Marketing Research Process

Marketing Research Process

The American Marketing Association defines marketing research as:

“Marketing research is the function that links the consumer, customer and public to the

marketer through information – information used to identify and define marketing

opportunities and problems; generate, refine and evaluate marketing actions; monitor

marketing performance; and improve understanding of marketing as a process.”

Marketing research specifies the information required to address the issues, designs the

method for collecting information, manages and implements the data collection process,

analyzes the results, and communicates the findings and their implications.

Marketing Research can be classified as:

Problem identification research

Problem solving research

- Market research involves systematic planning which is required at all stages.

- Steps under market research are followed in a chronological order.

- All data is well maintained & well documented, therefore, results in proper

analysis of the situation.

- It is expected to be from the personal bias of a researcher.

- The first step in market research is problem definition wherein the data is

collected, situation is analyzed & the problem is defined.

- Next step involves formulation of the objectives for the study, analytical models &

research questions.

- Third step is the research design formulation step wherein the type of research

design to be used is decided upon. It can be exploratory, descriptive or

conclusive.

- In the next step data collection is done through interviews, surveys,

questionnaires, etc.

- Then, the analysis of the data is done once it is documented as per the needs.

- Last step involves the preparation of the report & finally its presentation.

Marketing Research Process

Step One:

Identify the Problem and State the Marketing Research Objectives

The best objectives will lead to precise decision making information for managers.

Problem Definition

The first step in any marketing research project is to define the problem. In defining the

problem, the researcher should take into account the purpose of the study, the relevant

background information, what information is needed, and how it will be used in decision-

making. Problem definition involves discussion with the decision makers, interviews with

industry experts, analysis of secondary data, and, perhaps, some qualitative research,

such as focus groups. Once the problem has been precisely defined, the research can

be designed and conducted properly.

Interviews with the experts

Discussions with the decision makers

Secondary Data Analysis

Qualitative Research

Tasks involved

Environmental Context of the problem

Defining the Problem

- The Problem Definition Process

- Identify the problem or opportunity

- Find out why the information is being sought

- Understand the decision-making environment ( the industry, company, product,

and target market)

- Use the symptoms to help clarify the problem

- Translate the management problem into a marketing research problem

- Determine whether the information already exists

- Determine whether the research problem can really be answered.

- State the research objectives

Problem Definition

Research Problems

Examples

1. To determine the percentage of families who got any electronic household instrument

in a special offer

2. To determine the demand for:

a. household vacuum cleaners

b. Microwave Oven

c. a refrigerator

d. mp3/vcd/dvd player

3. To determine the choice of cars in middle class families in a small car segment.

Step Two:

Creating the Research Design

The six W’s of the descriptive research to be adopted are:

1. Who – They have to keep in mind the type of customers that they are targeting. Like in

case of Sweet Cookies, they are targeting the premium section of the market. They

need to first understand the need of the customers in those sections who have a

requirement of chocolate – pineapple cookies.

2. What – It includes the information that is required from the customers. From example

here it can be the consumption of cookies in a week or the flavors liked by majority in a

family, etc.

3. When – It includes the availability of the customers. A researcher must always keep in

mind the time to contact the respondents.

4. Where- It refers to the places where the respondents can be contacted. For instance,

shopping malls, homes, parking lots, etc.

5. Why – It takes into account the use of the information take from the respondents. Like

in this case, information is obtained in order to understand the potential market for

chocolate – pineapple cookies & the market size.

6. Way – The ways of obtaining information from the respondents. For example, it can be

telephonic interviews, observations, surveys, personal interviews, etc.

7. Express each type of error as an equation:

a. Total error – It is the variation between the true mean value in the population & the

obtained mean value obtained in the market research. It comprises of both random

sampling errors & non- random sampling errors. Non – random sampling errors arises

out of factors other than sampling. Such as bias, non response, wrong data analysis,

etc.

b. Random sampling error – It is the misrepresentation of the population. It is the

variation between the true mean value of the population & of the original sample.

Eg: The average monthly income of the target population is Rs. 22,000 but it is comes

out to be Rs. 19,500 for the original sample.

c. Nonresponse error – It arises when some of the respondents don’t respond. The

primary reason for the same can be refusals & not-at-home.

Eg: A researcher is introducing his product to the respondent but he straight away

bangs his door on researcher’s face.

d. Response error – Such errors arises when the respondents give inappropriate answers

or their answers are either not recorded correctly or are misanalysed.

Eg: A respondent is asked about his views about the product & he is telling why does

his friends don’t use it.

