Marketing Research

Marketing Research

• The success of any business venture lies in the existence of markets.
• Unless the entrepreneur identifies the existing needs or potential needs of the market he cannot translate these needs into products/services that would be acceptable by the market.
• In the past, the intuitive ability of the entrepreneur was a good enough method for understanding the needs of the consumer.
• Marketing research is the process of collecting information on any facts relevant to market.
• Marketing research is the systematic collection of information, its analysis and interpretation to strategize some relevant business decision.
• Marketing research is the systematic gathering, recording and analysing of data about marketing problems to facilitated decision-making.
• The marketing research is a tool of marketing information system which has become an important function of management.

Definitions

• American Marketing Association (AMA) – Defines marketing research as the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services.
• Philip Kotler – Marketing research is the systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in the marketing of goods and services.
• Richard D. Crisp – Defines Market Research as the systematic objectives and exhaustible search for the study of facts relevant to any problem in the field of marketing.
• Clark and Clark – Defines Marketing Research is the careful and objective study of product design, markets and such transfer activities as physical distribution, warehousing, advertising and sales management.
• Marketing management needs essential information regarding products, prices, market conditions of demand and supply, consumer needs and desires, selling methods, physical flow of goods, competitive decisions, external marketing environment and other factors of marketing management.
• Marketing research has proved an essential tool to meet all the needs of marketing management.
• Marketing research therefore, is the scientific and controlled process of gathering and analysis of marketing information to meet the needs of marketing management. 

Salient features of Market Research

1. Market Research consists of fact findings based on data 
2. Systematic collection of data
3. Market Research is objective
4. Market Research converts data into information
5. Market Research is a continuous process
6. Market Research draws heavily from different disciplines – multi-disciplinary subject
7. Market Research is only a tool to the Decision-making

1. MR consists of fact finding based on data

• These data relate to any area of marketing function
• From a study of the market place to a study of buyer behaviour.
• They cover an expanse of products, prices, distribution & promotion.
• The collection data analyzing data interpretation - for the use of the decision-makers.

2. Systematic collection of data

• The data are collected by a systematic procedure
• Firstly, identification of a problem – for example sales declining - poor advertising, prices, competition.
• Formulation of objectives
• Sample selection – collection of data
• Analyzing interpretation presentation in the form of report

3. Marketing Research is objective

• We do not pre-suppose things
• We just put forth a hypothesis collect data and either accept the hypothesis or reject it
• The research is never carried out to support a pre-determined result.

4. Market Research converts data into information

• Data as such are not meaningful
• But on processing by systematic record, analysis and interpretation.
• They become useful information for the decision-maker.

5. Market Research is a continuous process

• Since marketing activities is a continuous one where there are changes in product mix, promotion mix, distribution channels & prices.
• Marketing Research also is carried out on a continuous basis.
• But in the light of changed environment the data also changes and so continuous monitoring is called for.

6. Market Research draws heavily from different disciplines

• Market Research draws heavily from Economics, Psychology, Sociology, Statistics, Operation Research, Computer Science and such other subjects.
• Market Research is a multi-dimensional cross – disciplinary subject.

7. MR is only a tool to the Decision-maker

• Market Research does not replace decision-making process
• Market Research only serves as an input to the decision-making process.
• Market Research is at best a tool that guides the decision-makers.

Objectives of Marketing Research

1. Help in the selection of right course of action.
2. Identify various opportunities or problems.
3. Evaluate the need of the customers.
4. Analyze the probable market for the product
5. Briefly study the competitors and the substitute products.
6. Identify the best sources of distributing the products.
7. Estimate future sales and expected share of the market.
8. Analyse the effectiveness of advertisement
9. Assess the sales representative efficiency.

Marketing Research Process

• The marketing research process involves identification of problems, research design, collection of data, sample design, analysis of data and interpretation of data for reporting the conclusions to solve specific problems.
• All research problems require their own special emphases and approaches.
• Since every marketing research problem is unique in some ways, the research process is typically tailored.
• However, there are some basic steps to be followed in each marketing research process.
• Each research process must be carefully planned, effectively coordinated and integrated.
• There are seven research steps involved in almost all types of market research
• Identification of research problems research design selection of data sample design analysis and interpretation report writing (preparation) Recommendation
• If all the steps are taken in a systematic manner the research conducted becomes quite effective.

Steps in Marketing Research

The marketing research process is carried out according to a designated series of steps which are required – chronological order

Step I Formulation of Problem

Step II Research Design

Step III Data collection

Step IV Sample Design

Step V Analysis and Interpretation

Step VI Report Writing

Step VII Recommendation

1. Identification of Problem

• In the first step in MR process is to define the problem chosen for investigation.
• This step is a very significant one and a problem well defined is half solved.
• On the other hand, if the problem is defined vaguely, a wrong problem is defined – research results may be completely useless for the management.
• When the problem is carefully and precisely defined, the research can provide a pertinent solution.
• The problem formation should be neither too broad nor too narrow.

