MARKETING RESEARCH

UNIT I

What is Market Research?

Market research is a process of gathering, analyzing and interpreting raw data about target
market, product or service, competitors and about past, present and potential consumers to derive
usable business information.
What Questions Can Be Answered Through Market Research

Who are my target audience? What do they need? What are their wants? Which
geographies have sales potential? What can be the distribution channel? Why they will
need/want my product and services? Who will be our competitors? Hows the market
environment? What can I do to make my product and service more attractive? What are
Government rules and regulations in my target market? What is the best entry strategy
for my target market?

Where Market Research Can Be Used:

Case 1: We (foreign manufacturer) want to know if there is a market in India for electronic
products which operate on alternative energy systems. Can you tell us?
Research Solution: In this case an opportunity assessment study will be conducted to find out if
there is a market in India for targeted products i.e. products which operate on alternative energy
systems.
Case 2: I have a product which is superior to the products currently available in the market. Can
you test and tell me if consumers also think so?
Research Solution: In this case a product testing study will be conducted to find out how the
targeted product fares in the market against its competitors.
Case 3: I can launch this product only if it can manage X volumes. Can you do a research and
tell me it would generate X volumes?
Research Solution: In this case a market research study will be conducted to find out if that
market will be able to meet expectations in terms of demand for target product.

Role & Scope of Marketing Research:

1. Business Intelligence BI is the ability to access data from multiple sources
within and outside an organization for the purpose of analysis. It links
the disparate operation systems to the end users of the data, thus
creating an environment with free flow of information. It offers a reliable
barometer of the business performance.
2. BUSINESS INTELLIGENCE Operations

Intelligence

Finance

and

Accounting Intelligence Marketing Intelligence HR Intelligence Back-End

Analysis.
3. Need for Marketing Intelligence MI focuses on the use of information as a
source of strategic advantage. Need to have a thorough knowledge of
customers, their attitudes, tastes and preferences. Need to analyze
competition for benchmarking and making price, product, market and
segment decisions.
4. Marketing Information System A continuing and interacting structure of
people, equipment and procedures designed to gather, sort, analyze,
evaluate, and distribute pertinent, timely and accurate information to
marketing decision making MIS Uses 3 Types of Information Recurring
market and accounting data from market analysis and accounting
activities Intelligence relevant to future strategy of business Marketing
research studies not of a recurring nature.
5. Role of Marketing Research in Decision Making Four Stages of Market
Planning Process Situation analysis Strategy development marketing
program development Implementation.
6. Situation Analysis of Market environment

Market

characteristics

Consumer behavior Research Approaches Organize information obtained

from prior studies (secondary) Focus groups.
7. Strategy Development Market Research provides information to assist
management with three critical decisions, what business should we be
in? How will we compete? What are the objectives for the business?
8. Marketing Program Development Programs embrace specific tasks Action
program usually focuses on a single objective in support of one element of
overall business strategy.

9. Factors Influencing Marketing Research Decisions Relevance Type and

Nature of Information Sought Timing Availability of Resources Costbenefit Analysis.
10. Understand the environment and the market Identify threats and
opportunities Assess the competitive position Define the business scope
and served market segments Establish competitive advantages Set
performance objectives. Product and channel decision Communication
decisions Pricing Personal selling decisions Performance monitoring
Refining strategies and program Situation Analysis Strategy Development
Marketing Program Development Implementation.
11. Conquering Latino Homes Hispanics account for nearly 13% of the U.S.
population. Research shows that Latino households spend $600 billion of
$1.3 trillion purchasing power of multicultural population. In 1998 only
2.5% of total advertising dollars in the United States was focused on
Latinos. By 2050, Hispanic population would represent 25% of US
population. Who can tell me what the problem is?
12. Marketing Research in Practice Programmatic Research Develops market
options through market segmentation, market opportunity analysis, or
consumer attitude and product usage studies Selective Research Tests
different decision alternatives such as new product testing, advertising
copy testing, pre-test marketing, and test marketing Evaluative Research
Evaluation of performance of programs.
13. Marketing Decision Support System Combines marketing data from
diverse sources into a single database, enabling product managers, sales
planners,

market

researchers,

financial

analysts,

and

production

schedulers to share information.

