Welcome to Powerpoint slides for

Chapter 2

The Marketing Research Process: An Overview

Marketing Research Text and Cases by Rajendra Nargundkar

Slide 1 A marketing research project starts with an information need. It ends with an actionable report or presentation or both. In between are various steps to ensure that the marketing research project achieves what it set out to do. A diagrammatic representation of the Marketing Research Process is shown in the figure below
1. Information Need Felt 2. Define the Research Objective 3. Design the Research Methodology 4. Plan and do Secondary Research 5. Plan and do Primary Research

6. Tabulation and Analysis 7. Report Writing and Presentation

8.

Marketing Action

We will now consider each of these steps in detail

Slide 2

Information Need

Consider, for example, an expensive advertising campaign which has been running on television for 3 weeks. It may not have produced the expected jump in sales in some of the major sales territories. The client, let us assume, is a shaving blades manufacturer. The marketing manager has to decide whether to discontinue the campaign, or change it, or reconfirm that the ad campaign is good. If the ad campaign is good, it may be some other marketing variables such as the price or distribution, or strong competitive promotions that are the reasons for sales not being upto expectations. One way to find out is to do marketing research. Therefore, the marketing manager has identified an information need , and it could be fulfilled by a marketing research study.

There could be a second marketing manager who is considering the launch of a new brand of deodorant in the market. He wants to know how to position the brand in the market, and get a rough estimate of what the market size would be in the chosen segments. He has an information need, which could be filled by doing a consumer survey.

Slide 2contd... The risk involved in taking a marketing decision with inadequate information, should be weighed against the cost of getting the information, and, taking a betterinformed decision. Success depends on many factors, and information is only one of them. A third marketing manager heads a popular music channel on T.V. He wants to know which of his video disc jockeys is the most popular, and which show is the most watched. He could commission a study by an independent marketing research agency to do just that. Of course, any need for information must be examined in terms of the cost of obtaining the required information. Also, the cost of not having this information should be estimated.

The risk involved in taking a marketing decision with inadequate information, should be weighed against the cost of getting the information, and, taking a betterinformed decision. Success depends on many factors, and information is only one of them.

Slide 3

Defining The Research Objective

If we do have an information need that can be met by doing marketing research, the next step would be to define the Research Objective in terms of that information need. For example, a study could have as its objective, the determination of customer satisfaction with a brand of new frost-free refrigerator launched by our company. A research objective can be specified broadly, or narrowly. One common pitfall in the field of marketing research is to specify too many objectives for a single marketing research project. It produces a mass of data that is not really needed at that point of time. In most cases, about four or five objectives are adequate to do a useful marketing research study. Every objective translates into a few questions on a questionnaire, and there is a limit to how many questions a respondent can honestly answer before his interest level goes down. Sometimes, we call the research objective by another name the research problem. Broadly, these two terms can be used interchangeably.
Whatever the terminology used, the research should end up with useful information that enables a marketing manager or entrepreneur to make a better decision. If a report is meant to lie on a shelf, it is not really marketing research, but a waste of resources.

Slide 4 Research Designs: Exploratory, Descriptive and Causal A research design provides the framework to be used as a guide in collecting and analysing data. But it is not necessary that a particular research design is always the best. Experience with different research designs will generally provide the researcher with the capability to match a research problem with an appropriate design. For example, in a study for a new English daily newspaper launched in Bangalore in the eighties, it was found that the sales were much below expectations. A survey was proposed. But as a complement to the survey, the author's team at a research agency proposed a Content Analysis of all the major dailies in Bangalore. This method analysed the coverage of various categories of news such as politics, sports, regional, national, city-based news etc. by the client's newspaper and the competitors. This gave vital insights to the publishers of the paper, and over a period, it became successful. This is just an example to show that sometimes unusual research designs do pay off. Broadly speaking, we can classify research designs into the following three kinds .Exploratory Research .Descriptive Research .Causal Research

Slide 5

Exploratory Research

It is generally used to clarify thoughts and opinions about the research problem or the respondent population, or to provide insights on how to do more conclusive (causal) research. An example could be a chocolate manufacturer wanting to identify the ten most important variables his consumers use to decide on whether to buy a chocolate brand. The results of this exploratory study could provide him with inputs for a second study using Factor Analysis techniques (discussed in Part 2 of this book) to reduce the ten variables into a smaller set of FACTORS. Another example of exploratory research is a focus group discussion among housewives to debate the future of convenience foods in India. It may be used to throw up ideas about new products, or suggest modifications to existing products through a free-wheeling discussion. One major application of exploratory research is to generate hypotheses for further studies. The methods used in exploratory studies can range from the usual surveys, to focus groups, to consultations with experts in the field, to analysis of selected cases. An example of the last may be to study three of a company's best salespeople, and three of the worst, to try and figure out what drives the sales of the products, and their motivations. This could help in designing a study of customers to find out more from them.

