MARKETING RESEARCH

Marketing research is the intelligence service of a business enterprise.

American Marketing Association defined marketing research as “the gathering, recording and analyzing of all
data about problems relating to the transfer and sale of goods and services from producer to consumer.”

Objectives of Marketing Research

1. To know the demographics and psychographics of customers:- Marketing research tries to reveal the
number of persons who buy, why they buy, when they buy, the frequency of their buying, and the sources of
their buying. It also includes the social status and the regional location of the customers.
2. To find out the impact of promotional efforts.
3. To know customer response to a new product.
4. To probe ‘what went wrong’.

NATURE OF MARKETING RESEARCH

Marketing research is systematic and objective collection of data, its analysis and evaluation, and
decision making in respect of specific aspects of a marketing problem.

Marketing Research and Market Research:- The nature of marketing research cannot be properly understood
without knowing the meaning of market research. Market research is the gathering, recording and analyzing of
market data to identify the present and potential customers and their motives and buying habits. It is the
discovery of the capacity of the market to absorb the products of a firm. It is a part of the marketing research. It
is worthwhile to quote Richard D.Crips to identify clearly the scope of Marketing research and market research.
“Marketing research is the systematic, objective and exhaustive search for the study of the facts relevant to any
problem in the field of marketing. Market research is restricted to the study of actual and potential buyers, their
location, their actual and potential value of purchases and their motives and habits.”

Market research may be conducted for the following reasons:-

(i) To identify the present and potential customers and their needs.
(ii) To forecast the demand of a product.
(iii) To determine customers preferences with regard to packaging, design, size, price and other features of
a product.
(iv) To locate the demand for products with regard to time and place, such as festival demand.
(v) To explore new markets for existing products.

SCOPE OF MARKETING RESEARCH

Marketing research covers different aspects of marketing of goods, services and ideas. There are many
areas of marketing management where marketing research has special branches.

Product Research:- Product research is associated with the conversion of customer needs into tangible product
offer. This includes development and testing of new products, improving the existing products, and a tab on the
changing customer preferences, habits, tastes, etc. Packaging design, branding, and labeling decisions are also
included here. Customer Research:- This research type includes investigation into the customer buying
behavior – the economic, social, cultural, personal and psychological influences. Sales Research:- Sales
research involves decisions concerning selection of store location, channels, territories, sales force motivation
and compensation, etc. The purpose is to reach the target customer more effectively, efficiently and timely. .
Promotion Research:- Promotion research encompasses all efforts by the marketers to communicate the
company’s offer. This includes advertising, publicity, public relations, sales promotion, etc.
SIGNIFICANCE OF MARKETING RESEARCH

Marketing is one of the most important areas of any business enterprise. Making of right type of
decision in this area determines the success of the enterprise. Correct and sound marketing decision can be
made only if right type of information is available to the management. The required information can be made
available by conducting marketing research. The significance of marketing research has increased because of
severe competition in the market, frequent technological changes, and the emergence of buyer’s market.
Marketing research is of great value to management.

Advantage of Marketing Research

A business enterprise can derive the following benefits by conducting marketing research.

(i) Forecasting. Marketing research facilities forecasting of demand for the products of the firm. This will
help in adjusting the production schedules accordingly.
(ii) Assessing Product Acceptance. Marketing research helps in knowing the probability of acceptance of
the products in its present form. Such type of research may lead to alternations in design, colour and
other features of the product to make it more acceptable by the consumers.
(iii) Rightful Promotion. Marketing research reduces wasteful expenditure on production and
advertisement. It tells in advance the products and services which are required by the customers.
(iv) Understanding New Markets. Marketing research helps in discovering new markets and in
understanding the behavior of various types of customers.
(v) Suitability of Channels. Marketing research can be used to study the effectiveness of existing
channels of distribution, advertising, sales promotion activities and other marketing activities.
(vi) Overall Business Direction. Marketing research provides invaluable information which not only
affects the working of the Marketing Department, but has an important impact on the functioning of
other departments of the enterprise, particularly production and purchase departments.
(vii) Assessment of Middlemen. Marketing research helps in knowing the reaction of the middlemen in
regard to the company’s marketing policies. This may lead to the discovery of the new lines of
production which can be taken up along with the existing products.

