Marketing research -Prof.

TMK
Philip Kottler defines market research as systematic problem analysis, model building, and fact finding for the purpose of improved decision making and control in the marketing of goods and services. While the British marketing Research Society defines it as the modus used by those who provide goods and services to keep themselves in touch with the needs and wants of those who buy and use these goods and services. While the American Marketing Association defines it as the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services.
Types of Market Research: Market Research basically is divided into: a) Product Research: This is concerned with the design, development and testing of new products. - Improvement on existing products - Forecasting of likely trends in consumer preferences related to styling, product performance, quality of materials etc. Global competition among business are becoming stiff thus organizations need to meet the ever demanding expectations of their customers. As this happens design has become more important factor in winning customers. b) Sales & Distribution Research: Sales research involves a thorough examination of the selling activities of the company. This is accomplished by looking at the sales outlets and/or sales territories and formulating the data so that direct comparisons can be made. Distribution research 1

involves evaluating all of an organizations selling arrangements along with looking at alternative methods of distribution. c) Customer Research This research studies the social, economic and psychological influences affecting purchase decisions. It looks into the behaviour of buyers. The research may include customer surveys to study the opinions and behaviour of ultimate users of the products. d) Pricing Research: Pricing is a critical factor when it comes to gaining competitive advantage, competitor may also bring in substitute products thus an organization might want to carry out a research on what price their products are favorable to consumers. Determination of a pricing strategy must always take into account Market Research. d) Promotion Research: This is concerned with testing and evaluating the effectiveness of the various methods of promoting an organization product or services. f) Services Research: Market Research should be used to design, develop and distribute specific services. Most organization are now shifting into the services industry and its important for them to have useful information before making critical decisions.

Types of marketing research

Primary research is often expensive to prepare, collect and interpret from data to information. Nevertheless, while secondary research is relatively inexpensive, it often can become outdated and outmoded, given that it is used for a purpose other than the one for which it was intended. Primary research can also be broken down into quantitative research and qualitative research, which, as the terms suggest, pertain to numerical and non-numerical research methods and techniques, respectively. The appropriateness of each mode of research depends on whether data can be quantified (quantitative research), or whether subjective, non-numeric or abstract concepts are required to be studied (qualitative research). There also exist additional modes of marketing research, which are: Exploratory research, pertaining to research that investigates an assumption. Descriptive research, which, as the term suggests, describes "what is". Predictive research, meaning research conducted to predict a future occurrence. Conclusive research, for the purpose of deriving a conclusion via a research process.

Designing and Developing a Market Research: Methodologies of Market Research: For a Market Research to be useful one needs to carry out the research in a systematic and organized manner, there should be a framework for the entire research process. There are basically 3 types of research design, these are (a) Exploratory Design This design attempts to study what it is you will ultimately research ie. the real nature of research problems. (b) Descriptive Studies: This seeks specific information. It is done when one has substantial knowledge about the marketing problem. E.g census, public opinions etc. These are basically descriptive reports eg customer profile, market demand etc (c) Casual Studies: Attempts to identify factors which underlie market behaviour and evaluate other relationships and interactions. There are basically 2 categories of research.

Reactive: Where data originates from interaction with investigators and respondents as in interviews, questionnaires or experiments. Normactive : (non-reactive): This relates to surveys involving observation or library research, where there is no dependence on respondents directly. One should use a variety of reactive and normative research testing to provide the widest range of data collection. a) Exploratory Research: This design method is used for generating hypothesis and identifying areas to study further. In exploratory research one gathers information from various sources which are likely to provide useful insights. The researcher is less concerned with carrying out probability sampling, he is more concerned with allowing use to communicate or provide their ideas. b) Descriptive Research: This seeks specific information. It is done when one has substantial knowledge about the marketing problem. E.g census, public opinions etc. These are basically descriptive reports eg customer profile, market demand etc c) Casual Research: Attempts to identify factors which underlie market behaviour and evaluate other relationships and interactions. Collecting Data: This may involve a variety of activities thus it requires a large number of personnel. The researcher must decide what type of data to use either primary data, secondary data or some combination of the two. Secondary data: is the use of data that had been collected earlier for some other purpose secondary data is cheaper and easier to gather. If a researcher goes or chooses to use primary data then he can use various techniques to collect this data. i. Observation: Involves monitors and recording actions of customers and events in the market place according to Gilbert A. Churchill Jr. observation can be useful for learning about competitors and their products. ii. Surveys: this is another technique. It is the collection of data through questionnaires. The researcher can conduct survey through mail, telephone or the