14. Marketing Decision Support Systems Managers needs for decision
relevant information: Routine comparisons of current performance
against past trends on each of the key measures of effectiveness Periodic
exception reports to assess which sales territories or accounts have not
matched previous years purchases Special analyses to evaluate the sales
impact of particular marketing programs, and to predict what would
happen if changes were made.
15. Marketing Decision Support Systems Contd. Characteristics of MDSS:
Interactive Flexible Discovery oriented User friendly.

16. Marketing Decision Support Systems Four components of MDSS:

Database Reports and Displays Analysis capabilities Models.
17. Gaining Insight from a MDSS Manager Modeling Analysis Display
Database Environment.
18. Participants in marketing

research

activities

Information

Users

Information Suppliers: Inside Company Information Suppliers: Outside

Company General management Planning Marketing and sales managers
Product managers Lawyers Marketing research department Sales analysis
group accounting department Corporate strategic planning Research
consultants marketing research suppliers advertising agencies.

Limitations of marketing research:

(1) Marketing research offers suggestions and not decisions:
Marketing research is not a substitute for decision making process. It
only offers possible suggestions/solutions to marketing problems. It
actually acts as a tool that facilitates decision-making process. It
guides marketing managers in taking balanced, result-oriented and
rational decisions. The suggestions offered by marketing researchers
are usually possible/probable solutions but not the exact solutions.
MR does not provide readymade solutions to marketing problems. It
only provides indicators. It may not provide conclusive information on
marketing problems.
(2) Marketing research cannot predict accurately:
In MR, efforts are being made to estimate or predict the possible future
situation. For this/ certain research studies are undertaken. However,
the results/ conclusions arrived at may not be complete, perfect or
accurate. Future is always uncertain and exact prediction about the
future is just not possible through marketing research. This is because
market environment is ever changing consumer behavior is difficult to
estimate correctly and reliable data for research purpose may not be
available. As a result, the decisions taken and policies framed on the
basis of such research studies may not be accurate and useful for
solving current marketing problems.
(3) MR conclusions are not always dependable:

There are many who are skeptics of MR. Their criticism is that MR
conclusions are not dependable. There are examples where the
research failed to deliver desired results or a product failed even when
the research had shown promising market demand and consumer
support. The classical example is that of Coke. Its MR showed that
68% customers in US liked the taste of the new formula developed by
the Coca-Cola Corporation. However, the New Coke failed and in less
than six months of its launch, the Coke management had to re-launch
old Coke under the brand name Coke Classic. However, this failure of
MR was mainly due to conventional approach of researchers.
(4) Not an exact science:
Since marketing research plates to consumers, it cannot be accepted
as an exact science. Both quantifiable and non-quantifiable factors
have to be assessed with the help of various techniques available to
formulate marketing policies that will help to achieve maximum sales.
The technical part of marketing research comes into operation
particularly while collecting, analyzing, and interpreting facts and
figures. No amount of sophistication makes the subject an exact
science. Because, as stated earlier, it concerns primarily the consumer
as a human being Study of human behavior precludes absolute
mathematical accuracy Probable trends, at the most can be indicated
within pre-determined limits. This sets a basic limitation to marketing
research.
(5) Time lag in presentation and implementation:
There are other constraints as well that make for qualified utility of
marketing research in decision-making. For example, there is the
limitation of time. Collection of data, their checking as to accu-racy
and analysis and presentation often involve considerable time. The
formulation of policies and their implementation as also their
subsequent evaluation, which are a necessary follow-up, also take
time. Peoples tastes and preferences are subject to frequent changes.
It is, therefore necessary, keeping in mind the scope and nature of
marketing research, that the projects should be completed in time to
ensure their utility. In this process, at times, as a compromise some

