setting, sales territory design, distribution cost analysis, trade channel behaviour, physical distribution research etc. Advertising and Sales Promotion Research Marketing research is invariably used to measure consumers awareness, recall of advertisement, interest shown and in general, to assess the impact of different advertisement campaigns. Marketing research is also alone to examine the effectiveness of different media. Marketing research is utilized to ascertain the impact of different consumer promotion programmes (like deals, discount etc.). The major focus of this research is on analysis and evaluation of marketing effort put in by a firm on advertising and promotion. Marketing Audit of Company Performance In recent times few research studies have tried to audit companys strengths and weaknesses vis-a-vis major competitors. Ultimately the results have been utilised to relate to the diverse market requirements, specially to know the trends and to seize the opportunity. It involves an analysis of historical strategy, performance and key requirements of that market. Marketing opportunities and capabilities of key competitors can be judged through marketing research feedback. Environment Trends Marketing research may be carefully used to know the diverse social, economic, technological factors and government policies affecting the market. It is important because these changes continually reshape consumer behaviour and competitive strategies. Research findings are used to assess the marketing opportunities available to the firm and improvement needed in the marketing strategy to facilitate larger consumer acceptance. SUMMARY From the above discussion it emerges that to evolve an effective marketing strategy and planning it, it is imperative to analyse the behaviour of consumers, competitors, trade channels, environmental trends and to evaluate how the companys strengths and weaknesses relate to the market requirements. Initially conducting such analysis appeared quite simple, yet found very difficult in practice. It requires data, imagination. experience and good understanding about the product-market char-

MARKETING RESEARCH SCENARIO IN INDIAN CORPORATE SECTOR The following paragraph highlights some of the special problems faced by corporate organisations in India while conducting marketing research. As long as marketers in India did not face much difficulty in selling their products (services) they did not find much value in marketing research. Formal use of marketing research in the Indian Corporate sector began sometime in mid 1970s. In recent times there is further momentum in the practice as the business environment in the country is now characterised by many diversities like high degree of competition the memories of long waiting time to get delivery of a product, limited choice and sometimes shabby products and unusually high prices have dimmed a great deal. The heat of competition is not restricted to the upper echelons of urban markets. Even the rural markets have begun to benefit from the impact of these changes. large number of consumers with wide variations of requirements, tastes and preferences for different products and services. change in the socio-economic condition of the market. Specially the consumer goods manufacturers today encounter a sizeable middle income population, and moreover, rise in the number of working women and educational level have significantly affected con sumer behaviour. growth in the communication facilities has led to greater awareness and more choice option to advertise through. consumers, by and large, are found to have more discretionary income. But they have at the same time much concern about their value for money. since 1985 liberal licensing and import policy of the Indian government has brought about many changes in the corporate environment. Changes have taken place both, in the scale and in the nature of problems which the management must tackle. Recent developments in the Indian market bear a similarity to traditional free markets, where primary determinant of success is keeping the customers happy. Managing a product (service) in tune with such market forces assumes a critical role. Historically, in the shortage prone economy, marketing was found to be a luxury that did not seem relevant to the needs of the Indian consumer. This view is now rapidly changing. Expenditure on unsuccessful product launches, wrong product positioning, improper distribution system etc. can whittle away the vitals of an organisation in the absence of a sound, professional marketing management and high quality marketing research. Thus corporate world in India has now realised the utility of data based marketing decision making rather than only intuition and hunch. So to derive an edge over the competition in todays dynamic business environment, any marketer finds it essential to evolve marketing programmes based on proper marketing research. ORGANISING MARKETING RESEARCH FUNCTION Several options are open to a company for organising its marketing research activity. For example, in some companies like 1-lindustan Lever, ITC there is a separate marketing research department who undertakes research on its own. Alternatively, there are many organisations who assign the responsibility of conducting marketing research to an outside specialist, individual or an organisation. Medium and small sized companies