Step Three:

Choosing a Basic Method of Research

Survey: an interviewer and questionnaire

Observation: to monitor respondents’ actions without direct interaction

Experiments: to measure causality

Differentiate between exploratory & conclusive research:

Basis of differenceExploratory Research

design

Conclusive Research

Design

ObjectiveTo provide insights &

understanding

To test specific

hypothesis & examine

relationships

Characteristics

Information needed is

defined only loosely.

Research process is

flexible & unstructured.

Sample is small & non

representative.

Information needed is

clearly defined. Research

design is formal &

structured. Sample is

large & representative.

Findings Tentative Conclusive

Outcome

Generally followed by

further exploratory or

conclusive research.

Findings used as inputs

in decision making

Differences between qualitative research & quantitative research techniques

Basis Of differences

Qualitative

Research

Quantitative

Research

Objective

To gain a qualitative

understanding of the underlying

research & motivation

To quantify the data & generalize

the results from the sample to the

population of interest

SampleSmall number of non

representative cases

Large number of representative

cases

Data Collection Unstructured Structured

Data analysis Non statistical Statistical

Outcome Develop an initial understandingRecommend a final course of

action

Qualitative Techniques

- Focus group discussion

- In-depth interviews

- Observation

- Ethnography

Quantitative Techniques

- Face to face

- Telephone interviewing

- Self administered questionnaire (online, fax) and postal research

Step Four:

Selection of the Sampling Procedure

• Probability & nonprobability sampling

• Quota sampling

Main Points to consider.

- Accuracy of the findings from the total sample

- Sub-group analysis

- Coverage of the universe

- Prior knowledge

- Resource

Step Five:

Collection of the Data

• Marketing research field service

Starting procedure

1. Recruitment

2. Training

3. Selection

4. Field Work

5. Control

Three virtues of good questionnaire

- Being clear and unambiguous

- Simple and comfortable to respond to

- Relevant to the respondent

Sources of Data

Primary and Secondary

There are two main sources of data - primary and secondary. Primary research is

conducted from scratch. It is original and collected to solve the problem in hand.

Secondary research, also known as desk research, already exists since it has been

collected for other purposes.

We have given a general introduction to marketing research. Marketing research is a

huge topic area and has many processes, procedures, and terminologies that build

upon the points above.

Primary - Marketing Research.

Primary marketing research is collected for the first time. It is original and collected for a

specific purpose, or to solve a specific problem. It is expensive, and time consuming,

but is more focused than secondary research. There are many ways to conduct primary

research. We consider some of them:

1. Interviews 6. Diaries

2. Mystery shopping 7. Omnibus Studies

3. Focus groups

4. Projective techniques

5. Product tests

Interviews.

This is the technique most associated with marketing research. Interviews can be

telephone, face-to-face, or over the Internet.

Telephone Interview.

Telephone ownership is very common in developed countries. It is ideal for collecting

data from a geographically dispersed sample. The interviews tend to be very structured

and tend to lack depth. Telephone interviews are cheaper to conduct than face-to-face

interviews (on a per person basis).

Advantages of telephone interviews

Can be geographically spread

Can be set up and conducted relatively cheaply

Random samples can be selected

Cheaper than face-to-face interviews

Disadvantages of telephone interviews

Respondents can simply hang up

Interviews tend to be a lot shorter

Visual aids cannot be used

Researchers cannot behavior or body language

Face-to-face Interviews.

Face-to face interviews are conducted between a market researcher and a respondent.

Data is collected on a survey. Some surveys are very rigid or 'structured' and use

closed questions. Data is easily compared. Other face-to-face interviews are more 'in

depth,' and depend upon more open forms of questioning. The research will probe and

develop points of interest.

Advantages of face-to-face interviews

They allow more 'depth'

Physical prompts such as products and pictures can be used

Body language can emphasize responses

Respondents can be 'observed' at the same time

Disadvantages of face-to-face interviews

Interviews can be expensive

It can take a long period of time to arrange and conduct.

Some respondents will give biased responses when face-to-face with a

researcher.

The Internet

The Internet can be used in a number of ways to collect primary data. Visitors to sites

can be asked to complete electronic questionnaires. However responses will increase if

an incentive is offered such as a free newsletter, or free membership. Other important

data is collected when visitors sign up for membership.

Advantages of the Internet

Relatively inexpensive

Uses graphics and visual aids

Random samples can be selected

Visitors tend to be loyal to particular sites and are willing to give up time to

complete the forms

Disadvantages of the Internet

Only surveys current, not potential customers.

Needs knowledge of software to set up questionnaires and methods of

processing data

May deter visitors from your website.

Mail Survey

In many countries, the mail survey is the most appropriate way to gather primary data.