person. Survey are useful to the marketer, they are volatile and can generate important information. (d) Analyzing and Interpreting data The research examines the data collected through questionnaires or observation. The researcher the codes (-assigns human symbols to the answers) and then he tabulates the data. (counting number of cases that fall into each category of response). The tabulated data is then used as a basis of carrying out statistical analysis. The researcher then evaluates the results so as to uncover situations where the researcher can provide more helpful information by modifying the research design. (e) Preparing the research report The researcher then puts information generated by the analysis into a report. The research report should contain:

ADVANTAGES/IMPORTANCE OF MARKETING RESEARCH: 1. Indicates current market trends: Marketing research keeps business unit in touch with the current market trends and offers guidance for facing market situation with confidence. 2. Pinpoints deficiencies in marketing policies: MR pinpoints the deficiencies as regards products, pricing, promotion, etc. It gives guidance regarding different aspects of marketing. They include product development, branding, packaging and advertising. 3. Explains customer resistance: MR is useful for finding out customer resistance to company's products. The researcher also suggests remedial measures to deal with the situation. This makes the products and marketing policies agreeable to consumers. 4. Suggests sales promotion techniques: MR enables a manufacturer to introduce appropriate sales promotion techniques, select most convenient channel of distribution, suitable pricing policy for the products and provision of discounts and concessions to dealers. Marketing research facilitates sales promotion. 5. Offers guidance to marketing executives: MR offers information and guidance to marketing executives while framing marketing policies. Continuous research enables a company to face adverse' marketing situation boldly. It acts as an insurance against possible changes in market environment. 6. Facilitates selection and training of sales force: Marketing research is useful for the selection and training of staff in the sales organization. It also suggests the incentives that should be offered for motivation of employees concerned with marketing. 7. Promotes business activities: Marketing research enables a business unit to grow/expand its activities. It creates goodwill in the market and also enables a business unit to earn high profits through consumer-oriented marketing policies and programmers. 8. Facilitates appraisal of marketing policies: Research activities enable business executives to have an appraisal of the present marketing policies in the light of findings of research work. Suitable adjustments in the policies are also possible as per the suggestions made by the researchers. 9. Suggests new marketing opportunities: MR suggests new marketing opportunities and the manner in which they can be exploited fully. It identifies emerging market opportunities.