Slide 6

Descriptive Research

Most marketing research is of this type. Typically, descriptive studies are either (1) longitudinal or (2) cross-sectional.
Longitudinal studies These generally take the form of a sample which is studied over a period of time - from a few months to a few years. An example is a panel. A Panel is a sample of respondents chosen from the defined target population for the study. This sample could be of consumers, retailers or of any other type. A consumer panel could be used to study consumption of products/brands over a period of time. It could also be used to measure viewership of T.V. shows, or readership of magazines. A retail store audit is a variation of the panel, with data being collected from retail stores on the products/brands being stocked, shelf space allotted, sales and promotions etc. Panel data has the advantage of enabling comparisons at different points of time For example, the effect of a change in price, pack design, or other elements of the marketing mix can be easily measured by comparing the sales or market share before and after the change. This is not so easy to do in typical survey data, because it is cross-sectional in nature, for only one point in time.

Slide 6contd... One other advantage of panels is that if a quick check on something is needed, sample selection time can be saved by approaching panel members. In these days of the internet it may be possible to get a quick response to a short survey of panel members in a matter of a couple of days. There is of course a disadvantage to panel data. Panels suffer from a selection bias. Some people are more likely to agree to be on a panel than others, because it needs a commitment in terms of time and effort to regularly record and report data. This selection bias may make panels non-representative of the target population. In some data mining applications, the analysis may resemble longitudinal studies, because data from the same customers or retailers over a period of time may be analysed for patterns of behaviour etc.

Slide 7

Cross-sectional design

It is the most commonly used in marketing research. This is a one-shot research study at a given point of time, and consists of a sample (cross-section) of the population of interest. The typical market survey is of this type.
Its advantages are that it gives a good overall picture of the position at a given time It can cover many variables of interest, and is not affected by the movement of elements in the sample, because other elements can be substituted for them (at least in consumer research). The disadvantages could be that a cross-sectional study tends to rely too much on numbers, can be affected by poor quality of interviewers or supervisors, and tends to view the population in terms of too many generalisations - the "average" consumer's views about anything, which may cloud the individuals or segments among the population. To some extent, the last mentioned problem can be overcome with certain techniques of analysis. For example, we can analyse data by town or region or by other segments to prevent unnecessary aggregation which is misleading. On the whole, though, cross-sectional research appears to be most preferred by market researchers and their clients on account of its simplicity and understandability. It is also quite flexible in nature, and can take care of simple analysis as well as complex statistical methods.

Slide 8

Causal Research Designs

In research, we can never be completely sure that a particular variable (say X) influences another (say Y). But a causal design seeks to establish causation as far as possible, by employing controls and conditions under which we can state with reasonable confidence whether or not Y is affected by X. In addition to X and Y, of course, there may be other variables which could affect the relationship between X and Y. How to treat the other variables during the analysis of the effect of X on Y also forms part of the causal designs. Causal designs differ from descriptive designs in their greater probability of establishing causality. The reason for this is that causal designs are similar to experiments done in a lab, where we know what goes in, what changes are made, and what results from the changes. Causal designs are also known as Experimental Designs, for this reason.

Slide 9
Designing The Research Methodology

Every research study starts with some information need. Sometimes, the information required can be collected entirely from published sources or internal records. This is called secondary research.
It is more usual, however, that we will need to collect data from primary sources customers, buyers, users, dealers or some other respondents. The major parts of the research methodology that need designing are .Research Method Secondary and Primary .Sampling Plan .Questionnaire Design (if applicable) .Field Work Plan .Analysis Plan Usually, the first thing one has to decide is the method to be used for data collection.

Slide 10

Data Collection Methods

It is possible to collect data from respondents by many different methods. The major methods commonly used are .Survey .Observation .Experimentation .Qualitative Techniques .Other specialised techniques

Quantitative methods are generally more popular than qualitative techniques in marketing research studies. Also, the survey technique is more popular than other techniques.

Slide 11

Survey

There are different ways a survey can be carried out. It can be done by telephone, by mail, or in person. In present times, it can even be done by email using the internet. Each of these has its own merits and demerits. For example, personal interviews have the advantage that questions can be explained to respondents, and facial reactions or body language can be observed. Telephonic surveys have the advantage of low cost. But facial reactions cannot be observed.