Lists are collated, or purchased, and a predesigned questionnaire is mailed to a sample

of respondents. Mail surveys do not tend to generate more than a 5-10% response rate.

However, a second mailing to prompt or remind respondents tends to improve response

rates. Mail surveys are less popular with the advent of technologies such as the Internet

and telephones, especially call centers.

Mystery Shopping

Companies will set up mystery shopping campaigns on an organizations behalf. Often

used in banking, retailing, travel, cafes and restaurants, and many other customer

focused organizations, mystery shoppers will enter, posing as real customers. They

collect data on customer service and the customer experience. Findings are reported

back to the commissioning organization. There are many issues surrounding the ethics

of such an approach to research.

Focus Groups.

Focus groups are made up from a number of selected respondents based together in

the same room. Highly experienced researchers work with the focus group to gather in

depth qualitative feedback. Groups tend to be made up from 10 to 18 participants.

Discussion, opinion, and beliefs are encouraged, and the research will probe into

specific areas that are of interest to the company commissioning the research.

Advantages of focus groups

Commissioning marketers often observe the group from behind a one-way

screen

Visual aids and tangible products can be circulated and opinions taken

All participants and the research interact

Areas of specific interest can be covered in greater depth

Disadvantages of focus groups

Highly experienced researchers are needed. The are rare.

Complex to organize

Can be very expensive in comparison to other methods

Projective techniques.

Projective techniques are borrowed from the field of psychology. They will generate

highly subjective qualitative data. There are many examples of such approaches

including: Inkblot tests - look for images in a series of inkblots Cartoons - complete the

'bubbles' on a cartoon series Sentence or story completion Word association - depends

on very quick (subconscious) responses to words Psychodrama - Imagine that you are

a product and describe what it is like to be operated, warn, or used.

Product tests.

Product tests are often completed as part of the 'test' marketing process. Products are

displayed in a mall of shopping center. Potential customers are asked to visit the store

and their purchase behavior is observed. Observers will contemplate how the product is

handled, how the packing is read, how much time the consumer spends with the

product, and so on.

Diaries.

Diaries are used by a number of specially recruited consumers. They are asked to

complete a diary that lists and records their purchasing behavior of a period of time

(weeks, months, or years). It demands a substantial commitment on the part of the

respondent. However, by collecting a series of diaries with a number of entries, the

researcher has a reasonable picture of purchasing behavior.

Omnibus Studies.

An omnibus study is where an organization purchases a single or a few questions on a

'hybrid' interview (either face-to-face or by telephone). The organization will be one of

many that simply want to a straightforward answer to a simple question. An omnibus

survey could include questions from companies in sectors as diverse as heath care and

tobacco. The research is far cheaper, and commit less time and effort than conducting

your own research.




Secondary - Marketing Research.

Secondary marketing research, or desk research, already exist in one form or another.

It is relatively cheap, and can be conducted quite quickly .However, it tends to have

been collected for reasons other than for the problem or objective at hand. So it may be

untargeted, and difficult to use to make comparisons (e.g. financial data gather on

Australian pensions will be different to data on Italian pensions). There are a number of

such sources available to the marketer, and the following list is by no means conclusive:

Trade associations

National and local press Industry magazines

National/international governments

Websites

Informal contacts

Trade directories

Published company accounts

Business libraries

Professional institutes and organisations

Omnibus surveys

Previously gathered marketing research

Census data

Public records




Step Six:

Preparation and Tabulation of Data

Data

is defined as any collections of facts

Data Processing

involves the conversion or reduction of information that one collects into a form

that permits statistical tabulation, ease of storage and access for future use any process

that uses a computer program to enter data and summarise, analyse or otherwise

convert data into usable information. The process may be automated and run on a

computer. It involves recording, analysing, sorting, summarising, calculating,

disseminating and storing data.

Data Processing Cycle

1. Input – the initial data are prepared in some convenient form for processing. The

form will be depend on the processing machine

2. Processing – the input data are changed, and usually combined with the other

information, to produce data in a more useful form.

3. Output – the result of the preceding processing steps are collected.

Three Basic Steps In Data Processing.

Input OutputProcessing

1. Classification or Categorization of Data

2. Coding of Raw Data

3. Tabulation of Data

Categorization of Data

Categorization

The partitioning or grouping of information according to certain principles or rules

which tell how to assign the subjects under study to groups and subgroups

The Five Rules in Categorization

1. Categories are set up according to the research problem

2. Categories are mutually exclusive and independent

3. Categories are exhaustive

4. Easy category is derived from one classification principle.

5. Any categorization scheme must be on one level of discourse.

Coding Of Raw Data

Raw data are usually transformed to codes which could e either alphabetical or

numerical.

