MARKETING RESEARCH

OBJECTIVES

After studying this lesson, you should understand the following: The meaning, scope and objects, of marketing research. The marketing research process. STRUCTURE 21.1 Introduction 21.2 Marketing research meaning, Importance and scope 21.3 Objects of marketing research 21.4 Marketing research process 21.5 Types of marketing research 21.6 Summary 21.7 Key words 21.8 Revision points 21.9 Model questions 21.10 References 21.11 Assignment question 21.12 Terminal exercise 21.1 INTRODUCTION Decisions making in various areas marketing management, such as pricing, product development, promotion and distribution, is a complex problem. It is both a problem and a challenge. It is essential for every marketer to develop a dependable marketing data and information base for rational decision making. This in turn, depends on collection, recording and analysing relevant data. This job of collecting, recording and analysing relevant data for marketing decisions is known as marketing research. 21.2 MARKETING RESEARCH MEANING IMPORTANCE AND SCOPE Meaning and importance Marketing research has been variously defined. It is the systematic, objective and exhaustive search for and study of the facts relating to any problem in the field of marketing. (Richard Crisp). The American marketing Association has defined marketing research as the systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services. Marketing research is a step by step process of planning for, acquiring, analysing, and interpreting information relevant to a marketing decision making situation (Cravens, Hills and Woodruff, Marketing management, Richard D. Irwin, Illusions, 1988. P. 631). An analysis of the definition reveals the following salient features of marketing research: 1.It is a search for data which are relevant to marketing problems distribution, promotion, pricing, etc. Marketing Management 214 2.It is a carried out in a systematic manner as opposed to a hazard or hit-and -miss manner. 3.It involves a process or gathering, recording, and analysis of data. As regards the importance, it can be said that marketing research plays a key role in the entire marketing process. It helps the firm in market measurement, assessment of market potential and development of sales forecasts. Marketing research can significantly help each and every function of marketing. It is rightly observed, Marketing Research is the radiology and pathology of marketing

operations of a business. It diagnoses the business ailments when there is a trouble, it is also means regular checks. Like the radiologist who provides an X-ray, the market researcher gives a true picture of the business position. As the pathologist gives test reports to the medical practitioner, the marketing research furnishes reports that can guide the business executives. With the emphasis shifting from the product to the consumer and his needs and with the consumer becoming more involved and the market turning into a buyers market, it became necessary to get information on the needs, preference and evaluations of the consumer. One of the important tasks is to deliver the right product to the right person at the place at right time. It also required obtaining information on consumers satisfaction and dissatisfaction for bringing requisite change in companys marketing programme, so that the customer remains loyal to the enterprise and its product. Thus, marketing research is described as an activity, the results of which are useful in enhancing the ability to make marketing decisions in the ever changing world. Scope A wide range of research activities are carried on by marketing researchers of this century. They can be broadly categorized into 7 groups. a) Product / Service research which covers the research on customer acceptance of the proposed new product, comparative study of competitive products, and determination of new uses of existing products. Test marketing of proposed product, study of customer dissatisfaction, product line decision, packaging labeling and design decision. b) Market research which covers analysis of market potentials for existing products, Estimation of demand for new products, sales forecasting, characteristics of product markets, analysis of sales potential and study of trends in markets. c) Promotion research which covers advertising campaign evaluation, analysis of advertising and selling practices, selection of advertising media, motivational study establishment of sales territory, evaluation present and proposed sales methods, studying competitive pricing analysing salesmans effectiveness and establishing sales quota. Marketing Management 215 d) Distribution research which covers location and design of distribution centers, handling and packing of merchandise, cost analysis of transportation methods, Dealer supply and storage requirements. e) Pricing Research which covers demand elasticities, perceived prices, cost analysis and margin analysis. f) Corporate Responsibility research which covers research on ecological impact of business, protection of customers rights, studies on legal restraints and regulations, studies on social values and policies. g) Miscellaneous Research activities cover various research activities which are not conducted regularly but has some marketing implication. This cover research on diversification satisfaction and motivation of sales personnel, governmental actions and attitudes towards corporate sector, international marketing research. The scope of modern marketing research is two fold i.e. routine problem analysis and non-routine problem analysis. The above categorization helps in giving a broader look to the scope of marketing research.

