Marketing Research

UNIT I
INTRODUCTION Marketing Research: - Research is the systematic and objective identification, collection, analysis, dissemination, and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing. Marketing Research is the application of scientific method in searching for truth about marketing phenomenon. Research must be systematic. Must be objective to avoid effects of personal bias Rigorous process It can also be defined asthe systematic process of collecting and analyzing information (data) in order to increase our understanding of the phenomenon about which we are concerned or interested. Marketing Research is the branch of marketing intelligence that conducts specific enquiries into problem in order to guide decisions. the American Marketing Association defined Marketing Research as the function which links the consumer, customer and public to the marketing through information used to identify and define marketing opportunities and problems, refine and evaluate marketing actions, monitor marketing performance and improve understanding of marketing as process.

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Classification of Marketing Research Marketing Research

Problem Identification Research Market Potential Market Share Image Analysis Sales Analysis etc.

Problem Solving Research Segmentation Product Research Pricing Promotion etc.

Purpose of Research: Identify changes in the existing market Build up a knowledge bank Improve market awareness & opportunities Reduce risk and uncertainty Support marketing mix decisions Support marketing planning and controls Improve understanding of marketing Solve ad hoc problems

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Research Characteristics:1. Originates with a question or problem. 2. Requires clear articulation of a goal. 3. Follows a specific plan or procedure. 4. Often divides main problem into sub problems. 5. Guided by specific problem, question, or hypothesis. 6. Accepts certain critical assumptions. 7. Requires collection and interpretation of data. 8. Cyclical (helical) in nature. Application of Marketing Research:Marketing Research is used for all the purpose which is generally needed by the marketer. Therefore for help in correct decision making. Marketing research has been classified into two parts i.e. problem identification research and problem solving research.

Problem Identification Research is the research undertaken to help in identifying problems that are not necessarily apparent on the surface and yet exist or likely to arise in future.

Problem Solving Research is the research which is undertaken to help in solving specific marketing problems. Therefore marketing research can be used for following purpose: Research on market Research on product and service Research on promotion Research on distribution Research on price

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Limitation of Marketing Research 1. It not a science which will give correct information. 2. Many uncontrollable variables affect the decision making of any company. 3. Many human errors can affect the analysis. 4. lack of technological up gradation

Marketing Research during different phases of the Administrative process There is a conceptual framework that can help interested marketing people to learn more about the many applications of marketing research. This conceptual framework is called the administrative process, and it consists of the four phases managers frequently go through: (1) settings and establishing strategies (2) developing marketing plan (3) putting the plan into action, and (4) evaluating the effectiveness of the marketing plan. Phase 1: Setting Goals and Establishing Strategies: Useful information can be obtained on a variety of topics when managers attempt to select a new strategy to pursue. Changes in the size or trend of demand or changes in the structure or composition of the market may suggest that a new strategy is appropriate. Changes in media trends such as the growth of cable television may signal the emergence of an opportunity that might be exploited with certain new strategies. Needs, wants and/or dissatisfaction in relevant market segments may suggest that a problem exists, waiting to be solved, if the right strategy can be identified. After the Gillette Company discovered that consumers were dissatisfied with roll on deodorants (because they were too wet) the company went on to develop its successful Dry idea brand of roll on deodorant. These can be monitored through marketing research and the findings of such research often help managers identify new strategies to pursue. Phase 2: Developing a Marketing Plan: When developing marketing plans, managers often use marketing research to identify key market segments. By measuring their attitudes and opinions towards the features of available products and how these products are used managers can identify important product and advertising considerations to include in their plans.