accuracy may have to be sacrificed, but the degree of it can be decided

in relation to the specific circumstances.
(6) Limitations of personnel:
Another constraint that is experienced pertains to personnel and its
quality. Trained, well-equipped and well-directed research personnel
can improve the quality and utility of marketing research. In the
absence of this, research is likely to be costly and unreliable. Correct
and complete information has to be collected from the respondents
tactfully. The interviewer has to be reasonably aware of the
psychological make-up of the persons that are being interviewed and
should be able to analyze their thoughts and reactions. Apart from
this, interviewers may have their own failings and weaknesses. Hence
the training interviewers and investigators is a must.
(7) A cost-generating operation:
Marketing research is expensive. The existence of sellers market or a
sheltered market in many developing countries in particular has also
been responsible for an apathetic approach to marketing research.
However, with the growth and development of their economies, the
marketing conditions are changing in favor of buyers and the need for
and the value of marketing research are being increasingly recognized
by the enterprises in these countries also. With the communication
between the purchaser and the manufacturer becoming indirect,
meagre and unsatisfactory and as a result of competition, the
manufacturer is increasingly becoming anxious to know the
(8) Marketing research cannot study all marketing problems:
Marketing research is rather very wide in scope. However, it cannot
study all marketing problems particularly where it is difficult to collect
relevant data. Similarly, research study is not possible where value
judgments are involved. Even it is not useful for dealing with urgent
marketing problems where quick decisions and follow-up actions are
necessary. Thus, all marketing problems are not researchable and all
research problems are not answerable.
(9) Resistance by marketing executives:
Researchers study marketing problems and offer information and
guidance to marketing executives in their decision making process.
However, some executives are reluctant to use the solutions suggested

by the researchers. They feel that such extensive use will act as a
threat to their personal status. Findings of the research work may
bring them in difficulties if the policy-decisions taken accordingly
prove to be wrong.
(10)
Lengthy and time consuming activity:
MR is a lengthy and time-consuming activity. It involves various
stages/steps, which need to be completed in an orderly manner. It is
not desirable to conduct research work in a haphazard manner.
Naturally, the research work takes longer period for completion and
the findings when available may prove to be old and outdated. Even
data collected very soon become old or historical due to fast changing
market environment. As a result, research findings based on them
become irrelevant in the changed situation.
(11)
Complexity of the subject:
Marketing research fails to give complete and full proof solutions to
management. This is because marketing research itself is not an exact
science. It is concerned with the study of human beings and human
behavior is always difficult to predict, errors in drawing conclusions
are possible due to this human element in marketing research
activities. Errors in the research studies are also possible due to
uncertainty of human behavior and also because of no availability of
reliable data.

(12)
Non-availability of qualified staff:
For scientific MR, professional marketing researchers with proper
qualifications, training and experience are necessary. Research work is
likely to be incomplete/ unreliable in the absence of such expert staff.
Companies find it difficult to have the services of such expert staff.
They find it difficult to pay high salary to professional consultants.
Research activities are conducted in limited areas due to no availability
of

properly

qualified

staff.

Such

staff

includes

statisticians,

psychologists, sociologists, economists and computer experts.

(13)
Changing behavior of consumers:
Consumer is the focal point in marketing research. However, his
buying motives are difficult to judge precisely and accurately. This

brings some sort of uncertainty in the conclusions drawn from the

research activity. The findings of the research work (particularly in the
case of consumer research) may not prove to be accurate.
(14)
Absence of effective communication:
The research activity will be useful and result-oriented only when
there is meaningful dialogue between the marketing management and
marketing research team. However, such dialogue is ineffective in
many organizations. This make research activity ineffective.

The Market Research Process:

The market research process is a systematic methodology for informing
business decisions. The figure below breaks the process down into six
steps:

Step 1. Define the Objective & Your Problem

Perhaps the most important step in the market research process is defining the
goals of the project. At the core of this understands the root question that
needs to be informed by market research. There is typically a key business
problem (or opportunity) that needs to be acted upon, but there is a lack of
information to make that decision comfortably; the job of a market researcher
is to inform that decision with solid data. Examples of business problems
might be How should we price this new widget? or Which features should we
prioritize?
By understanding the business problem clearly, youll be able to keep your
research focused and effective. At this point in the process, well before any
research has been conducted, I like to imagine what a perfect final research
report would look like to help answer the business question(s). You might even
go as far as to mock up a fake report, with hypothetical data, and ask your
audience: If I produce a report that looks something like this, will you have the
information you need to make an informed choice? If the answer is yes, now
you just need to get the real data. If the answer is no, keep working with your
client/audience until the objective is clear, and be happy about the
disappointment youve prevented and the time youve saved.