10. Facilitates inventory study: Marketing research is useful for the evaluation of companys inventory policies and also for the introduction of more efficient ways of managing inventories including finished goods and raw materials. 11. Provides marketing information: MR provides information on various aspects of marketing. It suggests relative strengths and weaknesses of the company. On the basis of such information, marketing executives find it easy to frame policies for the future period. MR provides information/ guidance and alternative solutions to current marketing problems. 12. Suggests appropriate distribution channels: MR can be used to study the effectiveness of existing channels of distribution and the need of making suitable changes in the distribution system. 13. Provides information on product acceptance: Marketing research helps in knowing the probability of acceptance of the product in its present form. It is also useful for the introduction of modifications in the existing product line of a firm. 14. Creates progressive outlook: MR generates a progressive and dynamic outlook throughout the business organization. It promotes systematic thinking and a sense of professionalization within the company. It also creates enthusiasm among marketing executives. This brings success and stability to the whole business unit 15. Has wider social significance: MR is of paramount importance from the social angle. It is the means by which the ultimate consumer literally becomes king of the market place, with his desires/ prejudices and every whim transmitted to the producer and distributor. In brief, MR has wider social significance. It is useful to all parties involved in the process of marketing. Marketing research need not be treated as a fad. It is one of those fundamental tools that todays marketing manager needs to keep sharpened all the time so that he might be-m a position to minimize the business or marketing risk. Limitations of marketing research are as explained below: (1) Marketing research offers suggestions and not decisions: Marketing research is not a substitute for decision-making process. It only offers possible suggestions/solutions to marketing problems. It actually acts as a tool that facilitates decision-making process. It guides marketing managers in taking balanced, resultoriented and rational decisions. The suggestions offered by marketing researchers are usually possible/probable solutions but not the exact solutions. MR offers predictions but they are not necessarily accurate or perfect. Such predictions should be taken in the right spirit by the management. It offers information and guidance to marketing managers but not the final decisions, which are to be taken by managers themselves.

MR does not provide readymade solutions to marketing problems. It only provides indicators. It may not provide conclusive information on marketing problems. The marketing managers have to use available information properly and take appropriate marketing decisions. The effectiveness of MR depends on the skill of the decision-maker. For this/ various marketing forces need careful consideration. However all such forces are not covered by research project undertaken. MR aids managerial decision-making but it cannot replace judgment and experience of marketing executives/managers. (2) Marketing research cannot predict accurately: In MR, efforts are being made to estimate or predict the possible future situation. For this/ certain research studies are undertaken. However, the results/ conclusions arrived at may not be complete, perfect or accurate. They predict possible tendencies but not certainties. Future is always uncertain and exact prediction about the future is just not possible through marketing research. This is because market environment is ever changing consumer behavior is difficult to estimate correctly and reliable data for research purpose may not be available. As a result, the decisions taken and policies framed on the basis of such research studies may not be accurate and useful for solving current marketing problems. Marketing research gives guidance to marketing managers through information and conclusions drawn but such guidance may not be accurate as it is based on the predictions about future situation. The guidance offered through research activities may prove to be out-dated at the time of taking current marketing decisions. (3) MR conclusions are not always dependable: There are many who are skeptics of MR. Their criticism is that MR conclusions are not dependable. There are examples where the research failed to deliver desired results or a product failed even when the research had shown promising market demand and consumer support. The classical example is that of Coke. Its MR showed that 68% customers in US liked the taste of the new formula developed by the Coca-Cola Corporation. However, the New Coke failed and in less than six months of its launch, the Coke management had to relaunch old Coke under the brand name Coke Classic. However, this failure of MR was mainly due to conventional approach of researchers. (4) Not an exact science: Since marketing research plates to consumers, it cannot be accepted as an exact science. Both quantifiable and non-quantifiable factors have to be assessed with the help of various techniques available to formulate marketing policies that will help to achieve maximum sales. The technical part of marketing research comes into operation particularly while collecting, analyzing, interpreting facts and figures. No amount of sophistication makes the subject an exact science. Because, as stated earlier, it concerns primarily the consumer as a human being Study of human behavior precludes absolute mathematical accuracy Probable trends, at the most can be indicated within predetermined limits. This sets a basic limitation to

