Unit-1 Marketing Research

MBA MK-01: MARKETING RESEARCH

Unit – 1

Q1. What is Marketing Research? Explain its Objectives and Applications?

Ans. Meaning:

It is very important to understand at the outset that the, modern concept of marketing revolves around the customer. Satisfaction of customer is the main aim of marketing. For achieving this goal, marketing research is undertaken.

In fact, marketing management is nothing but marketing research. With the expansion of business, marketing management becomes complex. It has to rely heavily on marketing research for solving problems in the field of marketing.

Various definitions of marketing research are given below:

“The systematic gathering, recording and analysis of data about problems relating to the marketing of goods and services” -The American Marketing Association.

“The systematic objective and exhaustive research for and study of the facts relevant to any problem in the field of marketing.” -Richard Crisp

“Marketing research is the careful and objective study of product design, markets, and such transfer activities as physical distribution and warehousing, advertising and sales management.” -Clark and Clark

“Marketing research is the inclusive term which embraces all research activities carried on for the management of marketing work, the gathering, recording and analysing of all facts about problems relating to the transfer and sale of goods and services from producer to consumer.” —Harry Hapner

From the above definitions, it is clear that marketing research is concerned with tackling the problems emerging from the beginning to the final stage of marketing process.

Objectives of Marketing Research :-

Objectives of Marketing Research:

Marketing research is undertaken for attaining the following objectives:

(1)  To Provide Basis For Proper Planning:

Marketing and sales forecast research provides sound basis for the formulation of all marketing plans, policies, programmes and procedures.

(2)  To Reduce Marketing Costs:

Marketing research provides ways and means to reduce marketing costs like selling, advertisement and distribution etc.

(3)  To Find Out New Markets for The Product:

Marketing research aims at exploring new markets for the product and maintaining the existing ones.

(4)  To Determine Proper Price Policy:

Marketing research is considered helpful in the formulation of proper price policy with regard to the products.

(5)  To Study in Detail Likes and Dislikes of the Consumers:

Marketing research tries to find out what the consumers, (the men and women who constitute the market) think and want. It keeps us in touch with the consumers, minds and to study their likes and dislikes.

(6)  To Know The Market Competition:

Marketing research also aims at knowing the quantum of competition prevalent in the market about the product in question. The company may need reliable information about competitor’s moves and strategies which are of immense significance for further planning.

(7)  To Study The External Forces and Their Impact:

Marketing research provides valuable information by studying the impact of external forces on the organisation. External forces may include conditions developing in foreign markets, govt, policies and regulations, consumer incomes and spending habits, new products entering in the market and their impact on the company’s products.

Prof. Gilies has rightly pointed out that, “The basic objective of marketing research is to supply management with information which will lead to a fuller understanding of the distribution habits and attitudes of present and potential buyers and users, and their reactions to products, packing, selling and advertising methods”.

Application of Marketing Research :-

Advertising testing research, branding research, customer satisfaction research, pricing research, product positioning research, new product assessments, marketing due diligence, and segmentation research. We conduct these marketing research studies for firms of most sizes — from venture funded start ups to middle-market and large enterprises. The applications of Marketing Research can be discussed as follows:

Pricing Research

We provide pricing strategy consulting backed by strong pricing research capabilities. Our perspective is broad when dealing with pricing research and pricing strategy decisions, and focus on finding for your business optimum price-product-feature configurations in the context of market positioning opportunities. We employ both qualitative and quantitative pricing research tools.

Product Research

Product market research serves several goals: new product design and market validation research, or assessing existing product strength and line extension potential.   We follow the product development cycle integrating research with creative positioning and technical product design efforts.

Concept Testing

Concept testing research evaluates advertising concepts, ad theme concepts and appeals, new product concepts, pricing, brand concepts, brand names, and positioning strategy concepts.   We select techniques -- qualitative and quantitative -- to both develop concepts, refine, and screen to assess market potential.