2. Research Design

• Once the problem is defined, the next step, that is the research design, becomes easier.
• A research project conducted scientifically has a specific framework of research from the problems identification to preparation of the research report.
• It is a Master Plan or blue print according to which the research is to be conducted.
• Research can be conducted without a research design but it may not solve the problems.
• The research design specifies the methods for data collection and data analysis.
• The basic objective of research cannot be attained without proper research design – it leads to loss of money, energy and time.
• The success of good marketing research project is depends on good/sound research design.
• A good research design has the characteristics – problem formulation, specific methods of data collection and analysis, time required for research project, estimate of expenses to be incurred.
• The research design specifies the methods for data collection and data analysis
• The researcher specifically pin points that to carry out research properly

3. Selection of Sources of Data

• There are two types of data – primary and secondary data – fresh data and existed data
• Primary data - are original data from which the researcher directly collects data that have not been previously collected.
• Collection of data directly - on brand awareness, brand preferences, brand loyalty and other aspects of consumer behaviour.
• Primary data are directly collected by the researcher from their original sources.
• Secondary data means data which have be already been collected and analysed by some one else.
• Secondary data may either be published data or unpublished data.

4. Sample Design

• Sampling may be defined as the selection of some part of an aggregate or totality on the basis of judgment of aggregate.
• In other words, it is the process of obtaining information about an entire population by examining only a part of it.
• In most of the research work and surveys, the usual approach happens to be make generalizations or to draw inferences based on samples about the parameters of population.
• The researcher quite often selects only a few items from the universe for his study purposes.
• All this is done on the assumption that the sample data will enable him to estimate the population parameters.
• Sample should be truly representative of population characteristics without any bias.
• For example, we test the warmth of our coffee by taking a slip.
• In marketing research too, we try to draw conclusions on the basis of a sample for the whole group known as universe.

A. Simple Random Sampling

• Simple random sampling is a sampling technique in which each element of the population get equal chance of being selected.
• For example – sampling frame of 300 population each element theoretically has 1/300th chance of being selected.
• In a population of 300, each element has 1/300th chance of being selected.
• In a population of 1000, each element has 1/1000th chance of being selected.

B. Systematic sampling - chance

• In this case the sample numbers are chosen in a systematic manner from the entire population.
• Each member has a known chance of being selected but not necessarily equal one.
• We want to select a sample of 250 from a population of 2500 employee one out of every 10 since ratio of sample size to population size as show below

N 2500
n 250

C. Stratified Random Sampling

• A stratified random sampling is used when the researcher is particularly interested in certain specific categories within the total population.
• The population is divided into strata on the basis of measurable characteristics of its member – age, income and education.
• Stratified sampling is usually used when a large variation exists within a population and the researcher has some prior knowledge about natural subgroups. D. Cluster Sampling
• In cluster sampling, the population is first divided into clusters (sub-groups) that are convenient and economical for sampling.
• Next, clusters (sub-groups) are selected at random or systematic method.
• Finally, some of the times in the selected cluster are taken at random or by systematic method to make up the sample.

A cluster sample is useful in two situations –

1. When there is incomplete data on the composition of the population.
2. When it is desirable to save time and costs by limiting the study specific geographical areas.

Non Probability sampling

• In non-probability sampling, the chance of any particular unit in the population being selected is unknown.
• Since randomness is not involved in the selection process, an estimate of the sampling error cannot be made.

There are three types of non-probability sampling –
1.Judgment Sampling
2.Convenience Sampling and
3.Quota Sampling

A. Judgment Sampling

• Judgment sampling method in which the sample items are selected by using a researcher’s personal judgment.
• It is usually in expensive to implement and takes little time to administers.

B. Convenience Sampling

• Sometimes when researchers want to obtain information, there is little time or money available to perform an elaborate study.
• In these cases, researchers may do convenience sampling selection.
• In this method, the same units are chosen primarily on the basis of the convenience to the investigator.

C. Quota Sampling
In quota sampling method is similar to stratified sampling where the population is divided on the basis of characteristics of population – age, income, race, gender and so on.

5. Analysis and Interpretation

• The raw and crude data is collected from the field may not be useful.
• It should be analysed but before analysis it should be edited, coded and tabulated.
• The types of statistical tests to be employed for the analysis and interpretation are edited, coded and tabulated.
• The types of statistical tests to be employed for analysis and interpretations and dependent upon the methods of data collection. 
• The data analysis can be conducted by using simple statistical tools – percentages, averages and measures of dispersion.
• Alternatively, the collected data may be analysed by using diagrams, graphs, charts, pictures etc.
• Data may be cross-tabulated to produce useful relationships among the variables involved.
• Various statistical tests – t, F, Z, X2 etc.
• The most complicated and sophisticate analysis uses – multiple-regression analysis, multiple correlation analysis, discriminate analysis, factor analysis, cluster analysis etc
• The conclusion, summary and recommendations of research are based on the statistical analysis. 6. Report Writing
• After the collected data is analysed and interpreted, the job of marketing researcher is to present research results in the form of systematically typed printed report.
• A specifically designed format must be used for research report preparation and result presentation. 7. Recommendation Follow up
• Research follow up is essential for the validity of marketing research
• The validity appropriateness, acceptability and control are the essential factors of recommendation follow up. 
• Control requires some check on various aspects such as time, cost, quality of work and so on.
• The marketing researcher should audit its performance validity, meaning the correctness of various aspects of the research process.
• Errors should be prevented to the greatest possible extent.
• The findings should be derived as per the objective.
• The findings should be acceptable to the executives