marketing research. At the same time, it necessitates a creative and skilled approach to the conduct of research. In this way, marketing research can contribute immensely to decision-making in a dynamic market. For accurate judgment, the marketer must be fully aware of the nature of limitations of marketing research. (5) Time lag in presentation and implementation: There are other constraints as well that make for qualified utility of marketing research in decision-making. For example, there is the limitation of time. Collection of data, their checking as to accuracy and analysis and presentation often involve considerable time. The formulation of policies and their implementation as also their subsequent evaluation, which are a necessary follow-up, also take time. People's tastes and preferences are subject to frequent changes. It is, therefore necessary, keeping in mind the scope and nature of marketing research, that the projects should be completed in time to ensure their utility. In this process, at times, as a compromise some accuracy may have to be sacrificed, but the degree of it can be decided in relation to the specific circumstances. (6) Limitations of personnel: Another constraint that is experienced pertains to personnel and its quality. Trained, well-equipped and well-directed research personnel can improve the quality and utility of marketing research. In the absence of this, research is likely to be costly and unreliable. Correct and complete information has to be collected from the respondents tactfully. The interviewer has to be reasonably aware of the psychological make-up of the persons that are being interviewed and should be able to analyze their thoughts and reactions. Apart from this, interviewers may have their own failings and weaknesses. Hence the training interviewers and investigators is a must. These limitations and constraints can be overcome or at least their impact can be minimized. To the extent a market researcher is successful in his task, the value of the findings can be improved. What is most important is that reliable data should be available on the basis of which production and marketing plans and programmers can be formulated with a fair degree of accuracy. It is better to be certain about 50 percent reliable information than do a guesswork, which has more chances of going wrong. (7) Difficult to ascribe results: It is also difficult to ascribe results as a direct consequence of market research. The rupee value received by a firm from marketing research, therefore, cannot be measured accurately and completely. This has contributed to an element of hesitation on the part of organizations to undertake marketing research in many cases, especially in the developing countries. (8) A cost-generating operation: Marketing research is expensive. The existence of sellers market or a sheltered market in many developing countries in particular has also been responsible for an apathetic approach to marketing research. However, with the growth and development of their economies, the marketing conditions are changing in favor of buyers and the need for and the value of marketing research are being increasingly recognized by the enterprises in these countries also. With the communication between the purchaser and the manufacturer becoming indirect, meagre and unsatisfactory and as a result of competition, the manufacturer is

increasingly becoming anxious to know the magnitude of his sales to consumers, where they are being effected, the kinds of people buying his goods and their reactions and responses. All this information is essential to the manufacturer, as this decides ultimately whether he will survive in the market or not. He can improve his product and marketing strategy to secure consumer satisfaction and logically profit from these changes. (9) Marketing research cannot study all marketing problems: Marketing research is rather very wide in scope. However, it cannot study all marketing problems particularly where it is difficult to collect relevant data. Similarly, research study is not possible where value judgments are involved. Even it is not useful for dealing with urgent marketing problems where quick decisions and follow-up actions are necessary. Thus, all marketing problems are not researchable and all research problems are not answerable. MR cannot provide answer to each and every marketing problem. A problem like Profitability Vs. Consumer satisfaction is difficult to answer with complete accuracy. The present marketing research techniques have certain limitations. MR fails to offer guidance to managers while dealing with specific problems. Thus, marketing research cannot study all marketing problems and do not offer ready-made solutions to all marketing problems faced by a business unit. It is also argued that very many times, marketing research tends to be fragmentary in its approach. As a result, it becomes difficult to have an overall perspective in which a marketing problem is to be viewed and studied. (10) Resistance by marketing executives: Researchers study marketing problems and offer information and guidance to marketing executives in their decision-making process. However, some executives are reluctant to use the solutions suggested by the researchers. They feel that such extensive use will act as a threat to their personal status. Findings of the research work may bring them in difficulties if the policydecisions taken accordingly prove to be wrong. Marketing executives may also feel that researchers suggest solutions that are academic in character and lack practical utility. They use guidance and suggestions given by the researched only when they are compelled to do so. There is absence of meaningful dialogue between the marketing managers and the marketing research team. As a result/ marketing researchers get divorced from the main stream of marketing. Such attitude of indifference on the part of researchers and marketing executives makes marketing research meaningless. It is necessary to have effective communication between researchers and marketing executives. Secondly, researchers should try to act as friend and guide of marketing executives. Marketing executives should also consider the findings of researchers in an impartial manner. Such attitude of mutual confidence and understanding is useful for cooperation between researchers and marketing executives. Conflict between

