Master of Business Administration - MBA Semester 3 MK0013 Market Research ASSIGNMENT- Set 1 (Marks 60) Note: Each Question

n carries 10 marks. Answer all the questions.

1. Explain the problems associated with marketing research. ANS: The various limitations of marketing research are: MR is not an Exact Science: Results obtained through marketing research are not very accurate compared to physical sciences. MR is carried in the open market place where there are so many variables acting upon the research settings. It is not possible to control as these can be done in a laboratory. If, for example, a company wants to measure the advertising effectiveness and conduct an experiment in certain markets, it assumes that conditions will remain the same, during the experimental period. If competitors change their strategy during this period, then the experimental results will be affected. Complex in Nature: MR is carried out on consumers/dealers/retailers who are human beings. Human beings have the tendency to behave artificially, when they know that they are being observed. Validity of the data collected, conclusions, observations might undergo a change. This aspect of human behaviour might distort MR results. Human beings are the centre for any MR study and hence complex in nature. Inexperienced Research Staff: Well trained and well directed personnel can alone improve the quality of research. In the absence of well experienced personnel, research is likely to be unreliable. Tactfulness is required to collect information. Lack of experience will pose constraints. Unfortunately availability of trained man power is limited. Limitation of Time: MR generally takes a long time to conduct. The time by which the results are presented, there may be a change in the market situation or competitors might enter the market, peoples tastes and preferences might change. The time gap significantly affects the implementation of results. Subjectivity: Subjectivity is an important limitation in MR. It is very difficult to verify the research results. Verification is the main characteristic of physical science, which is missing in MR. Also, it is not possible to repeat the same project on the same group of entities or respondents. Even if we do so, the results will be different. Time Frame: At times, the top management may hold certain pre-conceived opinion on the outcome. They may put pressure on the researcher to come out with a particular type of research report to support their belief. The management might thrust its opinion to influence research findings. Decision-Making: This is always influenced by various factors internal and external, to the organisation. The internal factors may ensure research is not taken seriously. The external factors could include inability to consider all factors influencing the study.

2. Explain the role of Marketing Research in decision-making process. Ans: Research aims to identify those aspects of the world we want to understand more clearly that the management of an industry or an organisation is involved in taking
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decisions about the development or expansion of the concern. No doubt the concern has to face many problems from time to time. The management has to overcome or solve these problems. These problems may be regarding the availability of resources, quality of production, costing, publicity or promotion, etc. For example, for the publicity of goods produced, the manufacturer or seller may take the help of TV, radio, newspapers or doorto-door promotion. Many such endless problems are there. In each of these decisionmaking problems, there are some common components. These are: Course of Action States of Nature (Events) Outcomes

Course of Action: Decision-making problems deal with the selection of a single act from a set of alternative acts. If two or more alternative courses of action occur in a problem, then making a decision is necessary to select only one course of action. In the above example of advertising goods produced, there are so many alternative courses of actions. The final choice of any one will depend on the pay-off (or money value) of each strategy under the circumstances. Let the acts or actions be symbolised by a 1, a2, a3, a4, ...........; then the totality of all these actions is known as action space denoted by A. For four actions a1, a2, a3, a4; A = action space = {a1, a2, a3} or A = {A1, A2, A3}. In a tree diagram the acts or actions are given after the initial fork as shown. As shown in Figure 1.1, acts may be also be represented in the following matrix form, i.e., either in row or column way

Figure 1.1 States of Nature (Events): If the outcome of some action (or act) is not known in advance, then that outcome is uncertain, but is vital for the choice of any act. When there are many possible outcomes (or states of nature) of an event, one cannot predict what will happen it is only in terms of probability that one may forecast. The various states of nature are outside a firm and, as such, not under their control, e.g., consumer demand, change of taste, improvement of technology, etc. These affect the pay-off and, hence, the choice of an act. A set of states of nature may be represented in any one of the following ways:
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S = {S1, S2, S3, ....... Sn} or E = {E1, E2, E3 .......En} or = {1, 2, 3,...........} For example, if a cosmetic product is marketed, it may be highly liked by customers (outcome 1) or it may not appeal at all (outcome 2 ), or it may satisfy only a small fraction, say 20% (outcome 3). So, = { 1, 2, 3,...........} In a tree diagram the places are text to acts. We may also get another act on the happening of an event as shown in Figure 1.2.

Figure 1.2 In matrix form they may be represented in either of the following two ways as shown in Figure 1.3.