Limitations of Marketing Research

Marketing research may suffer from the following limitations:

(i) Huge Expenditure. Marketing research involves huge expenditure of money, efforts and time on the
collection and analysis of data. Small firms cannot afford marketing research.
(ii) Bias in Collecting Data. The effectiveness of marketing research depends largely on the types of data
or information collected. The subjectivity of the investigators may have adverse effect on the
effectiveness of the marketing research.
(iii) Unpredictable Human Behaviors. Marketing research is mainly a study of the behaviour of human
beings. The individuals may not always give adequate and accurate data. Thus, the results of the
marketing research are not cent percent accurate.
(iv) Requires Intelligent Handling. Marketing research is not an end in itself. It is a means to decision –
making. It requires competent and experienced executives or managers to use the results of marketing
research.
(v) Supplementary, Not Substitute. Marketing research is not a substitute for executive judgment. It only
provides relevant information with the help of which executives can take decisions regarding product,
pricing, promotion, place, packaging, etc.
(vi) Requires Competent Researcher. Marketing research may lead the executive to wrong results because
of carelessness of the research staff. If the investigators are not competent to collect right type of data
and analyze it accurately, there will be no utility of marketing research.
(vii) No time Gap Allowed Between Research and its Implementation. There is generally a time lag
between marketing research and the implementation of its findings. During this period, business
conditions might change making the market research a futile exercise.
THE MARKETING RESEARCH PROCESS

Marketing research is carried out in a systematic and scientific manner to make it more effective and useful
for marketing management. There are 5 sequential steps that apply to any research
1. Define the Problem.
The starting point calls for the Marketing Manager and marketing researcher to define the problem
carefully and agree on the research objectives. The problem should be defined and written down with full
clarity. A problem well defined is half solved.

2. Developing the Research Plan

The second stage calls for developing the most efficient plan for gathering the needed information. The
Marketing Manager needs to know the cost of research plan before approving it. Designing research plan calls
for decisions on the data sources, research approaches, research instruments, sampling plans and contact
methods.

Data sources
In order to conduct marketing research, the marketing research department may collect information
from various sources which may be either primary or secondary. The primary source of data refers to the first
hand original data collected by the investigators through observation, experimentation, and field survey. The
information may be collected directly from the customers, dealers and salesmen. The secondary data include
facts and figures which are already collected by other individuals and institutions. The sources of secondary
data include publications of Government, private institutions like Trade Associations and Chambers of
Commerce, international institutions like the International Monetary Found and the World Bank, and data
collected by other research agencies, etc.
Researchers usually start their investigation by examining secondary data to see whether their problem
can be partly or wholly solved without collecting costly primary data.
Primary data can mainly be collected as follows

• Preparation and Use of questionnaire

Questionnaire is the soul of survey. Therefore, it is necessary that sufficient care is taken to draft the
questionnaire. The questionnaire should be so framed that it suits the purpose of survey and evokes the highest
possible response. Following considerations should be taken into account while preparing a questionnaire and
putting it into use.

(i) Questionnaire should be accompanied by a covering letter stating the purposes of enquiry and
requesting the respondent to complete it and send it back to the investigator. It should also give
assurance that the information supplied by the respondent will be kept as strictly confidential.
(ii) The number of questions in the questionnaire should be minimum possible. Particularly, questionnaire
used for telephone survey should be very brief.
(iii) The question should be short and simple. As far as possible, the answers to the questions should be
capable of being expressed in standard format, i.e. ‘Yes’, ‘No’ and ‘No comment’, etc.
(iv) There should be a logical arrangement of questions
(v) The questions should be expressed in unambiguous words.
(vi) Mathematical calculations like ratios and percentages should not be asked from the respondents.
(vii) As far as possible, personal questions should be avoided
(viii) The layout of the questionnaire should be attractive in printing and design and the paper used.
(ix) Questionnaire should be pre-tested by checking response of a select respondents. This pilot study is
necessary to remove the draw-backs of the questionnaire in the initial stages. The re-drafted
questionnaire can be effectively used for undertaking a large scale survey to collect data for marketing
research.

Surveys with the help of a questionnaire can be conducted in the following way: (1) Personal Interview; (2)
through mail and (3) through the telephone.
Personal Interview:- It involves face to face communication between the investigator and the respondent. The
investigator is given a list of questions (known as questionnaire or schedule) to be put to the respondents
concerned. However, the investigator is given some freedom to put the questions in different styles to suit the
needs of a particular situation. Thus, it is a flexible form of data collection. This interview can also be held
without a questionnaire. Personal interview helps in asking complex and probing questions to secure more
information. The investigator can also observe certain factors related to income, occupation, standard of living,
etc.of the respondent. Personal interview helps in contacting only those respondents from whom the required
information can be obtained. It helps in getting detailed and accurate information. Literacy of the respondent is
no problem. But this method is expensive, particularly when a large number of respondents are covered. More
time is required to collect data. The interviewers must be competent, trained and experienced. They must be
honest and free from any biases. Otherwise, data collected will not be accurate, valid and reliable.
Mail Survey:- Data may be collected by sending printed questionnaire to the respondents with a request to
supply the written replies. It is presumed that while writing the answers sufficient thought will be given and
therefore, it is more reliable than the oral answers provided to an interviewer. The answers can be collected in a
standard form which facilitate tabulation, computation and analysis. Questionnaire through mail can be sent to a
large number of respondents scattered throughout the country. Thus, it is a cheaper method of collecting data.
The bias on the part of the interviewers is also avoided. .