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researchers and executives is always undesirable but do exist in many companies. It is treated as one limitation of MR activity. (11) Lengthy and time-consuming activity: MR is a lengthy and time-consuming activity. It involves various stages/steps, which need to be completed in an orderly manner. It is not desirable to conduct research work in a haphazard manner. Naturally, the research work takes longer period for completion and the findings when available may prove to be old and outdated. Even data collected very soon become old or historical due to fast changing market environment. As a result, research findings based on them become irrelevant in the changed situation. MR is not useful for dealing with urgent marketing problems. Moreover, research work cannot be conducted overnight and marketing decisions cannot be postponed till the research work is completed. Thus, urgent/pressing marketing decisions arc usually taken without the support of research work. In brief, lengthy and time consuming aspect of marketing research reduces its practical utility and is rightly treated as one limitation of marketing research technique. (12) Non-availability of qualified staff: For scientific MR, professional marketing researchers with proper qualifications, training and experience are necessary. Research work is likely to be incomplete/ unreliable in the absence of such expert staff. Companies find it difficult to have the services of such expert staff. They find it difficult to pay high salary to professional consultants. Research activities are conducted in limited areas due to non-availability of properly qualified staff. Such staff includes statisticians, psychologists, sociologists, economists and computer experts. (13) Complexity of the subject: Marketing research fails to give complete and full proof solutions to management. This is because marketing research itself is not an exact science. It is concerned with the study of human beings and human behavior is always difficult to predict, errors in drawing conclusions are possible due to this human element in marketing research activities. Errors in the research studies are also possible due to uncertainty of human behavior and also because of non-availability of reliable data. (14) Changing behavior of consumers: Consumer is the focal point in marketing research. However, his buying motives are difficult to judge precisely and accurately. This brings some sort of uncertainty in the conclusions drawn from the research activity. The findings of the research work (particularly in the case of consumer research) may not prove to be accurate. (15) Limited practical utility: MR is regarded as an academic exercise. It is often been delinked from the business strategy. As a result many research reports become "academic" in nature and are 'filed'. Researchers take more interest in conducting research work rather than in supplying information and guidance to marketing managers in the decision-making process. Many research reports are rather bulky and

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unintelligible due to the use of technical language and unnecessary details. Such reports are rejected or are not used meaningfully b) marketing managers. This brings down the practical utility of MR. (16) Passive nature: MR is passive by its nature. Sometimes, it becomes too superficial and faulty in business management. Man) conclusions drawn from the marketing research activities may be imaginary or not based on realities. Its use and effectiveness largely depend on the ability of marketing executives to get the most promising results out of it. Marketing research by itself may not give any benefit. It only shows the way to executives in the decision-making process. (17) Fragmentary approach: On many occasions, marketing research tends to be fragmentary in its approach. It suggests solutions that may be difficult to put into operation. This is because overall marketing environment is not given adequate attention while suggesting the solution. Such fragmentary approach is not useful for solving marketing problems in an integrated manner. (18) Absence of effective communication: The research activity will be useful and resultoriented only when there is meaningful dialogue between the marketing management and marketing research team. However, such dialogue is ineffective in many organizations. This make' research activity ineffective. Inspite of the limitations noted above, MR is necessary and useful in marketing management. SCOPE OF MARKETING RESEARCH / BRANCHES OF MR: Marketing research is a subject with wide scope. Broadly speaking, it is concerned with the marketing activities of an enterprise. All activities of a seller-to market his products to consumers are covered by such research. Marketing research is primarily concerned with "4 Ps" of marketing mix. These are: Product, Price, Place and Promotion. The scope of marketing research is comprehensive and is actually widening in recent years. Products research, sales research, pricing research, brand and package research, promotion research and customer research arc the usual areas covered by MR. In addition, specialized research activities such as motivation research, consumer satisfaction research, etc. are also undertaken to meet the specific needs of a business unit. Additional areas and new methods of conducting research activities are regularly added within the scope of MR. In 1973, the American Marketing Association noted that marketing research activities were undertaken on 36 different topics of 1322 companies interviewed. Even in India, large companies conduct research activities on many marketing problems. Finally, it may be pointed out that marketing research is essentially for solving the marketing problems of a business unit. Naturally, research activities will be adjusted accordingly. This suggests that there is no limit to the areas covered by marketing research. Everything