Step 2. Determine Your Research Design

Now that you know your research object, it is time to plan out the type of
research that will best obtain the necessary data. Think of the research
design as your detailed plan of attack. In this step you will first determine
your market research method (will it be a survey, focus group, etc.?). You will
also think through specifics about how you will identify and choose your
sample (who are we going after?

where will we find them?

how will we

incentivize them?, etc.). This is also the time to plan where you will conduct
your research (telephone, in-person, mail, internet, etc.).

Once again,

remember to keep the end goal in mindwhat will your final report look like?
Based on that, youll be able to identify the types of data analysis youll be
conducting (simple summaries, advanced regression analysis, etc.), which
dictates the structure of questions youll be asking.
Your choice of research instrument will be based on the nature of the data you
are trying to collect. There are three classifications to consider:
Exploratory Research This form of research is used when the topic is not well
defined or understood, your hypothesis is not well defined, and your knowledge
of a topic is vague. Exploratory research will help you gain broad insights,
narrow your focus, and learn the basics necessary to go deeper. Common
exploratory market research techniques include secondary research, focus
groups and interviews. Exploratory research is a qualitative form of research.
Descriptive Research If your research objective calls for more detailed data on
a specific topic, youll be conducting quantitative descriptive research. The goal
of this form of market research is to measure specific topics of interest, usually
in a quantitative way. Surveys are the most common research instrument for
descriptive research.
Causal Research The most specific type of research is causal research, which
usually comes in the form of a field test or experiment. In this case, you are
trying to determine a causal relationship between variables. For example, does
the music I play in my restaurant increase dessert sales (i.e. is there a causal
relationship between music and sales?).

Step 3. Design & Prepare Your Research Instrument

In this step of the market research process; its time to design your research
tool. If a survey is the most appropriate tool (as determined in step 2), youll
begin by writing your questions and designing your questionnaire. If a focus
group is your instrument of choice, youll start preparing questions and
materials for the moderator. You get the idea. This is the part of the process
where you start executing your plan.
By the way, step 3.5 should be to test your survey instrument with a small
group prior to broad deployment. Take your sample data and get it into a
spreadsheet; are there any issues with the data structure? This will allow you
to catch potential problems early, and there are always problems.
Step 4. Collect Your Data

This is the meat and potatoes of your project; the time when you are
administering your survey, running your focus groups, conducting your
interviews, implementing your field test, etc.

The answers, choices, and

observations are all being collected and recorded, usually in spreadsheet form.
Each nugget of information is precious and will be part of the masterful
conclusions you will soon draw.
Step 5. Analyze Your Data

Step 4 (data collection) has drawn to a close and you have heaps of raw data
sitting in your lap. If its on scraps of paper, youll probably need to get it in
spreadsheet form for further analysis. If its already in spreadsheet form, its

time to make sure youve got it structured properly. Once thats all done, the
fun begins. Run summaries with the tools provided in your software package
(typically Excel, SPSS, Minitab, etc.), build tables and graphs, segment your
results by groups that make sense (i.e. age, gender, etc.), and look for the major
trends in your data. Start to formulate the story you will tell.

Step 6. Visualize Your Data and Communicate Results

Youve spent hours poring through your raw data, building useful summary
tables, charts and graphs. Now is the time to compile the most meaningful
take-away into a digestible report or presentation. A great way to present the
data is to start with the research objectives and business problem that were
identified in step 1. Restate those business questions, and then present your
recommendations based on the data, to address those issues.
When

it

comes

time

to

presenting

your

results,

remember

to

present insights, answers and recommendations, not just charts and tables.
If you put a chart in the report, ask yourself what does this mean and what
are the implications? Adding this additional critical thinking to your final
report will make your research more actionable and meaningful and will set
you apart from other researchers.
While it is important to answer the original question, remember that market
research is one input to a business decision (usually a strong input), but not
the only factor.

The figure below walks through an example of this process in action, starting
with a business problem of how should we price this new widget?

