Introduction to Marketing Research

Introduction Marketing research in a laymans language is the research done to solve marketing problems. Marketing research as a support in marketing decision making at the strategic and operational level is getting stronger in sync with the competition, changes, business models and process innovation across companies in last few decades. However, a lot of small organizations still dont indulge in any sort of formal research and depend on their experience and gut feeling for most of their decisions.

Objectives To understand the meaning of marketing research To appreciate the need for research services To understand the difference between marketing and other types of research To learn the process of conducting marketing research study To appreciate the need to know about when to conduct marketing research

Meaning of Marketing Research As described in the introduction, the objective of marketing research is to provide solutions to marketing problems. However, this requires following a logical and planned approach. A series of steps are required, which are interrelated and interdependent, to determine the truth or facts relevant to a question at hand. Therefore, marketing research can also be described as a systematic process conducted to better understand or solve a marketing problem. The American Marketing Association formally defines Marketing Research is the

function that links the consumer, customer & public to the marketing through informationinformation used to identify & define marketing opportunities and problems, generate, refine & evaluate marketing actions, monitor marketing performance, and improve understanding of marketing as a process. Marketing Research specifies the information required to address these issues , designs the method for collecting information, manages and implements the data collection process, analyses the results and communicate the findings and their implications.

Some of the points of this definition are worth elaboration. There may be information gap between the research process stakeholders like customers, employees, suppliers,

environmentalists, media, government & general public. For example a consumer durables company based in India got a marketing research done by the authors. The authors were asked to assess the perception gap with regard to the image of the company among its targeted customers and its own managers. The managers thought that launch of new products by the company have projected their image as a new generation company. The marketing research conducted revealed that the company was considered by the young generation as an old mind set company more in sync with the generation of their parents or grandparents. This helped company to take measures like inviting the current generation hires in all board meetings as special invitees. They also associated themselves with IPL cricket tournament 2010 to get closer to the younger generation. So this information gap can be filled by having research. The above example related to a marketing problem but there can be opportunities in the market. In Economic Times dated 135-2010, an article titled Hotels put a premium on desi travelers read that most Indian hotels like Taj, Oberoi, Leela, Anand etc. are launching special schemes like discounted tariffs and free deals to woo desi travelers which means Indian travelers consuming hospitality services in India. This was based on the research findings that domestic travelers helped the hotel industry report a 8% jump in occupancy despite a drop in foreign tourist inflow in the fiscal year ended March 2010. So the growth in Indian tourist numbers is seen by the hotel industry as an opportunity and they are trying to tap it. However, both problem & opportunity will be used interchangeably in this course material.

Difference between Marketing Research and Market Research Both these terms marketing research and market research are used many times interchangeably. However, it is important to decipher the jargon in such cases with the help of common usage and understanding of such terms among the professional circles. Marketing is one of the functional areas in management. Other areas which the students will be familiar with will be Finance, Human Resources, Information Technology, Operations Research etc. Marketing research deals with research pertaining to marketing problems. However, if the organization is doing a research in the aspects directly linked to the financial decisions of the company then it may be termed as financial research. Marketing research covers all aspects of marketing related

decisions which may concern one or several markets. But if the research is carried out specific to a market or research is conducted on any aspect related to that specific market it will be called market research. Hence marketing research is a broader term encompassing market research.

Relationship of Marketing Research with other types of functional research Various functional areas in an organization and their processes are interdependent and interrelated. They have to work in coordination with each other to accomplish business objectives. However, the crucial thing for business success is customer satisfaction and delight. Marketing research deals with customers and therefore it is often the first step. Suppose a slump in sales led a marketing research initiative which revealed that the product has deficiency in features desired by targeted customers. Now, it will require research by operations to overcome the product related issues in the manufacturing or design departments. So, various researches are interlinked because various departments are interlinked too.

Classification of Marketing Research Various authors have classified research in different ways to ease learner understanding which includes categorization into s problem identification & problem solving research. The treatment in this material is taken to a level below so that the classification is done according to the 7 Ps of marketing i.e. product, price, place, promotion, process, physical evidence and people which are the customer focused chords synchronized by a marketing decision maker.