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connected with marketing comes within the scope of MR.. The branches of MR are as explained below: 1. Product Research: Product research relates to products that are to be marketed to consumers. It is useful for introducing new product that will be agreeable to consumers. Product research relates to various aspects such as design, development and introduction of new products, testing of existing products, product modification studies and so on. 2. Packaging Research: Packaging research is a part of product research and is important for making the products attractive and agreeable to consumers. Packaging is now treated as a tool for sales promotion. It attracts the attention of consumers and induces them to purchase products. Constant changes in the package design are-required for sales promotion. For innovation in the package design/ packaging research is necessary. Packaging research is now treated as an independent branch of marketing research. Such research is conducted in order to know the impact of packaging. Branding and packaging normally go together and hence brand research is treated as a part and parcel of packaging research. 3. Pricing Research: Pricing research relates to pricing of the product It relates to analysis of pricing policies and strategies, studies market price trends, fixation of market prices, studies relating to prices charged by competitors, studies relating to future price trends, price incentives for sales promotion and provision of price discount and other price concessions to dealers and consumers. 4. Market Research: Market research proper relates to analysis of consumer markets, assessment of market trends, forecasting of business conditions, setting of sales territories and sales quota, sale potentials studies, studies of wholesale marketing, demography descriptions of customers, market competition studies, sale-forecasting, estimating demand for new products, analyzing relative profitability of sales territories and monitoring competitive-marketing activities. 5. Sales Research: Sales research relates to studies of sales outlets, sales territories and their revision, trends in sales, sales forecasting, effectiveness of sales force, sales policies and sales performance and so on. 6. Promotion and Distribution Research: Promotion research related to assessing effectiveness of the sales force and selling efforts, testing of media selected, advertising copy and assessing effectiveness of advertising campaigns. The scope of this area of marketing research also includes the study of channels of distribution for modification, distribution cost analysis of the

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physical distribution, problems relating to warehousing, inventory control and handling of goods. 7. Consumer Research: It relates to finding out consumers' needs and preference, consumers' purchasing intentions, consumers' choice of brands, trends in consumer preferences and purchasing patterns

8. Policy Research: Policy research activity is connected with the evaluation of effectiveness of marketing policies, sales policies, distribution policies, pricing policies, inventory policies and so on. Necessary changes in such policies are possible through intensive policy research studies. 9. Advertising Research: It relates to evaluation of advertising effectiveness, analyzing competitive advertising and selection of appropriate advertising media. 10. Media Research: Different media are used for communicating message about the products to prospective buyers. Media are used for advertising and publicity purpose. Newspapers, radio, TV magazines, transport vehicles, etc. are the media used for advertising. Media research relates to detailed study of different media for selection and use. 11. Motivational Research: Motivational research is one aspect of consumer research as it deals with consumer behavior. It studies "Why" aspect of consumer behavior. Consumer research is useful for finding out the sentiments, buying motives, priorities and inner feelings of consumers. It is a type qualitative research. 12. International Marketing Research: International marketing research deals with foreign markets that are attractive and profitable provided products and marketing activities are adjusted as per the need of foreign markets and buyers. Such research is useful for exploring profitable foreign markets, for export promotion and for making suitable modifications in the exportable items. Data collection about foreign markets, market surveys, etc. are undertaken under international MR. Such research is costly and time consuming as compared to internal research. However, it is a must in the case of exporting companies. International MR is also undertaken by export promotion organizations such as Export Promotion Councils and Commodity Boards.

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