usually prefer second option, whereas the large firms set up a marketing research department consisting of full time specialists. Also many a time, com panies in India subscribe to a syndicate research work, done by some marketing research oi consultancy firm. The latter arrangement would involve paying some subscription fee for obtaining the findings of some research studies at a regular interval. Such services are particularly available in the spheres of readership survey, the movement of consumer or pharmaceutical goods through retail outlet, TV viewing etc. As syndicated research services are normally designed to meet the requirements of many companies, they do not provide any tailor made information. Its major advantage lies in cost effectiveness. MARKETING MANAGER AND RESEARCHER INTERACTION In India, research based decision making has just made a beginning. There are still a lot of gaps in understanding between the two sets of people involved in these activities. It should be reiterated that marketing research is an aid to decision making, not a substitute for it. Unfortunately, sometimes marketing managers view marketing research reports as the final answer to their problems. Marketing managers usually complain that 1. Research is not problem oriented, it provides a number of facts, but not actionable results. 2. Researchers are too pre-occupied with techniques and they are often reluctant to get involved in solving the managements problems. 3. Research is not executed with the proper sense of urgency. It is sometimes vague, and of questionable validity. 4. Researchers are generally poor communicators. They do not talk the language of the management. They lack the sense of accountability. Likewise, researchers have complaints about marketing managers that 1. Marketing managers do not include research in the overall problem or total decision context. They tend to ask for only specific information about partial issues. 2. Marketing managers pay lip service to research and do not really appreciate its value/problems. 3. Marketing managers do Rot allow adequate time and budget for research. They tend to draw conclusion based on early or incomplete results. Good research requires sufficient lead time for thorough reporting and documentation. 4. Marketing managers rely more on intuition and judgement rather than on formal re search. Research is used to confirm or excuse past actions or as a fire fighting device, not as an aid in decision making. The key factor underlying the mutual distrust between marketing managers and researchers, seems to be the lack of understanding of the mutual role and responsibility of both parties. To be effective, researchers must understand the decision contexts and views of the marketing managers. Likewise marketing managers must recognise that decisions should be evolved in the light of their own experience, and knowledge and other factors that are not explicitly considered in the research project. Thus, it is most essential that both marketing managers and researchers must be equally involved and interact with each other as much as possible. In subsequent chapters we will describe the major steps involved in a marketing research project. 1. Keane, John G, Some Observations on Marketing Research in Top Management Decision-Making Journal of Marketing, Vol. 1, 33, October 1969, pp. 10-15.

MARKETING BRIEF AND FORMULATION OF M.R. OBJECTIVE(S) The first and foremost step, in the marketing research process, consists of problem or opportunity identification. The necessity of properly identifying marketing problems cannot be over-emphasized is rightly said that a problem properly defined is half sot Poor identification i.e. specifying a problem too broadly or too narrowly results in unnecessary dissipation of efforts. Therefore, marketing managers and marketing researchers must work closely to ensure that they agree on the specific nature of the marketing problem being addressed. To avoid a possible controversy being raised at a later stage of research study, it is recommended to prepare a written statement about the background of the marketing problem. This exercise is popularly referred as Research Brief where the marketing managers provide detailed information about what is known and purpose of undertaking the research study. In other words, marketing managers must justify as to how the research findings shall be utilised for the decision making purpose. Subsequently the scope/priorities, assumption, cost and time required to conduct the research project are defined by the researcher(s) involved. Typically a marketing research task is expressed in terms of a few specific sets of marketing research objectives. There are as such no well defined rules followed in formulation of marketing research objectives from a marketing brief. Also, experience shows that there are even possibilities of arriving at alternative sets of research objectives from a given marketing brief. Ideally both the parties must ascertain the priorities of the issues involved, scope or potential benefits, cost as well as the time required to conduct the study. It is. essential to develop a decision perspective so that all research findings offer practical directives to marketing decision making. In certain instances we have experienced that a marketing manager poses a problem that cannot be feasibly answered by marketing research. That is, even when management has stated the marketing issue clearly in the brief, researchers must make a thorough analysis of the symptoms and their background. This is not so easy as it appears at first sight. Researcher must specify the exact issues being examined and the underlying logic in setting the priorities. Moreover, the research must define the boundaries of the population covered in the proposal. This will have a bearing to the data collection plan. Also, the concepts to be measured and how such concepts are defined must be explicitly stated. While carrying out the task of developing the research proposal, researcher should independently assess whether the study is being done to prove a point or support a decision already made. If so, a researcher must not agree to undertake the study. Often this is most easily resolved by merely posing a series of what if questions about potential impact of research findings on the marketing problem that is in question. In essence, a proper formulation of research problem through stating a number of marketing research objectives would enable to give a sense of direction to the researcher. As such, by laying down assumptions and precise scope of the study, it could make meaningful contribution to decision making and avoid any future conflict with the sponsors of the study. Finally, it may be noted that problem formulation would focus what sort of decision issues are tackled. In other words, it gives a clear idea about the perspective of the research itself.

EXERCISES: 1. Discuss some of the major uses of marketing research in todays corporate environment of India. 2. Marketing research is a valuable tool for marketing managers because it eliminates the uncertainty typically associated with situations calling for a decision. Comment on the above statement and then discuss how marketing research should help in marketing decision making. 3. Define Marketing Research. Comment on the essential elements embodied in the definition. 4. Explain how the task of market segmentation can be facilitated by using marketing research. 5. Discuss how marketing research may help in the decision involving new product launch and positioning of a brand. 6. What kind of issues in sales methods and policy determination are amenable to marketing research? 7. Specif some advertising and sales promotion decisions where marketing research input would act as an effective aid. 8. In India industries like cement, fertilizer, light commercial vehicles etc. have reached a stage of over-production than what the market can absorb. Under this situation what will be your priorities of marketing research for a companys short term decision making. 9. What are the barriers to good interaction between marketing managers and marketing researchers.

