Marketing_Research_394_v1.pdf

MARKETING RESEARCH
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Developed by
Prof. Sarang Kulkarni
On behalf of
Prin. L.N. Welingkar Institute of Management Development & Research

Advisory Board
Chairman
Prof. Dr. V.S. Prasad
Former Director (NAAC)
Former Vice-Chancellor
(Dr. B.R. Ambedkar Open University)
Board Members
1. Prof. Dr. Uday Salunkhe
Group Director
Welingkar Institute of
Management
2. Dr. B.P. Sabale
Chancellor, D.Y. Patil University,
Navi Mumbai
Ex Vice-Chancellor (YCMOU)
3. Prof. Dr. Vijay Khole
Former Vice-Chancellor
(Mumbai University)
4. Prof. Anuradha Deshmukh
Former Director
(YCMOU)
Program Design and Advisory Team
Prof. B.N. Chatterjee
Dean – Marketing
Welingkar Institute of Management, Mumbai
Mr. Manish Pitke
Faculty – Travel and Tourism
Management Consultant
Prof. Kanu Doshi
Dean – Finance
Dean – Marketing
Prof. Dr. V.H. Iyer
Dean – Management Development Programs
Mr. Smitesh Bhosale
Faculty – Media and Advertising
Founder of EVALUENZ
Dean – Marketing
Prof. Vineel Bhurke
Faculty – Rural Management
Prof. Venkat lyer
Director – Intraspect Development
Dr. Pravin Kumar Agrawal
Faculty – Healthcare Management
Manager Medical – Air India Ltd.
Prof. Dr. Pradeep Pendse
Dean – IT/Business Design
Mrs. Margaret Vas
Faculty – Hospitality
Former Manager-Catering Services – Air India Ltd.
Prof. Sandeep Kelkar
Faculty – IT
Mr. Anuj Pandey
Publisher
Management Books Publishing, Mumbai
Prof. Dr. Swapna Pradhan
Faculty – Retail
Course Editor
Prof. Dr. P.S. Rao
Dean – Quality Systems
Prof. Bijoy B. Bhattacharyya
Dean – Banking
Dean – Marketing
Mr. P.M. Bendre
Faculty – Operations
Former Quality Chief – Bosch Ltd.
Course Coordinators
Prof. Dr. Rajesh Aparnath
Head – PGDM (HB)
Mr. Ajay Prabhu
Faculty – International Business
Corporate Consultant
Ms. Kirti Sampat
Assistant Manager – PGDM (HB)
Mr. A.S. Pillai
Faculty – Services Excellence
Ex Senior V.P. (Sify)
Mr. Kishor Tamhankar
Manager (Diploma Division)
COPYRIGHT © by Prin. L.N. Welingkar Institute of Management Development & Research.
Printed and Published on behalf of Prin. L.N. Welingkar Institute of Management Development & Research, L.N. Road, Matunga (CR), Mumbai - 400 019.
ALL RIGHTS RESERVED. No part of this work covered by the copyright here on may be reproduced or used in any form or by any means – graphic,
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permission of the publisher.
NOT FOR SALE. FOR PRIVATE CIRCULATION ONLY.
1st Edition (May, 2014) 2nd Edition June 2015)
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Preface
This book is meant for the both students and marketing researchers. The idea is
to introduce the concepts and practices to show how marketing information and
research tools be applied, not only to solve the various problems but also to
identify opportunities to grow in today’s growing competitive business.
In changing markets, there is always a demand for useful or vital information
from all possible resources.
Carefully analyzing the demand factor using marketing research tools help
management in making key decisions is the USP of our subject. This, in turn,
would help researchers to introduce better systems capable of creating
innovative solutions and creating a vital information database.
The objectives of the marketing research are to discover what the consumers in
general want, need or aspire for. It also involves the study of consumer
behaviour. Once the research is completed, it offers the guidelines for suitably
positioning and marketing the product.
The goal of marketing research is to identify and assess the need for changing
elements of the marketing mix which will impact consumer’s behaviour and
inﬂuence their buying decisions.
All the topics are covered in this book, keeping in mind the students needs. The
book comprises 13 chapters and in general, covering most of the special aspects
of marketing research including concept of marketing research, importance of
marketing research, marketing research techniques, various methods of data
collection, methods of hypothesis testing, etc.
In general, after studying the complete book, students will be able to
understand the concept of marketing research, research process and
applications of marketing research.
Prof. Sarang Kulkarni
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Contents
Chapter 1: Introduction 4 – 44
Chapter 2: Marketing Research Process 45 – 82
Chapter 3: Various Sources of Market Information 83 – 117
Chapter 4: Market Research Techniques 118 – 142
Chapter 5: Marketing Mix Research 143 – 210
Chapter 6: Types of Research Designs 211 – 226
Chapter 7: Qualitative and Quantitative
Research Techniques 227 – 249
Chapter 8: Causal and Experimental Research 250 – 261
Chapter 9: Primary Data 262 – 304
Chapter 10: Sampling 305 – 335
Chapter 11: Data Analysis 336 – 377
Chapter 12: Hypothesis Testing 378 – 400
Chapter 13: Report Writing 401 – 417
Chapter 14: Marketing Information System 418 – 431
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INTRODUCTION
Chapter 1 - Introduction
Objectives
After studying this chapter you will be able to understand
• Understand the meaning and significance of the “marketing
research”
• Understand, how the marketing information can be utilized for the
purpose of making decisions
• How to relate the MR as a function to marketing environment,
consumers, and
• customers through information
• Understand how marketing research provides valuable inputs to
MIS and in turn help making critical decisions.
Structure
1.1 Introduction
1.2 Meaning and Definition of Marketing Research
1.3 Nature and Scope of Marketing Research
1.4 Significance of Marketing Research
1.5 Limitations and Obstacles in Acceptance
1.6 Ethics in Marketing Research
1.7 Types of Researches
1.8 Importance of MIS and DSS in Marketing Research.
1.9 Summary
1.10 Self Assessment Questions
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INTRODUCTION
1.1 INTRODUCTION
To undertake marketing effectively, businesses need information.
Information about customer wants, market demand, competitors,
distribution channels, etc.
Marketers often complain that they lack enough marketing
information of the right kind or have too much of the wrong kind.
The solution is an effective marketing information system.
The information needed by marketing managers comes from three
main sources:
1. Internal company information
E.g. sales, orders, customer proﬁles, stocks, customer service reports,
etc
2. Marketing intelligence
This can be information gathered from many sources, including
suppliers, customers, and distributors. Marketing intelligence is a
catch-all term to include all the everyday information about
developments in the market that helps a business prepare and adjust
its marketing plans. It is possible to buy intelligence information from
outside suppliers (e.g., Mintel, Dun & Bradstreet, Mori) who sets up
data gathering systems to support commercial intelligence products
that can be proﬁtably sold to all players in a market.
3. Market research
Management cannot always wait for information to arrive in bits and
pieces from internal sources. Also, sources of market intelligence
cannot always be relied upon to provide relevant or up to date
information (particularly for small or niche market segments). In such
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INTRODUCTION
circumstances, businesses often need to undertake speciﬁc studies to
support their marketing strategy - this is market research.
The task of marketing research (MR) is to provide management with
relevant, accurate, reliable, valid and current information.
Competitive marketing environment and the ever increasing costs
attributed to poor decision making, require that marketing research
provide sound information. Sound decisions are not based on gut
feeling, intuition or even pure judgment.
Marketing managers make numerous strategic and tactical decisions
in the process of identifying and satisfying customer needs. They
make decisions about potential opportunities, target market selection,
market segmentation, planning and implementing marketing
programs, marketing performance and control. These decisions are
complicated by interactions between the controllable marketing
variables of product, pricing, promotion, and distribution. Further
complications are added by uncontrollable environmental factors
such as general economic conditions, technology, public policies and
laws, political environment, competition, and social and cultural
changes. Another factor in this mix is the complexity of consumers.
Marketing research helps the marketing manager link the marketing
variables with the environment and the consumers. It helps remove
some of the uncertainty by providing relevant information about the
marketing variables, environment and consumers. In the absence of
relevant information, consumers' response to marketing programs
cannot be predicted reliably or accurately. Ongoing marketing
research programs provide information on controllable and non-
controllable factors and consumers; this information enhances the
effectiveness of decisions made by marketing managers.
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INTRODUCTION
Traditionally, marketing researchers were responsible for providing
the relevant information and marketing decisions were made by the
managers. However, the roles are changing and marketing
researchers are becoming more involved in decision making, whereas
marketing managers are becoming more involved with research. The
role of marketing research in managerial decision making is explained
further using the framework of the "DECIDE" model:
The DECIDE model conceptualizes managerial decision making as a
series of six steps. The decision process begins by precisely deﬁning
the problem or opportunity, along with the objectives and constraints.
Next, the possible decision factors that make up the alternative
courses of action (controllable factors) and uncertainties
(uncontrollable factors) are enumerated. Then, relevant information
on the alternatives and possible outcomes is collected. The next step is
to identify and select the best alternative based on chosen criteria or
measures of success. Then, a detailed plan to develop and implement
the alternative selected is developed and put into effect. Last, the
outcome of the decision and the decision process itself are evaluated.
The Evolution of Marketing Research (MR)
Marketing research has evolved in the decades since Arthur Nielsen
established it as a viable industry, one that would grow hand in hand
with the B2B and B2C economies. Markets naturally evolve, and since
the birth of ACNielsen, when research was mainly conducted by in-
person focus groups and pen-and-paper surveys, the rise of the
Internet and the proliferation of corporate websites have changed the
means by which research is executed.
Web analytics were born out of the need to track the behavior of site
visitors and, as the popularity of e-commerce and web advertising
grew, businesses demanded details on the information created by new
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INTRODUCTION
practices in web data collection, such as click-through and exit rates.
As the Internet boomed, websites became larger and more complex
and the possibility of two-way communication between businesses
and their consumers became a reality. Provided with the capacity to
interact with online customers, Researchers were able to collect large
amounts of data that were previously unavailable, further propelling
the Marketing Research Industry.
In the new millennium, as the Internet continued to develop and
websites became more interactive, data collection and analysis
became more commonplace for those marketing research ﬁrms whose
clients had a web presence. With the explosive growth of the online
marketplace came new competition for companies; no longer were
businesses merely competing with the shop down the road —
competition was now represented by a global force. Retail outlets
were appearing online and the previous need for bricks-and-mortar
stores was diminishing at a greater pace than online competition was
growing.
With so many online channels for consumers to make purchases,
companies needed newer and more compelling methods, in
combination with messages that resonated more effectively, to capture
the attention of the average consumer.
Having access to web data did not automatically provide companies
with the rationale behind the behavior of users visiting their sites,
which provoked the marketing research industry to develop new and
better ways of tracking, collecting and interpreting information. This
led to the development of various tools like online focus groups and
pop-up or website intercept surveys. These types of services allowed
companies to dig deeper into the motivations of consumers,
augmenting their insights and utilizing this data to drive market
share.
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INTRODUCTION
As information around the world became more accessible, increased
competition led companies to demand more Market Researchers. It
was no longer sufficient to follow trends in web behavior or track
sales data; companies now needed access to consumer behaviour
throughout the entire purchase process. This meant that the
Marketing Research Industry, again, needed to adapt to the rapidly
changing needs of the marketplace, and to the demands of companies
looking for a competitive edge.
Today, Marketing Research has adapted to innovations in technology
and the corresponding ease with which information is available. B2B
and B2C companies are working hard to stay competitive and they
now demand both quantitative (“What?”) and qualitative (“Why?”)
marketing research in order to better understand their target audience
and the motivations behind customer behaviors.
This demand is driving marketing researchers to develop new
platforms for interactive, two-way communication between their
firms and consumers. Mobile devices such as smartphones are the
best example of an emerging platform that enables businesses to
connect with their customers throughout the entire buying process.
Innovative research firms, such as On Research with their On Mobile
app, are now providing businesses with the means to reach
consumers from the point of initial investigation through to the
decision and, ultimately, the purchase.
As personal mobile devices become more capable and widespread,
the marketing research industry will look to further capitalize on this
trend. Mobile devices present the perfect channel for research firms to
retrieve immediate impressions from buyers and to provide their
clients with a holistic view of the consumers within their target
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INTRODUCTION
markets, and beyond. Now, more than ever, innovation is the key to
success for marketing researchers. Marketing research clients are
beginning to demand highly personalized and specifically-focused
products from the MR firms; big data is great for identifying general
market segments, but is less capable of identifying key factors of
niche markets, which now defines the competitive edge companies
are looking for in this mobile-digital age.
1.2 MEANING AND DEFINITION OF MARKETING
RESEARCH
"Marketing research is the function that 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 specifies the
information required to address these issues, designs the methods
for collecting information, manages and implements the data
collection process, analyzes, and communicates the findings and
their implications." American Marketing Association (AMA) -
Official Definition of Marketing Research
It is the systematic gathering, recording, and analysis of qualitative
and quantitative data about issues relating to marketing products and
services. The goal of marketing research is to identify and assess how
changing elements of the marketing mix impacts customer behavior.
The term is commonly interchanged with market research; however,
expert practitioners may wish to draw a distinction, in that market
research is concerned specifically with markets, while marketing
research is concerned specifically about marketing processes.
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INTRODUCTION
Thus, marketing research may also be described as the systematic and
objective identification, collection, analysis and dissemination of
information for the purpose of assisting management in decision
making related to the identification and solution of problems and
opportunities in marketing.
1.3 NATURE AND SCOPE OF MARKETING RESEARCH
Marketing research is often partitioned into two sets of categorical
pairs, either by target market:
• Consumer marketing research, and
• Business-to-business (B2B) marketing research
Or, alternatively, by methodological approach:
• Qualitative marketing research, and
• Quantitative marketing research
Consumer marketing research is a form of applied sociology that
concentrates on understanding the preferences, attitudes, and
behaviors of consumers in a market-based economy, and it aims to
understand the effects and comparative success of marketing
campaigns. The field of consumer marketing research as a statistical
science was pioneered by Arthur Nielsen with the founding of the AC
Nielsen Company in 1923.
First, marketing research is systematic. Thus, systematic planning is
required at all stages of the marketing research process. The
procedures followed at each stage are methodologically sound, well
documented, and, as much as possible, planned in advance.
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INTRODUCTION
Marketing research uses the scientific method in that data are
collected and analyzed to test prior notions or hypotheses. Experts in
marketing research have shown that studies featuring multiple and
often competing hypotheses yield more meaningful results than those
featuring only one dominant hypothesis.
Marketing research is objective. It attempts to provide accurate
information that reflects a true state of affairs. It should be conducted
impartially. While research is always influenced by the researcher's
research philosophy, it should be free from the personal or political
biases of the researcher or the management. Research which is
motivated by personal or political gain involves a breach of
professional standards. Such research is deliberately biased so as to
result in predetermined findings. The objective nature of marketing
research underscores the importance of ethical considerations. Also,
researchers should always be objective with regard to the selection of
information to be featured in reference texts because such literature
should offer a comprehensive view on marketing. Research has
shown, however, that many marketing textbooks do not feature
important principles in marketing research.
Organizations engage in marketing research for two reasons: (1) to
identify and (2) solve marketing problems. This distinction serves as a
basis for classifying marketing research into problem identification
research and problem solving research.
Problem identification research is undertaken to help identify
problems which are, perhaps, not apparent on the surface and yet
exist or are likely to arise in the future like company image, market
characteristics, sales analysis, short-range and long-range forecasting
and business trends research. Research of this type provides
information about the marketing environment and helps diagnose a
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INTRODUCTION
problem. For example, the findings of problem solving research are
used in making decisions which will solve specific marketing
problems.
The Stanford Research Institute, on the other hand, conducts an
annual survey of consumers that is used to classify persons into
homogeneous groups for segmentation purposes. The National
Purchase Diary panel (NPD) maintains the largest diary panel in the
United States.
Standardized services are research studies conducted for different
client firms but in a standard way. For example, procedures for
measuring advertising effectiveness have been standardized so that
the results can be compared across studies and evaluative norms can
be established. The Starch Readership Survey is the most widely used
service for evaluating print advertisements; another well-known
service is the Gallup and Robinson Magazine Impact Studies. These
services are also sold on a syndicated basis.
Customized services offer a wide variety of marketing research
services customized to suit a client's specific needs. Each marketing
research project is treated uniquely.
Limited-service suppliers specialize in one or a few phases of the
marketing research project. Services offered by such suppliers are
classified as field services, coding and data entry, data analysis,
analytical services and branded products. Field services collect data
through the internet, traditional mail, in-person, or telephone
interviewing, and firms that specialize in interviewing are called field
service organizations. These organizations may range from small
proprietary organizations which operate locally to large multinational
organizations with WATS line interviewing facilities. Some
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INTRODUCTION
organizations maintain extensive interviewing facilities across the
country for interviewing shoppers in malls.
• Coding and data entry services include editing completed
questionnaires, developing a coding scheme, and transcribing the
data on to diskettes or magnetic tapes for input into the computer.
NRC Data Systems provides such services.
• Analytical services include designing and pretesting
questionnaires, determining the best means of collecting data,
designing sampling plans, and other aspects of the research design.
Some complex marketing research projects require knowledge of
sophisticated procedures, including specialized experimental
designs, and analytical techniques such as conjoint analysis and
multidimensional scaling. This kind of expertise can be obtained
from firms and consultants specializing in analytical services.
• Data analysis services are offered by firms, also known as tab
houses, that specialize in computer analysis of quantitative data
such as those obtained in large surveys. Initially most data analysis
firms supplied only tabulations (frequency counts) and cross
tabulations (frequency counts that describe two or more variables
simultaneously). With the proliferation of software, many firms
now have the capability to analyze their own data, but data
analysis firms are still in demand.
• Branded marketing research products and services are specialized
data collection and analysis procedures developed to address
specific types of marketing research problems. These procedures
are patented, given brand names and marketed like any other
branded product.
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INTRODUCTION
1.4 SIGNIFICANCE OF MARKETING RESEARCH
A business faces many types of marketing problems. It faces problems
about its product, price, place and promotion. It also faces problems
about product design packaging, branding, marketing channels,
advertising, etc. Some marketing problems are very serious.
Therefore, in marketing, managers use marketing research as an
important tool to solve marketing problems.
The importance of marketing research in management extends to
intelligent decision making, maximizing proﬁts, increasing the sales,
minimizing the risks and ascertaining whether a new product will be
proﬁtable in a given market at a given time.
Toying with a new product idea, wanting to boost up your sales or
planning to launch a new product, the importance of marketing
research has grown unprecedentedly, especially in the times of
recession. In fact, Philip Kotler, the marketing guru, acknowledges
that it is only by marketing research, planning, implementation and
control that effective marketing management can be accomplished
The need and importance of marketing research are depicted below.
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! Need and Importance of Marketing Research
1. Marketing Research (MR) provides valuable data.
2. It studies provides data about consumer behaviour.
3. It helps to select suitable sales promotional techniques.
4. It supplies market-related information.
5. It helps a company to evaluate its marketing performance.
6. It also has miscellaneous importance.