Positioning Research

We offer experienced market positioning and creative branding research capabilities to define and go-to-market with a high-impact positioning strategy. First, it requires understanding the market positioning concept, your current and potential markets, and the process needed to generate brand name impact.

Marketing Due Diligence

We support venture investment firms with primary and secondary marketing research in a stand alone or component marketing due diligence study.

Customer Satisfaction Research

The buzz and interest around customer satisfaction research sometimes deflates if the research design does not lead to actionable results. Also, customer expectations generally rise overtime as advances in technology in many categories boost the consumer consciousness of what to expect. We build into our customer satisfaction study design "action indicators" to point to immediate use of customer satisfaction results.

Branding Research

Branding decisions drive branding marketing research strategy.  Corporate, product and advertising brand development is a mix of creativity and marketing information to uncover brand positioning opportunities in cluttered market spaces.

Brand Equity Research

Brand equity research measures the breadth and depth of brand power in your target markets.  We use both standard and custom tailored brand equity survey measurements.  A key to research design is the goal of a brand equity measurement study.

Advertising Research

Advertising research design is determined by specific advertising goals and the stage of ad development, or campaign. We use a broad range of advertising research techniques including ad recall surveys, message and theme salience and impact measures, buying motivation and association with the ad message or positioning theme. We employ both qualitative and quantitative pricing research tools.

Market Segmentation

Market segmentation research maintains focus and delivers needed marketing information in today's moving economy where new markets and new product categories emerge and traditional market segments fade away.  Market segmentation research is a way to keep 'your eye on the ball.'  Often we start the market segmentation process with qualitative research to the range and breadth of customers.  Then we follow with quantitative research using appropriate multivariate analysis (cluster, k-means factor, etc) to define meaningful segments.

Q2. What do you mean by Marketing Research? Explain its advantages and  limitations?

Ans. Marketing Research has two words, viz., marketing and research. Marketing means buying and selling activities. Research means a systematic and complete study of a problem. It is done by experts. It uses scientific methods. Thus, we can say, “Marketing Research is a systematic method of collecting, recording and analyzing of data, which is used to solve marketing problems.”

A company faces many marketing problems. It faces problems about consumers, product, market competition, sales promotion, etc. Marketing research helps to solve these problems. Marketing research is a systematic process. It first collects data (information) about the marketing problem. Secondly, it records this data. Then it analyses (studies) this data and draws conclusions about it. After that, it gives suggestions (advice) for solving the marketing-problem. So, marketing research helps to solve the marketing problems quickly, correctly and systematically.

Marketing research collects full information about consumers. It finds out the needs and expectations of the consumers. So the company produces the goods according to the needs and expectations of the consumers.

Marketing research helps the company to make its production and marketing policies. It helps the company to introduce new products in the market. It helps to identify new-markets.

Marketing research also collects full information about the competitors. The company uses this information to fight competition. It also helps the marketing manager to take decisions.

Marketing research is a special branch and soul of 'Marketing Management'. It is of recent origin and widely used by manufacturers, exporters, distributors and service organisations.

Marketing research is very systematic, scientific, objective and organised. It has a wide scope. It includes product research, consumer research, packaging research, pricing research, etc.

Marketing research is a continuous process. It has a few limitations. However, a company cannot survive and succeed without it.

Limitations of Marketing Research :-

Following are the main limitations of Marketing Research:

1.      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.

2.      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.

3.      MR is not a complete solution to any marketing issue as there are many dominant variables between research conclusions and market response.

4.      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.

5.      Inappropriate training to researchers can lead to misapprehension of questions to be asked for data collection.

6.      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.

7.      There is less interaction between the MR department and the main research executives. The research department is in segregation. This all makes research ineffective.

8.      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.

9.      Huge cost is involved in MR as collection and processing of data can be costly. Many firms do not have the proficiency to carry wide surveys for collecting primary data, and might not also able to hire specialized market experts and research agencies to collect primary data. Thus, in that case, they go for obtaining secondary data that is cheaper to obtain.