Marketing information system Vs marketing Research

A marketing information system is an on going future oriented structure designed to generate, process, store and later retrieve information to aid decisionmaking in an organizations marketing programme. It is a set of procedures and methods for the regular and planned collection, analysis and presentation of information in making marketing decisions. It consists of people, equipment and procedures to gather, sort, analyse, evaluate and distribute needed, timely and accurate information to marketing decision makers. In order to carryout their analysis planning implementation and control responsibilities, the marketing managers need information about developments in the marketing environment. The role of the MIS is to assess the managers information needs, develop the needed information and distribute the information in time to marketing managers.

There is an increasing need for marketing information system because a) There is a growing consumer discontent. b) There is a shortage in scarce resources. c) There is the emergence of complex marketing environment d) There is a knowledge explosion e) There is shortening of time span for decision making There is a varying degree of contradiction among theorists regarding the relationship between the MIS and MR. Some view marketing intelligence system as simply a logical, computer based extension of marketing research. Others view them distinctly different. Some opinions that if a company has a formal MIS, then marketing research is a part of this broader information system. CONTRAST BETWEEN MARKETING INFORMATION SYSTEM AND MARKETING RESEARCH
Marketing Information System Marketing Research 1. Handles both internal and external data. 2. Concerned with prevention and solution of marketing problems. 3. operates continuously as a system 4. Tends to be futuristic 5. Mostly a computerized / process 6. Includes other subsystems besides marketing research 1. Depends largely on the handling of external data 2. Concerned with solution of problems 3. operates in a fragmented & interment basis

4. Tends to concentrate on past information 5. Need not be a computerised process 6. Is one of the sources of input for an effective marketing information system

21.3 OBJECTS OF MARKETING RESERCH

The first and foremost objective of marketing research is to enable manufactures to make product acceptable and saleable and to see that they reach the market easily, quickly, cheaply and profitably without sacrificing consumer interest. MR aims at providing the following information to the marketing manager: 1.To define his present market situation together with the long range trends which have led up to it? 2.To discover what major and underlying factors are dominating the situation and how these factors can be influenced or controlled. 3.To set up a plan for keeping in touch with the behaviour to these dominating factors and for measuring the results of any efforts made to influence or control them. 21.4 MARKETING RESEARCH PROCESS The marketing research begins with the recognition of a marketing related problem. Identifying and stating the right problems is like winning half of the marketing war. This is followed by a formulation of the objectives of the study and the methodology to be used to achieve these objectives. The detailed steps involved in the marketing research process are explained in the following flow chart.

Definition of Problem: This is the first step in marketing research process. The problem may be of different types depending on the marketing situation e.g. product failure, sales decrease, market gossip etc. the problem may be solved internally or external assistance from a marketing research agency, is required depending on the gravity of the problem. The problems then are formulated into statements known as hypotheses can be translated into research objectives which give an indication on information to be collected and variables to be studied. Step 2 Statement of Research Objectives: The hypotheses are translated into research objectives. The information so obtained while formulating the problems pass through a subjective exercise to assess the possible outcomes. The hypothesis and objectives are formulated having the idea about the possible set of outcomes, the subjective probabilities associated with each outcome and the pay-offs associated with each outcome. Step 3 List of Needed Informations: Information is required about attitudes, beliefs, values, knowledge, intention and socioeconomic status of prospects. The main source of information