The Marketing Research Process:

1. Learning Objectives to learn the steps in the marketing research process.

To understand how the steps in the marketing research process are
interrelated and that the steps may not proceed in order. To be able to
know when market research may be needed and when it may not be
needed. To know which step is the most important in the marketing
research process.
It is rare in practice a research project follows all the exact steps.
Research is an interactive process where a researcher by discovering
something may move forward or backwards in the process. May not
involve every step shown. The research problem may be resolved, for
example by a review of secondary data, thereby eliminating the need to
determine a sample plan or size.
Whats important is although every research project is different; there are
enough commonalities to follow the eleven steps of marketing research.
Step 1:
Establish the Need for Marketing Research, A good monitoring system
will alert the marketing manager to a problem that can be attacked by
marketing research. Regardless of the monitoring system used a good
monitoring system constantly searches for hints that the companies
marketing mix may be out of sync in the market place. Marketing
research may not be needed Information is already available There is
insufficient time for marketing research Resources are not available Costs
outweigh the value of the research
Step 2:
Define the Problem Defining the problem is the single most important
step in the marketing research process. Often studies are commissioned
without a clear understanding of the problem that needs to be
addressed. Exploratory research is needed to define the problem so
research may be conducted. Problem definition involves: Specifying the
symptomsItemising the possible causes of the symptoms listing the
reasonable alternative courses of action that the marketing manager can
undertake to solve the problem.

Step 3:
Establish the Research Objectives Research objectives identify what
specific pieces of information are necessary to solve the problem at hand.
Research objectives step is the specification of the specific types of
information useful to the managers as they grapple for a solution to the
marketing problem at hand.
Step 4:
Determine Research Design:
There are three types of research design: Exploratory Research Design is defined as collecting information in an unstructured and informal
manner. Examples: Reading periodicals, visiting competitors premises,
examine company sales and profits vs. industry sales and profit, clipping
service.
Descriptive Research Design - refers to a set of methods and procedure
that describe marketing variables. Portray these variables by answering
who, what, why and how questions. example: consumer attitude survey
to your companies services.
Casual Research Design designs allow us to isolate causes and their
effects. Casual research is conducted by controlling various factors to
determine which factor is causing the problem.
By changing one factor, say price, we can monitor its effect on a key
consequence, such as sales. In other words, casual design allows us to
determine causality, or which variable is causing another variable to
change.
Step 5:
Identify Information Types and Sources.
Basically two types of data information available to a marketing
researcher:

Secondary data as it name implies, refers to information that has been

collected for some other purpose.
Primary data- refers to information that has been gathered specifically to
serve the research objectives at hand.

Step 6:
Determine Methods of Accessing Data Once the researcher has
determined which type or types of information are needed, he or she
must determine methods of accessing data. Methods of accessing
external secondary data have improved over the last five years:
Information processing technology. Easy and Quick retrieval. Internal
data- company reports, salespersons, executives, MIS and other
information sources. There are several different methods of collecting
primary data including: Telephone surveys Mail surveys Door-to-door
interviews Mall-intercept studies New data collection methods are
emerging.
Step 7:
Design Data collection:
Data Collection Forms Questionnaires and observation forms must be
designed with great care. Questionnaires which record the information
communicated by respondents or the respondents behavior as observed
by the researcher Structured Questionnaires - list questions that have
pre-specified answer choices. Unstructured questionnaires have open
ended questions and/or questions that are asked based on a response.
Disguised-true object of the study is not identified. Undisguisedrespondent is made fully aware of the purpose/or sponsor of the survey.
Step 8:
Determine Sample Plan and Size:
A sample plan identifies who is to be sampled and how to select them for
study. A sample element refers to a unit of the entity being studied

sample Frame is a list from which the sample elements are drawn for the
sample. A sample plan specifies how to draw the sample elements from
the sample plan. Methods are available to help the researcher determine
the sample size required for the research study.

Step 9:
Data collection is usually done by trained interviewers who are employed
by field data collection companies to collect primary data. Being ware of
errors that may occur is important. Non-sampling Errors are attributable
to factors other than sampling errors. Wrong sample elements to
interview Securing participants who refuse to participate Not a home
Interviewing

subjects

who

give

the

wrong

information.

Hiring

interviewers who cheat and fill out fictitious survey questionnaires.