10.  MR is conducted in open market place where numerous variables act on research settings.

Q3. Discuss the various steps to be followed in the process of Marketing Research?

Ans. Marketing Research Process:-

Marketing research process is a set of six steps which defines the tasks to be accomplished in conducting a marketing research study. These include problem definition, developing an approach to problem, research design formulation, field work, data preparation and analysis, and report generation and presentation.

Stages of Marketing Research Process

Step 1: 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.

Step 2: Development of an Approach to the Problem

Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, hypotheses, and identifying characteristics or factors that can influence the research design. This process is guided by discussions with management and industry experts, case studies and simulations, analysis of secondary data, qualitative research and pragmatic considerations.

Step 3: Research Design Formulation

A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions, and provide the information needed for decision making. Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design. The issue of how the data should be obtained from the respondents (for example, by conducting a survey or an experiment) must be addressed. It is also necessary to design a questionnaire and a sampling plan to select respondents for the study.

More formally, formulating the research design involves the following steps:

·         Secondary data analysis

·         Qualitative research

·         Methods of collecting quantitative data (survey, observation, and experimentation)

·         Definition of the information needed

·         Measurement and scaling procedures

·         Questionnaire design

·         Sampling process and sample size

·         Plan of data analysis

Step 4: Field Work or Data Collection

Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing), from an office by telephone (telephone or computer-assisted telephone interviewing), or through mail (traditional mail and mail panel surveys with pre recruited households). Proper selection, training, supervision, and evaluation of the field force help minimize data-collection errors.

Step 5: 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 key-punched 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.

Step 6: 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 present 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.

Q.4 Define Marketing Information System (MIS)? Discuss the significance or need of the MIS?

MARKETING INFORMATION SYSTEM

A system that analyzes and assesses marketing information, gathered continuously from sources inside and outside an organization. Timely marketing information provides basis for decisions such as product development or improvement, pricing, packaging, distribution, media selection, and promotion. A marketing information system (MIS) is a set of procedures and methods designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis. An information system can be used operationally, managerially, and strategically for several aspects of marketing. A marketing information system can be used operationally, managerially, and strategically for several aspects of marketing.

We all know that no marketing activity can be carried out in isolation, know when we say it doesn’t work in isolation that means there are various forces could be external or internal, controllable or uncontrollable which are working on it. Thus to know which forces are acting on it and its impact the marketer needs to gathering the data through its own resources which in terms of marketing we can say he is trying to gather the market information or form a marketing information system.

This collection of information is a continuous process that gathers data from a variety of sources synthesizes it and sends it to those responsible for meeting the market places needs. The effectiveness of marketing decision is proved if it has a strong information system offering the firm a Competitive advantage. Marketing Information should not be approached in an infrequent manner. If research is done this way, a firm could face these risks:

·         Opportunities may be missed.

·         There may be a lack of awareness of environmental changes and competitors’ actions.

·         Data collection may be difficult to analyze over several time periods.

·         Marketing plans and decisions may not be properly reviewed.

A marketing information system (MIS) is a set of procedures and methods designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis. An information system can be used operationally, managerially, and strategically for several aspects of marketing.

NEED FOR MARKETING INFORMATION SYSTEM :-

With an increasingly competitive and expanding market, the amount of information needed daily by an organization is profound. Thus they have to establish a Marketing Information system. There are several advantages of marketing information systems which formulate the basis of its need for any marketing organisation:

1) Organized Data collection –Lots of data can be collected from the market. But the main word here is “Organized”. Organizing data is very important else the data is meaningless. Thus MIS helps you to organize your database thereby improving productivity.

2) A broad perspective –With a proper MIS in place, the complete organization can be tracked which can be used to analyse independent processes. This helps in establishing a broader perspective which helps us know which steps can be taken to facilitate improvement.

3) Storage of Important Data –Several times in pharmaceuticals, when one drug is being produced they may need data of another drug which was produced years back. Similarly in Media, photographs are stored in archives. This storage of important data plays a crucial role in execution and thus proves again that MIS is not important only for information but also for execution.