INTRODUCTION
1. Provides valuable data
Marketing research provides valuable data to the decision makers. It
provides data about demand, supply, consumer behavior,
competition, etc. This data is used for decision making.
This data improves the quality of decisions. It makes the decision
very successful.
2. Studies consumer behaviour
Marketing research provides data about consumer behavior. It
provides data about age, incomes, likes, dislikes, etc., of the
consumers. It also ﬁnds out the opinions of the consumers about a
company’s product. This data is used to make production and
marketing policies.
3. Selects promotional techniques
Marketing research helps the company to select suitable sales
promotion techniques. It helps to select marketing techniques. It helps
to select proper media for advertising. It helps to solve the problems
of after-sales service. It also helps to prepare the budget for
advertising and sales promotion.
4. Supplies marketing information
Marketing research supplies data about the market situation.
This market-related data is used to ﬁnd out:
1. The present and future demand and supply position.
2. The level of competition and steps taken to control it.
3. Market opportunities.
4. The cause of fall in sales level.
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INTRODUCTION
5. Evaluates marketing performance
Marketing research helps the company to evaluate its marketing
performance and to take steps to improve it.
Marketing research is used to find out the effect of price, package,
brand name, etc., on sales. It is used to find consumers’ reaction
towards the company’s product. It is used to evaluate the inventory
and pricing policies. It is also used to evaluate the effectiveness of
advertising, sales promotion techniques, channels of distribution, etc.
6. Miscellaneous needs and importance
Miscellaneous needs and importance of marketing research are as
follows:
• Marketing research improves the efficiency of the marketing
department. This creates goodwill and good reputation.
• It helps the marketing manager to take the rational and effective
decisions.
• It helps to choose suitable staff for doing research.
• It is used to make growth and expansion programs.
• It benefits all, i.e., it benefits the company, distributor, advertising
agency, consumer, government and the entire society.
So, marketing research is very helpful to everyone. But it is most
useful to a manufacturer because it helps to answer the basic
questions, i.e., what, where, when, who, whom and how to sell?
1.5 LIMITATIONS AND OBSTACLES IN MARKETING
RESEARCH
"Marketing research does not make decisions and it does not
guarantee success". Marketing managers may seek advice from
marketing research specialists, and indeed it is important that
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INTRODUCTION
research reports should specify alternative courses of action and the
probability of success, where possible, of these alternatives.
However, it is marketing managers who make the final marketing
decision and not the researcher. The second observation, that
marketing research does not guarantee success, is simply a
recognition of the environment within which marketing takes place.
In the fields of science and engineering researchers are often working
with deterministic models of the world where y = f(x). That is, x is a
necessary and sufficient condition for y to occur.
For instance, an increase in pressure is usually necessary and
sufficient to bring about a rise in air temperature. In the social
sciences, and this includes marketing and marketing research, the
phenomenon under investigation rarely, if ever, lends itself to
deterministic modelling.
Consider the marketing problem of determining how much to spend
on promotion in order to achieve a given market share. The link
between promotional expenditure and sales is not so direct as that
between pressure and temperature.
There are a great many more intervening variables, including: the
media used, the effectiveness of the promotional message, the length
and frequency of the campaign, not to mention the many dimensions
of the product, price and distribution. Marketing researchers work
with probabilistic models of the form:
y = f(x1)..(fx2)...f(xn)...
This reflects the fact that in order for a target market share to be
reached some promotion (amount unknown) is necessary but will not
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INTRODUCTION
be sufficient, on its own, to achieve the target. Y is a function of a
number of variables and the interactions between them. The model is
further complicated by the fact that these interactions are themselves
often not understood. It is for these reasons that marketing
researchers cannot guarantee that decisions based on their
information will always prove 'successful'. Rather the best that a
competent researcher and a well designed study will be able to offer
is a reduction in the amount of uncertainty surrounding the decision.
Following are the Main Limitations of Marketing Research
• 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.
• 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.
• 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
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INTRODUCTION
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.
• 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 be 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.
• MR is conducted in open marketplace where numerous variables
act on research settings.
Obstacles that a Company May Face at the Time of Conducting
Market Research
The concept of market research as a strong component of business is
predominant for pretty long time. The key element of any market
research is accumulation of customer and market insights.
It is expected that the observations will help businesses to gain
competitive advantage, market leadership and innovation. Though it
sounds tempting from a business point of view, the question is
whether it is possible to achieve this ideal outcome all the time
through market research.
In reality, the market has become so vast that it is no longer easy to
study the buying behaviour of consumers and gather insights. It is
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INTRODUCTION
true that the data gathered from market research provide a strong
avenue for strategical decision making. But the usefulness of the
accumulated data largely depends on its statistical and analytical
interpretation. The ultimate goal of a research is to turn buyers’
insights into competitive advantage. It is difficult for the leaders to
determine trends and turn them into actionable strategies from the
quantitative analysis alone. An equal effort and investment is
required for qualitative behavioural research also.
Some of the common obstacles faced in Business to Business (B2B)
organisations that hinder the business to buyers’ insights into
actionable strategies are:
Scope for Study
Most of the time the scope of gathering information is too narrow and
focused only on specific marketing message that will fulfil the
assumed needs. If a product is launched on the basis of inadequate
research, future of such a product is uncertain. It may click or may be
completely rejected by the customers. Businesses in this competitive
scenario cannot afford to roll out a product that will not meet the
expectations of customers or gain a profitable market share.
Pressure to Derive Profit
Quarterly and annual profitability pressure is so dominant, that the
marketing department hardly has the time to study the outcome of
market research in depth and predict buying trends. As a result the
customer focused approaches slowly fade in lieu of achieving targets.
But the pun is that profit is so interrelated with business approach,
that deterioration in the way of providing services will ultimately
have an impact on the overall profitability.
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INTRODUCTION
Gap between Management and the Research Personnel
The job of research department is over with the collection of
quantitative or qualitative insights. Though they provide the content
and analysis, they hardly engage in decision making. An
insurmountable gap, is created between the top management and the
research professionals, that makes the predictions superﬁcial.
Overload of Information
This is a very common problem that almost every research initiative
has to meet. When senior executives are presented with the research
report they are lost in charts, volumes of statistics and analytics. They
hardly can gather meaningful insights from the pages of reports laden
with information.
Today’s dynamic and ever evolving market structure require new
thinking and initiatives. The purpose of market research is to drive
business growth in the right direction. The insights of the customers
are very helpful in this regard and market research is the only way to
understand customers’ way of thinking and analyse their buying
trends. So, a business cannot sustain or grow without performing
research.
Therefore, it must take resort of a third party to perform the market
research, analyze the report and help the business to make strategic
decisions on the basis of the outcome.
1.6 ETHICS IN MARKETING RESEARCH
Market research is the collection and analysis of information about
consumers, competitors and the effectiveness of marketing programs.
With market research, businesses can make decisions based on how
the responses of the market, leading to a better understanding of how
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INTRODUCTION
the business has to adapt to the changing market. It is used to
establish which portion of the population will or does purchase a
product, based on age, gender, location, income level, and many other
variables. This research allows companies to learn more about past,
current, and potential customers, including their speciﬁc likes and
dislikes.
Ethical danger points in market research include:
• Invasion of privacy
• Stereotyping
People affected by unethical market research:
• Public
• Respondents
• Client
• Researcher
Approaches to privacy can, broadly, be divided into two categories:
free market, and consumer protection. In a free market approach,
commercial entities are largely allowed to do what they wish, with
the expectation that consumers will choose to do business with
corporations that respect their privacy to a desired degree. If some
companies are not sufﬁciently respectful of privacy, they will lose the
market share. In a consumer protection approach, in contrast, it is
claimed that individuals may not have the time or knowledge to
make informed choices, or may not have reasonable alternatives
available. Stereotyping occurs because any analysis of real population
needs to make approximations and place individuals into groups.
However if conducted irresponsibly, stereotyping can lead to a variety
of ethically undesirable results. In the American Marketing
Association Statement of Ethics, stereotyping is countered by the
obligation to show respect ("Acknowledge the basic human dignity of
all stakeholders").
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INTRODUCTION
Marketing research has experienced a resurgence with the
widespread use of the Internet and the popularity of social
networking. It is easier than ever before for companies to connect
directly with customers and collect individual information that goes
into a computer database and can be matched to other pieces of data
collected during unrelated transactions. The way a company conducts
its market research these days can have serious ethical repercussions,
impacting the lives of consumers in ways that have yet to be fully
understood. Further, companies can be faced with a public backlash if
its market research practices are perceived as unethical.
Deceptive Practices
The ease with which a company can access and gather data about its
customers can lead to deceptive practices and dishonesty in the
company's research methods. This type of ethical problem can run the
gamut — from not telling customers that information is being
collected when they visit a website to misrepresenting research
numbers by changing database numbers. Any action that uses lies
and deception to ﬁnd out or establish information about consumers
falls under this category.
Invasion of Privacy
One of the most serious ethical considerations involved in market
research is invasion of privacy. Companies have an unprecedented
ability to collect, store and match information relating to customers
that can infringe on a customer's right to privacy. In many instances,
the customer does not know or understand the extent of the
company's inﬁltration into his life. The company uses this information
to reach the customer with targeted advertising, but the process of
targeting can have a chilling affect on personal freedom.
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INTRODUCTION
Breaches of Confidentiality
Another significant ethical consideration involved in market research
involves breaches of confidentiality. Companies regularly share
information about customers with partners and affiliates, requiring
the customer to opt out of the sharing if he does not want to be
involved. Some companies sell information they have gathered on
customers to outside companies. Ethically, any unauthorized
disclosure of customer information is problematic.
Objectivity
Marketing and advertising have a significant impact on public
perceptions. Market researchers have an ethical obligation to conduct
research objectively, so data is available that allows for the
development of a nuanced picture. Researchers who allow their own
prejudices to skew their work tend to contribute to the perpetuation
of stereotypes in advertising, the development of destructive social
constructs and the enabling of unjust profiting from poverty. For
example, a market researcher with a one-dimensional view of
minorities could do a fair amount of harm if allowed to shape an
advertising campaign based on skewed data collection.
1.7 TYPES OF RESEARCHES
