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Introduction, Nature & Scope of Marketing Research. Dr. A. K. Dey. Reference Books. Marketing Research an Applied Orientation Naresh Malhotra & S. Dash Business Research Methods Cooper & Schindler Marketing Research – Text & Cases Boyd, Westfall & Stasch. Some Important Aspects. - PowerPoint PPT Presentation
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Introduction, Nature & Scope of Marketing Research
Dr. A. K. Dey
Res Method _ 1: Dr. Dey 2
Reference Books
• Marketing Research an Applied Orientation– Naresh Malhotra & S. Dash
• Business Research Methods– Cooper & Schindler
• Marketing Research – Text & Cases– Boyd, Westfall & Stasch
Some Important Aspects
• In order to understand and appreciate Research Methodology following points must be very clear
• What is Research?• What is Marketing Research? Why carry out
Marketing Research? How it is different from Market Research?
• What is Bus Res Methods or Research Methodology?
• The connection between MR and managerial decision making.
Res Method _ 1: Dr. Dey 3
Some Important Aspects…Contd.
• Is MR applicable in all situation?• Def of MR.• Scope of MR• Scientific & Non-scientific Research: Distinction
between these• Validity & Reliability
Res Method _ 1: Dr. Dey 4
Some Important Aspects…Contd.
• Six difficulties in applying scientific method to marketing– Investigator involved in the use of result– Imprecise measuring devices: How to measure
attitudes? Intentions? Opinions?– Influence of measurement process on the result– Time pressure for the result– Difficulty in using experiments to test hypothesis– Great complexity of subjects
Res Method _ 1: Dr. Dey 5
Some Important Aspects…Contd.
• Research Process: How to conduct a research? Which steps in which sequence?
• How many types of research– Qualitative: Exploratory– Quantitative: Descriptive and Experimental
• What is Research Design• Sampling Design• Scaling: Attitude Measurement• Questionnaire Construction
Res Method _ 1: Dr. Dey 6
Res Method _ 1: Dr. Dey 7
Objectives
• Understand Marketing Research (MR)• Understand relevance of MR for
marketing decisions• Develop appreciation of MR & its
applications• Know the procedure of conducting • Develop familiarity with each step of
procedure
Res Method _ 1: Dr. Dey 8
What is Business Research?
• A systematic Inquiry whose objective is to provide information to solve managerial problems.
Res Method _ 1: Dr. Dey 9
Why Study Research?
• Research provides you with the knowledge and skills needed for the fast-paced decision-making environment
Res Method _ 1: Dr. Dey 10
Different Styles of Research
• Applied Research– Emphasis on solving practical (specific) problems– It could be exploring opportunities also
• Rectifying an inventory system that is resulting into lost sales
• Opportunity to increase stockholder wealth by acquiring another firm
• Pure Research/Basic Research– Emphasis on problem solving but of a general nature
(not specific)• Effect of coupon as against rebate to stimulate demand
Res Method _ 1: Dr. Dey 11
What is Good Research?
• Following the standards of the scientific method– Purpose clearly defined– Research process detailed– Research design thoroughly planned– Limitations frankly revealed– High ethical standards applied
Res Method _ 1: Dr. Dey 12
What is Good Research? (cont.)
• Following the standards of the scientific method (cont.)– Adequate analysis for decision-
maker’s needs– Findings presented unambiguously– Conclusions justified– Researcher’s experience reflected
Res Method _ 1: Dr. Dey 13
The Manager-Researcher Relationship
• Manager’s obligations– Specify problems– Provide adequate background information– Access to company information gatekeepers
• Researcher’s obligations– Develop a creative research design– Provide answers to important business
questions
Res Method _ 1: Dr. Dey 14
Manager-Researcher Conflicts
• Management’s limited exposure to research
• Manager sees researcher as threat to personal status
• Researcher has to consider corporate culture and political situations
• Researcher’s isolation from managers
Res Method _ 1: Dr. Dey 15
When Research Should be Avoided
• When information cannot be applied to a critical managerial decision
• When managerial decision involves little risk
• When management has insufficient resources to conduct a study
• When the cost of the study outweighs the level of risk of the decision
Res Method _ 1: Dr. Dey 16
Need for MR
• A manager takes decisions• His responsibility is to reduce risk of failure in
decision making• Risk arises due to lack of relevant information• A manager always seeks information to
