Welcome to Powerpoint slides

for

Chapter 3

Research Methods
and Design:
Additional Inputs

Marketing Research
Text and Cases
by
Rajendra Nargundkar

Slide 1

Sources of Secondary Data

There are two major sources of secondary data

.Internal
.External
Internal records in the company comprise information about
the product being researched, its history, company
background and history, market share, and competitor
information.
These types of information are usually
maintained by the marketing department, sales department,
or a corporate cell for marketing intelligence in the company.
External information sources include syndicated reports such
as retail sales data, or market share data, or industry
analyses. Some of this information may be available from
public sources such as business newspapers , magazines,
industry associations or trade bodies, or the net.
A prominent source of data on Indian industry is the CMIE
or Centre for Monitoring Indian Economy, which publishes
monthly reports on various aspects of the Indian economy
and industry. The Hindu, a prominent daily newspaper,
publishes an annual Survey of Indian Industry, which is a
low-priced and useful compilation which deals with
industrial goods, infrastucture and core industries, consumer
durables growth prospects and past performance.

Slide 2
Syndicated research studies such as the NRS (National
Readership Survey) or IRS (Indian Readership Survey)
are rich sources of data available to any subscriber or
buyer. These studies cover a large national sample, and
measure the readership of newspapers and magazines in
great detail. They also cover demographics and
consumption patterns of household consumer goods.
The Audit Bureau of Circulation (ABC) is an autonomous
body which certifies the circulation of newspapers and
magazines. The Indian Newspapers Society (INS) also
publishes a handbook every year with circulation,
readership and advertisement tariffs for various print
media in the country.
There are several computer-based data sources which
provide on a sale and subscription basis, updated
information on financial and sales data on all publicly
listed companies. Now, some of this data is available on
the internet, particularly industry analyses.

Slide 3
Creating a Mechanism for Gathering Secondary Data
The most useful way to gather relevant secondary data on a
given industry is to have a cell within the company to monitor
and keep cuttings from business magazines such as
Advertising and Marketing, Business India, Business Today
and Business World.
This can be supplemented by newspaper reports from The
Economic Times, Business Line or other business dailies.
Over a period of a few years, this method ensures that we can
easily look back and get a perspective on our brands, industry,
competitors etc.
This also creates reference material for new employees or
trainees who are hired to do their internship or summer
projects in the company. It is now possible to keep electronic
clippings from the websites of many of these newspapers and
magazines.
The marketing research agency can also use this gathered
material as background information, and quickly launch into
designing and conducting the primary research based on what
is known.

Slide 4

Disadvantages of Secondary Data

Having looked at its advantages, it is also necessary to keep in

mind some disadvantages of secondary data.
.It may be outdated. We may have cuttings which are 2
years old, about consumer preferences, and these may have
changed over time.
.It may be done for a different purpose and therefore be
slanted or biased. It is important to note who has collected
the data, and for what purpose, before making a judgement
on its usefulness.
.The sample or the methodology may be different from, or
unrepresentative of, the target population we are studying.
For example, the earlier study may have studied only
teenagers, whereas we are looking at all adults and
teenagers.
.The units of data aggregation may be different from what
we need. For example, we may want to know reactions from
different sexes (male and female separately), and these may
not be reported separately. Or, only regionwise data may be
reported, not centre-wise or citywise. Or, the way income
groups are formed may be different from what we want to
study.

Slide 5
In spite of some obvious limitations, many types of secondary
data serve the useful purposes of
Better prepared primary researchers
Serving as a cross check for other secondary data
Provoking thinking about methodology and its impact on
results of research
Used judiciously, secondary research is an appropriate starting
point for any marketing research project, mainly because it is
much less expensive than primary research.
In the age of the internet, it is worthwhile to at least
download and look at what is available on the product and
industry, before venturing out into the field for doing primary
research.

Slide 6

Exploratory Research
Exploratory research usually does not directly lead to
marketing decisions being made. Conclusive research does
lead to major marketing decisions being taken.
Exploratory research may be undertaken for knowing a little
more about the problem, or the consumer, or the way
questions should be formulated, which factors should be
included in the study, or in general, to help design a follow-up
conclusive research study. As the name indicates, a study
which seeks to explore any of these subjects is called an
Exploratory Study.

An exploratory study may not use as rigorous a methodology

as is used in conclusive studies, and sample sizes may be
smaller.
One of the reasons for conducting an exploratory study is that
we do not know enough to even formulate a conclusive
study. But if a study is designated as exploratory and treated
as such, it must be followed up by another one before any
major conclusions or inferences can be drawn.
There is no separate methodology for doing exploratory
studies. The same process and methodologies that are
available for regular research are also used in exploratory
studies.