Marketing research techniques come in many forms, including:
• Ad Tracking – periodic or continuous in-market research to monitor
a brand’s performance using measures such as brand awareness,
brand preference, and product usage. (Young, 2005)
• Advertising Research – used to predict copy testing or track the
efficacy of advertisements for any medium, measured by the ad’s
ability to get attention (measured with attention tracking),
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INTRODUCTION
communicate the message, build the brand’s image, and motivate
the consumer to purchase the product or service. (Young, 2005)
• Brand equity research — how favorably do consumers view the
brand?
• Brand association research — what do consumers associate with the
brand?
• Brand attributes research — what are the key traits that describe the
brand promise?
• Brand name testing - what do consumers feel about the names of
the products?
• Commercial eye tracking research — examine advertisements,
package designs, websites, etc., by analyzing visual behavior of the
consumer
• Concept testing - to test the acceptance of a concept by target
consumers
• Cool hunting - to make observations and predictions in changes of
new or existing cultural trends in areas such as fashion, music,
films, television, youth culture and lifestyle
• Buyer decision making process research — to determine what
motivates people to buy and what decision making process they
used over the last decade. Neuro marketing emerged from the
convergence of neuroscience and marketing, aiming to understand
consumer decision making process
• Copy testing – predicts in-market performance of an ad before it
airs by analyzing audience levels of attention, brand linkage,
motivation, entertainment, and communication, as well as breaking
down the ad’s flow of attention and flow of emotion. (Young, p 213)
• Customer satisfaction research - quantitative or qualitative studies
that yields an understanding of a customer's satisfaction with a
transaction
• Demand estimation — to determine the approximate level of
demand for the product
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INTRODUCTION
• Distribution channel audits — to assess distributors’ and retailers’
attitudes toward a product, brand, or company
• Internet strategic intelligence — searching for customer opinions in
the Internet: chats, forums, web pages, blogs... where people
express freely about their experiences with products, becoming
strong opinion formers.
• Marketing effectiveness and analytics — building models and
measuring results to determine the effectiveness of individual
marketing activities.
• Mystery consumer or mystery shopping - an employee or
representative of the market research ﬁrm anonymously contacts a
salesperson and indicates he or she is shopping for a product. The
shopper then records the entire experience. This method is often
used for quality control or for researching competitors' products.
• Positioning research — how does the target market see the brand
relative to competitors? What does the brand stand for?
• Price elasticity testing — to determine how sensitive customers are
to price changes
• Sales forecasting — to determine the expected level of sales given
the level of demand. with respect to other factors like advertising
expenditure, sales promotion, etc.
• Segmentation research - to determine the demographic,
psychographic and behavioral characteristics of potential buyers
• Online panel - a group of individual who accepted to respond to
marketing research online
• Store audit — to measure the sales of a product or product line at a
statistically selected store sample in order to determine market
share, or to determine whether a retail store provides adequate
service
• Test marketing — a small-scale product launch used to determine
the likely acceptance of the product when it is introduced into a
wider market
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INTRODUCTION
• Viral Marketing Research - refers to marketing research designed to
estimate the probability that specific communications will be
transmitted throughout an individual's social network. Estimates of
social networking potential (SNP) are combined with estimates of
selling effectiveness to estimate ROI on specific combinations of
messages and media.
All of these forms of marketing research can be classified as either
problem identification research or as problem solving research.
There are two main sources of data — primary and secondary.
Primary research is conducted from scratch. It is original and
collected to solve the problem in hand. Secondary research already
exists since it has been collected for other purposes. It is conducted on
data published previously and usually by someone else. Secondary
research costs far less than primary research, but seldom comes in a
form that exactly meets the needs of the researcher.
A similar distinction exists between exploratory research and
conclusive research. Exploratory research provides insights into and
comprehension of an issue or situation. It should draw definitive
conclusions only with extreme caution. Conclusive research draws
conclusions the results of the study can be generalized to the whole
population.
Exploratory research is conducted to explore a problem to get some
basic idea about the solution at the preliminary stages of research. It
may serve as the input to conclusive research. Exploratory research
information is collected by focus group interviews, reviewing
literature or books, discussing with experts, etc. This is unstructured
and qualitative in nature. If a secondary source of data is unable to
serve the purpose, a convenience sample of small size can be
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INTRODUCTION
collected. Conclusive research is conducted to draw some conclusion
about the problem. It is essentially, structured and quantitative
research, and the output of this research is the input to management
information systems (MIS).
Exploratory research is also conducted to simplify the findings of the
conclusive or descriptive research, if the findings are very hard to
interpret for the marketing managers.
Marketing Research Methods
Methodologically, marketing research uses the following types of
research designs:
Based on questioning
• Qualitative marketing research - generally used for exploratory
purposes — small number of respondents — not generalizable to
the whole population — statistical significance and confidence not
calculated — examples include focus groups, in-depth interviews
and projective techniques
• Quantitative marketing research - generally used to draw
conclusions — tests a specific hypothesis - uses random sampling
techniques so as to infer from the sample to the population —
involves a large number of respondents — examples include
surveys and questionnaires. Techniques include choice modeling,
maximum difference, preference scaling and covariance analysis.
Based on observations
• Ethnographic studies — by nature qualitative, the researcher
observes social phenomena in their natural setting — observations
can occur cross-sectionally (observations made at one time) or
longitudinally (observations occur over several time-periods) -
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INTRODUCTION
examples include product-use analysis and computer cookie traces.
See also Ethnography and Observational techniques.
• Experimental techniques - by nature quantitative, the researcher
creates a quasi-artificial environment to try to control spurious
factors, then manipulates at least one of the variables — examples
include purchase laboratories and test markets Researchers often
use more than one research design. They may start with secondary
research to get background information, then conduct a focus group
(qualitative research design) to explore the issues. Finally, they
might do a full nation-wide survey (quantitative research design) in
order to devise specific recommendations for the client.
Business to business market research
Business to business (B2B) research is inevitably more complicated
than consumer research. The researchers need to know what type of
multi-faceted approach will answer the objectives, since seldom is it
possible to find the answers using just one method. Finding the right
respondents is crucial in B2B research since they are often busy, and
may not want to participate. Encouraging them to “open up” is yet
another skill required of the B2B researcher. Last, but not least, most
business research leads to strategic decisions and this means that the
business researcher must have expertise in developing strategies that
are strongly rooted in the research findings and acceptable to the
client.
There are four key factors that make B2B market research special and
different to consumer markets:
• The decision making unit is far more complex in B2B markets than
in consumer markets
• B2B products and their applications are more complex than
consumer products
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INTRODUCTION
• B2B marketers address a much smaller number of customers who
are very much larger in their consumption of products than is the
case in consumer markets.
• Personal relationships are of critical importance in B2B markets
Marketing Research in Small Businesses and Nonproﬁt
Organizations
Marketing research does not only occur in huge corporations with
many employees and a large budget. Marketing information can be
derived by observing the environment of their location and the
competitions, location. Small-scale surveys and focus groups are low
cost ways to gather information from potential and existing
customers. Most secondary data (statistics, demographics, etc.) is
available to the public in libraries or on the Internet and can be easily
accessed by a small business owner.
Below are some steps that could be done by SME (Small Medium
Enterprise) to analyze the market:
1. Provide secondary and or primary data (if necessary);
2. Analyze Macro and Micro economic data (e.g. supply and
demand, GDP, price change, economic growth, sales by sector/
industries, interest rate, number of investment/ divestment, I/O,
CPI, social anlysis,etc.);
3. Implement the marketing mix concept, which consists of place,
price, product, promotion, people, process, physical evidence and
also political and social situation to analyze global market
situation);
4. Analyze market trends, growth, market size, market share, market
competition (e.g., SWOT analysis, B/C analysis, channel mapping
identities of key channels, drivers of customers’ loyalty and
satisfaction, brand perception, satisfaction levels, current
competitor-channel relationship analysis, etc.)
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INTRODUCTION
5. Determine market segment, market target, market forecast and
market position;
6. Formulating market strategy and also investigating the possibility
of partnership/ collaboration (e.g., profiling and SWOT analysis of
potential partners, evaluating business partnership.)
7. Combine those analysis with the SME's business plan/ business
model analysis (e.g. Business description, business process,
business strategy, revenue model, business expansion, return of
investment, financial analysis (company history, financial
assumption, cost/benefit analysis, projected profit and loss, cash
flow, balance sheet and business ratio, etc.).
Note as important: Overall analysis should be based on 6W+1H
(What, When, Where, Which, Who, Why and How) question.
International Marketing Research Plan
International marketing research follows the same path as domestic
research, but there are a few more problems that may arise.
Customers in international markets may have very different customs,
cultures and expectations from the same company. In this case,
marketing research relies more on primary data rather than secondary
information. Gathering the primary data can be hindered by
language, literacy and access to technology. Basic cultural and market
intelligence information will be needed to maximize the research
effectiveness. Some of the steps that would help overcoming barriers
include; (1) Collect secondary information on the country under study
from reliable international source e.g. WHO (2) Collect secondary
information on the product/service under study from available
sources (3) Collect secondary information on product manufacturers
and service providers under study in relevant country (4) Collect
secondary information on culture and common business practices (5)
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INTRODUCTION
Ask questions to get better understanding of reasons behind any
recommendations for a speciﬁc methodology.
1.8 IMPORTANCE OF MIS AND DSS IN MARKETING
RESEARCH
Marketing Information System (MIS)
Firms are always interested in understanding the needs of their
customers and employees. Firms design the marketing information
system so as to get the insight of the information provided by the
various internal and external sources. These information systems are
basically created to meet the needs of clients and executive staffs.
These intelligent systems stock the data of various interactions of
company personnel to the marketing environment like customers,
prospects, distributors, competitors, general public etc,
Company’s Internal Support System and Decision Making System
It is important to remember that the quality of decisions that are made
are only as good as the quality of information on which they are
founded. Marketing management must plan for the continuous
gathering of information. The costs attached to the gathering, analysis
and storage of data must, however, be borne in mind because they
can sometimes be very high and place a limit on the amount of data
that can be collected.
According to the objectives, it is essential for you to be familiar with
the necessity for marketing information. You will realise from above
that marketing information is necessary to enable marketing
management to make effective decisions concerning the handling of
various circumstances in the marketing environment.