Internet surveys are quite new, but may have the same disadvantages that telephonic surveys have. It is difficult to ensure that all target respondents have an opportunity for selection in the sample.
For example, every potential respondent for the survey may not be using the e-mail, or even a computer. Therefore, the e-mail survey does not represent a true sample of the target population for many products or services. To that extent, the results may be wrong, compared to the errors in a door-to-door personal interview done with scientific probability sampling.

Slide 11 contd...

But if some amount of error is acceptable and speed is of the essence, an e-mail survey or a telephone survey would be excellent methods. A traditional mail survey would be much slower, by comparison. At present, personal interviews are the preferred method for doing surveys in India. Telephone and mail surveys are used in a minority of cases where they are justified by the target population and the objective of the research.

Slide 12

Observation

Sometimes, Observation, or Experimentation could be the method of choice. Observation is a technique where the consumers behaviour is recorded, usually without his knowledge.
For example, a video camera in a retail store can be used to record a customers behaviour while she buys a garment. If it is a full service store, like many Indian stores, she could ask for a particular brand or brands, look for specific colours, or fabric, or prices etc. in a particular sequence. Her facial reactions or eagerness or lack of interest when a piece is displayed to her can be recorded along with the garment. Viewed later, this video tape can be interpreted for the purchase factors, purchase behaviour, brand preference, price and colour preference, and matched with the ladys age and complexion if she bought for herself.

The obvious advantage of this technique is that it is actual consumer behaviour that gets recorded, rather than their statements of purchase intention. Therefore, we get more accurate information.
If a video recording is too expensive, an audio recording is possible, or even a data collector in person can observe and record his findings on paper.

Slide 13

Experimentation

This is the third major technique in quantitative research. This involves more control over the cause and effect, when compared to a survey.
In experiments, we try to measure the effect of one or more variables by changing the level of some variables, and measuring the effects. For example, if an advertisement is released, and we measured the Brand Awareness of the advertised brand among a sample of target respondents, we would be doing an experiment. In the same way, a product test could be designed as an experiment, with three different variants of the product being tested on three randomly chosen sets of respondents from a target population. The modern method of Simulated Test Marketing (STM) is usually a design which can be termed an experiment. A detailed discussion of experimental techniques with numerical examples appears in the Chapter titled ANOVA.

Slide 14

Qualitative Techniques

Sometimes, the research objective calls for more indirect methods of questioning, either because normal quantitative surveys are inadequate, or inappropriate.
In such cases, qualitative methods, which probe the minds of respondents may be used. Here, the emphasis may be on free-wheeling interviews with open-ended, unstructured questions such as What do you expect from a refrigerator?, What needs does it fulfill? or What do you feel when a friend shoots an envious glance at your car? Other methods of qualitative research include the Word Associations where a respondent is asked to think of a word which comes to mind when he thinks of a brand. Other variations include associating each brand with a person or celebrity, or an animal, etc. The major requirement for using qualitative techniques is that we require a behavioural specialist such as a psychologist or sociologist to analyse the findings. The sample sizes in qualitative studies are usually small, and analysis and interpretation is not as easy as it is in quantitative studies. If done by non-experts, qualitative research can be completely misleading. Qualitative techniques can also be used in combination with quantitative techniques to gain better insights into consumer mindsets.

Slide 15

An example of qualitative research is a study done by TVS Suzuki, among scooter and moped users in 1989. (cited in The Catalyst, Business Line, July 10, 1989).
The research objective was to assess the impact of a newly launched scooterette from Bajaj on the market for TVS mopeds, and to try and find out what people expected TVS to do in response. The method used was focus groups, who discussed on motivations behind purchase of mopeds and scooters. Projective techniques were also used with respondents being asked to put themselves in place of existing moped brands and talk about themselves as if they were the brands.

The concept of a low cost scooterette was then exposed to the participants, and their interest levels appeared high. This research formed one of the bases for TVS to design and launch the SCOOTY.

Slide 16

Specialised Techniques

There are three specialised techniques, used commonly by marketing researchers

.A Consumer Panel is a sample of consumers chosen for keeping a record of what they buy in a given period or what T.V. shows they watch in a given periodThe special feature of this is that the sample remains the same for a year or six months .Retail Audit : Many companies routinely do a retail audit and publish the results (at least partially). Detailed reports are available for anyone to buy and use. A retail audit measures what brands are sold and their quantity sold in a particular period. It could be done weekly. In India, ORG is a company which routinely performs retail audits. Both regional and national audits can be done. Usually, such audits are best done by a third party (independent agency), to reduce chances of bias, rather than the marketing company. Sometimes, similar studies are undertaken by the company for its own brands at either consumer level or retail level. .T.V. Audience Measurements : These days, millions of rupees are spent in ads on T.V. It is important for the marketer to know who is watching the T.V. shows on which he has advertised. Or, to plan for a particular audience profile.