Data Tabulation

Data Matrix

The final output of processed quantities information

Dummy Tables

These tables have all the features of real tables except for the absence of

statistical figures.

Step Seven:

Analyzing the Data

To interpret and draw conclusions

Data Preparation and Analysis

Data preparation includes the editing, coding, transcription, and verification of data.

Each questionnaire or observation form is inspected, or edited, and, if necessary,

corrected. Number or letter codes are assigned to represent each response to each

question in the questionnaire. The data from the questionnaires are transcribed or

keypunched on to magnetic tape, or disks or input directly into the computer.

Verification ensures that the data from the original questionnaires have been accurately

transcribed, while data analysis, guided by the plan of data analysis, gives meaning to

the data that have been collected. Univariate techniques are used for analyzing data

when there is a single measurement of each element or unit in the sample, or, if there

are several measurements of each element, each RCH variable is analyzed in isolation.

On the other hand, multivariate techniques are used for analyzing data when there are

two or more measurements on each element and the variables are analyzed

simultaneously.

- Questionnaire registration and editing

- Listing of open-ended responses and classification

- Coding and code transfer

- Data entry and entry verification/cleaning

- Development of analysis plan

- Program development as per the analysis plan

- Program running and report generation

Step Eight:

Preparing and Writing the Report

• Using the internet to disseminate reports

• Judging the quality of a report

Report Preparation and Presentation

The entire project should be documented in a written report which addresses the

specific research questions identified, describes the approach, the research design,

data collection, and data analysis procedures adopted, and presents the results and the

major findings. The findings should be presented in a comprehensible format so that

they can be readily used in the decision making process. In addition, an oral

presentation should be made to management using tables, figures, and graphs to

enhance clarity and impact.

For these reasons, interviews with experts are more useful in conducting marketing

research for industrial firms and for products of a technical nature, where it is relatively

easy to identify and approach the experts. This method is also helpful in situations

where little information is available from other sources, as in the case of radically new

products.

Expectations of Decision Makers From Marketing Researchers

1. Maintenance of client confidentiality

2. Honesty

3. Punctuality

4. Flexibility

5. Delivery of project specifications

6. Provision of high-quality output

7. Maintenance of high quality-control standards

8. Customer-orientation

9. Keeps the client informed

Good Research Management Motivates Decision-Makers To Use Research

Information

The determinants of whether a manager used research data:

(1) conformity to prior expectations

(2) clarity of presentation

(3) research quality

(4) political acceptability

Case Study

PHILIPS GoGear (Audio/Video Player & Audio Recorder)

Features include:

• Intuitive user interface

• Double action search key

• Fast data transfer

• Support wide range of music formats

Introduction

• MP3 players are considered to be a style statement

• Major players

– Philips

– Apple

– LG

– Sony

– Transcend

• Apple –Market leader

Market Research

Research Design

• Decision Maker’s problem

To increase the sales of PHILIPS GoGear MP3 players

Components of MR problem

• Identifying the target segment

• Identifying the pricing pattern

• Positioning of the product

• The features the people look for

• The major competitors

• Factors affecting buying decision

• Most effective medium of communication

Exploratory Research

- Questionnaires

- Expert Interviews

- Focus groups

- Internet and Technology magazines

Major findings

- The target segment – Students and working professionals

- Preference is given to branded MP3 players

- Importance of additional features

- Usage of music phones

- Owning MP3 players- statement of style

- Low awareness of Philips GoGear

- Lack after sales service

Descriptive Research

- Pre-test and questionnaire design

- Personal methods

- Online surveys

Findings

• Willingness of respondents depend on various factors

• Place and time influences the attitude of respondents

- Sample size of respondents- 197

- Sample size of dealer interview- 30

Data analysis-Findings

- Target segment –students and young working professionals

- Major competitors are Apple, Sony, and Samsung

- Primary use- Listening to music but respondents prefer add-on features

- -Mainly used while travelling or leisure time

- -MP3 players – not considered cool and trendy

- -Sound quality and battery life- most important features

Recommendations

- Setting up kiosks in shopping malls

- Setting up stalls and canopies in trade fares

- Pamphlets and catalogues with purchase of other products of Philips

- Distributing hand bills with news papers and magazines

- Sponsoring youth events

- More emphasize on after sales service

- Providing display shelves in electronic mega stores

- Working out an incentive plan for the dealer

- Preferably changing the name ‘GoGear’

My Learnings…

- Better insight to MR process

- Importance of a holistic perspective

- Importance of observational and exploratory research

- Magic of numbers

- Launch pad towards a marketing career

Documents

Marketing Research Process