CASE STUDY NO.01

(FOR MMS- SEM-III-MARKETING MANAGEMENT)

NEEM TOOTHPASTE
Marketing Brief Shaw Wallace & Co. has taken up the marketing of Calcutta Chemicals products from June 1988. One of them is the Neem Toothpaste. During the Calcutta Chemical days the Neem Toothpaste was a low profile toothpaste iiot much advertised and apparently not distributed, all over the country. Bulk of the market was confmed to the eastern region and part of southern India. After the take-over Shaw Wallace attempted to revamp the brand and make it available nationally, taking advantage of its already established distribution chain. The mint content of the toothpaste was increased and at the same time most of the toothpastes bitterness was withdrawn. A new soft squeeze tube bearing an up-market look and a new packet was designed for NEEM. Competitive Scenario The toothpaste market.Asprosently growing at an annual rate of 16%. In 1988 the market size by volume was 23,675 tonnes and in value terms it was Rs. 191 crores. The market is served by about fifteen companies which include even some multinationals. The leading brands market shares are as-follows:

The regionwise breakup of the market is shown below:

The penetration of major brands in terms of number of users per thousand households show Colgate in the lead.

The above figures give an indication of the supremacy of Colgate and thus shows the enormity of .he task involved in getting a new brand established. Balsara, who came up with a very unique strategy for the brand called Promise has slipped down after the initial success in the urban market. A study by NCAER found that the category of people who account for the sales are as follows:

How intensely does habit influence the buying behaviour of this product can be guessed by the duration of use of different brands of toothpaste obtained in a study by NCAER.

Exhibit 6 shows that NEEM has good amount of brand loyal users as it is the situation with other competitors. The consumption of toothpaste in various States is given below:

The above information indicates that there exists the necessity for any brand to exert its presence in Maharashtra and U.P. atleast. Segmentation The toothpaste market is roughly divided into cosmetic, fluoride and herbal segments. The dif ferent brands and the approximate size of each segment is shown below:

Apart from highlighting the gtheric value of cleanliness and hygiene, other key benefits emphasised in the 3 segments are found to be:.

In the absence of any tangible means to differentiate the brand, most companies have tried to make the psychological design as the springboard or success. Given the low size of the herbal market, Neem is attempting to break away from the traditional in However, one is not certain that they might even loose their existing brand loyal cu The new marketing strategy has not shown any significant breakthrough as yet. Sales History of Neem Given the existing scenario, let us take a look at the growth of Neem over the years. The brand was launched in 1935. Its growth was satisfactory till late 50s. This is the period when the middle class grew with the impetus created by the lind and Ilird Five Year Plans. However, Calcutta Chemi cals failed to make it a national brand. With the multinationals coming in the sixties, brands such as Colgate, Forhans and Binaca adopted- extensive advertising and promotion. Colgate gradually become the market leader through capitalising on cosmetic value. Neem neither grew, nor at tempted to deepen their distribution. Neems sales history perhaps reveals the story.

Brand Analysis Neems strengths are perceived as: (i) Contains desirable herbal ingredients for dental care (ii) Lower priced (iii) Makes good appeal to consumers with traditional outlook Its weaknesses noticed are: (i) Bitter taste of old Neem was disliked by many customers (ii) Inadequate promotion (iii) Inconsistent availability (iv) Low awareness on a national level The marketing objectives set by Shaw Wallace seem to be: (a)Product reformulation (making it as close to Colgate as possible on the taste and foam aspects). (b)Better distribution both in terms of width and depth, with a phased zonal coverage starting with East and extending to South and then nationally. (c) More intense promotion and a new positioning through advertising campaigns. MARKETING RESEARCH OBJECTIVES In the light of the above background, this study presumed that the modified Neem would find it difficult to achieve the image of a universally accepted toothpaste because of Colgates firm base and also due to Neems own weaknesses in the fields of awareness and distribution. So, Neem with its herbal connotation would perhaps find more acceptance among the health conscious people who would prefer natural ingredients of Neem rather than modern chemical based toothpastes. This led to the first marketing research objective. (i) Identify the profile of users of the modified rand The company is most eager to assess awareness level of the brand in the market today and ascertain whether some distinct image already exists. Thus the second objective was to (ii) Ascertain the awareness level of Neem and its distinct image, if any To understand the buying behaviour of the market it is essential to know the attiihutc preferred in a toothpaste. So the study included the third objective as to (iii) Examine the attributes sought in a toothpaste It is often said that buying behaviour of a toothpaste is greatly influenced by habit. So people continue to use the same brand. But is it a myth or reality? To test it out the study selected the following objective (iv) Investigate the level of brand loyalty of the existing toothpaste market Company has put much effort in promotng the new brand. But the question is what is its impact? So, finally the study wanted to (v) Assess the consumers perception about the new Neem