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Marketing Research Notes - Introduction I MEANING OF MARKETING RESEARCH

The term "Marketing Research" is composed of two words -"Marketing" and "Research". Marketing Marketing basically consists of spotting the needs of customers and meeting them in the best possible manner through appropriate production and distribution activities. The term marketing refers to buying and selling activities. Exchange/transfer of ownership is the essence of marketing.

Research Research means detailed/systematic/comprehensive study of

problem.

Research is a process involving a series of steps to collect and analyze the information needed for decision-making in the desired / specific field of inquiry. The term research can be applied to any field of human activity. Research means studious enquiry" or "thorough, honest and impartial study conducted by trained men using scientific methods". It means detailed study relating to a particular subject. The term MR is used extensively in modern marketing management. It acts as a tool for accurate decision making in marketing of goods and services. It is also useful for studying and solving different marketing problems faced by business units. . Here, the details (information and data) of the marketing problem are collected and studied, conclusions are drawn and suggestions/recommendations are made to solve the problem quickly, correctly and systematically. In MR/ marketing problem is studied in depth by collecting and analyzing all relevant information and solutions are suggested to solve the problem relating to consumers, product, market competition, sales promotion and so on.

MR is a special branch of marketing management. It is comparatively of recent in origin. MR acts as an investigative arm of a marketing manager. It suggests possible solutions on marketing problems for the consideration and selection by a marketing manager. It also acts as an important tool to study buyer behavior, changes in consumer life-styles and consumption patterns, brand loyalty and forecast market changes. MR techniques are used by manufacturers/exporters/distributors and service organizations to collect information on various aspects of marketing. The information collected is analyzed and used for decision-making in the marketing management. MR facilitates accurate marketing decisions for consumer satisfaction on the one hand and sales promotion on the other hand. It is rightly treated as the SOUL of modern marketing management. MR suggests possible solutions on marketing

problems to marketing manager for his consideration and final selection/decision. It is rightly said that the beginning and end of marketing management is marketing research. Decisions on each element of the marketing mix-product, price, distribution and promotion-need marketing research support. Marketing research is primarily used to provide information needed to guide marketing decision viz., market mix. It acts as a support system to marketing management. DEFINITIONS OF MARKETING RESEARCH:

Let us now, consider some definitions of MR: (1) The most widely accepted definition of marketing research is given by American Marketing Association (AMA). The AMA has defined marketing research as "the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services (2) According to Richard D. Crisp: "Marketing research is the systematic, objective and exhaustive search for and study of the facts relevant to any problem in the field of marketing." (3) According to Philip Kotler: "Marketing research is systematic problem analysis, model building and fact-finding for the purpose of improved decision-making and control in the marketing of goods and services." (4) Luck, Wales and Taylor have defined marketing research as "the application of scientific method to the solution of marketing problems" (5) Green and Tull have defined marketing research as "the systematic and objective search for and analysis of information relevant to the identification and solution of any problem in the field of marketing." (6) British Institute of Management: In 1962, the British Institute of Management defined marketing research as/ "The objective gathering, recording and analyzing of all facts about problems relating to the transfer and sales of goods and services from producer to consumer."

FEATURES

OF

MARKETING

RESEARCH:

(a) Marketing research is concerned with systematic gathering, recording and analyzing of information: In MR, information that is relevant to the marketing problem is collected in a systematic manner from all available sources. Thereafter, the same is tabulated and recorded for systematic scrutiny. Such scrutiny will offer certain specific conclusions useful for solving the marketing problem. (b) In MR, information is to be collected objectively and accurately: This feature of MR suggests that the required information needs to be collected objectively. In brief, the information collected should be accurate, precise, relevant and properly verified. The conclusions drawn and the remedial measures introduced will be ineffective if the information collected is not reliable. (c) Marketing research is a tool for solving marketing problems: MR is a means and not the end in itself. It is a tool in the hands of management for identifying and analyzing marketing problems. The purpose is to solve them correctly.

CHARACTERISTICS OF MARKETING RESEARCH: (1) Systematic and continuous process: MR is a continuous process. This is natural as new marketing problems are bound to come from time to time in the course of marketing of goods and services. One type of research is not adequate to resolve all marketing problems. Similarly, new research projects will have to be undertaken to solve new marketing problems and challenges. A marketing company faces new marketing problems from time to time. For facing these problems marketing research activities need to be conducted on a regular basis. A marketing company has to conduct MR regularly for its survival & growth in the present dynamic marketing environment. (2) Wide/comprehensive in scope and application: MR is wide in scope as it deals with all aspects of marketing of goods and services. It is more than just collecting data on marketing. Introduction of new products, identification of potential markets, selection of appropriate selling techniques, study of market competition and consumer preferences, introduction of suitable advertising strategy and sales promotion measures, are some areas covered by MR. It plays a role in all the three phases of the management process in marketing: planning, implementation and evaluation. (3) Emphasizes on accurate data collection and critical analysis: In MR, required data should be collected objectively and accurately. The data collected must be reliable. It should be analyzed in a systematic manner. This will provide comprehensive picture of the situation and possible solutions. (4) Offers benefits to sponsoring company and consumers: MR is useful to the sponsoring company. It raises the turnover and profit of the company. It also raises the competitive capacity and creates goodwill in the market. It enables a company to introduce consumer-oriented marketing policies. Consumers also get agreeable goods and more satisfaction due to MR activities. (5) Commercial equivalent of military intelligence: MR is the commercial intelligence activity. It is similar to military intelligence where systematic study is made before taking any military action. MR acts as the intelligence tool of marketing management. (6) Tool for managerial decisions: MR acts as a tool in the hands of management for identifying and analyzing marketing problems and finding out solutions to them. It is an aid to decision-making. It suggests possible solutions for the consideration and selection by managers. MR is an aid to judgment and never a substitute for it. (7) Applied type of research: MR is applied knowledge. It is also called 'decisional research as it provides specific alternative solutions to deal with a specific marketing problem. It studies specific marketing problem and suggests alternative solutions and possible outcome of each alternative. In addition, it is both science and an art. MR is also becoming highly professional activity. (8) Reduces the gap between the producers and consumers: MR is an essential supplement of modern competitive marketing. It is useful for understanding the needs and expectations of consumers. It reduces the gap between producers and consumers and adjusts the marketing activities to suit the needs of consumers. (9) Not an exact science: MR is both science and an art. It collects information and studies marketing problem in a scientific manner. The information collected is also applied to real lire problem. However, MR is not an exact science. It only suggests possible solutions and not the exact solution to marketing manager for consideration and selection. At present, MR is treated as a professional activity. We have professional agencies (MR agencies or advertising agencies) dealing with the marketing problems of their clients on commission basis. (10) Use of different methods: MR can be conducted by using different methods. Data can be collected through survey or by other methods like observation method or experimentation method. Even computers and internet are used for data collection. The researcher has to decide the method