Slide 16contd... There are now commonly used technologies which record who is watching a given channel and show at any given time, for upto a week. These are called Peoplemeters, and are available in India for about Rs. 40,000/- a piece. Indian Market Research companies such as IMRB and ORG-MARG/A.C. Nielsen have already started using them, and their use is likely to grow. The branded names for the peoplemeters in India are TAM and INTAM. The new meters have changed the advertising patterns of many T.V. channels and individual shows after they were introduced in India.

Slide 17

The next stage in a marketing research study, after the primary research method has been decided upon, is the plan for
.Sampling .Field Work .Analysis These are probably the most important in a study involving primary research, as the credibility and the accuracy of a study is dependent on these stages. Sampling Plan This is the statement of what will be the sample composition and size. This is the most critical of all decisions in the marketing research process, because we are usually trying to make a statement about the target population based on our study of the sample. For instance, if we find that 50% of our sample is favourably disposed towards Brand A, we are likely to use it as a benchmark for the entire target market, give or take a few percentage points (due to errors). But in order to make the sample representative of the population, a lot of care has to be taken by the researcher.

Slide 18 In general, two precautions should be taken to ensure a good sample (good means representative). .Use a probabilistic sampling technique which is not biased. .Try and divide the population to be sampled into segments or strata based on relevant parameters such as users/non-users, or classes based on age, income, etc. Then, ensure that each segment gets represented adequately in the final sample. This also applies to studies that are done in multiple cities. If a study is done in twenty cities, and if analysis is required by city (i.e. for each city separately), then the sample size for each city must be adequate for such analysis. Generally, formulas can be used to determine sample sizes, but they suffer from some limitations. For a more detailed discussion, please refer to the chapter titled Sampling Methods Theory and Practice. It is usually a blend of theory, practical limitations and experience which generates the best sampling plan in any given research situation.

Slide 19

Field Work Plan

This is clearly linked to the sampling plan. Once the sampling centres (cities, towns, etc.) are decided on, and the sample sizes are determined for each, the next step is to plan on the following .Who .When

The first question is who will do the field work for collecting data. Field work assumes that we are collecting data from respondents by going to the field that is, homes, offices, shops, dealerships, etc.

Slide 20 Before doing field work, whoever is going out in the field needs to have an idea of what is to be collected and its format of recording. In the traditional format of personal interviews (which is still the most popular format in India), a questionnaire is used by the field workers in most cases. Sometimes, a checklist is used instead, if the situation demands it. We will assume here that the questionnaire has been developed. A detailed discussion of how to develop a good questionnaire appears in the chapter titled Questionnaire Design a Customer-centric Approach. The second question is when. In many studies carried out nationally, it is not possible always to simultaneously cover all centres, on the same days. There could be logistical problems for supervisors, or there may be difficulties in recruiting adequate field workers etc. But it is desirable to have a well-planned schedule so that all field work is completed in an orderly fashion, and cross-checks can be established.

Slide 21

Briefing

For all important studies, the research executive in charge should personally brief the field supervisor (the person who will actually supervise the team of field workers during the data collection). This briefing session is conducted after recruiting field workers, and ends with a practice round of mock interviews and questions from field workers on any special difficulties they may encounter in locating respondents, asking certain questions, etc. The mock interviews and the briefing session is designed to explain and clarify to the field workers how to go about their data collection task. In most studies, temporary field workers are recruited on a daily wage basis and paid on the basis of a minimum number of complete, usable questionnaires filled up. The number of field workers required in each centre is usually estimated based on the sample size required, the locations where the sample can be found, the number of supervisors available, and the time limit for completion of field work. These are communicated by the research executive in charge to the field supervisors in his branch offices, who generally recruit the field workers.

Slide 22

Debriefing

It is important that any problems on the field get reported to the field supervisor or the research executive, and solutions found quickly. These problems may include difficulty in locating target sample units, or non-cooperation in answering some questions, or difficulties in comprehension.

To minimise any problems the field staff may encounter, a debriefing session is usually held at the end of the first days field work in each new centre (location). The field staff reports on the work progress, and problems faced in the field, if any. Solutions are thought of by the research executive or field supervisor, and implemented for the remaining part of the study.
Some of these problems are recognised even earlier if a pilot study of a small sample is performed, before starting regular field work. Alternatively, the first days or half days field work could be considered as a pilot study, and not included in the survey results.