Figure 1.3

Outcomes There is an outcome (or consequence) of the combination of each act with each possible state of nature. This outcome is also known as conditional value. In a tree diagram, outcomes are placed after events. In general, if there are m possible actions and n admissible states of nature, the consequences will be m n in number. It may be noted here that these consequences may be evaluated in several ways such as
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i) in terms of profit ii) in terms of cost iii) in terms of opportunity loss iv) utility Consequences of m of a matrix.

n in number are shown in Table 1.5 in centre cell in row and column Table 1.5: Consequences in Matrix Form

Here outcome O21 means 2nd row and 1st column and Oij means ith row and jth column and so on.

3. Describe consumer research process in detail. ANS: Consumer Research Process: The consumer research process is a set of operations which aids the researcher in systematic gathering, recording and analysis of data to help solve decision-making problems. The process provides the researcher with an orderly means to investigate problems: It is not a static and highly structured framework. Given the diversity of management problems and their corresponding information requirements, the sequence must be considered as topics of concern to the researcher rather than a strict step-by-step procedure to be followed in all cases Sequence of Steps in Consumer Research: Each consumer problem is different from the other and hence requires a special emphasis and different approach. Since every
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consumer research problem is unique in some ways the research procedure has to be typically customer-oriented. Nonetheless, there is a sequence of steps called the consumer research process that can be followed when designing the research project. Figure 2.1 shows the relationship among the stages in the research process. Formulate consumer research problem List out research objectives Determine research design Design data collection methods and forms Analyse and interpret the data Prepare the research report Figure 2.1: Stages in the Consumer Research Process

Formulate consumer research problem: One of the most valuable roles

consumer research can play is, helping to define the problem to be solved. Only when the problem is carefully and precisely defined can research be designed to provide pertinent information. Part of the process of problem definition includes specifying the objectives of the specific research project that might be undertaken.

List out research objectives: After identification of research problem, researcher

should make a list of research objectives which are considered for research purpose.

Determine research design: The sources of information for a study and the
research design go hand in hand. They both depend on how much is known about the problem. If relatively little is known about the phenomenon to be investigated, exploratory research will be warranted. If on the other hand, the problem is precisely and unambiguously formulated, descriptive or causal research is needed.

Design data collection method and forms: It begins by determining if the

information needed is already available as secondary data, either within the firm or from an outside source. If not, information will have to be generated by means of a surveyor in an experiment. While considering the sources of research information, it will be necessary to determine exactly how and by whom the information will be collected. Analyse and interpret data: First of all research data collection forms must be scanned to be sure that they are complete and consistent and that the instructions are followed. This process is called editing. Once the forms have been edited, they must be coded. Coding involves assigning numbers to each of the answers so that they may be analysed. The final step in analysing the data is tabulation. This refers to the orderly arrangement of data in a table or other summary format achieved by counting the frequency of responses to each question. It is also common to classify the data against other variables. Apart from these, statistical tests are also applied to analyse and interpret data. Prepare the research report: The research report is the document submitted to management that summarises the research results and conclusions. It is all that the research executives will see of the research effort and it becomes the standard by which that research is judged. Thus, it is imperative that the research report be clear and accurate. For it is the formalised presentation of the conclusions of the study.

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4. What is the importance of customer research? Ans: Consumer research is undertaken on a variety of issues. For example the M.B.A. Research Agency conducts periodical surveys of consumer behaviour. These surveys are classified under various groups and sub-groups. The most common consumer research studies relate to the determination of consumer characteristics, measurement of market potential and consumer motivation. In India, consumer research is not yet well developed as in the advanced countries. Some of the important reasons attributed for this condition include, the stage of Indias development, the lack of stiff competition and the scarcity of supply as a result of which the sellers do not have much difficulty in selling their goods and services. According to a 1994 survey, the most frequent use of consumer research in India is in the area of consumer buying behaviour. Other important applications of consumer research according to the survey are found in the fields of motivation, brand preference, brand attributes and customer satisfaction. But the success of consumer research depends upon the cooperation of the public. Unprofessional or unethical consumer research practices may seriously affect publics willingness to cooperate in research surveys. Characteristics of a Good Consumer Research: A good consumer research is characterised as follows:

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 Scientific method: Effective consumer research uses the principles of the

scientific method-careful observation formulation of hypotheses prediction and testing of consumer behaviour.

Research creativity: At its best consumer research develops innovative ways to

solve a problem related to consumer satisfaction.

Multiple method: Competent researchers can adopt various methods for solving a
problem. They also recognise the desirability of gathering information from multiple sources to give greater confidence.

Value and cost of information: Competent researchers show concern for

estimating the value of information against its cost. Value/cost helps the research department determine which research projects to conduct, which research designs to use and whether to gather more information after the initial results are available. Research costs are typically easy to quantify while the value is harder to anticipate. The value depends on the reliability and validity of the research findings and managements willingness to accept and act on its findings.

Ethical marketing: Most of the consumer research benefits both the sponsoring
company and its consumers. Through consumer research companies learn more about consumers needs and are able to supply more satisfying products and services. However, the misuse of marketing research can also harm or annoy consumers.