that is suitable for the conduct of research project. This selection is important as the use of unsuitable methods affect the quality of research work. (11) Dynamic character: MR is dynamic in nature. Its scope is fast expanding along with the new developments in the field of marketing. This is natural as MR is essentially for dealing with new problems and challenges in the field of marketing. In addition, developments in other subjects such as economics, statistics, computer science, sociology, psychology, cultural anthropology and behavioral sciences also bring corresponding changes in the field of MR. New methods, new techniques, etc., are used while conducting the research activities. This suggests that MR is a dynamic and progressive subject with new developments taking place regularly. (12) Closely connected with marketing information system: Both the concepts are interrelated. In fact, MR is one component of MIS. Both are useful for solving marketing problems and for accurate and quick decision-making in the field of marketing. (13) Phenomenal growth: MR has made a phenomenal growth since its inception. It has become an important tool in the hands of management (to solve marketing problems) along with the advent of consumer-oriented philosophy in modern business. The increasing research budgets of companies are the indicators of its tremendous growth in recent years. AIMS AND OBJECTIVES OF MARKETING RESEARCH: The aims of the marketing research and analysis may be stated as follows: (1) To study the needs, wants and expectations of consumers. (2) To find out reactions of consumers to the products of the company. (3) To evaluate company's sales promotion measures for suitable adjustment and improvement. (4) To study current marketing problems and opportunities for suitable follow-up actions. (5) To suggest the introduction of new products, modifications of existing products and to discover new uses of existing products. (6) To design and test appropriate packages of company's products and make packaging as attractive as possible (7) To study existing pricing, channels of distribution and market competition for suitable changes, if necessary. (8) To find out methods for making the products of the company popular and raising its goodwill and market reputation. (9) To assess competitive strength and policies. (10) To estimate potential buying-power in various areas (11) To know the company's expected share of the market. (12) To determine the dimensions of the marketing problems, facilitate evaluation of the alternative solutions of different problems and help in the selection of a right course of action. (13) To define the probable market for a specialized product and to report on general market conditions and tendencies, buying habits, etc. MARKET RESEARCH V/S MARKETING RESEARCH: The two terms market research" and "marketing research" are used interchangeably though there is difference in the meaning and scope of the two terms. "Market research" is used as a popular synonym for "marketing research". Market is a part of marketing and market research is only a part of marketing research. It covers only a few aspects of marketing. According to Philip Kotler, the term "market research" is accurate for describing research into the market, its size, geographical

distribution, income and so on. However, it fails to cover the idea of research into the effects of marketing efforts on the market for which the term "marketing research" is more accurate. MR is increasingly coming into favor as the term that describes both ideas. Marketing research need not be treated as pure academic research. It is a type of applied research with scientific orientation. Distinction between market research and marketing research

Dimension Market Research Marketing Research Meaning Market research directly relates to market situation i.e. size, location, market competition and features of customers. It provides details about the market for decision-making and policy framing. Marketing research is a systematic and comprehensive search/study of different aspects of marketing - including the current marketing problems and challenges for decision-making & policy framing. Nature Market research is a branch of marketing research. Marketing research is one branch of Marketing Information System. Scope The scope of market research is limited/restricted to the study of market or market situation The scope of marketing research is comprehensive & wide as it covers all aspects of marketing. Type of term Market research is a narrow term as it relates to one aspect of marketing Marketing research is a wide/broad term as it covers all aspects of marketing Objective Market research is undertaken in order to deal with the problems and challenges relating to different aspects of market such as competition, market demand and consumer needs Marketing research is undertaken in order to study varied types of marketing problems such as product line, marketing mix, advertising, packaging, branding and so on.

GROWING

IMPORTANCE

OF

MARKETING

RESEARCH:

Marketing research has received attention and importance along with the growth of highly competitive consumer-oriented marketing philosophy. Research activities in different aspects of marketing are necessary and useful in such competitive and flexible marketing environment. Large companies marketing consumer items noted the growing need of MR activities in the marketing decision-making process. They naturally took initiative in conducting research activities within the organization itself. This was followed by the formation of specialized marketing research agencies and advertising agencies for this purpose. This is how professional orientation was given to MR.

