Market Research

Course Layout Level 1: Market Research (Only concepts, no calculations) --- Definition and Related terms --- Process Flow Level 2: Case Study Indian Automotive Industry Report on present situation of Indian Market Setting up an Indian Automotive Firm (With Calculations) o Defining Objectives of company o Defining parameters to attain objectives o Defining methodology and process for calculating parameters o Parameters determination and conclusions o Submitting Reports

WHAT IS MARKET RESEARCH? Market research is the systematic gathering and interpretation of information about individuals or organizations using statistical and analytical methods and techniques of the applied social sciences to gain insight or support decision making which also includes social and opinion research. In layman language, it is any organized effort to gather information about Customer (purchasers, consumers, influencers), Company (product design, promotion, pricing, placement, service& sales), Competitors (how their market offerings interact in the market environment) For starting up a business, there are some important things:

Environment Analysis 1. Market information Through Market Information one can know the prices of different commodities in the market, as well as the supply and demand situation. Information about the markets can be obtained from different sources, varieties and formats, as well as the sources and varieties that have to be obtained to make the business work.
2.

Market Trends

Market trends are the upward or downward movement of a market, during a period of time. The market size is more difficult to estimate if one is starting with something completely new. In this case, you will have to derive the figures from the number of potential customers, or customer segments.

 Customer Analysis 1. Market segmentation Market segmentation is the division of the market or population into subgroups with similar motivations. It is widely used for segmenting on geographic differences, personality differences, demographic differences, use of product differences, psychographic differences and gender differences. 2. Choice modelling It attempts to model the decision process of an individual or segment in a particular context Company Analysis: Clear understanding of Companys product with its vision, mission and objective.

Marketing Measurement
As popularised near mid 90s that Its not marketing, if its not measured Need: Authors Rex Briggs and Greg Stuart calculated that marketers waste 37% of their marketing investment. Reasons for the waste include failure to understand underlying customer motivations for buying, ineffective messages and inefficient media mix investment Marketing effectiveness deals with return on marketing investment

Factors driving marketing effectiveness 1. Marketing Strategy Improving marketing effectiveness can be achieved by employing a superior marketing strategy. By positioning the product or brand correctly, the product/brand will be more successful in the market than competitors products/brands. Even with the best strategy, marketers must execute their programs properly to achieve extraordinary results. 2. Marketing Creative Even without a change in strategy, better creative can improve results. Without a change in strategy, AFLAC was able to achieve stunning results with its introduction of the Duck (AFLAC) campaign. With the introduction of this new creative concept, the company growth rate soared from 12% prior to the campaign to 28% following it.

3. Marketing Execution Marketers can improve their execution by making small changes in any or all of the 4-Ps (Product, Price, Place and Promotion) without making changes to the strategic position or the creative execution marketers can improve their effectiveness and deliver increased revenue. At the program level marketers can improve their effectiveness by managing and executing each of their marketing campaigns better. It's commonly known that consistency of a Marketing Creative strategy across various media (e.g. TV, Radio, Print and Online), not just within each individual media message, can amplify and enhance impact of the overall marketing campaign effort.

4. Marketing Infrastructure (also known as Marketing Management ) Improving the business of marketing can lead to significant gains for the company. Management of agencies, budgeting, motivation and coordination of marketing activities can lead to improved competitiveness and improved results. The overall accountability for

brand leadership and business results is often reflected in an organization under a title within a department.

5. Exogenous Factors - Generally out of the control of marketers, external or exogenous factors also influence how marketers can improve their results. Taking advantage of seasonality, interests or the regulatory environment can help marketers improve their marketing effectiveness.

CALCULATING MARKETING EFFECTIVENESS There are two forms of the Return on Marketing Investment (ROMI) metric.

short-term ROMI long-term ROMI

Short term The first, short-term ROMI, is also used as a simple index measuring the Rupees of revenue (or market share, contribution margin or other desired outputs) for every rupees of marketing spend. The value of the first ROMI is in its simplicity. In most cases a simple determination of revenue per dollar spent for each marketing activity can be sufficient enough to help make important decisions to improve the entire marketing mix. Long term In a similar way the second ROMI concept, long-term ROMI can be used to determine other less tangible aspects of marketing effectiveness. For example, ROMI could be used to determine the incremental value of marketing as it pertains to increased brand awareness consideration or purchase intent. In this way both the longer-term value of marketing activities (incremental brand awareness, etc.) and the shorter-term revenue and profit can be determined. For many other organizations, this method offers a way to prioritize investments and allocate marketing and other resources on a formalized basis.

Short-term ROMI is best employed as a tool to determine marketing effectiveness to help steer investments from less productive activities to those that are more productive. It is a simple tool to gauge the success of measurable marketing activities against various marketing objectives (e.g., incremental revenue, brand awareness or brand equity). With this knowledge, marketing investments can be redirected away from under-performing activities to better performing marketing media. Long-term ROMI, however, is a sophisticated measure used by a number of forward-thinking firms interested in getting to the bottom of value for money challenges often posed by competing brand managers.

PROCESS FLOW

1: PROBLEM FORMULATION Problem formulation is a statement of the management problem that is analytically meaningful and that often points the way to alternative solutions. An accurate problem formulation specifies the types of information needed to help solve the management problem. In short, quality thinking about a problem prior to data collection largely determines the quality of data collection, analysis and problem solving. Management Problems Research Problems Allocate advertising budget to media Estimate awareness generated by each media type 2: METHOD OF ENQUIRY Scientific or Random The goal of a scientific methodologist, also called an objectivist, is to run a hypothesis test using publicly stated procedures that are investigatorindependent. Formulate a problem Develop a hypothesis Make predictions based on the hypothesis Devise a test of the hypothesis Conduct the test

 Analyze the results 3: RESEARCH METHOD Two broad methodologies can be used to answer any research question experimental research and non-experimental research. The major advantage of experimental research lies in the ability to control extraneous variables and manipulate one or more variables by the intervention of the investigator. In non-experimental research, there is no intervention beyond that needed for purposes of measurement. 4: RESEARCH DESIGN Research design is defined as the specific methods and procedures for acquiring the information needed. 5: DATA COLLECTION TECHINQUES Communication Observation 6: SAMPLE DESIGN Rarely will a marketing research project involve examining the entire population that is relevant to the problem. For the most part, practical considerations (e.g., absolute resources available, cost vs. value, etc.) dictate that one use a sample, or subset of the relevant population. 7: DATA COLLECTION Data collection begins after the previous six stages of the research process are complete. Data collection, whether by communication or observation, requires the use of data collection personnel which then raises questions regarding managing these people. Because data collection can be costly, firms often utilize outside limited-service research suppliers, particularly when the extent of in-house

research activity does not warrant the cost of having permanent data collection personnel. Also, project design may require specialized data collection, which might best be obtained from an outside supplier. 8: ANALYSIS AND INTERPRETATION Data that are obtained and presented in the same form as originally collected are seldom useful to anyone. Data must be analyzed. The data must be edited, coded, and tabulated before performing formal analyses such as statistical tests. The types of analyses that can be properly performed depend upon the sampling procedures, measurement instruments, and data collection techniques used. Consequently, it is imperative that the techniques of analysis, associated descriptive or prescriptive recommendation types, and presentation formats be selected prior to data collection. 9: The RESEARCH REPORT Two approaches can be taken to ensure that this conflict is not a problem. One approach involves preparing two reports: (1) a technical report that emphasizes the methods used and underlying assumptions, and presents the findings in a detailed manner; and (2) a popular report that minimizes technical details and emphasizes simplicity.