Telephone Survey:- Telephone interview is the most convenient and speedy method of getting information.
This method allows limited coverage because it cane be used only to get the information from those people who
have installed telephones.

• Salesmen:- Salesmen are in important source of marketing data. They are in close touch with the
customers. They can be of great help in knowing data about the buying habits of the customers,
changing tastes of the customers, the preferences of the customers, and the products of the competitors.
The marketing manager should ask the salesmen to prepare and submit periodical reports to him. He
can also lay down the guidelines for the salesmen for preparing the report.

There are many advantages of obtaining data from the salesmen. The salesmen provide the first-hand
information of the conditions in the market. They provide the information within a short period. Salesmen can
appraise the marketing manager of the opinions and reactions of the consumers. This has also the effect of
motivating the salesmen because they feel that information provided by them is being used in framing
company’s marketing policy. But, sometimes, the reports submitted by salesmen suffer from biases. The
information provided by them may not be accurate because they feel that giving an accurate information will
affect their interest adversely. Care must be taken to check such practices amongst salesmen.

• Dealers:- The in charge of marketing research can also collect first hand information from the dealers.
Investigators may be sent to contact the dealers or distributors personally to know about the popularity of
the firm’s product, the share of firm in the market, acceptability by the consumers, and so on. The dealers
may also be requested to provide information about the marketing policies of the competitors. Dealers may
not always provide cent percent accurate information. They may not like to leak out the secrets of their
arrangements with other manufacturers and they may not even taken interest in the products of the firm in
question. Research can help solve such problems.

• Consumers:- Consumers are an invaluable source of primary data. A representative sample of the
consumers may be selected and information obtained regarding the prices, quality, packaging, etc. of the
products of the firm. By having direct contacts with the consumers, the reliability of the information
provided by the salesmen and dealers can also be checked. The firm can also use opportunity of inviting
suggestions from the customers regarding the importance of the specific characteristics of the product.
Some firms follow the practice of regularly knowing the opinion of ultimate consumers from the panel
called ‘consumers panel’. Such a panel is formed to know the fashion, taste and attitudes of the consumers.
The members of the panel are interviewed personally for obtaining the necessary information.

Observation:- The major method of getting primary data is by observing the behaviour (present and past)
of customer. The present behaviour can be observed by, say, positioning the investigator at the top of the
shop and watching how customer makes choice between different brands. The past behaviour can be
selectively observed only when we have some result of the past behaviour. For example, instead of asking
 which brand of washing machine the customer has, the interviewer can look at the washing machine, its
brand, colour, model, etc.

Sources of Secondary Data

o Press
o Publications of Trade Associations
o Government Publications.
o Publications of Reserve Bank of India and Financial Institutions
o Publications of private individuals, companies and research institutes
o Foreign Government and International Agencies

Sampling Plan

After deciding on the research approach and instruments, the marketing researcher must design a sampling plan
o Sampling unit-who is to be surveyed
o Sample size-How many people to be surveyed
o Sampling procedure-how should the respondents be chosen

Once the sampling plan has been selected, data may be collected by questionnaire, interview or any
other methods

3. Data Collection
Data collection from market/customer/sample surveys are submitted to experts for analysis

4. Data Analysis
The data analysis process involves the use of appropriate statistical techniques in order to
know the meaning of the collected data

5. Marketing Research Report

The last step in the marketing research process is the presentation of a marketing research report. The
report should be prepared while taking into account the preference of the marketers. The contents of the report
might include the title, table of contents, synopsis, introduction, methodology, major findings, limitations,
conclusions, recommendations, and suggestion. . However, the marketing research report should be easy to
follow, generate interest in reading, have visual graphics, and use non-technical language.

Once the marketing research process is competed with the submission of the report, the task is to
follow-up the research as presented. The quality of presentation, the contents, and the process should be
reviewed and marginal improvements, if necessary, provided as per the additional requirements of the
marketers. However, the marketing researcher should not expect full implementation of the research report
while it was being prepared. Changed circumstances, delays, and management perception might require minor
adjustments. On the whole, the marketing research should be able to satisfy the requirements of the marketing
management.