Step 10:
Data analysis involves entering data into computer files, inspecting it for
errors and running tabulations and various statistical tests. Data
cleaning process by which the raw data are checked to verify that the
data has been correctly inputted from the data collection form to the
computer software program. Use SPSS Coding is the process of
assigning

all

response

categories

numerical

value

males=1,

females=2.Tabulation which refers to the actual counting of the number

of observations that fall into each possible response category.
Step 11:
Prepare and Present the Final Research Report Preparing the marketing
research

report

involves

describing

the

process

used,

building

meaningful tables, and using presentation graphics for clarity. Preparing

the SPSS software allows you to prepare graphics to enhance your

written or oral presentation.
Summary: Virtually all market research projects are different. Some are limited
to review of secondary data; others require complex designs involving large
scale collection of primary data. Understand the eleven steps of the research
process. Steps can give researchers an overview of the entire research process.
Gives researchers a procedure to follow and a framework. Many steps outlined
are interactive and the researcher may decide which ones to use.

MAJOR TYPES OF MARKET RESEARCH DESIGN:

Learning Objectives
o To understand what research design is and why it is significant.
o To learn how exploratory research helps the researcher gain a feel for the
problem.
o To know the fundamental questions addressed by descriptive research and
different types of descriptive research.
o To explain what is meant by casual research and to describe four types of
experimental research designs.
o To know the different types of test marketing and how to select test market cities.
Research Design
o Marketing research methods vary from focus groups to stimulated test markets to
large, nationally representative sample surveys.
o Research design is a set of advance decisions that make up the master plan
specifying the methods and procedures for collecting and analyzing data.
o Each research problem is unique. However,

o There are similarities among research problems to allow us to use the best plan to
solve the problem.
o There are basic research designs that can be successfully matched to a given
research problem.
Three Types of Research Design
o Research designs are classified into three categories:
EXPLORATORY
DESCIPTIVE
And
CAUSAL
o Choice depends largely on objectives of the research.
o Research does not necessarily follow the order of exploratory, descriptive and
casual designs.
o Caution about thinking about research in a step-by-step process.

Classification of EXPLORATORY Research Design Studies:

To gain background information, to define terms, to clarify problems and hypotheses, to
establish Research priorities.
DESCRIPTIVE
To describe and measure marketing phenomena at A point in time.
CAUSAL
To

determine

causality,

to

make

if-then

statements

o Exploratory Research: is most commonly unstructured, informal research that is

undertaken to gain background information about the general nature of the
research problem.

o Exploratory research is systematic and flexible and allows the researcher to

investigate whatever sources he or she desires.
o Such research may consist of going to the library and reading published secondary
data; of asking questions, salespersons acquaintances for their opinions about a
company, its products and services, and prices; or of simply observing everyday
company practices.
o Exploratory Research is used in a number of situations:
1. Gain background information- When very little is known about the problem or when
the problem has not been clearly formulated.
o Firms having an MIS in which a review of internal information tracked over time
can provide useful insights into the background of the company, brand, sales
territories etc.
o Exploratory Research is used in a number of situations:
2. Define Terms Exploratory research helps to define terms and concepts.
o What is 3Ms image? The researcher learns that image is composed of several
components innovative products, friendly sales/customer service, good
corporate citizen and so on.
o Exploratory Research is used in a number of situations:

3. Clarify Problems and Hypotheses Exploratory research allows the researcher to

define the problem more precisely and to generate a hypothesis for the upcoming study.
o i.e.: banks have three types of customers: retail customers, commercial customers
and other banks for which services are performed for fees. Define which group
bank image should be measured.
o Exploratory Research is used in a number of situations:
4. Establish Research Priorities Exploratory research can be used to priorities research
topics in order of importance, especially when it is faced with conducting several
research studies.

o i.e.: customer complaint letters may indicate the product or service that needs
attention.
o i.e.: Office furniture store owner decided to conduct research on the feasibility of
carrying overhead projectors after interviewing his sales people revealed that
customers were requesting overhead projectors.

Methods of Conducting Exploratory Research:

1. Secondary Data Analysis refers to the process of searching for and interpreting
existing information relevant to the research problem.
o Sources of secondary data includes: information found in books, journals,
magazines, special reports, bulletins, newsletters, and so on.
o An analysis of secondary data is often the core of exploratory research.