4) Avoidance of Crisis –The best way to analyse a stock (share market) is to see its past performance. Top websites like money control thrive on MIS. Similarly MIS helps you keep tracks of margins and profits. With an amazing information system established, you can know where your organization is moving and probably avert a crisis long before it has taken place. Ignoring hints received from MIS reports is foolhardy.

5) Co-ordination –Consumer durables and FMCG companies have huge number of processes which needs to be co-ordinated. These companies depend completely on MIS for the proper running of the organization. There are dedicated people for marketing information systems in such organizations. This is mainly because of the speed required to access information and implement it.

6) Analysis and Planning –MIS is critical for planning. You cannot do planning without information. For planning, the first thing which is needed is the organizations capabilities, then the business environment and finally competitor analysis. In a proper MIS, all these are present by default and are continuously updated. Thus MIS is very important for planning and analysis.

7) Control –Just like MIS can help in a crisis, in normal times it provides control as you have information of the various processes going on and what is happening across the company. Thus it provides you with a sense of control.

Q5. Explain the process of Marketing Information System? Differentiate between Data and Information? Discuss the components of MIS?

Ans. A marketing information system (MIS) is a set of procedures and methods designed to generate, analyze, disseminate, and store anticipated marketing decision information on a regular, continuous basis. The marketing information system process contains collecting, analyzing, and disseminating marketing information. It can be discussed as follows:

Step 1. Determine what metrics to include in your marketing information system.

This is a very serious step in creating an effective marketing information system.  All data has a cost, both real and opportunity costs, so including the RIGHT metrics is critical.

Measure the wrong things and you’ll make bad decisions and waste money.  An example is measuring fans to your Facebook page.  Sure, there’s a slight advantage to having more fans, but their contribution to ROI is relatively small.  Making decisions that focus on increasing the number of fans likely wastes more money than warranted by the ROI you’ll see.

Measure too many metrics and analysis becomes difficult.  It’s like trying to find a needle in a haystack.  The vast amount of hay (useless data) hides the useful data — the needle.  Just because you CAN measure something, doesn’t mean you SHOULD.

Accumulating metrics costs money.  Data is only worth its cost when the value it contributes to improved decision-making outweighs the cost of collecting the data — and be sure to include the human cost of gathering and analyzing this data to other costs in acquiring the data.

Step 2. Gather relevant data.

Some data comes from internal sources, such as sales records, accounting figures, website analytics, and reports from your sales force.  Other data comes from external sources, including competitor results, economic metrics, listening post metrics, and Facebook Insights.  Your marketing research data can also form part of your marketing information system, such as recurring surveys of customer satisfaction.

Step 3. Plot data.

It’s very difficult to make decisions based on raw data because the data contains invisible patterns that might otherwise indicate appropriate actions.  For instance, it’s hard to see a downward trend in customer satisfaction without graphing the data until the decline is substantial and by then it might be too late to reverse the trend. Plotting data allows managers to quickly detect changes in critical metrics over time.  Sure, you can use the graphing function of Excel or other data program, but newer data visualization software makes the job even easier.  Examples of software providing superior data visualization are: IBM Cognos Insight, Tableau Software, and SAP Visual Intelligence.  Some even create dashboards to bring all your marketing metrics to one place, making decision-making even easier.

Step 4. Communicate results.

The more people who have the information from your marketing information system, the better.  But, not everyone is going to understand tables of raw data or even visualizations like in the dashboard above.  That’s because your marketing information system requires interpretation through the lens of marketing knowledge.

 Step 5. Make marketing decisions.

The final step in the process is using metrics from your marketing information system to make decisions that optimize your marketing outcomes.