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INTRODUCTION
The more information that is known about a certain matter, the easier
it is for decisions to be made that reduce the risk of making incorrect
decisions. Uncertainties may be cancelled out to a certain extent.
You will remember that according to the principles of the marketing
concept, a marketer can only maximise "proﬁtability" in the long-term
if he satisﬁes the consumers' needs. However, to satisfy the
consumers' needs, a marketer must continually keep up to date with
consumer needs, preferences and desires, as well as any changes in
terms of any of these aspects.
In reality, the marketer is not only supposed to be aware of
consumers' present needs, desires and preferences, but also of any
trends in them. In this way the marketer will not be taken by surprise
by changes, seeing that adaption to changes cannot always be made
immediately.
While the marketer keeps up to date with changes in the consumer
market, he must also gather information on aspects such as
competitors’ activities as well as changes in the technological
environment to enable him to see opportunities and threats in
perspective. It is of little value for him to only know that consumer's
needs have changed, but to be unaware of new techniques that can be
used to satisfy them or of suppliers who can supply components.
To sum up, the marketer must keep up to date on a continuous basis
with the present position, and changes at all levels of the marketing
environment. In order to satisfy the marketer's need for reliable,
relevant marketing information, a formal marketing information
system has come into being. This information system must be
managed by making it applicable to the elements of management,
such as planning, coordination and control. The marketer must, for
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INTRODUCTION
example, ﬁrst identify on a continuous basis the information needs
before the gathering of information can be planned and coordinated.
The marketing information system can be described as the formal,
planned system of people, methods and machines which are
responsible for the continuous gathering, analysis and storage of
information and the continuous supply, thereof, to marketing
management.
To carry out the above task, the marketing information system
comprises various components, each of which can be seen as a sub
system. The composition of the marketing information system will
differ from enterprise to enterprise, especially according to the size of
the enterprise. The composition will be very formal in very big
enterprises and almost identical to the description that follows, while
very small enterprises mostly cannot afford such a formal approach
and must look for alternatives, as indicated below.
Components of the marketing information system
The marketing information system comprises four components,
namely;
• The internal recording system.
• The marketing intelligence system.
• The statistical system.
• The market research system.
The internal record system comprises various reports which are
generated in the running of a business. These reports may pertain to
information such as sales data (per area, product and/or sales
representative); market share; sales costs; advertising; stock supplies,
and cash ﬂow.
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INTRODUCTION
This information is usually available in both large and small
enterprises. The internal recording system, therefore, consists of
sources from which an enterprise can gather marketing information
concerning the internal marketing environment of the enterprise. This
information is known as secondary information because it is not
gathered for a specific problem.
The marketing intelligence system is comprised of the sources from
which the business can gather marketing information concerning the
external environment and entails, amongst other things, the following
• Sales representatives
• Agents
• Suppliers
• Advertising agencies
• Private marketing research companies.
Decision Support System (DSS)
Marketing Decision Support System: An interactive, flexible
computerized information system that enables managers to obtain
and manipulate information as they are making decisions.
Database Marketing: The creation of a large computerized file of
customers’ and potential customers’ profiles and purchase patterns.
A Decision Support System (DSS) is a computer-based information
system that supports business or organizational decision making
activities. DSSs serve the management, operations, and planning
levels of an organization (usually mid and higher management) and
help to make decisions, which may be rapidly changing and not
easily specified in advance (Unstructured and Semi-structured
decision problems). Decision support systems can be either fully
computerized, human or a combination of both.
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INTRODUCTION
While academics have perceived DSS as a tool to support decision
making process, DSS users see DSS as a tool to facilitate
organizational processes. Some authors have extended the definition
of DSS to include any system that might support decision making.
Sprague (1980) defines DSS by its characteristics:
1. DSS tends to be aimed at the less well structured, underspecified
problem that upper level managers typically face;
2. DSS attempts to combine the use of models or analytic techniques
with traditional data access and retrieval functions;
3. DSS specifically focuses on features which make them easy to use
by non computer people in an interactive mode; and
4. DSS emphasizes flexibility and adaptability to accommodate
changes in the environment and the decision making approach of
the user.
DSSs include knowledge-based systems. A properly designed DSS is
an interactive software-based system intended to help decision
makers compile useful information from a combination of raw data,
documents, and personal knowledge, or business models to identify
and solve problems and make decisions.
Typical information that a decision support application might gather
and present includes
• inventories of information assets (including legacy and relational
data sources, cubes, data warehouses, and data marts),
• comparative sales figures between one period and the next,
• projected revenue figures based on product sales assumptions.
• a communication-driven DSS supports more than one person
working on a shared task; examples include integrated tools like
Google Docs.
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INTRODUCTION
• a data-driven DSS or data-oriented DSS emphasizes access to and
manipulation of a time series of internal company data and,
sometimes, external data.
• document-driven DSS manages, retrieves, and manipulates
unstructured information in a variety of electronic formats.
• knowledge-driven DSS provides specialized problem-solving
expertise stored as facts, rules, procedures, or in similar structures.
• model-driven DSS emphasizes access to and manipulation of a
statistical, ﬁnancial, optimization, or simulation model. Model-
driven DSS use data and parameters provided by users to assist
decision makers in analyzing a situation; they are not necessarily
data-intensive. Dicodess is an example of an open source model-
driven DSS generator.
Three Fundamental Components of DSS Architecture are
1. the database (or knowledge base),
2. the model (i.e., the decision context and user criteria), and
3. The users of the DSS.
Development Frameworks
DSS systems are not entirely different from other systems and require
a structured approach. Such a framework includes people,
technology, and the development approach.
The early framework of decision support system consists of four
phases:
• Intelligence searching for conditions that call for decision.
• Design inventing, developing and analyzing possible alternative
actions of solution.
• Choice selecting a course of action among those.
• Implementation adopting the selected course of action in decision
situation.
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INTRODUCTION
DSS technology levels (of hardware and software) may include:
1. The actual application that will be used by the user. This is the
part of the application that allows the decision maker to make
decisions in a particular problem area. The user can act upon that
particular problem.
2. Generator contains hardware/software environment that allows
people to easily develop specific DSS applications. This level
makes use of case tools or systems such as Crystal, Analytica and
iThink.
3. Tools include lower level hardware/software. DSS generators
including special languages, function libraries and linking
modules
An iterative developmental approach allows the DSS to be changed
and redesigned at various intervals. Once the system is designed, it
will need to be tested and revised where necessary for the desired
outcome.
DSS components may be classified as:
1. Inputs: Factors, numbers, and characteristics to analyze
2. User Knowledge and Expertise: Inputs requiring manual analysis
by the user
3. Outputs: Transformed data from which DSS "decisions" are
generated
4. Decisions: Results generated by the DSS based on user criteria
DSSs which perform selected cognitive decision making functions
and are based on artificial intelligence or intelligent agent’s
technologies are called Intelligent Decision Support Systems (IDSS).
The nascent field of decision engineering treats the decision itself as
an engineered object, and applies engineering principles such as
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INTRODUCTION
design and quality assurance to an explicit representation of the
elements that make up a decision.
Benefits
1. Improves personal efficiency
2. Speed up the process of decision making
3. Increases organizational control
4. Encourages exploration and discovery on the part of the decision
maker
5. Speeds up problem solving in an organization
6. Facilitates interpersonal communication
7. Promotes learning or training
8. Generates new evidence in support of a decision
9. Creates a competitive advantage over competition
10. Reveals new approaches to thinking about the problem space
11. Helps automate managerial processes
12. Create Innovative ideas to speed up the performance
DSS Characteristics and Capabilities:
1. Solve semi-structured and unstructured problems
2. Support managers at all levels
3. Support individuals and groups
4. Interdependence and sequence of decisions
5. Support Intelligence, design, choice
6. Adaptable and flexible
7. Interactive and ease of use
8. Interactive and efficiency
9. Human control of the process
10. Ease of development by end-user
11. Modeling and analysis
12. Data access
13. Stand-alone and web-based integration
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INTRODUCTION
14. Support varieties of decision processes
15. Support varieties of decision trees
16. Quick response
1.9 SUMMARY
With the customers of today becoming more exacting, sophisticated,
quality and brand conscious,” marketing research” is gaining lot of
importance. In the past customers generally interacted with sales and
marketing personnel who passed on the customer requirements to
other departments in the company and then in turn actions were use
to be taken, However with all scenario now rapidly changing with
business environment and steep competition nationally and globally
the marketing research has become modern.
The current scenario demands that the firm develops a proper
information system which will have a continuous flow of data and
information into the company from various sources.
To cope up with rapid changes in environment, tastes of people and
changing fashions, fast and accurate data is required to facilitate the
decision making.
Market researcher has to continuously work on various data and
analysis to generate faster results (findings). It has become necessary
to build marketing intelligence systems with internal sources and
external sources, which are backed up by software support and
modern market researchers and analysts.
In today’s environment where speed and accuracy are critical
elements of decision making, marketing research plays a pivotal role
in the decision making process.
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INTRODUCTION
1.10 SELF ASSESSMENT QUESTIONS
1. Marketing manager makes tactical decisions based upon
____________.
a. Marketing research
b. Market intelligence
c. Internal information system
2. Consumer marketing research focuses on ____________.
a. Behavior of consumer
b. Future products of company
c. Consumer needs
3. Which of the mention below is not a part of fundamental DSS
Architecture?
a. Database of interactions
b. User
c. Financial reports
4. Which component mentioned below is not a part of market
intelligence system?
a. Sales representative
b. Distributor
c. One time buyer
5. The internal recording system is a part of company’s ____________.
a. Marketing intelligence system
b. Advertising programme
c. Communications department
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INTRODUCTION
6. Advertising research is mainly concerned about ____________.
a. Increasing sales
b. Increasing brand value
c. Tracking advertising attention
7. Core function of decision support system is to ____________.
a. provide valuable inputs to make decision.
b. give consolidated market information.
c. company’s daily activity report.
8. The type of the research made to get some basic idea on problem
faced by the company _____________.
a. Exploratory research
b. Descriptive research
c. Empirical research
Activities for the student
1. Assuming you are a marketing research manager of a foods
product company
• design a marketing intelligence system.
• deﬁne components of DSS with respect to speciﬁc your company.
2. Discuss the ad campaign research conducted on newly launched
product.
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INTRODUCTION
REFERENCE MATERIAL
Click on the links below to view additional reference material for this
chapter
Summary
PPT
MCQ
Video Lecture - Part 1
45

