Marketing Research

DefinitionThe systematic gathering, recording and analyzing of

data about problems relating to the Marketing of goods and services.

-American Marketing Association

Systematic problem analysis, model-building and fact-finding for the purpose of improved decision-making and control in the marketing of goods and services‘.

-Kotler

The function which links the consumer, the

customer, and public to the marketer

through INFORMATION

Used to identify and define market opportunities and problems

Generate, refine, and evaluate marketing performance

Monitor marketing performance

Improve understanding of marketing as a process

Redefining Marketing Research

Classification of Marketing Research

Problem Identification ResearchResearch undertaken to help identify problems which are not

necessarily apparent on the surface and yet exist or are likely to arise in the future. Examples: market potential, market share, image, market characteristics, sales analysis, forecasting, and trends research.

Problem Solving ResearchResearch undertaken to help solve specific marketing

problems. Examples: segmentation, product, pricing, promotion, and distribution research.

A Classification of Marketing Research

Marketing Research

Problem Identification Research

Problem Solving Research

Market Potential ResearchMarket Share ResearchMarket Characteristics ResearchSales Analysis ResearchForecasting ResearchBusiness Trends Research

Segmentation Research

Product Research

Promotion Research

Distribution Research

Problem Solving Research

Determine the basis of segmentation

Establish market potential and responsiveness for various segments

Select target markets

Create lifestyle profiles: demography, media, and product image characteristics

SEGMENTATION RESEARCH

Test concept

Determine optimal product design

Package tests

Product modification

Brand positioning and repositioning

Test marketing

Control score tests

PRODUCT RESEARCH

Problem Solving Research

PRICING RESEARCH

Pricing policies

Importance of price in brand selection

Product line pricing

Price elasticity of demand

Initiating and responding to price changes

$ALE

PROMOTIONAL RESEARCH

Optimal promotional budget

Sales promotion relationship

Optimal promotional mix

Copy decisions

Media decisions

Creative advertising testing

Evaluation of advertising effectiveness

Claim substantiation

0.00% APR

Problem Solving Research

DISTRIBUTION RESEARCH

Determine…

Types of distribution

Attitudes of channel members

Intensity of wholesale & resale coverage

Channel margins

Location of retail and wholesale outlets

Basic research Basic research is also called fundamental or pure

research. As the name itself refers, Basic Research is of basic nature which is not carried out in response to a problem. It is more educative, towards understanding the fundamentals and aim at expanding the knowledge base of an individual or organization. It does not have any commercial potential.

Applied research Applied Research on the other hand is carried out to seek

alternate solutions for a problem at hand. Applied research is done to solve specific, practical questions; its primary aim is not to gain knowledge. It specifies possible outcomes of each of the alternatives and its commercial implications.

Applied research can be carried out by academic or industrial institutions. Often, an academic institution such as a university will have a specific applied research program funded by an industrial partner interested in that program. Electronics, informatics, computer science, process engineering and drug design are some of the common areas of applied research.

Applied research can further be divided into: Problem-solving research: It involves research oriented

towards a crucial problem facing the organization which may be issue specific.

Ex: How do we improve the communication skills of our employees?

Problem-oriented research: The research is oriented towards a crucial problem facing the organization. It is undertaken inside the organization or by an external consultant on its behalf. This research is conceptual in nature and newer innovative techniques of problem-solving are applied.

Marketing research can be used in: Product Management: One of the major scope of

marketing research is to manage the current products and new products. In product management Marketing Research is helpful in

Competitive Intelligence – To understand the competitive product strategy.

Pre-launch strategy for new products Test Marketing – To monitor the performance of the

brand by launching in a select area and then taking it across the country. In other words it is a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market.

Concept testing - to test the acceptance of a concept by target consumers.

Scope of Marketing Research

Sales analysis: Marketing research is used to study the sales trend and make suitable strategies when required. It is used to Assess market potential Estimation of demand for a product Market share estimation Study seasonal variation for a product Market segmentation studies Estimate size of the market Need analysis to find out where the product fits in

Corporate Research: Marketing Research is used to analyze the corporate effectiveness. Some examples are:

Assessing the image of the company Knowledge of the company activities Advertising Research: Advertising is an arena in which

Marketing Research is extensively used. Some scope are: Readership feedbacks – Mainly carried out for

newspapers and magazines Advertising Recall – To assess the recall of television or

other advertising and thereby assess its effectiveness. Syndicated Research: This is compiled by agencies on a

regular basis and sold to organizations on subscription basis.

The Marketing Research Process

• Step One: Establishing the Need for Marketing Research

• Step Two: Defining the Problem• Step Three: Establishing Research Objectives• Step Four: Determining Research Design• Step Five: Identifying Information Types and

Sources• Step Six: Determining Methods of Accessing

Data

The Marketing Research Process: 11 Steps

• Step Seven: Designing Data Collection Forms• Step Eight: Determining Sample Plan and Size• Step Nine: Collecting Data• Step Ten: Analyzing Data• Step Eleven: Preparing and Presenting the Final

Research Report

• Marketing Research is not needed when the:• required information is already available• decisions need to be made now• organization can’t afford the research• costs outweigh the value of the research

Step One: Establish the Need for Marketing Research

• The most important step in the marketing research process is defining the problem.