improve quality of decision making• Information can be collected through MR• Hence, MR is an important tool for managerial
decision making
Res Method _ 1: Dr. Dey 17
MR & Marketing Decisions
• For Production, Finance, Personnel– Most of the required info are available within the
organization; Hence easy to collect & analyze– Formal procedures are used to improve quality :
Stats Methods for QC, PERT & CPM, Queuing Theory, Optimization Techniques etc
• For Marketing – information mostly exist outside the organization– In consumer behaviour, perception, minds– In competitive moves– In new government rules & regulations– In social & political changes
Res Method _ 1: Dr. Dey 18
MR & Marketing Decisions
• Other problems for collecting information required for marketing decisions are– Being external – collection is cumbersome &
expensive– Variables are often qualitative & dynamic –
making measurements difficult & inaccurate– Variables are complex & interact with each
other
Res Method _ 1: Dr. Dey 19
Risk of using wrong information
• Choice of wrong information may lead to– Excessive expenditure– Decision going astray – Hind Sanitaryware– Becoming uncompetitive & losing out – S
Kumars Internet centers & Modular Kitchen– Market may vanish all of a sudden – fashion
garments
Res Method _ 1: Dr. Dey 20
Scientific Method: The Essential Tenets of Science• Direct observation of phenomena• Clearly defined variables, methods, and
procedures• Empirically testable hypotheses• Ability to rule out rival hypotheses• Statistical justification of conclusions• Self-correcting process
Res Method _ 1: Dr. Dey 21
Ways to Communicate
• Exposition – descriptive statements that merely
state and do not give reason
• Argument– allows us to explain, interpret,
defend, challenge, and explore meaning
– Two types: Deduction & Induction
Res Method _ 1: Dr. Dey 22
Important Arguments in Research
• Deduction is a form of inference that purports to be conclusive
• Induction draws conclusions from one or more particular facts• For suitable examples consult book
pages 32 - 34
Res Method _ 1: Dr. Dey 23
The Building Blocks of Theory
• Concepts• Constructs• Definitions• Variables• Propositions and Hypotheses• Theories• Models
Res Method _ 1: Dr. Dey 24
Understanding Concepts
• A concept is a bundle of meanings or characteristics associated with certain events, objects, conditions, situations, and behaviors
• Concepts have been developed over time through shared usage
Res Method _ 1: Dr. Dey 25
Understanding Concepts
• The success of research hinges on:– how clearly we conceptualize– how well others understand the
concepts we use• For customer loyalty use questions that
tap faithfully the Attitude of participants• Attitudes are abstract, try to measure
them using carefully selected concepts
Res Method _ 1: Dr. Dey 26
What is a Construct?
• A construct is an image or idea specifically invented for a given research and/or theory-building purpose.
• Constructs are required for more abstract concepts – “Personality”, “Satisfied Customer”
Res Method _ 1: Dr. Dey 27
Types of Variables
• Independent • Dependent• Moderating• Extraneous• Intervening
Res Method _ 1: Dr. Dey 28
• Independent & Dependent– Leadership style & Employee performance
or Job satisfaction– Price of a product & Demand
• Independent– Cause, Stimulus, Predictor, Antecedent
• Dependent– Effect, Response, Criterion, Consequence
Types of Variables
Res Method _ 1: Dr. Dey 29
• Moderating– In each relationship there is one
Independent Variable (IV) & one Dependent Variable (DV)
• Four day work week (IV) will lead to higher productivity (DV)
– Moderating variable is a second independent variable that has significant effect on the originally stated IV–DV relationship
• Four day work week (IV) will lead to higher productivity (DV), especially among young workers (MV)
Types of Variables
Res Method _ 1: Dr. Dey 30
• Extraneous– Infinite number of extraneous variables (EV)
exist that might effect the relationship– Most of such variables have little or no
effect on the given situation and these may be ignored
– Others may have highly random occurrence as to have little impact
– For productivity example: election of a new mayor, rainy days, bird flu, strike etc
Types of Variables
Res Method _ 1: Dr. Dey 31
• Intervening– Intervening variable (IVV) is defined
as a factor which theoretically effects the observed phenomenon but can not be seen measured or manipulated
– Its effect can be inferred from the effects on the observed phenomenon• Four day work week (IV) will lead to
higher productivity (DV) by increasing job satisfaction (IVV)
Types of Variables
Res Method _ 1: Dr. Dey 32
Propositions & Hypotheses
• Proposition– A statement about concepts that may