MARKETING RESEARCH PROCESS
Chapter 2 - Marketing Research Process
Objectives
After studying this chapter you will be able to understand
• understand the meaning and significance of the “management
dilemma.”
• understand how to define the decision problem?
• understand how to define the research problem?
• describe the research process.
• how to draft and evaluate proposal.
Structure
2.1 Introduction to Marketing Research Process
2.2 Management Dilemma
2.3 Defining a Decision Problem
2.4 Defining a Research Problem
2.5 Hypothesis
2.6 Research Proposal
2.7 Marketing Research Process
2.8 Summary
2.9 Self Assessment Questions
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2.1 Introduction to Marketing Research Process
The marketing research process is the systematic identification,
collection, analysis and distribution of information for the purpose of
knowledge development and decision making.
Green and Tull have defined Marketing research as:
“Marketing research is a systematic and objective search for and
analysis of, information relevant to the identification and resolution
of any problem in the field of marketing.”
Marketing research, thus, seeks to set about its task in a systematic
manner. This means that a detailed and carefully designed research
plan is developed in which each stage of the research is specified.
Such a research plan is only considered adequate if it specifies the
research problem in precise manner, the information necessary to
address the problem, the methods to be employed in gathering the
information and the analytical techniques to be used to interpret it.
Although the need for precision and thoroughness in marketing
research is stressed, it is to be remembered that, market research only
reports the findings to the decision makers and do not make any
decisions.
The reality is that management is frequently under pressure to make
timely decisions. Therefore, management often seeks answers
thorough marketing research in the shortest time possible and,
moreover at a minimum cost.
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Marketing research revolves around:
• Prospective customers.
• Existing customers.
• Lost customers.
• Internal customers (Employees)
• Community
• Business environment
Marketing research is concerned with variety of aspects of the market
like: Product, sales, consumer behavior, promotions, distribution,
pricing, packaging, and advertising. Since the researcher cannot
investigate everything about market and product, He/She must be
selective. The question remains that how researcher should focus and
to what depth the issue must be investigated. The answer to this
question is “marketing research brief”. The research brief sets
guidelines to the researcher. The research brief is prepared by the
decision makers who in turn is going to use information for decision
purpose.
The brief must inform the researcher about particulars to be
incorporated in the research like:
• Purpose of research.
• Objectives stated in a clear, concise, attainable, measurable and
quantiﬁable way
• A resource allocation
• Time frame
• Budget and facilities
• Reporting format and period
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2.2 Management Dilemma
Management dilemma can be defined as a problem or opportunity
that requires a marketing decision; a symptom of a marketing
problem or an early indication of a marketing opportunity.
In order to identify the Management Dilemma three categories of the
symptomatic situations should be studied.
• Overt difficulties: Overt difficulties are those which are quite
apparent and which manifest by themselves. For e.g. Parle products
is witnessing a decline in sales of beverages although A summer is
on.
• Latent difficulties: Latent difficulties are those which are not so
apparent but could grow into bigger problems if not attended, For
e.g. reduced sales volume may demoralize the distributor and
reduce his interest in product.
• Unnoticed opportunities: Unnoticed opportunities are those which
indicate substantial growth in some areas of market which requires
a special attention of marketing. For e.g., rising awareness of
Internet creating opportunities for students of online businesses.
Once the researcher has identified the problem/opportunity. It must
be carefully examined in the interest of the organization. After this the
researcher moves on to the next step of defining the research problem.
2.3 Defining a decision problem
The decision problem faced by the management must be translated
into a market research problem in the form of a question which
obtains the information required to make a decision, the decision
problem is now translated into a research problem.
49