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Marketing research can also be used to test how appealing certain proposed product attributes and advertisements are to the target market. The Campbell Soup Companys search with children is an example of such an applicable of marketing research. Perhaps more marketing research is used in this phase of the administrative process than in any other. Phase 3: Putting the plan into Action: When a plan is put into action, management must monitor the effects of the plan to see if it is achieving its objectives. Columbia Pictures use of research to track the awareness level of its Star man movie is an example of using marketing research or such an application. In these types of application the research is likely to measure (a) if the plan is achieving the desired level of retail availability (b) if the target market segments are seeing the advertisements (c) if the copy is communicating the intended message, (d) if the promotions are achieving the desired trial rates, (e) how much consumers are using, and (f) the proportion of buyers who repurchase. An interesting example of research designed to measure effectiveness of a new marketing program was that that carried out by the Hanes Company when it introduced Leggs hosiery. Hanes used two sets of test markets with one set receiving twice as much advertising as the other. Five consumer studies were conducted in all of the test markets 6, 13, 18, 26 and 43 weeks after advertising had begun. Some information obtained during the studies concerned brand and advertising awareness, trial and repeat purchase rates, the average number of units bought per purchaser and the average number of units bought per capita. Unit sales in each market were obtained from data on store deliveries and from audits by the A C Nielsen Company. All information was equally available from both high and low advertising markets. Phase 4: Evaluating the plans Effectiveness: At the end of the operating period management want to reappraise the plan and compare results with the objectives. Such a reappraisal will involve an aggregation and compilation of most of the information obtained during planning and action phases, with a special emphasis on sales, market share, marketing costs, and contribution to profit. It will also measure brand awareness, trial rates, repeat purchase rates, preferred brands, and other measures of marketing results.

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Marketing Information System Marketing information system is computer based system intended for used by particular marketing personnel at any functional level for the purpose of solving marketing problems. Marketing Information system is a computerized system that provides an organized flow of information to enable and support the marketing activities of an organization. Marketing Information System (MKIS) serves collaborative, analytical and operational needs. MKIS can be regarded as firms window on the world. Need for Marketing Information System 1. Market Monitoring: - Through the use of market research and marketing intelligence activities the MKIS can enable the identifications of emerging market segmentation, and the monitoring of the market environment for the change in consumer behavior, competitors activities, new technologies, economic conditions and governmental policies. 2. Strategy Development: - The MKIS provides the information necessary to develop marketing strategy. It supports strategy development for new products, product positioning, and marketing communications (advertising, public relations & sales promotion) pricing, personal selling, distribution, and customer service and partnership alliances. 3. Strategy Implementation: - The MKIS provides support for product launches, enables the co-ordination of marketing strategies and is an integral part of sales force automation (SFA), customer relationship management (CRM) and customer service system implementation. 4. Functional Integration: - The MKIS enables co-ordination of activities within the marketing department and between marketing and organizational functions such as engineering, production, production management, finance, manufacturing etc.

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Components of Marketing Information System Marketing Information System (MKIS) consists for four major components: 1. User Interfaces: - the essential element of the MKIS is the managers who will use the system and the interfaces they need to effectively analyze and use marketing information. The design of the system depend on what type of decision managers need to make, it may include the type of hardware that will be used, the way information is analyzed, formatted and displayed and reports are complied and distributed. 2. Application Software: - these are the programs that marketing decisions makers use to collect, analyze and manage data for the purpose of developing the information necessary for marketing decisions. Example: it may include the marketing decision support system & customer management software for online sales & customer service. 3. Marketing Databases: - A marketing database is a system in which marketing data files are organized and stored. Data may be collected from internal and external sources. Internal source largely results from transactions they provide data from e-commerce sited, sales result from transactions, external sources include market research competitors intelligence etc. 4. System Support: - This component consists of system managers who manage & maintain the systems assets including software and hardware network monitor its activities and ensure compliance with organizational policies. This function may also include a help desk for system user.

User Interfaces

Marketing Databases

Application Software

System Support

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Scientific Method of Investigation Scientific Method refers to a body of techniques for investing, acquiring new knowledge or correcting and integrating previous knowledge. Scientific method of inquiring must be based on gathering information, empirical and measurable evidence subject to specific principles of reasoning. Scientific method consists of the collection of data through observation and experimentation and formulation and testing of hypothesis. Karl Pearson, in his famous book the grammar of science observes that there are three distinct characteristics of scientific method1. Careful and correct classification of facts and observation of their correlation and sequence. 2. The discovery of scientific laws with the aid of the creative imagination and 3. Self criticism of final touch stone of equal validity for all normally constituted minds.