Marketing Management 218 may be the prospects themselves. The data may be primary or secondary in character. The primary data are original data gathered specifically for the project at hand. The secondary data have already been gathered for some other purpose. The sources of secondary data are libraries, government, trade, professional and business associations, private business firms, Advertising media, University research organizations and foundation. The primary sources of data are obtained from respondents on their attitude, opinion, preference, behaviour etc. for the specific research purpose. Step 4 Design of data Collection Project: This covers two broad concepts viz., the type of research design and the methods to collect information for the project. The development of research design largely depends upon the purpose for which the research is conducted. The depth and extent of data required the costs and benefits of the research, the urgency of the work and the tone available for the work also affects the research design. It provides the blueprint for research work. All marketing research projects start with exploratory research. This is required to obtain a proper definition of the problem and helps in providing insight to the problem. It is helpful in establishing in studying the competing explanations of phenomenon: conclusive research is an elaborate and systematic collection of the information needed, its analysis and findings as per the research findings. The second aspect of the design of data collection project is the selection of methods for gathering data. Primary data can be collected in various ways such as: a) Survey Method: A survey consists of gathering data by interviewing a limited number of people selected from a larger group. It has the advantage of getting original information. The interviewing in a survey method can be done by the researcher by person, telephone and mail. b) Personal interviews are more flexible because they are able to probe more deeply is the answer is not satisfactory. In addition to high cost and time consuming, personal interviews also face the possible limitation of inviting respondents bias. Telephone surveys can be conducted more rapidly and at least cost but it is time specific and it leaves the scope of reaching non-telephone holders. Interviewing by mail involves mailing a questionnaire to potential respondents and having them returned the completed form by mail. c) Observational Method: In this method data are collected by observing some action of the respondent. It is the observation of some occurrence, people and incident. The observation can be personal and mechanical but this method suffers from recording covert behavior. Marketing Management 219 d) Experimental Method: This method of gathering primary data involves the establishment of a controlled experiment that stimulates the real market situation as much as possible. The

small scale experiment will provide valuable information for designing a large scale marketing programme. Step 5 Selecting the Sampling Scheme & Sample Size: A complete enumeration or census involves in decisive data gathering and the cost involved is prohibitive in character, so it is prudent in marketing to select a small group (sample) out of the population (universe). This process of selecting small number of items out of a larger number of items is called sampling. Their process of sampling can be probabilistic as well a non-probabilistic or judgmental. A probabilistic or random sample is one that is selected in such a way that every unit in the predetermined universe has a known and equal chance of being selected. Some common probabilistic sampling methods are simple random sampling and quota sampling. In non-probabilistic, there is an unequal chance of few members being selected and rest others of being not selected out of the whole population. Step 6 Organizing the Field Work: This step involves the real research work on the field. The actual collection of data in the field by interviewing, observation is the weakest link in the entire research process. In other steps, marketing prudent are involved to ensure the accuracy of the result, so if the field workers are inadequately trained and supervised, the whole labour will be lost. There is the chance of bias because people in the sample may not feel at home and refuse to answer; the field workers may be unable to establish rapport with respondents. So organizing the field work is an uphill task for the researcher. Step 7 & 8 Analysis the Data, Finding and conclusion: The data so obtained from field survey are subjected to editing. Editing is a process of reviewing the data to avoid and check the error arising out of illegibility, non-response and response from non-competent respondents. Then these data are categorized by tabulation. Tabulation process involves manual as well as mechanical tabulation by using punched card, computers etc. After data processing various statistical and non-statistical tools are used to analyze the data quickly and inexpensively which invariably leads to finding solutions to the marketing problem and conclusions. These findings and conclusions are presented in the form of a report. Marketing research process to be effective should be always regulated with a follow up action. This helps the decision makers in finding out the effectiveness of the research. Marketing Management 220 21.5 TYPES OF MARKETING RESEARCH An ad-hoe research focuses on a specific marketing problem and collects data at one point in time from one sample of respondents. For example, a company wants to find the impact of its latest advertising campaign on its sales. Ad-hoc surveys are either custom designed or omnibus studies. Custom designed studies are based on specific needs of the client. The research design is based on the research brief given. The questionnaire is designed specifically for finding a solution to the clients problem. For omnibus survey, space is bought on a questionnaire for face to face or telephone interviews. The interview may cover many topics as the questionnaire