Many marketing research departments and agencies were established after World War II. MR activity (as we understand today) is comparatively new in the field of marketing. This activity probably began around 1950s (Modern era of marketing research) and attracted the attention of companies interested in marketing their products in the national and global markets. However, the concept of MR got firm roots in the marketing activity after 1910. First time the marketing research techniques were used by newspapers to predict the election results. However, during the second decade of 20th century, marketing research emerged as a valuable management tool to solve marketing problems. In the developed countries, marketing research activity is conducted on scientific lines. Even in India, large manufacturing companies treat marketing research as an essential supplement of planning and decision-making in the marketing field. It is treated as an indispensable tool for profitable and consumer-oriented marketing. The popularity of MR increased after 1960 due to the introduction of computers in data collection and analysis. In the early period, marketing research activities were confined to market studies only but in 1950s research relating to marketing activities was broadened to include all managerial aspects-price, produce place and promotion. In late 1950's motivational and psychological techniques were introduced to generate more information on consumers. Several factors have contributed to the growing importance of marketing research. For example, due to large-scale production, producers could not have direct contact with the consumers. This created many problems before producers. For solving all such problems developed due to the gap between producers and consumer and marketing research activities prove to be useful. Secondly, the shifting from sellers market to buyers' market made it necessary to have better understanding about consumer net-expectations. For this, marketing research proved to be useful. Thirdly, the introduction of computers has contributed to the growth of marketing research activity. Fourthly, rapid changes in the business environment, shift to consumer-oriented philosophy in business are also responsible for growing importance of marketing research. Finally, the scope of marketing has widened due to population growth and development of rural markets. MR proved to be useful for dealing with the problems created by national and global markets. In brief, growing importance of marketing research in the present marketing system is the net result of various factors and forces available in the present marketing system. At present, MR activities are undertaken by marketing companies on their own. In addition, marketing research consultants and agencies provide expert advice to companies on general and specific marketing problems of their clients.

Relevance of MR under Globalization: The business world is fast moving towards globalization in which all countries participate. Every country has to face competition in the domestic as well as in export marketing. Survival in the global business is possible through quality improvement, cost reduction and by attracting consumers through various sales promotion techniques. Here, MR offers helping hand to companies. It offers

suggestions for survival under global competitive environment. In brief, the importance/relevance of MR is fast growing along with the globalization of business. It is a must for survival and growth under globalization. Current marketing scenario is different as compared to traditional one. There is a new trend towards liberalization and globalization. Markets (domestic as well as foreign) are becoming highly competition. New companies and new products re entering in the markets. Survival is difficult under the present marketing environment. Here, MR offers various services. It is, now, a professional activity with new developments in regard to scope/coverage and techniques. In brief, MR has great relevance in the current marketing scenario in India as well as in all countriesdeveloped and developing of the world. MR has enormous capacity to help and guide marketing companies in regard to their marketing problems and challenges.

FUNCTIONS OF MARKETING RESEARCH: MR performs five basic functions. These are: Description, evaluation, explanation, prediction and finally aid in decision-making. These functions are related to the research project undertaken. Usually, every research study performs all the five functions explained below: (1) Description: MR provides data and gives information/description of customers who buy the product. This includes information about their age/sex, education, income and the amount of money that they are willing to spend on the product. Description of the customers is useful in order to draw certain conclusions about the customers and their buying behavior. Even marketing strategies can be decided as per the information available. (2) Evaluation: MR is useful for understanding the views/reactions of the buyers. This includes views of consumers on packaging/ advertising/sales promotion measures used. A manufacturer gets these details as well as the information about his product in comparison with the products of his competitors. This facilitates evaluation of the marketing policies. For example, how far the packaging of the product is attractive to consumers or superior as compared to packaging by competitors and so on. (3) Explanation: MR gives explanation to certain questions of a manufacturer. It may be related to decline in sales, retailers negative reaction or resistance of consumers in a particular marketing area. MR enables a manufacturer to understand why sales are reducing (causes) or why the response of the retailers is negative or why consumers in a particular region are not willing to purchase a specific product. Such explanation is important as it enables a manufacturer to adjust his marketing policies in order to rectify the prevailing unfavorable situation. (4) Prediction: MR conducts prediction function. Such predictions may be related to consumers, market environment/market competition, possible socio-economic changes and so on. This prediction function enables a manufacturer to understand how much people will spend on the specific product in the next year or the fashions that consumers may prefer in the next year. In addition, prediction about the possible turnover in the years to come is also possible through suitable marketing research studies. In brief, marketing research is useful for understanding the marketing environment likely to develop in future. This facilitates proper adjustment in the marketing policies for the future period. In this sense, the prediction function is important even when all predictions made through research studies may not prove to be fully correct. However, the trend indicated can be used for appropriate policy decisions. (5) Aid in Decision-making: One more function of MR is to facilitate the process of decision-making in the marketing field. MR guides the manufacturer as regards the manner in which he can make

effective advertising appeal or create incentive among his salesmen/distributors. It also gives him guidance as regards price fixation and sales promotion techniques that will be useful for the future period. This function of marketing research is closely related to other functions that it performs. These functions facilitate reasonably correct decision-making by marketing managers. They also suggest the practical utility of MR activities.

MR functions provide feedback (information and guidance) to marketing managers and improve the quality of their decision-making. This practice is certainly safer as compared to decision-making on the basis of past experience or intuition. When reality is complex and many facts are not detectable, intuition is not adequate for decision-making. Similarly, experience is useful but decisions on experience alone may not be accurate. Large companies and professional executives prefer to resort to marketing research than depending on experience. This is because information available is based on real data and is more reliable/ dependable. This facilitates correct decision-making. Thus, marketing executives should prefer decisions on the basis of information supplied through marketing research. Such decisions are likely to be more accurate as they are based on actual market situation. In brief, the basic function of MR is to support marketing decision-making process. Marketing research does not provide ready-made decisions or exact solutions on all marketing problems. It only provides the clues or possible solutions that should be taken into consideration in the decisionmaking process. It provides support to skills and abilities of marketing managers. The different functions of marketing research are supplementary in character. These functions enable a manufacturer to keep close touch with the marketing situation and enable him to make suitable changes in his marketing policies and programmers. They also suggest the role marketing research activity in modern competitive and consumer oriented marketing. Marketing research functions certainly improve the quality of decision-making by marketing managers.