Scientific method in the Physical Sciences and Marketing The scientific method, as a method of reducing uncertainty stemming from a lack of information, has been developed primarily in the physical sciences. A centuries old tradition of careful problem definition combined with the use of measuring instruments proved many tests to accurately measure specific characteristics provides validity for most physical science research. Much marketing research also has good validity but validity questions can be quite subtle. It was pointed out above that the measurement of TV sets turned on is not the same as the measurement of the number of people watching a given TV show. Measuring instruments used in marketing the questionnaire, for example do not provide as clear a definition of what is being measured as thermometers or balances do. Consumers must interpret questions and find ways to express answers, both of which are imprecise and in marketing it is often hard to know whether the sample from which information is collected really represents the universe that the researcher desires to study. It is in the area if reality however, that the physical sciences appear significantly more scientific than marketing. In most physical sciences the reproducible experiment is the accepted scientific method. In chemistry for example, an experiment is conducted under controlled conditions. Such variables as temperatures atmospheric pressure and quantities of chemicals are carefully measured and all but one held constant during the experiment. These conditions are reported in detail along with the results of the experiment so that others may reproduce the same conditions and verify the results. In marketing it is difficult, if not impossible; to control all the conditions surrounding a research project so that the same researcher can see if his or her techniques produce the same results at different times and places or so that other researchers can attempt to reproduce the results. Even more important, most marketing research projects are done as one time projects by private firms; no attempt is made to test the validity or reliability of the results, and the methodology is not

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published so that others can check for these characteristics. Until recent years few making research projects could be called experiments much less reproducible experiments; and even now only a small portion of all projects are real experiments. Three Distinctions between the Scientific and Non-Scientific Methods: It is useful to think of the scientific method as a very general method that can be adapted to many widely varying situations according to the subject matter and specific problem involved. As subject matter and problems vary across the whole range of human interest, it is obvious that the specifics of the methods applied will vary. Certain criteria, however, distinguish those methods that may be called scientific from other methods. There are differences between the scientific and non-scientific methods that affect the reliability and validity of the results are: (1) the objectivity of the investigator, (2) the accuracy of measurement and (3) the degree to which the investigation is continuing and exhaustive. Researchers must base judgment on acts, not on preconceived notions or intuition, if their work is to be scientific. If an investigator is not completely objective in his thinking if he is not just anxious to find his actions supporting one outcome of his study as another, it is unlikely his work will be scientific.

Difficulties in applying scientific method to marketing

Investigator Involved in Use of Results: Marketing researchers are involved in the sales of their results either directly as in the case of a commercial research form, or indirectly as in the case of the marketing research department of a manufacturing company. Marketing research data are usually sought for specific decisions that must be made promptly. Researchers are anxious to see the marketing organization prosper and for their careers to prosper as a result. They are, therefore anxious for their results to be accepted. This may encourage some researchers to find data that support the views of their clients or superiors, either by consciously or unconsciously fudging data obtained in the research (unreliable for lack of objectivity) or by drawing conclusions from limited (unreliable for lack of exhaustive study). All researchers may be subject to these pressures, as indicated by the Newton example, but the close association of the researcher with the decision action in marketing makes the problems greater there. Imprecise Measuring Devices: One of the characteristics that distinguish the scientific method from nonscientific activities is the emphasis put on accuracy of measurement. As marketing is concerned with people much of the information collected in marketing research is obtained by interview a partially subjective procedures that rarely leads to precise measurements. Much of