For e.g.: FMCG company wishes to launch a superior product with
added features anticipating competition to come up with similar
product- This is a decision problem, therefore, the corresponding
research problem would be “Will market accept a new product with
modified version”?
The objective of the research should be clearly defined so as to
address the decision problem.
The researcher must be able to outline and convey possible outcomes
of the research to the decision maker in order to formulate further
plans and strategies.
Marketing research acts a guide to the decision making management
by enabling it to take those decisions that have high probability of
succeeding as regards the attainment of its marketing objectives.
2.4 Defining a research problem
The first step in research is formulating a research problem. It is
rightly said that “A problem well defined is half solved” Poorly
defined problems could lead to confusion and do not allow
researchers to develop a good research design.
Research is basically a cycle; It starts with a problem and ends with a
solution to the problem. Problem statement is something around
which the entire research is revolving.
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A research problem creates many questions for researcher like:
• Who
• What
• When
• Where
• Why
Research originates from a need aroused. The researcher should
think on what caused the need to do the research (Problem
identification). A clear distinction between the PROBLEM and
PURPOSE should be made.
PROBLEM: The researcher finding the solution for.
PURPOSE: To solve the problem
The researcher should keep the following factors in mind while
framing the questions.
• Outline the general context area
• Highlight key concepts and ideas
• What are the underlying assumptions?
• Why the issues are so important?
• What needs to be solved?
• To identify the most significant issues for further exploration
The research problem should facilitate analytical thinking on part of
researcher to achieve conclusive solutions to the stated problem.
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2.5 Hypothesis
Definition: A hypothesis is a proposition which a researcher wants
to verify.
In common usage, a hypothesis refers to a provisional idea whose
merit requires evaluation. For proper evaluation, the framer of a
hypothesis needs to define specifics in operational terms.
A hypothesis requires more work by the researcher in order to either
confirm or disprove it. In due course, a confirmed hypothesis may
become part of a theory or occasionally may grow to become a theory
itself.
By definition, a hypothesis is a proposed statement made on the basis
of limited evidence that can be proved or disproved and is used as a
starting point for further investigation.
Let’s break that down:
Management Problems Corresponding Research Problems
Allocate advertising budget to
media.
Estimate awareness generated by each media
type.
Decide whether to keep office
open on Saturdays.
Evaluate use of services on Saturday and
determine on whether customers will shift usage
to weekdays.
Introduce a new health service.
Design a concept test and assess acceptance
and use.
Change the marketing program
to measure a product’s current
image.
Design a test-marketing situation such that the
effect of the new program can be estimated.
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It is a proposed statement.
• A hypothesis is not fact, and should not be argued as right or
wrong until it is tested and proven one way or the other.
It is made on the basis of limited (but hopefully some) evidence.
• Your hypothesis should be informed by as much knowledge as you
have. This should include data that you have gathered, any
research you have done, and the analysis of the current problems
you have performed.
It can be proved or disproved.
• A hypothesis pretty much says, “I think by making this change, it
will cause this effect.” So, based on your results, you should be able
to say “this is true” or “this is false.”
It is used as a starting point for further investigation.
• The key word here is starting point. Your hypothesis should be
formed and agreed upon before you make any wireframes or
designs as it is what guides the design of your test. It helps you
focus on what elements to change, how to change them, and which
to leave alone.
How do I write a hypothesis?
The structure of your basic hypothesis follows a CHANGE: EFFECT
framework.
!
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While this is a truly scientiﬁc and testable template, it is very open-
ended. Even though this hypothesis, “Changing an English headline
into a Spanish headline will increase click through rate,” is perfectly
valid and testable, if your visitors are English-speaking, it probably
doesn’t make much sense.
So now the question is …
How do I write a GOOD hypothesis?
We can’t just start plugging in nouns and verbs and conclude that we
have a good hypothesis. Your hypothesis needs to be backed by a
strategy. And, your strategy needs to be rooted in a solution to a
problem
So, a more complete version of the above template would be
something like this:
!
In order to have a good hypothesis, you don’t necessarily have to
follow this exact sentence structure, as long as it is centered on three
main things:
• Presumed problem
• Proposed solution
• Anticipated result
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1. Presumed problem
After you’ve completed your analysis and research, identify the
problem that you will address. While we need to be very clear about
what we think the problem is, you should leave it out of the
hypothesis since it is harder to prove or disprove. You may want to
come up with both a problem statement and a hypothesis.
For example:
Problem Statement: “The lead generation form is too long, causing
unnecessary friction.”
Hypothesis: “By changing the amount of form ﬁelds from 20 to 10,
we will increase number of leads.”
2. Proposed solution
When you are thinking about the solution you want to implement,
you need to think about the psychology of the customer. What
psychological impact is your proposed problem causing in the mind
of the customer?
For example, if your proposed problem is “There is a lack of clarity in
the sign-up process,” the psychological impact may be that the user is
confused.
Now think about what solution is going to address the problem in the
customer’s mind. If they are confused, we need to explain something
better, or provide them with more information. For this example, we
will say our proposed solution is to “Add a progress bar to the sign-
up process.” This leads straight into the anticipated result.
55