ADVANTAGES/IMPORTANCE OF MARKETING RESEARCH: 1. Indicates current market trends: Marketing research keeps business unit in touch with the current market trends and offers guidance for facing market situation with confidence. 2. Pinpoints deficiencies in marketing policies: MR pinpoints the deficiencies as regards products, pricing, promotion, etc. It gives guidance regarding different aspects of marketing. They include product development, branding, packaging and advertising. 3. Explains customer resistance: MR is useful for finding out customer resistance to company's products. The researcher also suggests remedial measures to deal with the situation. This makes the products and marketing policies agreeable to consumers. 4. Suggests sales promotion techniques: MR enables a manufacturer to introduce appropriate sales promotion techniques, select most convenient channel of distribution, suitable pricing policy for the products and provision of discounts and concessions to dealers. Marketing research facilitates sales promotion. 5. Offers guidance to marketing executives: MR offers information and guidance to marketing

executives while framing marketing policies. Continuous research enables a company to face adverse' marketing situation boldly. It acts as an insurance against possible changes in market environment. 6. Facilitates selection and training of sales force: Marketing research is useful for the selection and training of staff in the sales organization. It also suggests the incentives that should be offered for motivation of employees concerned with marketing. 7. Promotes business activities: Marketing research enables a business unit to grow/expand its activities. It creates goodwill in the market and also enables a business unit to earn high profits through consumer-oriented marketing policies and programmers. 8. Facilitates appraisal of marketing policies: Research activities enable business executives to have an appraisal of the present marketing policies in the light of findings of research work. Suitable adjustments in the policies are also possible as per the suggestions made by the researchers. 9. Suggests new marketing opportunities: MR suggests new marketing opportunities and the manner in which they can be exploited fully. It identifies emerging market opportunities. 10. Facilitates inventory study: Marketing research is useful for the evaluation of companys inventory policies and also for the introduction of more efficient ways of managing inventories including finished goods and raw materials. 11. Provides marketing information: MR provides information on various aspects of marketing. It suggests relative strengths and weaknesses of the company. On the basis of such information, marketing executives find it easy to frame policies for the future period. MR provides information/ guidance and alternative solutions to current marketing problems. 12. Suggests appropriate distribution channels: MR can be used to study the effectiveness of existing channels of distribution and the need of making suitable changes in the distribution system. 13. Provides information on product acceptance: Marketing research helps in knowing the probability of acceptance of the product in its present form. It is also useful for the introduction of modifications in the existing product line of a firm. 14. Creates progressive outlook: MR generates a progressive and dynamic outlook throughout the business organization. It promotes systematic thinking and a sense of professionalization within the company. It also creates enthusiasm among marketing executives. This brings success and stability to the whole business unit 15. Has wider social significance: MR is of paramount importance from the social angle. It is the means by which the ultimate consumer literally becomes king of the market place, with his desires/ prejudices and every whim transmitted to the producer and distributor. In brief, MR has wider social significance. It is useful to all parties involved in the process of marketing.

A marketing information system (MIS) is intended to bring together disparate items of data into a coherent body of information. An MIS is, as will shortly be seen, more than raw data or information suitable for the purposes of decision making. An MIS also provides methods for interpreting the information the MIS provides. Moreover, as Kotler's1 definition says, an MIS is more than a system of data collection or a set of information technologies:

"A marketing information system is a continuing and interacting structure of people, equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision makers to improve their marketing planning, implementation, and control". Figure 9.1 illustrates the major components of an MIS, the environmental factors monitored by the system and the types of marketing decision which the MIS seeks to underpin. Figure 9.1 The marketing information systems and its subsystems

The explanation of this model of an MIS begins with a description of each of its four main constituent parts: the internal reporting systems, marketing research system, marketing intelligence system and marketing models. It is suggested that whilst the MIS varies in its degree of sophistication - with many in the industrialised countries being computerised and few in the developing countries being so - a fully fledged MIS should have these components, the methods (and technologies) of collection, storing, retrieving and processing data notwithstanding. Internal reporting systems: All enterprises which have been in operation for any period of time nave a wealth of information. However, this information often remains under-utilised because it is compartmentalised, either in the form of an individual entrepreneur or in the functional departments of larger businesses. That is, information is usually categorised according to its nature so that there are, for example, financial, production, manpower, marketing, stockholding and logistical data. Often the entrepreneur, or various personnel working in the functional departments holding these pieces of data, do not see how it could help decision makers in other functional areas. Similarly, decision makers can fail to appreciate how information from other functional areas might help them and therefore do not request it. The internal records that are of immediate value to marketing decisions are: orders received, stockholdings and sales invoices. These are but a few of the internal records that can be used by marketing managers, but even this small set of records is capable of generating a great deal of information. Below, is a list of some of the information that can be derived from sales invoices.

Product type, size and pack type by territory Product type, size and pack type by type of account Product type, size and pack type by industry Product type, size and pack type by customer Average value and/or volume of sale by territory Average value and/or volume of sale by type of account Average value and/or volume of sale by industry Average value and/or volume of sale by sales person By comparing orders received with invoices an enterprise can establish the extent to which it is providing an acceptable level of customer service. In the same way, comparing stockholding records with orders received helps an enterprise ascertain whether its stocks are in line with current demand patterns. Marketing research systems: The general topic of marketing research has been the prime ' subject of the textbook and only a little more needs to be added here. Marketing research is a proactive search for information. That is, the enterprise which commissions these studies does so to solve a perceived marketing problem. In many cases, data is collected in a purposeful way to address a welldefined problem (or a problem which can be defined and solved within the course of the study). The other form of marketing research centres not around a specific marketing problem but is an attempt to continuously monitor the marketing environment. These monitoring or tracking exercises are continuous marketing research studies, often involving panels of farmers, consumers or distributors from which the same data is collected at regular intervals. Whilst the ad hoc study and continuous marketing research differs in the orientation, yet they are both proactive. Marketing intelligence systems: Whereas marketing research is focused, market intelligence is not. A marketing intelligence system is a set of procedures and data sources used by marketing managers to sift information from the environment that they can use in their decision making. This scanning of the economic and business environment can be undertaken in a variety of ways, including2 Unfocused scanning The manager, by virtue of what he/she reads, hears and watches exposes him/herself to information that may prove useful. Whilst the behaviour is unfocused and the manager has no specific purpose in mind, it is not unintentional Again, the manager is not in search of particular pieces of information that he/she is actively searching but does narrow the range of media that is scanned. For instance, the manager may focus more on economic and business publications, broadcasts etc. and pay less attention to political, scientific or technological media. This describes the situation where a fairly limited and unstructured attempt is made to obtain information for a specific purpose. For example, the marketing manager of a firm considering entering the business of importing frozen fish from a neighbouring country may make informal inquiries as to prices and demand levels of frozen and fresh fish. There would be little structure to this search with the manager making inquiries with traders he/she happens to encounter as well as with other ad hoc contacts in ministries, international aid agencies, with trade associations,

