Concept of Marketing Research

Unit 1
 Marketing Research
The American Marketing Association (AMA) redefined
Marketing Research as:

function which 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
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
Definition of Marketing Research
Marketing research is the systematic and objective

identification
collection
analysis
dissemination
and use of information

for the purpose of improving decision making related to the

identification and
solution of problems and opportunities in marketing.
 Market Research

Specifies the information necessary to address the

issues

Manages and implements the data collection process

Analyze the results

Communicates the findings and their implications

 Classification of Research
Basic research
Applied research

Basis research is a fundamental or pure research which

focuses more on fundamental questions and not to the
problems with immediate commercial problems.

Applied research is decisional research which gives

specific outcomes and is prompted by commercial
considerations. Applied research is divided into two
categories
Problem identification research
Problem solving research
 Marketing Research

Problem Problem Solving

Identification Research Research

Market Potential Research

Market Share Research
Market Characteristics Research
Sales Analysis Research
Forecasting Research
Business Trends Research
Segmentation Research
Product Research
Promotion Research
Distribution Research
 When MR is unnecessary?
Cost of research is more
When respondents does not remember the
information.
Information is very personal
Difficult to communicate emotions and
sensations (difference between taste of two
types of tea)
Product having very short life cycle
 Objectives of Marketing Research
Academic objectives : These objectives could be to gain
awareness about a phenomenon or to achieve new insights
into it.
The academic object of research is the acquisition of knowledge
& it is the thirst for knowledge coupled with curiosity that has
been the guiding force behind a rich variety of research work.

Utilitarian objectives : to understand marketing culture,

environment & marketing decision process & thereby gain
a greater measure of marketing control.
It may be used to determine the frequency with which a certain
thing occurs or with which it is associated with something else.
It helps in testing a hypothesis or a casual relationship between
variables to determine the cause & effect impacts.
It helps in providing information regarding manufacturers,
retailers, suppliers of all kinds of services.
 Need for Marketing Research
Determining the viability of a new market for
your company to enter.
Estimating market size/share/adoption rate
for investment or business planning.
Identifying new product/service opportunities
and value-added offerings.
Risk management - identifying what risks pose
the greatest threat to your business.
 Need for Marketing Research
Understanding what customers expect of you
and how well you are delivering.
Root cause analysis for lost business or
customer defections.
Identifying your most profitable customer
segments and how to protect them.
Developing the right price points/identifying
bundling opportunities.
SWOT intelligence on competitors to plan
business strategies/identify M&A scenarios.
 Nature of MR
MR- As an Economic Resource
MR- As a System of Authority
MR- As a Function of Marketing Management
MR- As a Teamwork or Group Effort
MR- As an Art or a Science
MR- As a Profession
 Scope of MR
Product research
Segmentation research
Promotional research
Pricing research
Distribution research
Sales research
Customer research
 PRODUCT RESEARCH

Test concept
Determine optimal product design
Package tests
Product modification
Brand positioning and repositioning
Test marketing
 SEGMENTATION 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
 PROMOTIONAL RESEARCH

Optimal promotional budget

Sales promotion relationship
Optimal promotional mix
Media decisions
Creative advertising testing
Evaluation of advertising effectiveness
Claim substantiation (validation)
 PRICING RESEARCH

Pricing policies
Importance of price in brand selection
Product line pricing
Price elasticity of demand
Initiating and responding to price changes
 DISTRIBUTION RESEARCH

Types of distribution
Attitudes of channel members
Intensity of wholesale & resale coverage
Channel margins
Location of retail and wholesale outlets
 Sales Research
Selling activities of the firm
Various sales outlets and territories
Position in the market through sales research
Effectiveness of sales force
Identifying factors to improve sales force
 Customer Research
Buyer behavior
Sociological, economic and psychological factors
that influence customer decisions.
Customer level of satisfaction
Attitudinal studies
 The Role of Marketing Research
Customer Groups
Consumers
Employees
Shareholders
Suppliers Uncontrollable
Controllable Environmental
Marketing Factors
Variables
Marketing Economy
Product
Research Technology
Pricing
Laws &
Promotion Regulations
Distribution Social & Cultural
Marketing Factors
Assessing Providing
Information Information Decision Political Factors
Needs Making

Marketing Managers
Market Segmentation
Target Market Selection
Marketing Programs
Performance & Control
 LIMITATIONS OF MR
Marketing Research (MR) is not an exact science though it
uses the techniques of science. Thus, the results and
conclusions drawn upon by using MR are not very accurate.

The results of MR are very vague as MR is carried out on

consumers, suppliers, intermediaries, etc. who are humans.
Humans have a tendency to behave artificially when they
know that they are being observed. Thus, the consumers
and respondents upon whom the research is carried
behave artificially when they are aware that their attitudes,
beliefs, views, etc are being observed.

MR is not a complete solution to any marketing issue as

there are many dominant variables between research
conclusions and market response.
 LIMITATIONS OF MR
Many business executives and researchers have ambiguity
about the research problem and its objectives. They have
limited experience of the notion of the decision-making
process. This leads to carelessness in research and
researchers are not able to do anything real.