Differences Between Data and Information :-

Data vs Information

The words Data and Information may look similar and many people use these words very frequently, but both have lots of differences between them. Data and information are interrelated. In fact, they are often mistakenly used interchangeably. Data is considered to be raw data. It represents ‘values of qualitative or quantitative variables, belonging to a set of items.’ It may be in the form of numbers, letters, or a set of characters. It is often collected via measurements. In data computing or data processing, data is represented by in a structure, such as tabular data, data tree, a data graph, etc. Information is "knowledge communicated or received concerning a particular fact or circumstance." Information is a sequence of symbols that can be interpreted as a message. It provides knowledge or insight about a certain matter. Information can be recorded as signs, or transmitted as signals. Basically, information is the message that is being conveyed, whereas data are plain facts. Once the data is processed, organized, structured or presented in a given context, it can become useful. Then data will become information, knowledge.

Key difference: Data usually refers to raw data, or unprocessed data. It is the basic form of data, data that hasn’t been analyzed or processed in any manner. Once the data is analyzed, it is considered as information. Information is "knowledge communicated or received concerning a particular fact or circumstance." Information is a sequence of symbols that can be interpreted as a message. It provides knowledge or insight about a certain matter. Data in itself is fairly useless, until it is interpreted or processed to get meaning, to get information. In computing, it can be said that data is the computer's language. It is the output that the computer gives us. Whereas, information is how we interpret or translate the language or data. It is the human representation of data.

Some differences between data and information:

·         Data is used as input for the computer system. Information is the output of data.

·         Data is unprocessed facts figures. Information is processed data.

·         Data doesn’t depend on Information. Information depends on data.

·         Data is not specific. Information is specific.

·         Data is a single unit. A group of data which carries news and meaning is called Information.

·         Data doesn’t carry a meaning. Information must carry a logical meaning.

·         Data is the raw material. Information is the product.

COMPONENTS OF MARKETING INFORMATION SYSTEM :-

The four components of marketing information system are as follows:

1. Internal record, 2. Marketing intelligence system, 3. Marketing decision support system, 4. Marketing research.

An MIS should provide updated information. Hence, it is necessary to use new techniques for speed and accuracy in the MIS. Thus, various subsystems are used to develop information. Following are the four components of MIS:

1. Internal record:

Marketing managers rely on internal reports related to customer orders, sales, price levels, cost, inventory levels, receivable and payables. The heart of the internal record sys­tem is the order-to-payment cycle. Customers send orders to the firms.

The sales department pre­pares invoices and transmits copies to various departments. The billing department sends invoices as quickly as possible. It is the order from the customer that sets the internal record keeping. This record becomes a vital source of information for analysis of sales, inventory levels, profit margins, credit policy to customers, etc.

2. Marketing intelligence system:

The marketing intelligence system is a set of procedures and sources used by the managers to obtain everyday information about marketing environment.

A company can collect marketing intelligence in the following ways:

i. Sales force:

Sales representatives are trained to pick information and send it to the concerned manager. They can spot and report new developments.

ii. Distributors, retailers and other intermediaries:

A company can motivate the members of the distribution channel to pass information about shoppers. Information is also collected on sales force behaviour.

iii. External networking:

Managers can attend trade shows, read competitors published reports, talk to employees, and analyse new stories about competitors.

iv. Published data:

A company can take advantage of the government data resources. For instance, census supplies information on changes in population, demographic groups and changing family structure. Similarly, a company can purchase information from professional research agencies such as IMRB, A.C. Nielson Company, etc.

v. Customer feedback:

This is a technique of collecting information at a low cost. The online customer feedback facilities make it more convenient for both the customer and the firm to collect and evaluate information.

3. Marketing decision support system:

A growing number of organizations are using marketing decision support system to help the managers in taking better decisions. It is a system supported by software and hardware to gather information from business and environment.

It helps manag­ers in providing evidence for the decisions taken by them. The current marketing software pro­grams assist in designing marketing research studies, market segmentation, selling prices, budget, analysing media, and planning sales force activity.

4. Marketing research:

It acts as a tool for accurate decision-making in marketing. It is useful for studying and solving different marketing problems. Marketing research techniques are used by manufacturers, exporters, distributors and service organizations. Marketing research is an applied knowledge. Hence, it provides alternative solutions to deal with a specific problem.