Step Two: Define the Problem

• What information is needed in order to solve the problem?

Step Three: Establish Research Objectives

• Exploratory Research: collecting information in an unstructured and informal manner

• Descriptive Research: refers to a set of methods and procedures describing marketing variables

• Causal Research (experiments and other approaches): allows isolation of causes and effects

Step Four: Determine Research Design

• Secondary Data: information that has been collected for some purpose other than the research at hand

• Primary Data: information that has been gathered specifically for the research objectives at hand

Step Five: Identify Information Types and Sources

• Secondary Data: accessing data through sources such as the Internet and library

• Primary Data: collecting data from participants through methods such as telephone, mail, online, and face-to-face (quantitative), and observation studies and focus groups (qualitative)

The Marketing Research ProcessStep Six: Determine Methods of Accessing Data

• The design of the data collection form that is used to ask or observe and record information in marketing research projects is critical to the success of the project.

• It is easy to write a set of questions but very difficult to construct a questionnaire.

• General types of “instruments” (forms)• Questionnaires• Observation Study forms (protocols)

Step Seven: Design Data Collection Forms

• Sample plan: refers to the process used to select units from the population to be included in the sample

• Sample size: refers to determining how many elements (units) of the population should be included in the sample

The Marketing Research ProcessStep Eight: Determine Sample Plan and Size

• Sound data collection is very important because, regardless of the data analysis methods used, data analysis cannot “fix” bad data.

• Nonsampling errors may occur during data collection. These are related to poor design and/or execution of the data gathering.

• Sampling errors may occur based purely on chance

The Marketing Research ProcessStep Nine: Collect Data

• Data analysis: involves entering data into computer files, inspecting data for errors (data cleaning), running tabulations (frequencies), and conducting various statistical tests

The Marketing Research ProcessStep Ten: Analyze Data

• Findings are presented, often by research objective, in a clear and concise way.

• The need for a good report cannot be overstated. It is the report, and/or its presentation, that properly communicates the results to the client.

The Marketing Research ProcessStep Eleven: Prepare and Present the Final Research Report

What is a Marketing Information System (MIS)?

A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Objectives

Understand the importance of information to the company.

Know the definition of a marketing information system and be able to discuss its subparts.

Learn the steps in the marketing research process.

Objectives

Learn how companies analyze and distribute marketing information.

Realize the special issues some marketing researchers face, including public policy and ethical issues.

Characteristics of Marketing Information System

Information- Accurate, continuous flow to all

Scientific base with the help of OR techniques

Future OrientedOngoing ProcessIt provides pertinent information,

collected from sources both internal and external to the company, for use as the basis of marketing decision making.

Need for Marketing Information System

Complexity of MarketingCompetitor AnalysisDemand ForecastingBetter understanding of

the consumerNew InnovationEconomic IndicatorsPlanning of resources

Components of marketing Information System

SOURCES OF INFORMATION

MarketingManagers

MarketingEnviron-ments

InternalReporting

System

MarketingIntelligence

System

AnAnalyticalMarketing

System

MarketingResearchSystem

Marketing Decisions and Communications

INFORMATION

1. Assessment ofNeeds

2. Distribution

AssessingInformation

Needs

AssessingInformation

Needs

Developing InformationDeveloping Information

InternalRecords

InternalRecords

MarketingIntelligence

MarketingIntelligence

MarketingResearch

MarketingResearch

DecisionSupport

DecisionSupport

Marketing Information System

Marketing Decisions and Communications

DistributingInformationDistributingInformation

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Internal Marketing SystemDetailed reports on Orders, Sales, Prices, Inventory Levels, Payables and

so onMarketing Intelligence System

Marketing research is focused, Market intelligence is not 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 behavior is unfocused and the manager has no specific purpose in mind, it is not unintentional

Semi-Focused Scanning -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.

Informal Search -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 neighboring country may make informal inquiries as to prices and demand levels of frozen and fresh fish.

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.

Marketing Decision Support System

.. a coordinated collection of data, systems, tools and techniques with

supporting software and hardware

by which an organization

gathers and interprets relevant information from business and environment and

turns it into a basis for marketing action.