be judged as TRUE or FALSE if it refers to observable phenomenon
– Proposition formulated for empirical testing is Hypothesis
– Example• Infosys employees have higher than
average achievement motivation
Res Method _ 1: Dr. Dey 33
The Role of the Hypothesis
• Guides the direction of the study• Identifies facts that are relevant• Suggests which form of research
design is appropriate• Provides a framework for
organizing the conclusions that result
Res Method _ 1: Dr. Dey 34
Characteristics & Types of a Good Hypothesis
• A good hypothesis should fulfill three conditions:– Must be adequate for its purpose– Must be testable– Must be better than its rivals
• Hypothesis types– Descriptive– Relational: Correlation & Causal
Res Method _ 1: Dr. Dey 35
Types of Hypothesis• Descriptive
– Describes the existence, size, form or distribution of some variables
– Eighty percent of shareholders of HLL favour increasing the company’s cash dividend
• It can also be stated as research question– Do shareholders of HLL favour an increased cash
dividend?• Either form is acceptable, but descriptive
hypothesis format has advantages– Encourages researcher to crystallize thinking– Encourages to think about implications of either an
accepted or rejected finding– Useful for testing statistical significance
Res Method _ 1: Dr. Dey 36
• Relational– Statements that describe the
relationship between two variables with respect to some case
– Foreign (variable) refrigerators are perceived to be of better quality (variable) by Indian consumers (case)
Types of Hypothesis
Res Method _ 1: Dr. Dey 37
• Two types: Correlation & Causal• Correlation
– Merely states that variables occur together without implying that one causes the other• People in Kerela give more importance to
education than people in Punjab• In an office old employees are more
responsive than young employees
Types of Relational Hypothesis
Res Method _ 1: Dr. Dey 38
• Causal (or Explanatory)– There is an implication that existence
of (or a change in) one causes or leads to a change in the other• Causal variable is called Independent
variable and the other Dependent variable
• Advertisement causes higher sales• Increase in income leads to higher
savings
Types of Relational Hypothesis
Res Method _ 1: Dr. Dey 39
The Value of a Theory
• Narrows the range of facts we need to study
• Suggests which research approaches will yield the greatest meaning
• Suggests a data classification system• Summarizes what is known about an
object of study• Predicts further facts that should be
found
Res Method _ 1: Dr. Dey 40
Definition of Marketing Research
• American Marketing AssociationMR is the systematic gathering, recording and
analyzing of data about problems related to the marketing of goods & services
• Philip KotlerMR is the systematic design, collection,
analysis & reporting of data & findings relevant to a specific marketing situation facing the company
It may be relevant to add the word “continuous” to the above definitions
Res Method _ 1: Dr. Dey 41
Purpose of MR
• To improve quality of decision making process by providing information
• To help reduce the risk associated with managerial decision making– Risk due to two types of uncertainties:
• About the expected outcome• About the future environment
• To discover opportunity & exploit profitably
For example : Frooti, Velvette, Mother Dairy, Dhara, Pan Parag
Res Method _ 1: Dr. Dey 42
Scope of MR
• Consumers of products & servicesBuyer behaviour, Influencers, Buying habits, Incentives
• Product & product designPricing, Sourcing, Physical attributes
• Distribution ChannelsPerformance, Dealer Satisfaction, Own vs Multi-brand
• Advertising ImpactImage, Positioning, Media Planning, Message Content &
Prioritizing • Macro Level Phenomenon
Govt spending. Mood of the Industry, State of Economy
Res Method _ 1: Dr. Dey 43
MR Procedure
• Seven inter-related steps1.Specifying research objectives2.Preparing a list of needed information3.Designing the data collection project4.Selecting a sample type5.Determining sample size6.Organizing & carrying out the field work7.Analyzing the collected data & report the
findings
Res Method _ 1: Dr. Dey 44
The Management-ResearchQuestion Hierarchy
1 Management Dilemma
Measurement QuestionsInvestigative
Questions
Research Questions
Management Questions
Management Decision
23
45
6
Res Method _ 1: Dr. Dey 45
The Management-ResearchQuestion Hierarchy
1 Why are sales declining in south while sales are booming in all other regions?
Conduct an employee survey for outcomes of change in compensation structure
If compensation scheme is changed, will good sales persons leave?
How can we improve sales in south?
Introduce individual incentive? Quota based incentive? Advertise more?