2. Experience Surveys refer to gathering information from those thought to be

knowledgeable
on
the
issues
relevant
to
the
research
problem.
3. Case Analysis we refer to a review of available information about a former
situation(s) that has some similarities to the present research problem.
4. Focus Groups bringing small groups of people together and guided by a moderator
through an unstructured, spontaneous discussion for the purpose of gaining information
relevant to a research problem.

5. Projective Techniques we refer to the process of searching for and interpreting

existing information relevant to the research problem.
o Sources of secondary data includes: information found in books, journals,
magazines, special reports, bulletins, newsletters, and so on.
o An analysis of secondary data is often the core of exploratory research.

o Descriptive Research: which provides answers to questions such as who, what,

where, where and how, as they are related to the research problem.
o Who- may be defined as firms (competitors) customers?
o What- defined as brands, brands, sizes that are being purchased.
o Where- places where customers are purchasing products?
o Why- we cannot conclusively answer the question of why using descriptive
research. Need to use causal research designs.

Classification of DESCRIPTIVE Research Design Studies:

To describe and measure marketing phenomena at A point in time.

1. Cross-sectional studies- are very prevalent in market research, outnumbering
longitudinal studies and casual studies.
o Because cross-sectional studies are one time measurements.
o Often described as snapshots of the population.
o I.e. used to describe the readership of a magazine in terms of demographics.
o Classification of Descriptive Research Studies:
2. Longitudinal studies- repeatedly measure the same population over a period of time.
o Often described as movies of the population.
o To be successful researchers must have access to the same members of the
sample, called a panel
o Refer NFO(National Family Opinion)

Classification of CAUSAL Research Design Studies :

3. Causality- may be thought of as understanding a phenomenon in terms of conditional
statements of the form If x, then y. These if-then statements become our way of
manipulating variables of interest.
o If I spend more on advertising will sales increase?
o Casual is difficult in terms of if-then in understanding business problems.

Experiments
o An Experiment is defined as manipulating an independent variable to see how it
affects a dependent variable, while also controlling the effects of additional
extraneous variables
o Types of experiments:
o Laboratory experiments are desirable when the intent of the experiment is to
achieve high levels of internal validity.
o Field experiments those in which independent variables are manipulated and the
measurements of the dependent variable are made on test units in their natural
setting.

Test Marketing
o Test Marketing is the phase commonly used to indicate an experiment, study, or
test that is conducted in a field setting?
o Companies may use one or several test market cities, which are geographical
areas selected in which to conduct the test.
o There are two broad classes of uses of test markets:

o To test the sales potential for a new product or service

o To test variations in the marketing mix for a product or service.

Types of Test Markets:

Standard test market is one in which a firm tests the product and/or marketing mix
variables
through
the
companys
normal
distribution
channels.
Controlled test markets are conducted by outside research firms who guarantee
distribution of the product through pre specified types and numbers of distributors.
Electronic test markets in which a panel of consumers has agreed to carry an id card that
they
present
when
buying
goods
and
services.
Simulated test markets (STMs) are those in which a limited amount of data on consumer
response to a new model are fed into a model containing certain assumptions regarding
planned marketing programs, which generates likely sales volumes.
Consumer versus Industrial Test Markets:
o With industrial test markets, prototype products are tested, revised, and retested
under actual conditions.
o i.e. 3M are experimenting with this concept
Lead Country Test Markets:
o Is test marketing conducted in specific foreign countries that seem to be good
predictors for an entire continent?
o I.e. Colgate Palmolive use lead country test marketing when it launched its
Palmolive Optims shampoo and conditioner.
Pros and Cons of Test Marketing:
o Test markets are considered by some to be the ultimate way to test a new
product.
o Test markets are costly and subject to competitive sabotage.

o Predicting changing consumer behavior is difficult.

Summary
o Research design refers to a set of advance decisions made to develop the master
plan to be used in the conduct of the market research.
o If very little is known about the project exploratory research is appropriate.
o Descriptive research measures market phenomena and answers questions such as
who, what, where, when and how.
o It can be cross sectional or longitudinal
o If we know quite a bit about our research we can use causal relationships.
o Laboratory experiments are used for achieving internal validity while field
experiments suited for achieving external validity.
o Test marketing is a form of experimentation and takes various forms (standard,
controlled, electronic, simulated, consumer, industrial and lead country.