-Kotler

Marketing Decision Support System

... a set of statistical tools and decision models with supporting hardware and software available to marketing managers to assist them in analyzing data and making better marketing decisions. -Dyer and Forman

Characteristics of DSS

DSS offer users flexibility, adaptability, and a quick response

DSS allow users to initiate and control the input and output

DSS operate with little or no assistance from professional programmers

DSS provide support for decisions and problems whose solutions cannot be specified in advance

DSS use sophisticated analysis and modeling tools

Identifying DSS Problem

Problems should be identified by usersThere must be a body of data to work with and analyzeThe problem must be one for which no simple formula p

rovides a solutionThere must be some systematic way of thinking about t

he problem that a DSS can automate or assistThe problem must be important enough to engage the ti

me and energy of management groups ranging from first line supervisors to senior management

DSSDatabase

DSSDatabase

DSS Software SystemDecision Models

OLAP ToolsData Mining Tools

DSS Software SystemDecision Models

OLAP ToolsData Mining Tools

UserInterface

UserInterface

(Adapted from Laudon and Laudon)

InteractiveQuick response

Internal RecordsMarketing IntelligenceMarketing Research

Level 1

Level 2

Level 3

Data ManagementData acquisition, storage and retrieval

Data AnalysisFinding and analyzing relationships between variables

Decision AnalysisPrioritization and choice amongdecision alternatives

DSS Level 1 – Data Management

ToolsDatabaseDatabase management system (D

BMS)Query facilitiesReport writersDocument and image manageme

nt system

DSS Level 1-Data Management

The difficultiesThe amount of data increases exponentiall

yData are scattered through out organizatio

ns and are collected by many individuals using several methods and devices

Only small portions of an organization’s data are relevant for specific decisions

An ever-increasing amount of external data needs to be considered in making decisions

DSS Level 2 – Data Analysis

Basic data analysis toolsSpreadsheet

What-if analysisGoal seeking analysisSensitivity analysis

Graphical toolsStatistical tools

DSS Level 2-Data Analysis

OLAP (online analytical processing) toolsAccess very large amounts of dataAnalyze the relationships between ma

ny types of business elementsInvolve aggregated dataCompare aggregated data over time p

eriodsPresent data in different perspectivesInvolve complex calculations between

data elements

DSS Level 3 -Decision Analysis

Nature of Marketing criteriaQuantitative criteria

Monetarye.g. $ sales value, costs, contribution

Non-monetarye.g. sales growth rate, market share

Qualitative criteria e.g. image, satisfaction

DSS Level 3 -Decision Analysis

Difficulties in decision makingHuman cognitive limitations

Short term memory (7+2)Scaling technique

Need to combine different scalesNo scales for qualitative factors

Measurement

The assignment of numbers to characteristics of objects, persons, states, or events, according to rules

Nominal

Ordinal

Interval

Ratio• Numbers assigned to runners7

36

• Rank order of winners21

3

• Performance rating on a 0 to 10 scale

• Time to finish

Scales of Measurement

What you can or cannot say about the object

Which statistical analyses you may use

Components of Measurement

True Characteristic: Direct reflection of the characteristic of interestShort term characteristic of Respondent: hunger, fatigue or angerSituational characteristic : reflection of the surroundings in which the

measurement is takenCharacteristic of the measurement process: reflection of the interviewer,

interviewing method and the likeCharacteristics of the measuring instrument : reflection of ambiguous or

misleading questionsCharacteristics of the response process: reflection of mistaken replies

caused by checking wrong response and the likeCharacteristics of the analysis: reflection of mistakes in coding, tabulating

and the like

Mapping Rules

ClassificationOrderDistanceOrigin

Difficulty of Measurement

Dangerfield Syndrome

Less TrainingDelegationResponse is

InaccurateIrrelevant Data

Secondary Data

Problems Encountered with Secondary DataAvailabilityRelevanceAccuracySufficiency

Internal sources of Secondary dataAccounting RecordsSales Force ReportsMiscellaneous ReportsInternal Experts

External Sources Of Secondary dataComputerized databasesBibliographic databasesNumeric databasesDatabase SystemsAssociationsGovernment agencies

Data on Population, Income, and Housing Data on Industrial and Commercial Product sales,

Agricultural producers, wholesalers, retailers and Service Organizations

Data on Financial and other Characteristics of Firms Data on Employment Miscellaneous reports

Syndicated services Directories Other Published Sources

External ExpertsInternational secondary data

Nature of International secondary data Internal Sources of International Secondary data External Sources of Secondary data

Databases Foreign Government Sources U.S. Govt. International Political Organizations

Attitude

A predisposition or a tendency to respond positively or negatively towards a certain idea, object, person, or situation. Attitude influences an individual's choice of action and responses to challenges, incentives, and rewards (together called stimuli).

Procedure In Attitude Scaling

Collection of dataProcessing of the dataFormation of Scale

Components of Attitude

Cognitive ComponentAffective ComponentBehavioral Component

Advanced Scaling Techniques

Single Item Scales Itemized Category Scales Rank Order Scales Comparative Scales Paired Comparison Scales Constant Sum Scales Pictorial Scales Q-Sort Scale

Considerations for Developing Single Item Scales Number of Scale category Types of Poles used in the scale Balance of Scale Strength of Anchor Types of Poles used in the scale Labeling of Categories

Continuous ScalesMulti Item Scales

Profile AnalysisThurstone type of ScaleLikert ScalesSemantic differentialStapel Scales