Semifocused scanning

Informal search

importers/exporters etc. Formal search This is a purposeful search after information in some systematic way. The information will be required to address a specific issue. Whilst this sort of activity may seem to share the characteristics of marketing research it is carried out by the manager him/herself rather than a professional researcher. Moreover, the scope of the search is likely to be narrow in scope and far less intensive than marketing research

Marketing intelligence is the province of entrepreneurs and senior managers within an agribusiness. It involves them in scanning newspaper trade magazines, business journals and reports, economic forecasts and other media. In addition it involves management in talking to producers, suppliers and customers, as well as to competitors. Nonetheless, it is a largely informal process of observing and conversing. Some enterprises will approach marketing intelligence gathering in a more deliberate fashion and will train its sales force, after-sales personnel and district/area managers to take cognisance of competitors' actions, customer complaints and requests and distributor problems. Enterprises with vision will also encourage intermediaries, such as collectors, retailers, traders and other middlemen to be proactive in conveying market intelligence back to them. Marketing models: Within the MIS there has to be the means of interpreting information in order to give direction to decision. These models may be computerised or may not. Typical tools are: Time series sales modes Brand switching models Linear programming Elasticity models (price, incomes, demand, supply, etc.) Regression and correlation models Analysis of Variance (ANOVA) models Sensitivity analysis Discounted cash flow Spreadsheet 'what if models These and similar mathematical, statistical, econometric and financial models are the analytical subsystem of the MIS. A relatively modest investment in a desktop computer is enough to allow an enterprise to automate the analysis of its data. Some of the models used are stochastic, i.e. those containing a probabilistic element whereas others are deterministic models where chance plays no part. Brand switching models are stochastic since these express brand choices in probabilities whereas linear programming is deterministic in that the relationships between variables are expressed in exact mathematical terms.

. THE MARKETING RESEARCH PROCESS:

a. Marketing Research an Introduction: Every marketer needs marketing research, and most large companies have their own marketing research departments. Marketing research involves a four-step process. The first step consists of the manager and researcher carefully defining the problem and setting the research objectives. The objective may be exploratory, descriptive, or causal. The second step consists of developing the research plan for collecting data from primary and secondary sources. Primary data collection calls for choosing a research approach (observation, survey, experiment); choosing a contact method (mail, telephone, personal); designing a sampling plan (whom to survey, how many to survey, and how to choose them); and developing research instruments (questionnaire, mechanical). The third step consists of implementing the marketing research plan by collecting, processing, and analyzing the information. The fourth step consists of interpreting and reporting the findings. Further information analysis helps marketing managers to apply the information and provides advanced statistical procedures and models to develop more rigorous findings from the information. Some marketers face special marketing research considerations, such as conducting research in small-business, non-profit, or international situations. Marketing research can be conducted effectively by small organizations with small budgets. International marketing researchers follow the same steps as domestic researchers but often face more challenging problems. All organizations need to understand the major public policy and ethics issues surrounding marketing research. b. Uses & Application of Research in Marketing: Decision-making is crucial process in all types of the organization. This decision-making requires then information that is collected and acquired through the marketing research process this information can be regarding customers companies or competitor or the other environmental factors. Major uses of the marketing research in the organizations are as following: Measurement of market potential. Analysis of market share. Determination of market characteristics Sales analysis. Product testing. Forecasting. Studies of business trends Studies of competitors' products.

c. THE MARKETING RESEARCH PROCESS Before researcher can provide managers with information, they must know what kind of problem the manager wishes to solve. Marketing research process has following steps: 1. Defining the problem and research objectives 2. Developing the research plan, 3. Implementing the research plan, and 4. Interpreting and reporting the findings.

Now we will discuss these steps in detail: Step 1 Defining the Problem and Research Objectives The marketing manager and the researcher must work closely together to define the problem carefully and agree on the research objectives. Marketing managers must know enough about marketing research to help in the planning and to interpret research results. Defining the problem and research objectives is often the hardest step in the process. After the problem has been defined carefully, the manager and researcher must set the research objectives. The three general types of objectives are: 1). Exploratory research where the objective is to gather preliminary information that will help to better define problems and suggest hypotheses for their solution. 2). Descriptive research is where the intent is to describe things such as the market potential for a product or the demographics and attitudes of customers who buy the product. 3). Casual research is research to test hypotheses about cause-and-effect relationships. The statement of the problem and research objectives will guide the entire research process. It is always best to put the problem and research objectives statements in writing so agreement can be reached and everyone knows the direction of the research effort. Step 2 Developing the Research Plan In developing the research plan, the attempt is to determine the information needed (outline sources of secondary data), develop a plan for gathering it efficiently, and presenting the plan to marketing management. The plan spells out specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data. The firm should know what data already exists before the process of collecting new data begins. The steps that should be followed are. Developing the research plan involves all of the following: 1. Determining Specific Information Needs 2. Gathering Secondary Information 3. Planning Primary Data Collection