space is bought by a number of client.; who benefit from cost sharing. Continuous Research Interview In this method the same respondents are interviewed repeatedly. Respondents are enrolled by the research agency. Information is gathered from these respondents on a periodic basis. Thus, it is possible to track changes within the same set of audience over a period of time. Consumer Panels Consumer panels are formed by recruiting a large number of households which provide information about their purchases over time. By using the same households and tracking the same variables over a period of tine, measures of brand loyalty and switching can be determined. The demographic profile of a person who buys a particular brand can also be found. Changes in market share can also be examined over time. Thus, it is possible to track even small behavioural changes in response to changes in marketing variables. Retail Audits Sales of brands can be measured by means (If laser scans of barcodes on packaging which are read at the checkout. Brand loyalty and switching cannot be measured, but accurate assessments, of sales achieved by the store and competitive activity is provided. For identifying geographic areas or type of outlets where new products may be, introduced, such audits can be particularly useful. Potential problems related to distribution, in-store promotions or layout can also be assessed by using retail audits. Sales potential and sales forecasts can also be planned with such data. Television Viewership Panel The audience size of a program is measured minute by minute. Commercial breaks can be allocated rating points according to the proportion of the target audience watching the program. This is the currency by which television advertising is bought and judged. People meters record whether the set is on or off, which channel is being watched and by means of a hand console, who is watching. 21.6 SUMMARY Marketing research has become vital weapon in the armory of a modern marketer. It is an activity, the results of which are useful in enhancing the ability of the marketer to make marketing decisions in the ever changing world. He has to gather information Marketing Management 221 and process them for taking a decision on any marketing aspect. The scope of marketing research is widening. It has embraced with itself consumer research, advertising research, and product and price research. MR involves a number of steps starting with definition of problem and ending with finds and conclusions. The future of marketing research in India is bringing on account of the growing business awareness about its usefulness and the steady growth of data base. Specialised research skill and data processing facilities are also improving. 21.7 KEY WORDS Marketing information system, Corporate responsibility research, Conclusive research, Exploratory research 21.8 REVISION POINT Marketing research process 21.9 MODEL QUESTIONS 1.Why does a company need a marketing information system? 2.How does a marketing information system differ from marketing research? 3.Describe the types of goods/services which would definitely need exploratory/research 4.In depth interviews are similar to individual case studies Comments.

21.10 REFERENCES

1.Beri, G.C. Marketing Research, TMH, New Delhi, 1994. 2.Boyd Jr. et al., Marketing Research: Text and Cases, Richard D. Irwin, Illinois, 1964. 3.Green P.E. & D.S. Tull, Research for Marketing Decisions, PHI New Delhi, 1973. 4.Stanton, et al. Fundamental of Marketing. MrGraw Hill, New York, 1967. 21.11 ASSIGNMENT QUESTION 1.Evaluate the merits of personal, telephone and mail survey method on the basis of accuracy, speed, cost case of implementation, flexibility and amount of information obtained. 21.12 TERMINAL EXERCISE 1.Develop a suitable marketing research procedure for a departmental store for the following problems: Inability to copeup with large turnover of customers Lake of proper stock status Stock accounting Cash collection and reconciliation Excessive reliance on the owner in day to day operations of the store made him unable to devote sufficient time for developing business. Marketing Management 222 CASE Attitude towards Advertising You have been asked to ascertain the attitude of people towards advertising, whether favourable or unfavourable, in the medium sized city where you live. The study should indicate whether heterogeneous groups differ significantly or otherwise in their attitudes towards advertising. The proposed study has to be carried out in two parts. Part I will involve the construction of a suitable scale for measuring attitudes of people. Part II will examine some hypotheses and conclude whether they are accepted or rejected. The hypotheses will concern the differences in attitude of the two groups towards advertising. For this purpose, you may think of groups in terms of male and female, young and old, educated and uneducated, rich and poor. QUESTIONS 19. What type of study is this? 6. How would you develop a suitable scale for the proposed study? 7. Which scale would be most appropriate and why? 8. What would be the limitations of such a study? Source: Beri G.C. Marketing Research 2nd Edn., Tata Mc Graw-Hill Publishing Co. Ltd., New Delhi, 1994. P. 218. Marketing Management 223

QUESTIONS

21. Evaluate this questionnaire in the light of the object stated. 20.Can you suggest a few more items that can be included in the questionnaire?