To elucidate the above mentioned approach to classification, a FMCG Company investigated reasons for sales performance after it test marketed a new cosmetic cream with a different formulation. It used water instead of chemical as the base. Some of the consumers gave a remark that the cream was thinner and more than required quantity comes out when squeezed. The reason may be that the cream turns thinner if water is used as base instead of oil. The first time customer not being aware of this fact applied usual force to squeeze out cream and as a result of which more than the required cream comes out of the tube. Also, some people perceived the cream less effective because it is relatively thinner. The first problem is a product problem which can be improvised by either increasing the thickness of the cream or changing the tube so

that lesser cream comes out with larger force. However, when people believe that the cream is ineffective because of its characteristic then it can be both a product as well as a promotion problem which can be improvised by either changing the product or changing the perception of the consumer or both. Likewise, host of other problems may occur in the domain of marketing which demands specific type of research marketing research. For example Product Research: Test Concept, Product attributes Test Marketing and Consumers response to product changes Pricing: Price elasticity of customers, Perceived price, Responses to price change and determine the optional price Promotional Research: Optimal Promotional budget, allocating budget to different mediums, Evaluation Promotional effectiveness and testing creative advertisements Channel Research: Type of distribution, No. of distributors, Evaluating distributors, Area

coverage, Channel margins and Channels conflicts The extended marketing mix is required in case of services:Physical evidence: The ambience of the outlet and the physical layout/ design of an outlet Process: Determining process effectiveness, finding bottlenecks in the process and Improvising process for customers People: Determining peoples productivity, settling Objective targets and Defining

responsibilities in training people

The Role of Marketing Research in Decision Making The senior executives in the marketing function are involved in segmenting targeting and positioning of their brands (STP). However, the middle and lower executives are supposed to execute the marketing programs. The executives require information to carry out their decision making with less risk of failure. The marketing research helps the manager in providing this information after careful assessment of the situation/environment variables. The marketing managers operate in an environment which is fast changing. Some factors like economy, government laws, cultural factors etc. are not much in control of the marketing managers however marketing mix variables like product; price, place and promotion are often controllable by marketing managers. Marketing Researchers job therefore, is to help decision makers by

using controllable variables and adjusting best to the opportunities / threats posed by Macro factors to satisfy the stakeholders.

Business Environment (macro Factors) Marketing Decsion Variables Stakeholders & Decision Makers

Marketing Research process

The Marketing Research Process The marketing research process consists of six steps. Step 1: Problem Definition The first step in any marketing and the important step in research process is to define the problem. Young researchers, often make a mistake of not defining the problem correctly. Many times fresh researchers put lot of questions in the questionnaire without relevance to the problem at hand. For example in an executive development programme for a executives of a Knowledge Process Outsourcing company conducted in one of the business schools in Delhi, the author of this material was the instructor. The participants were asked to discuss a case around market concerns of Banking Company. The young executives among the participants were more comfortable in using automated analytical tools like SPSS and showed less appreciation for problem definition whereas the senior executives demonstrated sufficient appreciation for problem understanding and asked relevant questions and define the research problem at hand.

This is the most crucial aspect of research because all further steps depend on this. To understanding the marketing problem is to understand the decision makers

perspective and their objectives. This leads to insight about customers in focus. In a marketing research study by a freelance researcher with Dainik Jagran, a regional daily, in Kanpur City of

Uttar Pradesh India , the marketing manager was interested to know whether increasing the content scope to include results of different competitive/ entrance tests in its employment supplement Nayee Rahein( which means New Tracks) can scale up the circulation of the paper. The researcher carried out a comaparative study of the supplement with the competing employment supplements like Ascent of The Times of India, a national daily. The process further leads to understanding its target customers and segments its caters. Step 2: Development of an approach to the problem Once the problem is clearly defined, the researcher needs to develop the objectives, sub objectives, theoretical framework, analytical models, research questions which emanate from problem and hypothesis formulation. As mentioned earlier under Classification of Marketing Research in this chapter, again the example of cosmetic cream with water base instead of oil base is taken to elaborate the development of an approach. Readers will recall that the problem identified by the company was the negative perception about the cream. The objectives for carrying out research to solve this problem can be: To know the importance of thickness of cream in buying decision process What is the current perception of this cream vis--vis competing products To know the reasons of the current perception

We can also make hypothesis and test them like: 1. Our cream is considered less effective than the market leader. 2. The perception of less effectiveness emanates from the lower thickness of the cream. 3. People are aware that our cream has water as base and not any harmful chemicals/oils. We can develop a graphical model on these lines like Creams less thickness Perception of less effectiveness

TheFewer Sales model indicates that the cream is less thick than its competing creams. This causes the perception of it being less effective. This leads to lesser sales. Recall that the cream is a new

entrant in the market and we have used a lot of variables like sales etc., however these objectives and hypothesis can only be developed after the company has done some pilot study. So some data is available on the basis of which these hypothesis and objectives are formulated. The approach to the problem makes the problem better understood. It helps the researcher plan the research so that the research problems identified can be solved and the objectives can be achieved. The graphical approach also makes it easy for the readers to understand what the researcher is trying to do.