3. Anticipated result
If we reduce the confusion in the visitor’s mind (psychological
impact) by adding the progress bar, what do we foresee to be the
result? We are anticipating that it would be more people completing
the sign-up process. Your proposed solution and your KPI need to be
directly correlated.
Note: Some people will include the psychological impact in their
hypothesis. This is not necessarily wrong, but we do have to be
careful with assumptions. If we say that the effect will be “Reduced
confusion and therefore, increase in conversion rate,” we are
assuming the reduced confusion is what made the impact. While this
may be correct, it is not measureable and it is hard to prove or
disprove.
To summarize, your hypothesis should follow a structure of: “If I
change this, it will have this effect,” but should always be informed
by an analysis of the problems and rooted in the solution you deemed
appropriate.
Characteristics of a good hypothesis:
1. A good hypothesis is based on a sound reasoning.
a. The hypothesis is always based on previous research.
b. The hypothesis must follow most likely outcome and not
exceptional outcome.
2. A good hypothesis provides a reasonable explanation for the
predicted outcome.
3. A good hypothesis clearly states the relationship between the
deﬁned variables.
a. Written in a simple and clear manner is easier to test
b. It should not be vaguely expressed.
56

4. A good hypothesis defines variables in clearly measurable terms.
a. Who are the participants?
b. What will be different in the test?
5. A good hypothesis is testable in a reasonable amount of time
6. A good hypothesis is self explanatory and corresponds with
existing knowledge.
7. It must be verifiable
8. A good hypothesis must be formulated in simple and
understanding terms.
2.6 Research Proposal
The researcher after receiving the brief from the management sets out
to make a research proposal.
The major components to the research proposal are
• Research Design
• Procedures
Research brief basically helps a researcher to define the research
problem. Researcher develops the proposal after giving careful
considerations to all the contents in the brief.
The procedures are divided into the major seven steps of research
proposal which are discussed below. These steps are also popularly
known as steps of marketing research process
A well-planned proposal will ensure you get the most out of your
market research activity.
57

Provides 10 key steps to consider
Marketing research is vital in all businesses and it is important that a
proposal is written before any formal research activity takes place.
Businesses often find themselves in a challenging situation and need
to find reliable answers to key questions in order to make the right
decisions. The research proposal is a statement of intent and explains
the purpose for the research to take place. Below are 10 key points to
consider when structuring your proposal.
1. Title and keywords
The title of the proposed investigation should be clear, precise and
accurate. A short main title outlining the area of the research may
be followed by a secondary part of the title that includes more
specific information.
Keywords are normally required to identify the content of the
proposal. An average of four to six words should suffice.
2. Aims and objectives
The primary aim of the proposal is to identify the purpose of the
research and the research questions/issues it attempts to address.
You should provide a sequence of statements (normally between
two and five) that gives an overview of what the research is trying
to achieve.
3. Background analysis
This section needs to justify the proposal with a brief account of
the practical issues the research will address. It should attempt to
demonstrate the importance of the proposed investigation in
relation to specific problems, contexts etc. References of facts,
figures, reports and authors will be useful.
58

4. Research hypothesis
This part should specify the exact questions to be investigated.
This needs to be precise and should take the form of hypotheses or
statements (normally between two and four). It should specify
what indicators will be measured in order to address the broad
issues identified within the aims and background sections.
5. Data collection
The data collection methods must be described succinctly. They
should include a description of the data collection process and the
strategy to be adopted (survey method or case study). If a survey
method is used, then you should mention the geographic regions
or demographic to be covered. Mention should be made of the
sample frame and sampling technique utilised Statistical
knowledge helps and there are many books available on this topic.
Careful attention needs to be paid in selecting the sample if it is to
represent the demographic being investigated. The sample also
needs to be determined based on confidence interval and
confidence level. A useful tool to determine these is available at
survey system.com (click on the research aids sample calculator).
6. Research methodology
The research methodology section should explain the key reasons
for choosing the proposed methods. The research strategy and
data collection methods should be discussed and evaluated, in
terms of their suitability and their implications for the quality of
the data to be collected.
This section may also discuss the need for depth and breadth of
information and the benefits of using qualitative or quantitative
data, the likely validity of the data collected the probability of the
59

respondents providing honest responses and the reliability of the
methods utilised. Benefits should also be compared to possible
alternative approaches.
7. Schedule of activity
This is an important section as the proposed research should be
conducted within time and budgetary limits. The feasibility of the
proposed research should be considered in relation to the
availability of resources. An estimate needs to be provided in
terms of total hours required for completion of the project –
designing the questionnaire, planning, scheduling and conducting
interviews, data analysis (qualitative/quantitative), and writing
up the report (first draft/final draft). A Gantt chart may help to
outline this plan.
8. Code of conduct
This section will articulate the way the researcher will comply
with the spirit and practice of research ethics and will conduct
their activities within the political/legal context within which the
research will be conducted. Factors to address may include:
confidentiality and anonymity statements, undertaking informed
consent, authorization for access to people and/or data and data
security.
9. Research limitations
The researcher needs to acknowledge any limitations that may be
inherent in the research design and to the extent it may affect the
accuracy of the research findings. Examples could include: how far
the findings can be generalised to the whole demographic/
situation, restrictions arising from time and resources, and issues
around objectivity.
60