Management Decision
234
56
Res Method _ 1: Dr. Dey 46
Working with the Hierarchy
• Management Dilemma– The symptom of an actual problem– Not difficult to identify a dilemma,
however choosing one to focus on may be difficult
– Needs proper prioritizing
Res Method _ 1: Dr. Dey 47
Working with the Hierarchy
• Management Question Categories– Choice of purposes or objective– Generation and evaluation of
solutions– Troubleshooting or control
situation
Res Method _ 1: Dr. Dey 48
Working with the Hierarchy
• Fine tune the research question– Examine concepts and constructs – Break research questions into specific
second-and-third-level questions– Verify hypotheses with quality tests– Determine what evidence answers
the various questions and hypothesis– Set the scope of your study
Res Method _ 1: Dr. Dey 49
Working with the Hierarchy
• Investigative Questions– Questions the researcher must
answer to satisfactorily arrive at a conclusion about the research question
Res Method _ 1: Dr. Dey 50
Working with the Hierarchy
• Measurement Questions– The questions we actually ask to
extract information from respondents
Res Method _ 1: Dr. Dey 51
Other Processes in the Hierarchy
• Exploration– Recent developments– Predictions by informed figures about
the prospects of the technology– Identification of those involved in the
area– Accounts of successful ventures and
failures by others in the field
Res Method _ 1: Dr. Dey 52
Research Process Problems
• The Favored Technique Syndrome• Company Database Strip-Mining• Unresearchable Questions• Ill-Defined Management Problems• Politically Motivated Research
Res Method _ 1: Dr. Dey 53
MR Procedure
• Seven inter-related steps1.Specifying research objectives (Problem
Definition)2.Preparing a list of needed information3.Designing the data collection project4.Selecting a sample type5.Determining sample size6.Organizing & carrying out the field work7.Analyzing the collected data & report the
findings
Res Method _ 1: Dr. Dey 54
Problem Definition
• Any situation requiring further investigation is a problem
• Not all problems require fresh MR to be carried out. Many can be decided upon based on past data, trend, experience
• Distributor Credit• Manufacturing out put• Stocking level
• Problem Definition should be• Specific – neither too broad nor too narrow• Target outcome should be precise• Should be manageable within time & resource
available
Res Method _ 1: Dr. Dey 55
Problem Definition – an example
Incomplete Problem Definition
Better Problem Definition
1. Product Refrigerator Refrigerator – Ordinary & Frost free
2. Market West Zone West Zone with spl ref to Mumbai, Nashik, Pune & Nagpur
3. Market Segment
---- Office & Institutional Sector & NOT Households
4. Current Mkt Share
Not available 12% over all3% in Office & Inst
5. Problem Sales not picking up at the rate at which they should
Last year our growth 5%Industry grew by 25%
6. MR Problem To find out the reason
To find out the reasons for shortfall in our growth rate in office & inst segments & suggest specific strategies followed by Brands A & B
Res Method _ 1: Dr. Dey 56
Research Design
• It spells out how to achieve stated MR objectives
• Consists of – Data Collection Method– Specific Research Instruments– Sampling Plan
Res Method _ 1: Dr. Dey 57
Research Design– Data Collection Method
• Secondary Data• Primary Data
– Observation– Survey (Most widely used)– Experimentation
– Specific Research InstrumentsCamera, Tape, People Meter, Tally Sheet, Questionnaire
– Sampling Plan– Who is to be surveyed? Sampling unit– How many? Sample size– How are they to be selected? Sampling Procedure– How are they to be reached? Sampling Media
Res Method _ 1: Dr. Dey 58
Field Work
• Involves planning, execution, supervision & checking for errors
• MR must be planned & executed well so as to complete within resource & time limits
• Progress to be closely monitored to avoid time & cost overrun
• Extensive back checks & spot checks will improve the quality of MR output
Res Method _ 1: Dr. Dey 59
Data Analysis
• Done in two phases– Classification of raw data
• Quantitative vs Qualitative• Chronological, Geographical,
Demographic
– Summarizing the data• Frequency distribution, Mean, Median,
Mode, Range, Variance, Standard Deviation
• Data Analysis Methods – Four classes
Res Method _ 1: Dr. Dey 60
Data Analysis……….Contd.
• Analytical Methods – Four classes:– Tests of Significance :Sampling Statistics,
Chi Square Analysis & Analysis of Variance– Explaining Observed difference I: Cross
Tabulation, Correlation & Regression – Explaining Observed difference II: Linear
Discriminant Analysis & Automatic Interaction Detector
– Identifying Interdependencies: Cluster, Factor & Conjoint Analysis
Res Method _ 1: Dr. Dey 61
Report Presentation
• Report must have following sections– Executive Summary– Objectives & Methodology– Summary, Conclusion, Recommendation– Sample Characteristics & Basis of selection– Detailed findings– Questionnaires & other supporting
documents
Res Method _ 1: Dr. Dey 62
Marketing Research
Res Method _ 1: Dr. Dey 63
Secondary Research
Secondary DataInexpensiveMay not be relevantMay be old
Res Method _ 1: Dr. Dey 64
Internal Sources
• Company Accounts• Internal Reports and Analysis• Stock Analysis• Retail data - loyalty cards, till data, etc.
Res Method _ 1: Dr. Dey 65
External Sources
• Government Statistics • Trade publications• Commercial Data – IMRB, Gallup, Mintel, etc.• Household Expenditure Survey• Magazine surveys• Other firms’ research• Research documents – publications, journals,
etc.
Res Method _ 1: Dr. Dey 66
Marketing Research
• Advantages of Marketing Research– Helps focus attention on objectives– Aids forecasting, planning and strategic
development– May help to reduce risk of new product
development– Communicates image, vision, etc. – Globalisation makes market information
valuable (HSBC adverts!!)
Res Method _ 1: Dr. Dey 67
Marketing Research
• Disadvantages of Marketing Research– Information only as good as the
methodology used– Can be inaccurate or unreliable– Results may not be what the business wants
to hear!– May stifle initiative and ‘gut feeling’– Always a problem that we may never know
enough to be sure!
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