Step 3: Deciding a Research Design A research design is the blueprint of research. It is the entire planning of how research will be conducted. Firstly, the research design should be decided i.e. whether the research is exploratory, descriptive or causal. This decision depends on the kind of research problem at hand. Next, the researcher should know what information will be needed to solve the research questions & hypothesis developed in step 2. Other decisions include the method and instrument used for data collection. Chapter three deals with research design in detail.

Step 4: Fieldwork or Data Collection In marketing research, data collection is a very critical and tiresome process. Data should be collected from the target population identified in previous step. The researcher may collect the data himself or he/she may outsource the work to some outside research agency. However, when the researcher outsources the work, he/she needs to take care that the process is done as per the requirements. The data can be collected by survey, observation, experiments etc. but the errors can reap in at this stage. The objective of the research therefore, at this step is to minimize the errors, both sampling and non-sampling errors.

Step 5: Data Preparation and analysis After the data has been collected, it needs to be cleaned for any errors or erroneous responses. this stage is called data preparation and it involves data entry into software packages like SPSS, SAS, Minitab, excel etc. for analysis. The data needs to be entered in a particular way for problem analysis. Missing values also needs to be treated. After all this, appropriate tests need to be carried out to answer the research questions and test the hypothesis.

Step 6:Report Preparation A standard report format should be followed to prepare the report and present the findings. At times, the researcher is asked to give an oral presentation. The presentation should be made keeping in mind the requirements of the management. It is often advisable to keep it simple and audience friendly. A practical problem encountered by many MBA students in report preparation is that the company where they worked may not give any importance to the report or report structure. Often a large chunk of students are asked to do selling and they think about report preparation only after the completion of summer training. Then they often find it very difficult to find data or prepare any worthwhile report. However, understanding the process of marketing in a logical manner and improvising it can also be considered as marketing research. For example, suppose one of the students doing summer training in a leading insurance company as is told to sell insurance policies. In order to sell properly, the trainee requires understanding of the consumer needs. He can prepare a questionnaire for this. After collecting data through questionnaire (which he can do simultaneously with selling), he needs to analyze. Some interesting facts may come out of the study which may be useful to the insurance industry. It might be that people India may not be buying insurance for actually getting ensured. They might be buying policies for tax saving or investment. Another finding could be the application f the human life cycle concept in insurance. The kind of policies purchased by an individual may be associated with the life cycle stage he is. The findings thus make the process of marketing better understood and if used well can enhance the selling effectiveness of a salesman.

The Decision to Conduct MR Although most firms understand the importance of having the right information before taking a decision they often do not go for external agencies & expect their MIS department to fulfill that role. This is truer in the case of smaller firms with lesser resources. Time and money are two very important resources often deciding the scope of MR in small firms. However, Marketing Research firms, if able to prove that the information provided by them at a particular cost will benefit the organization more than that cost, they have a sound logic to be in business. A lot of firms, now a days employ MBA students as summer trainees to do a research for them. It often provides the companies with a cheap option as compared to marketing research firms but the

quality of such a project is often an issue. It would be a win win situation for both the students and the company if quality of summer projects becomes better. The companys should try to get serious work done from MBA students. It will make them learn the various marketing decisions making them much better and improvise their understanding of marketing process. Throughout this book, examples of marketing research projects undertaken by MBA students will be quoted. Self Study Questions 1. Define marketing research? How is it different from market research? 2. What is the relationship of marketing with other functional research? Define a problem that will require marketing research as well as at least one more functional research? 3. What are the various classifications of marketing research? Give an example each of the various classifications? 4. Explain the role of marketing research in decision making in an organization? 5. What are the various steps of marketing research process? Explain it with an example? 6. What should be the criteria of deciding whether a company should go for Marketing research or not? 7. In spite of the best efforts of marketing research firms, many organizations dont seek professional marketing research before taking decisions? Do you agree with this statement? What according to you may be the reasons if you agree with the statement? References & Suggested Further Reading 1. Anderson, L. McTier (1994). Marketing Science: Wheres the beef? Business Horizons, 37 (1), 8 16. 2. Gibson, Lawrence D. (2000). Quo Vadis, Marketing Research. Marketing Research, 12 (1), 36 41. 3. Malhotra, Naresh (2009), Marketing Research, Pearson Education. 4. Neal, William D. (2002). Getting Serious about Marketing Research. Marketing Research, 14 (2), 24 28. 5. Thomas, Jerry W. (5.12.1997). How, when and why to do market research. Nations Restaurant News, 31 (19), 84 86.