Slide 23 Analysis Plan and Expected Outcome Analysis is based on the answers given to questions. It is important to have an analysis plan in mind even before going to the field with a questionnaire. Regrettably, this is not always given the attention it deserves by the researcher. It is sometimes assumed that it can be done later, or that all possible analyses can be done anyway, so why bother to plan the analysis in advance. But for many reasons, it is vital to do so. A very powerful reason is that the sample size gets reduced, if the analysis is done on parts of the sample. For instance, in a sample of 200 respondents, there could be 16 combinations of income (4 groups) and age (4 age groups). If analysis is performed for a combination of age and income, we get a 16- celled output matrix. Even assuming a uniform distribution of the sample into these 16 cells, each cell only gets a sample size of 100 / 16 or 12.5 persons. This may not be good enough to draw conclusions about the given Age-Income combination.

Slide 23 contd...

But if it is known in advance that we will analyse the data by this combination, we can increase the sample sizes in each cell to say, 20 or 30 by incurring marginal additional cost. This cannot be done easily at the analysis stage, after all data has been collected and tabulated.
In certain cases, special statistical procedures or tests have to be performed. For example, in a procedure called multidimensional scaling (covered in a later chapter), the questionnaire has to be constructed in a particular way. Otherwise, it is not possible to do the required analysis. For these reasons, we must know in advance, at least the types of analyses we want to perform.

Slide 24

There are normally two very basic kinds of analyses in a marketing research study. These are
.Simple Tabulation .Cross Tabulation

Simple Tabulation involves counting the number of responses in each category for a question, and putting it in a frequency table form. This can be used to compute percentages, by dividing the number of responses by the sample size. This is done for each question in the questionnaire. Cross Tabulation: This is the result of counting simultaneously, answers to two or more different questions on a questionnaire. For example, one question may ask how frequently respondents buy a soap brand. Answers may vary from Once a Month to Thrice a Month.
Another question on the same questionnaire may ask for their reaction to the fragrance of the soap. We may want to cross tabulate the responses to these two questions. How many of the people who liked the fragrance bought once a month, and how many of them bought twice or thrice a month? Similarly, how many who did not like the fragrance bought it once, twice or thrice a month?

Slide 25 While doing cross-tabulation, it is also necessary that the two questions (variables) that we are crosstabulating must be related to each other. For example, in the above example, it is possible that the frequency of soap purchase is a function of family size, rather than the liking for its fragrance. It is possible to compute cross tabulation data for any two questions on a questionnaire but all of these may not be meaningful. Expected Outcome One good way to think about expected outcome is to prepare a blank table of output, particularly for any cross tabulations we may be interested in. This can be done after the questionnaire is designed, but before the field work is done. This helps to anticipate some of the problems in sampling and corrective action can be taken easily to adjust sample sizes on the field.

Slide 26 Budget and Cost Estimation There are two or three basic parameters which provide an estimate of how much a study is going to cost. .Sample size .How difficult to find the sampling units (respondents) are, and their geographical dispersion. .Who will do the field work For example, if hired field workers are doing the field work, a study costs much less per respondent, than if a research executive conducts the interviews. In some industrial marketing research, a qualified research executive may in fact do the field work himself. But in most consumer product or service studies, it is hired temporary field workers who do it. In such cases, sample size is multiplied by the estimated cost per respondent to arrive at a total cost estimate. This estimate is modified by the number of centres (geographical dispersion) for the study, and the difficulty in locating required respondents.

For example, locating a 2-wheeler owner for a given brand of 2wheeler (say, a Suzuki or Honda), is much easier than locating an owner of a luxury car say, a Mercedes. Additional cities for the survey may entail travel and communication cost for the research executive and supervisory staff in addition to normal cost of field work.

Slide 27 Presentation, Report and Marketing Action

After the tabulation and analysis is completed, the next step is usually a presentation to the sponsor of the study. This includes frequency tables and cross tabulations in percentage terms, and special analyses if any. It also includes a summary of major findings, and some recommendations. If any additional cross tabulations are required, the client or sponsor usually requests them at this stage.
A formal report usually follows the presentation. This should normally contain the following : .Executive Summary .Table of Contents .Introduction .Research Objectives .Research Methodology -Sample Design Field Work Plan and Dates -Analysis / Expected Outcome Plan -Questionnaire Copy (as Annexure)

Slide 27 contd...

.Analysis -Simple Tabulation -Cross Tabulation -Any Special Analysis .Findings .Limitations .Recommendations for Action .Bibliography / List of References Based on the report, the client normally will take some marketing actions. This is the expected outcome of any marketing research study.