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the information desired relates to opinions and attitudes that, at best, can be reduced to quantitative terms in only rough approximations. For example, the strength of an individuals liking for a brand of Soft Drink can be measured, but only in a relatively crude way. The measuring devices to the marketing researcher are, in general not as accurate as those available to the natural scientists Influence of measurement Process on Results: When chemists weigh the precipitate resulting from the combination of two chemicals or when physicists measure the speed of sound, neither are concerned with the effect of their measurement process has on the results. They can repeat the measurement another day and get essentially the same answer. Such is not always the case in marketing research. When humans recognize that they are being measured, they frequently change For example, the family with a people meter on its television set may modify its viewing habits because it knows all the viewing is recorded. Similarly individuals questioned about specific opinions may find their opinions changing as a result of the questioning. This is particularly important in studies that include interviews of the same people a second time at an alter date to determine what changes have taken place in their opinions. People previously questioned frequently change their opinions in a different way than they would have done had they not questioned. The interview may call their attention to the subject say a brand of soap. Thereafter they are more apt to note advertisements for this soap, the slogans used, and changes in the product than are other individuals whose attention has not been called to it. Marketing research is particularly subject to the pressures of time. Competition rewards the first entry into a new field (for example, a personal computer) with a larger share of the market than the product would otherwise achieve. Consequently decisions on new products (and other marketing variables) are made hurriedly. If research is to be used at all, it must be done quickly. As a result, most marketing research suffers from lack of reliability because it does not benefit from the continuing and exhaustive study that characterizes the scientific method. It should Time Pressure for results: be noted, however that while, most marketing studies have an immediate short range objective, similar types of studies are done over and over, for different products and at different times, so that a gradual improvement in methodology and understanding takes place. The general result is the gradual development of something that approaches scientific method in marketing.

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Difficulties in Using Experiments to test Hypothesis: Unfortunately, the use of experimentation in marketing research is often impractical or even impossible. It is impossible to control all the factors affecting product sales for example, consumer attitudes the weather and competitive sales strategies. Therefore, it is impossible to reproduce the same experiment time after time. Great Complexity of Subject: Marketing is concerned with the movement of goods from producers to consumers. The most important determinant of marketing activity is the reaction of people to given stimuli (for example, advertisement) or, more exactly the anticipated reaction of people to stimuli. Thus, marketing is concerned with individuals who in themselves and in their activities are more complex than the subjects of the physical scientists.

RESEARCH PROCESS:Research process consists of series of steps which help in doing research properly. to start a research it is important to make two important decisions to make i.e. what the researcher wants to find out about and how would the research would do the same. The set of steps that defines the tasks to be accomplished in conducting a marketing research study. The steps included in research process are:-

Problem Defination Development of An Approach to the Problem Research Design Formulation Field Work or Data Collection Data Preparation and Analysis Report Preparation and Presentation

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Problem Definition: - The first step of research process is to define the research problem and understand it. It is important for the researcher to understand the research problem so that answers of questions like what is the problem? What type of information is required to solve it? What segment of the information is already available? Defining a research problem essential provides the researcher complete overview about the matter of the study. Researcher should decide his area of interest or aspect of subject matter which he wants to study. There are two types of research problem the one which relates to sates of nature and the other which related to relationship between variables. Development of an approach to the problem: - Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions and hypotheses and identifying information needed. This process is guided by discussions with management and industry experts. Research Design Formulation: - A research design is a framework or blue print for conducting the marketing research project. it details the procedures necessary for obtaining the required and its purpose is to design a study that will test the hypotheses of interest, determine possible answer to the research questions and provide needed information for decision making. Field Work or Data Collection: - Date collections involves a field force or staff that operates either in the field as in the case of personal interviewing (in-home, mall intercept or computer assisted personal interviewing) from an office by telephone. Proper selection, training, supervision and evaluation of the field force help in minimize data collection errors. Data Preparation and Analysis: - Data preparation includes the editing, coding, transportation & verification of data. Each questionnaire or observation form is inspected or edited and if necessary corrected. Number or letter codes are assigned to represent each response to question in questionnaire. Report Preparation and Analysis : - The entire project should be documented in a written report the addresses the specific research questions identified, describes the approach, the

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research design, data collection and data analysis procedures adopted and presents the results and major findings.