1). Determine specific information needs. In this step research objectives are translated into specific information needs. For example, determine the demographic, economic, and lifestyle characteristics of a target audience. 2). Gathering secondary information. a). Secondary data is information that already exists somewhere, having been collected for another purpose. Sources of secondary data include both internal and external sources. Companies can buy secondary data reports from outside suppliers (i.e., commercial data sources). Information can be obtained by using commercial online databases. Examples include CompuServe, Dialog, and Lexis-Nexus. Many of these sources are free. Advantages of secondary data include:

1. It can usually be obtained more quickly and at a lower cost than primary data. 2. Sometimes data can be provided that an individual company could not collect on its own. Some problems with collecting secondary data include: 1. The needed information might not exist. 2. Even if the data is found, it might not be useable. 3. The researcher must evaluate secondary information to make certain it is relevant, accurate, current, and impartial. Secondary data is a good starting point; however, the company will often have to collect primary data. b). Primary data is information collected for the specific purpose at hand. Planning Primary Data Collection. A plan for primary data collection calls for a number of decisions on research approaches, contact methods, sampling plans, and research instruments. Research Approaches: a). Research approaches can be listed as: 1. Observational research where information is gained by observing relevant people, actions, and situations. However, some things such as feelings, attitudes, motives, and private behavior cannot be observed. Mechanical observation can be obtained through single source data systems. This is where electronic monitoring systems link consumers exposure to television advertising and promotion (measured using television meters) with what they buy in stores (measured using store checkout scanners). Observational research can be used to obtain information that people are unwilling or unable to provide. 2. Survey research is the gathering of primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior. Survey research is best suited for gathering descriptive information. Survey research is the most widely used form of primary data collection The major advantage of this approach is flexibility while the disadvantages include the respondent being unwilling to respond, giving inaccurate answers, or unwilling to spend the time to answer. 3. Experimental research involves the gathering of primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in-group responses. This form of research tries to explain cause-andeffect relationships. Observation and surveys may be used to collect information in experimental research. This form is best used for causal information.

In last Lesson we discussed the marketing research process first two steps were discussed in that Lesson today we will continue the same topic and will be discussing the remaining steps of the marketing research process. Second topic of todays Lesson is an introduction to the consumer behavior. So our todays topics are: A. THE MARKETING RESEARCH PROCESS (Continued) B. CONSUMER MARKET Contact Methods:

Contact methods are used to obtain the information Contact methods can be listed as: 1. Mail questionnaires--used to collect large amounts of information at a low cost. 2. Telephone interviewing--good method for collecting information quickly. 3. Personal interviewing (which can be either individual or group interviewing). A form of personal interviewing is focus group interviewing. Focus-group interviewing consists of inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer focuses the group discussion on important issues. 4. Online (Internet) marketing research can consist of Internet surveys or online focus groups. Many experts predict that online research will soon be the primary tool of marketing researchers. 5. Computer interviewing is a new method being used in the technology age. Consumers read questions from a computer screen and respond. Sampling plans are used to outline how samples will be constructed and used. 1. A sample is a segment of the population selected for marketing research to represent the population as a whole. 2. Marketing researchers usually draw conclusions about large groups of consumers by studying a small sample of the total consumer population. 3. Designing a sample calls for three decisions: a. Who is to be surveyed (what sampling unit)? b. How many people should be surveyed (what sample size)? c. How should the sample be chosen (what sampling procedure)? 4. Kinds of samples include: a. Probability samples--each population member has a known chance of being included in the sample, and researchers can calculate confidence limits for sampling error. b. Nonprobability samples--sampling error cannot be measured. Research Instruments: In collecting primary data, marketing researchers have a choice of two main research instrumentsthe questionnaire and mechanical devices. The questionnaire is by far the most common instrument, whether administered in person, by phone, or online. Questionnaires are very flexiblethere are many ways to ask questions. However, they must be developed carefully and tested before they can be used on a large scale. A carelessly prepared questionnaire usually contains several errors.

In preparing a questionnaire, the marketing researcher must first decide what questions to ask. Questionnaires frequently leave out questions that should be answered and include questions that cannot be answered, will not be answered, or need not be answered. Each question should be checked to see that it contributes to the research objectives. The form of each question can influence the response. Marketing researchers distinguish between closed-end questions and open-end questions. Closed-end questions include all the possible answers, and subjects make choices among them. Examples include multiple-choice questions and scale questions. Open-end questions allow respondents to answer in their own words. Open-end questions often reveal more than closed-end questions because respondents are not limited in their answers. Open-end questions are especially useful in exploratory research, when the researcher is trying to find out what people think but not measuring how many people think in a certain way. Closed-end questions, on the other hand, provide answers that are easier to interpret and tabulate. Researchers should also use care in the wording and ordering of questions. They should use simple, direct, unbiased wording. Questions should be arranged in a logical order. The first question should create interest if possible, and difficult or personal questions should be asked last so that respondents do not become defensive. Although questionnaires are the most common research instrument, mechanical instruments also are used. We discussed two mechanical instruments, people meters and supermarket scanners, earlier in the chapter. Another group of mechanical devices measures subjects' physical responses. Step 3 Implementing the Research Plan The researcher next puts the marketing research plan into action. This involves collecting, processing, and analyzing the information. Data collection can be carried out by the company's marketing research staff or by outside firms. The company keeps more control over the collection process and data quality by using its own staff. However, outside firms that specialize in data collection often can do the job more quickly and at a lower cost. The data collection phase of the marketing research process is generally the most expensive and the most subject to error. The researcher should watch fieldwork closely to make sure that the plan is implemented correctly and to guard against problems with contacting respondents, with respondents who refuse to cooperate or who give biased or dishonest answers, and with interviewers who make mistakes or take shortcuts. Step 4 Interpreting and Reporting the Findings The final step in the marketing research process is interpreting and reporting the findings. The researchers should keep from overwhelming managers with numbers and fancy statistical techniques. Researchers should present important findings that are useful in the major decisions faced by management. Interpretation should not be left only to researchers. Marketing managers will also have important insights into the problems. Interpretation is an important phase of the marketing process. The best research is meaningless if the manager blindly accepts wrong interpretations from the researcher. The researcher must now interpret the findings, draw conclusions, and report them to management. The researcher should not try to overwhelm managers with numbers and fancy statistical techniques. Rather, the researcher should present important findings that are useful in

the major decisions faced by management. However, interpretation should not be left only to the researchers. They are often experts in research design and statistics, but the marketing manager knows more about the problem and the decisions that must be made.