There is less interaction between the MR department and

the main research executives. The research department is
in segregation. This all makes research ineffective.

MR faces time constraint. The firms are required to

maintain a balance between the requirement for having a
broader perspective of customer needs and the need for
quick decision making so as to have competitive advantage.
 LIMITATIONS OF MR
Huge cost is involved in MR as collection and processing of
data can be costly.

MR is not free from bias. The research conclusions cannot

be verified. The reproduction of the same project on the
same class of respondents give different research results.

Inappropriate training to researchers can lead to

misapprehension of questions to be asked for data
collection.

MR is conducted in open marketplace where numerous

variables act on research settings
 Users of Marketing Research
External Clients
Vendors
Franchisees

Internal Clients

New product development, pricing

Top Managements Use of Research
Other Users of Marketing Research
 Marketing Research Customers

Users or Customers
of Marketing Research

External Internal

Company
Franchisees Marketing Other Senior
Vendors Dept. Dept. Mgmt.

Advertising New
Brand Pricing Product Manufac- H.R.
Logistics Sales and Product Finance Legal
ManagersCommitteeEngineers turing Mgmt.
Promotion Dev.
 Users of MR
Following are the major users of marketing
information:
Consumer Goods Manufacturers
Industrial Goods Manufacturers
Market Intermediaries
Consumer Services
Media and Business Services
Farmers Rural Markets
Non-Business Users
Governmental Organizations
Miscellaneous Users
 MARKETING RESEARCH IN
INDIA
Despite increase in marketing research India,
there are some inherent constraints in its use.
 Constraints in Using Marketing
Research in India
Heterogeneity of the country with the vast
geographical area
Non-availability of relevant secondary data.
Firms believe that marketing research is too
expensive
Relationship between the researcher and
management may also act as a constraint
Firms think that it is not necessary
 Outsourcing MR Activity
In this MR is going to have a major opportunity. It has
been estimated that the global MR industry is likely to
sponsor 10 to 15% of its business (about $ 20 billion) to
markets like India.

Some foreign experts say that Indian researcher are

good as their own.

At the same time as far as research costs concerned,

these are much less in India compared to several
advanced countries. As a result, some companies have
set up their offshore research activity in India.
 DEFICIENCES IN RESEARCH
ACTIVITIES IN INDIA
Not satisfied with the quality of research
Poor field work
No permanent field staff
Structured questionnaires cannot used
Needed more basic research
Multiplicity of languages
Resort to small samples
Advertising agencies spend very little on Marketing
Research
Non traditional sectors are neglected
 The Structure of the Marketing Research Industry

Level 1 Corporate Corporate

Information Client A Client B
Users
Ad
Level 2
Agency

Research Custom Custom Syndicated Syndicated

Designers
and Research Research Research Research
Level 3
Suppliers Firm A Firm B Firm X Firm Y

Field Field Field Field

Level 4 Service Service
Office X Office Y
Data Firm X Firm Y
Collectors

Interviewer Interviewer Interviewer Interviewer Interviewer

Respondents R R R R R R R R R R
 Level 1. Primary Information Users (Corporate
Marketing Departments)

The ultimate users of marketing research

Marketing research data is needed to:
1. Determine how targets will react to alternative marketing
mixes.
2. Evaluate success of operational marketing strategies.
3. Assess changes in the external environment.
4. Identify new target markets.
5. Create new marketing mixes for new target markets.
Level 2: Information Users (Ad Agencies)

serves corporate clients

may be ultimate users of research data
main business: the development and execution of ad
campaigns.
Level 3: Research Designers and Suppliers

sell research services

design research studies
analyze results
make recommendations to client
they design research, manage its execution, and buy data
collection from other firms
Level 4: Data Collectors

Field service firms collect data for:

syndicated research firms

custom research firms

ad agencies

corporations
 Coca Cola Failure: Chronology

May 1985 Old Coke withdrawn

New Coke introduced
July Old Coke reintroduced as Coke Classic
 Coca Cola Failure: Background and Research

- Early 80s, share losses to Pepsi

- New Product research carried out
$4m cost
200,000 taste tests
60% of consumers preferred it in blind tests
- BUT research was narrowly defined
considered taste not emotions
dropping Old Coke not mentioned
 U.S. Reaction to Old Cokes Return

Political Senator David Prior of Arkansas on the

Senate Floor:
A very meaningful moment in the history
of America, this shows that some national
institutions cannot be changed
Media ABC interrupted its soap opera, General
Hospital on Wednesday afternoon to
break the news
Economic Coca Colas share price rose to its
highest level in 12 years
 Market Research: Summary

1. Market Research is usually an integral part of understanding

innovations - you ignore it at your peril....
2. But it must be timely, objective and relevant, otherwise it is worse than
useless, leading you down the wrong path
3. So, be involved as far as you can be, especially up front and dont let
the jargon deter you!