10. Outcomes
The end-products likely to be produced as a result of the research
activity are described in this section. The outcomes are not similar
to ﬁndings. Examples would include: new practices, guidelines for
good practice and recommendations.
2.7 Marketing research process steps
Step 1: Identify and deﬁne the problem
In a very real sense, problem formulation is the heart of the research
process. As such, it represents the single most important step to be
performed. From the researcher’s point of view, problem formulation
means translating the management problem into a research problem.
As previously discussed, in order to formulate an appropriate
research problem, the researcher must understand the origin and
nature of management’s problem and then be able to rephrase it into
meaningful terms from an analytical point of view. This involves
timely and clear communication between manager and researcher.
Various researchable marketing problems with management
(management dilemmas):
• Launching a new product or a service.
• Low awareness of the company products and services.
• The market is aware about company products and services but still
not buying in required manner.
• Worrying companies image and reputation
• Problems related to distribution.
61

Step 2: Generation of the hypothesis or a problem statement
The end result of problem formulation is a statement of the
management problem that is analytically meaningful and that often
points the way to alternative solutions.
An accurate problem formulation specifies the types of information
needed to help solve the Management problem. In short, quality
thinking about a problem prior to data collection largely determines
the quality of data collection, analysis and problem solving.
Closely related to problem formulation is the development of a
working hypothesis, or an assertion about a state of nature. While
hypotheses are crucial for basic research because they tell the
researcher what to do, the concept of a hypothesis can also be useful
in decisional research to direct the development of the research
problem statement.
Properties of good hypotheses include the following:
• The hypothesis is a statement about the relationship between two
or more variables in declarative statement form.
• The hypothesis carries clear implications for testing the stated
relationship
(i.e., variables must be measurable or potentially measurable).
How to Formulate the Research Problem:
Problem formulation is much easier when specific components of the
research problem are defined:
(a) Specify the Research Objectives
Objectives guide the researcher in developing good, useful
research, and they help the client evaluate the completed project.
62

Objectives range from the very general, such as profit
Maximization, to the highly specific, such as measuring market
interest in a new product. It is rare that the objectives are well
explained to the researcher.
However, the researcher needs to take the initiative to develop a
clear statement of objectives. Each study should have a very limited
and manageable set of objectives that focus on the problem being
solved. Two or three well targeted objectives is preferable to many
that are ill conceived.
Fewer the objectives make it easier to keep track of progress toward
the objectives, to ensure that each is properly addressed, and to
determine the best methodology. If there are too many objectives
separate studies may be appropriate.
(b) The Environment or Context of the Problem
Consider the problem of deciding whether to introduce a new
consumer product. The marketing researcher must work closely
with the client in transforming the client’s problem into a workable
research problem.
The researcher’s efforts should be oriented toward helping the
manager decide whether any investigation is justified based on the
potential value of the research findings versus their cost. The
researcher must be aware of, and assist in, the identification of
objectives, courses of action, and environmental variables, insofar
as they affect the design of the research investigation.
If the research is undertaken and if the resulting findings are to be
utilized (i.e., have an influence on the user’s decision making), the
manager and researcher must have a productive and trusting
63

relationship that is based on the researcher’s ability to perform and
deliver the research as promised.
(c) The Nature of the Problem
Every research problem may be evaluated on a scale that ranges
from very simple to very complex. The degree of complexity
depends on the number of variables that inﬂuence the problem.
Understanding the nature of the problem helps a researcher ensure
that the right problem is being investigated and that a marketing
plan can be developed to solve the problem. A thorough
preliminary investigation using focus groups of consumers,
salespeople, managers, or others close to the problem may produce
much needed insight.
(d) Alternative Course of Action
Speciﬁes a behavioral sequence that occurs over time, such as the
adoption of a new package design, or the introduction of a new
product. Such a program of action becomes a commitment, made in
the present, to follow some behavioral pattern in the future.
It is usually desirable to generate as many alternatives as possible
during the problem formulation stage and state them in the form of
research hypotheses to be examined.
(e) The Consequences of Alternative Courses of Action
A set of consequences always relate to courses of action and even to
the occurrence of events not under the control of the manager. One
of the manager’s primary jobs is to anticipate and communicate the
possible outcomes of various courses of action that may result from
following the research.
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(f) Degrees of Uncertainty
Most marketing problems are characterized by a situation of
uncertainty as to which course of action is best. Years of experience
may allow the decision making manager to assign various
“likelihoods of occurrence” to the various possible outcomes of
speciﬁc courses of action. A carefully formulated problem and
statement of research purpose is necessary for competent research.
The statement of purpose involves a translation of the decision
maker’s problem into a research problem and the derivation of a
study design from this problem formulation. The research problem
provides relevant information concerning recognized (or newly
generated) alternative solutions to aid in this choice.
Step 3: Determination of the type of study and research process
design:
A research design speciﬁes the methods and procedures for acquiring
the information needed to structure and solve the research problem.
The overall operational design for a research project stipulates what
information is to be collected, from what sources, and by what
procedures. A good research design ensures that the information
obtained is relevant to the research problem, and that it is collected by
objective and economical procedures.
A research design might be described as a series of advance decisions
that, taken together, form a master plan or model for conducting a
research investigation.
Research designs vary depending on the type of study.
65

Generally, designs are associated with three types of studies, those
that focus on providing exploratory research, descriptive research and
causal research.
Types of Studies
1. Exploratory Studies
The major purposes of exploratory studies are for the identification of
problems, the precise formulation of problems (including the
identification of relevant variables), and the formulation of new
alternative courses of action.
An exploratory study is often the first in a series of projects. That is,
an exploratory study is often used as an introductory phase of a larger
study, and its results are used to bring focus to the larger study and to
develop specific techniques that will be used. Thus flexibility is a key
to designing and conducting exploratory studies.
We can distinguish three separate tasks that are usually included in
exploratory studies and that are typically conducted in the sequence
listed:
• A search of secondary information sources.
• Interviews with persons knowledgeable about the subject area.
• The examination of analogous situations.
Search Secondary Sources
Secondary sources of information are the “literature” on the subject. It
is the rare research problem for which there is no relevant information
to be found by a relatively quick and inexpensive search of the
literature. Secondary information sources are not limited to external
sources. Searches should also be made of company records.
66

Interview Knowledgeable Persons
Having searched secondary sources, it is usually desirable to talk with
persons who are well informed in the area being investigated,
including company executives, experts, consumers and mavens, and
users outside the organization.
A widely used technique in exploratory is the focus group. In focus
group interviews, a group of knowledgeable people participate in a
joint interview that does not use a structured question-and-answer
methodology. The group, usually consisting of 8 to 12 people (but
may have as few as 5 or as many as 20), is purposely selected to
include individuals who have a common background, or similar
buying or use experience, as related to the problem being researched.
Focus groups are used primarily to identify and deﬁne problems,
provide background information and generate hypotheses. Focus
groups typically do not provide solutions for problems.
Areas of application include detecting trends in lifestyles, examining
new product or service concepts, generating ideas for improving
established products or services, developing creative concepts for
advertising, and determining effective means of marketing products
or services.
If the sole purpose is to create ideas, then individual interviews may
be a better alternative than focus groups.
Examine Analogous Situations
It is also logical that a researcher will want to examine analogous
situations to determine what else can be learned about the nature of
67

the problem and its variables. Analogous situations include case
histories and simulations.
2. Descriptive Studies
Much research is concerned with describing market characteristics or
functions. For example, a market potential study may describe the
number, distribution, and socioeconomic characteristics of potential
customers of a product.
A market-share study finds the share of the market received by both
the company and its major competitors. A sales analysis study
describes sales by territory, type of account, size or model of product,
and the like.
In Marketing, Descriptive Studies are also made in the Following
Areas
1. Product research
Identification and comparison of functional features and
specifications of competitive products
2. Promotion research
Description of the demographic characteristics of the audience
being reached by the current advertising program
3. Distribution research
Determining the number and location of retailers handling the
company’s products that are supplied by wholesalers versus those
supplied by the company’s distribution centers
68

4. Pricing research
Identifying competitors’ prices by geographic area these examples
of descriptive research cover only a few of the possibilities.
Descriptive designs, often called observational designs by some
researchers, provide information on groups and phenomena that
already exist; no new groups are created.
5. Causal Research
Casual research deals with the question ‘why’. There are occasions
when a researcher wants to know why a change in one variable
brings about a change in another variable. If he is able to
understand the causes of the effects then the ability to predict and
control such events is increased. In addition, the cause and effect
have to be related. That is, there must be logical implication (or
theoretical justiﬁcation) to imply the speciﬁc causal relation.
Marketing Research Design
This is the most crucial step of the entire market research process,
requiring a great deal of thinking and an expertise. Marketing
research design includes secondary information, analysis, qualitative
research, methodology selection, question measurement and scale
selection, questionnaire design, sample design and determination of
data analysis to be used.
Elements of the market research design in a nutshell:
• The questionnaire
• Measurement and scaling
• Statistical testing
• Survey
69

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