In many cases, findings can be interpreted in different ways, and discussions between researchers and managers will help point to the best interpretations. The manager will also want to check that the research project was carried out properly and that all the necessary analysis was completed. Or, after seeing the findings, the manager may have additional questions that can be answered through further sifting of the data. Finally, the manager is the one who ultimately must decide what action the research suggests. The researchers may even make the data directly available to marketing managers so that they can perform new analyses and test new relationships on their own. Interpretation is an important phase of the marketing process. The best research is meaningless if the manager blindly accepts faulty interpretations from the researcher. Similarly, managers may be biasedthey might tend to accept research results that show what they expected and to reject those that they did not expect or hope for. Thus, managers and researchers must work together closely when interpreting research results, and both must share responsibility for the research process and resulting decisions

RESEARCH DESIGN

Exploratory research and its methods Exploratory research is conducted to clarify ambiguous problems. Management may have discovered general problems, but research is needed to gain better understanding of the dimensions of the problems. Exploratory studies provide information to use in analyzing a situation, but uncovering conclusive evidence to determine a particular course of action is not the purpose of exploratory research. Usually, exploratory research is conducted with the expectation that subsequent research will be required to provide conclusive evidence, It is a serious mistake to rush into detailed surveys before less expensive and more readily available sources of information have been exhausted. In an organisation considering a program to help employees with childcare needs, for example, exploratory research with a small number of employees who have children might determine that many of them have spouses who also work and that these employees have positive reactions to the

possibility of an on-site child-care program. In such a case exploratory research helps to crystallize a problem and identify information needs for future research. Exploratory research methods: The quickest and the cheapest way to formulate a hypothesis in exploratory research is by using any of the four methods:

Literature search Experience survey Focus group Analysis of selected cases

Literature Search This refers to referring to a literature to develop a new hypothesis. The literature referred are trade journals, professional journals, market research finding publications, statistical publications etc Example: Suppose a problem is Why are sales down? This can quickly be analyzed with the help of published data which should indicate whether the problem is an industry problem or a firm problem. Three possibilities exist to formulate the hypothesis.

The companys market share has declined but industrys figures are normal. The industry is declining and hence the companys market share is also declining. The industrys share is going up but the companys share is declining.

If we accept the situation that our companys sales are down despite the market showing an upward trend, then we need to analyse the marketing mix variables. Example 1: A TV manufacturing company feels that its market share is declining whereas the overall television industry is doing very well. Example 2: Due to a trade embargo imposed by a country, textiles exports are down and hence sales of a company making garment for exports is on the decline. The above information may be used to pinpoint the reason for declining sales. Experience Survey In experience surveys, it is desirable to talk to persons who are well informed in the area being investigated. These people may be company executives or persons outside the organisation. Here, no questionnaire is required. The approach adopted in an experience survey should be highly unstructured, so that the respondent can give divergent views. Since the idea of using experience survey is to undertake problem formulation, and not conclusion, probability sample need not be used. Those who cannot speak freely should be excluded from the sample. Examples :

1) A group of housewives may be approached for their choice for a ready to cook product. 2) A publisher might want to find out the reason for poor circulation of newspaper introduced recently. He might meet (a) Newspaper sellers (b) Public reading room (c) General public (d) Business community; etc. These are experienced persons whose knowledge researcher can use. Focus Group Another widely used technique in exploratory research is the focus group. In a focus group, a small number of individuals are brought together to study and talk about some topic of interest. The discussion is co-ordinated by a moderator. The group usually is of 8-12 persons. While selecting these persons, care has to be taken to see that they should have a common background and have similar experiences in buying. This is required because there should not be a conflict among the group members on the common issues that are being discussed. During the discussion, future buying attitudes, present buying opinion etc., are gathered. Most of the companies conducting the focus groups, first screen the candidates to determine who will compose the particular group. Firms also take care to avoid groups, in which some of the participants have their friends and relatives, because this leads to a biased discussion. Normally, a number of such groups are constituted and the final conclusion of various groups are taken for formulating the hypothesis. Therefore, a key factor in focus group is to have similar groups. Normally there are 4-5 groups. Some of them may even have 6-8 groups. The guiding criteria is to see whether the latter groups are generating additional ideas or repeating the same with respect to the subject under study. When this shows a diminishing return from the group, the discussions stopped. The typical focus group lasts for 1-30 hours to 2 hours. The moderator under the focus group has a key role. His job is to guide the group to proceed in the right direction. Analysis of selected cases Analysing a selected case sometimes gives an insight into the problem which is being researched. Case histories of companies which have undergone a similar situation may be available. These case studies are well suited to carry out exploratory research. However, the result of investigation of case histories arc always considered suggestive, rather than conclusive. In case of preference to ready to eat food, many case histories may be available in the form of previous studies made by competitors. We must carefully examine the already published case studies with regard to other variables such as price, advertisement, changes in the taste, etc.