5. Describe data-driven MDSS in detail. Ans: In general, a data-driven MDSS emphasizes access to and manipulation of a time-series of internal company data and sometimes external and real-time data. Simple file systems accessed by query and retrieval tools provide the most elementary level of functionality. You would have noted that all enterprises which have been in operation for any period of time have a wealth of information. Nevertheless, this information may remain underutilised because it is compartmentalised, either in the form of an individual entrepreneur or in the functional departments of larger businesses. This makes it imperative for various organizations to maintain an efficient and adequate internal record system. Information is usually classified into various categories depending upon its nature so that there are, financial, production, manpower, marketing, stockholding and logistical data. Often the entrepreneur, or other personnel working in the functional departments holding unrecorded pieces of data, do not see how it could help decision makers in other functional areas. Similarly, decision makers can fail to appreciate how information from other functional areas might help them and therefore do not request it. The internal records that are of immediate value to marketing decisions are: orders received
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 stockholdings and sales invoices. These are just some of the internal records that marketing managers use, but even this small set of records is capable of generating a great deal of information. Below, is a list of some of the information that can be derived from sales invoices: Product type, size and pack type by territory Product type, size and pack type by type of account Product type, size and pack type by industry Product type, size and pack type by customer Average value and/or volume of sale by territory Average value and/or volume of sale by type of account Average value and/or volume of sale by industry Average value and/or volume of sale by sales person By comparing orders received with invoices an enterprise can establish the extent to which it is providing an acceptable level of customer service. In the same way, comparing stockholding records with orders received helps an enterprise ascertain whether its stocks are in line with current demand patterns. Since good quality data is important for every researcher, attention must be paid to getting the numbers right. Discuss the topic in this context.

6. List the functions of marketing information system. Ans: A Marketing Information System (MkIS) consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely and accurate information to marketing decision makers. MkIS distributes information to managers in the right form and at the right time to help them make better marketing decisions. Figure 1 illustrates an MkIS.

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Figure 1: Marketing Information System Functions of marketing information systems Activities or functions of marketing information systems are: Assessing Information Needs Developing Information Internal records Procedures to gather and analyze information for marketing decision-making. Information Analysis Distributing Information Marketing information systems integrate the information flow required by many marketing activities. Marketing information systems provide information for:

Internet/intranet websites and services make an interactive marketing process

possible where customers can become partners in creating, marketing, purchasing, and improving products and services. Sales force automation systems use mobile computing and Internet technologies to automate many information processing activities for sales support and management. Other marketing systems assist marketing managers in product planning, pricing, and other product management decisions, advertising and sales promotion strategies, and market research and forecasting. Interactive marketing The explosive growth of internet technologies has had a major impact on the marketing function. The term interactive marketing has been coined to describe a type of marketing that is based on using the internet, intranets, and extranets to establish two-way interaction between a business and its customers or potential customers. The goal of interactive marketing is to enable a company to profitably use those networks to attract and keep customers who will become partners with the business in creating, purchasing, and improving products and services. Customers are not passive participants, but are actively engaged in a networkenabled proactive and interactive process. Encourages customers to become involved in product development, delivery, and service issues. Enabled by various Internet technologies, including chat and discussion groups, web forms and questionnaires, and e-mail correspondence. Expected outcomes are a rich mixture of vital marketing data, new product ideas, volume sales and strong customer relationships. Sales force automation Increasingly, computers and networks are providing the basis for sales force automation. In many companies, the sales force is being outfitted with notebook computers that connect them to Web browsers, and sales contact management software that connect them to marketing websites on the Internet, extranets, and their company intranets. Characteristics of sales force automation include: Increases the personal productivity of salespeople.

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 Dramatically speeds up the capture and analysis of sales data from the field to marketing managers at company headquarters. Allows marketing and sales management to improve the delivery of information and the support they provide to their salespeople. Many companies view sales force automation as a way to gain a strategic advantage in sales productivity and marketing responsiveness. Customer Relationship Management (CRM) By keeping the customer in the centre of all the processes, a state of the art CRM will fulfil several goals. First, it should enhance customer experience by delivering a personalized service no matter which interaction channel is chosen. Second, it will assist the employees to bring a better service, providing them with a broad and consolidated view on customer profile and relationship. Third, it helps the management to capture and analyze customer behavior, to provide metrics for customer segmentation and further supplies input for Decision Support Systems. Customer care and handling processes are systematized and marketing budgets can be optimally allocated to target specific groups. On the long term CRM will allow to maximize the customer life time value of each relationship where relationship is not the sum of punctual sales of poorly related products anymore but turns to the delivery of a consistent value proposition accompanying the customer in every stage of his life. **************************************************************

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