II DESCRIPTIVE RESEARCH AND ITS METHODS Descriptive research is used to obtain information concerning the current status of the phenomena to describe what exists with respect to variables or conditions in a situation. The methods involved range from the survey which describes the status quo, the correlation study which investigates the

relationship between variables, to developmental studies which seek to determine changes over time. Descriptive Research Methods 1. Case Studies Detailed analysis of a single (or limited number) of people or events. Case studies are usually interesting because of the unusualness of the case .The major problem with case studies is the problem of objectivity. The person who is presenting the case usually has some theoretical orientation. It is acceptable for a theoretical orientation to affect ones interpretation of events. In a case study the theoretical orientation can also lead to the selection of the facts to include in the case. It is not surprising that case studies often seem to provide very compelling evidence for a theory. Case studies can therefore assist psychology by illustrating how a theory could be applied to a person or events and by assisting with the development of hypotheses for more systematic testing. 2. Observational Research Accounts of the natural behavior of individuals or groups in some setting. Unless the observation is unobtrusive, there may be some subject reactivity to being observed. This often decreases with time, a process called habituation. Observers cannot usually observe all behaviors all of the time. They may use a behavioral checklist and may also use time sampling or event sampling procedures. It is important to assess observer bias by the use of interobserver reliability. Observational research may also pose ethical problems. These can arise when the behaviors being observed are not public behaviors and when the observer joins a group in order to observe the members behavior participant observation. 3. Survey Research Structured questions to assess peoples beliefs, attitudes, and self-reports of behavior. If the researcher wishes to generalize the responses to a population, it is important to have a representative sample. Surveys that rely on self-selection (respond if you are interested) produce non-generalizable results. Surveys also provide information for co relational research. One can correlate responses to some questions (often demographic questions) with responses to other questions (often attitudes or reports of behavior). Survey question must be clear and unambiguous. Even if the questions are unambiguous and non-leading, people may display a social desirability bias and give positive or socially acceptable and desirable answers. Survey methods include: (1) the interview or face-to-face method which is generally viewed as the best method for obtaining a high rate of responses but is also very costly; (2) phone surveys, which are less expensive but have a higher non-response rate (which has probably increased with caller ID); and (3) written or mail surveys, which are least expensive but have a very high non-response rate. Follow-up messages can help increase the response rate. 4. Archival Research Analysis of pre-existing data or records. Archival research often involves content analysis, a qualitative analysis of material. For example, one would use content analysis to determine whether

there had been an increase in the frequency with which women and minorities were mentioned in US history books between 1920 and 2000. Some archival research is quasi-experimental.

III EXPERIMENTAL RESEARCH AND ITS STAGES Science revolves around experiments, and learning the best way of conducting an experiment is crucial to obtaining useful and valid results. When scientists speak of experiments, in the strictest sense of the word, they mean a true experiment, where the scientist controls all of the factors and conditions. Real world observations, and case studies, should be referred to as observational research, rather than experiments. For example, observing animals in the wild is not a true experiment, because it does not isolate and manipulate an independent variable. THE BASIS OF CONDUCTING AN EXPERIMENT With an experiment, the researcher is trying to learn something new about the world, an explanation of why something happens. The experiment must maintain internal and external validity, or the results will be useless. When designing an experiment, a researcher must follow all of the steps of the scientific method, from making sure that the hypothesis is valid and testable, to using controls and statistical tests. Whilst all scientists use reasoning, operationalization and the steps of the scientific process, it is not always a conscious process. Experience and practice mean that many scientists follow an instinctive process of conducting an experiment, the streamlined scientific process. Following the basic steps will usually generate valid results, but where experiments are complex and expensive, it is always advisable to follow the rigorous scientific protocols. Conducting a experiment has a number of stages, where the parameters and structure of the experiment are made clear. Whilst it is rarely practical to follow each step strictly, any aberrations must be justified, whether they arise because of budget, impracticality or ethics. STAGE ONE After deciding upon a hypothesis, and making predictions, the first stage of conducting an experiment is to specify the sample groups. These should be large enough to give a statistically viable study, but small enough to be practical. Ideally, groups should be selected at random, from a wide selection of the sample population. This allows results to be generalized to the population as a whole. In the physical sciences, this is fairly easy, but the biological and behavioral sciences are often limited by other factors. For example, medical trials often cannot find random groups. Such research often relies upon volunteers, so it is difficult to apply any realistic randomization. This is not a problem, as long as the process is justified, and the results are not applied to the population as a whole. If a psychological researcher used volunteers who were male students, aged between 18 and 24, the findings can only be generalized to that specific demographic group within society. STAGE TWO

The sample groups should be divided, into a control group and a test group, to reduce the possibility of confounding variables. This, again, should be random, and the assigning of subjects to groups should be blind or double blind. This will reduce the chances of experimental error, or bias, when conducting an experiment. Ethics are often a barrier to this process, because deliberately withholding treatment is not permitted. Again, any deviations from this process must be explained in the conclusion. There is nothing wrong with compromising upon randomness, where necessary, as long as other scientists are aware of how, and why, the researcher selected groups on that basis. STAGE THREE This stage of conducting an experiment involves determining the time scale and frequency of sampling, to fit the type of experiment. For example, researchers studying the effectiveness of a cure for colds would take frequent samples, over a period of days. Researchers testing a cure for Parkinsons disease would use less frequent tests, over a period of months or years. STAGE FOUR The penultimate stage of the experiment involves performing the experiment according to the methods stipulated during the design phase. The independent variable is manipulated, generating a usable data set for the dependent variable. STAGE FIVE The raw data from the results should be gathered, and analyzed, by statistical means. This allows the researcher to establish if there is any relationship between the variables and accept, or reject, the null hypothesis. These steps are essential to providing excellent results. Whilst many researchers do not want to become involved in the exact processes of inductive reasoning, deductive reasoning and operationalization, they all follow the basic steps of conducting an experiment. This ensures that their results are valid.

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