Slide 7

Conclusive Research

Conclusive research, as the name indicates, seeks to

draw conclusions about effects of marketing or
consumer variables on other variables like sales or
consumer preferences. This is usually done through a
proper research methodology, rigorously designed
sampling plans and field work, and appropriate
analytical techniques.
Conclusive research may follow exploratory research
in cases where the area of investigation is new. If the
field of investigation is not new, it may be a routine
activity, repeated every year or half-year or quarter,
as per the need.
Conclusive research is more likely to use statistical
tests, advanced analytical techniques, and larger
sample sizes, compared with exploratory studies.
Conclusive research is also more likely to use
quantitative, rather than qualitative techniques. This
does not mean that quantitative techniques are
necessarily better, but it is a fact they are more easily
understood by the sponsors of most marketing
research.

Slide 8
Major Qualitative Research Techniques

In addition to the well-known quantitative

techniques such as the survey, many qualitative
techniques are used for various purposes by
marketing researchers. We will look at three of
them in some detail. These are
.Depth Interview
.Focus Group
.Projective Techniques

Slide 9

Depth Interview

This is an unstructured and longish interview on the given

subject. Most questions are open-ended, and ask for
opinions, anecdotes, feelings about products, occasions of use
and so on. The discussion is rich in personal detail, which is
individualistic.
Compared to a regular structured interview, a depth
interview has only minimal instructions for the interviewer,
and the respondent is free to respond in any way he likes, not
constrained to a set of multiple responses or predetermined
categories. But it could also be more difficult for the same
reason, for both the interviewer and the interviewee.
The expectation of the respondent from a regular survey is
easy to answer, non-intrusive questions which do not probe
too far. It is different with depth interviews. Every selected
respondent may not feel comfortable being open with a
stranger interviewing him, and this may hinder the process.
The interviewer also must have the required training to make
a focussed, but unstructured conversation over a period as
long as an hour or more.
An example of a depth interview would be to try and probe
the feelings of a car owner about his car, what it means to
him, how he feels when he is driving it, who generally he
takes out with him or who else he allows to drive it, how he
perceives other people who drive the same brand, and other
brands or models, why he would or would not consider other
brands, etc.

Slide 9contd...
To define it, a depth interview could be called a
process of probing for the feelings, associations,
reasons for behaviour of a consumer of a product
category or brand through a mostly unstructured
interview consisting of a lot of open-ended
questions, by a trained interviewer.
Like many qualitative techniques, a depth
interview tends to be subjective rather than
objective, and therefore difficult to interpret. But
it is capable of revealing much more about the
underlying thought processes and feelings of a
consumer about the product or service being
researched, compared with traditional structured
interviews.

Slide 10

Focus Group

This is essentially a group discussion on a given subject

conducted by a trained moderator. The purpose of this is to
create a less than formal situation, where people can exchange
views, bringing out their opinions, attitudes, feelings about the
given subject.
To bring out a fruitful discussion, the subject has to be
carefully thought out, and moderated if it veers away from the
given subject. The participants have to be called to the venue,
and a system of video or audio recording should be used to
record the discussion for later analysis. The moderator and
the analyser of a focus group can be different persons.
The sample is selected as usual from a target population which
is specified by the needs of the study. Usually, a group
consists of about 6-10 persons. The length of the discussion
can be about an hour to an hour and a half, or until the group
has nothing left to add.

This technique is used frequently to check out opinions about

new concepts, before a product is launched, and in general, as
an exploratory research tool. It is sometimes also used for
conclusive research, or in combination with a survey, as a
cross-check for the important findings from the survey.

Slide 11

Projective Techniques

There are many different techniques which can be

called projective.
One popular method is to show a respondent a
picture and ask him to describe the persons or
objects in the picture. A particular product or
brand can be shown being used, or displayed, and
the respondent can be asked to guess the type of
consumer who would use the product shown.
This is essentially a technique which seeks to get
indirectly at the underlying motivations, attitudes
or emotions of the respondent, which he would not
reveal under direct questioning.
This method of questioning overcomes some
common inhibitions of respondents such as the
wish to give socially desirable responses, or
giving answers acceptable to the interviewer.

Slide 12

Word Associations

Another variation of projective techniques is to ask

respondents to associate brands with one word - a
person, a celebrity, or an animal, which they associate
with the brand. Interpretation of such association is
best left to a psychologist, or a researcher with a
psychoanalytical background and experience.
Sentence Completion
Another type of projective technique is to give an
incomplete sentence to the respondent, and askihim to
complete it. For example, People who use Brand B
coffee tend to be .
This method is similar to word associations, and may
result in surprising or unexpected associations. It is
equally difficult to interpret, and needs a trained hand
to do it.
Indirect methods such as projective techniques have
proved themselves useful in many classic research
situations, where direct methods proved unsatisfactory

Slide 13

Validity of Research

Let us assume that we changed the price of a `brand of pen,

and its sales were affected in the following week. Can we
conclude that the price change was responsible for the
change in its sales?
We cannot be really sure, unless we know what else
remained the same and what else changed during the period.
An experiment could be designed to draw a "valid"
conclusion that price was a major cause of change in sales.
Validity of a result refers to it generalisability and its
robustness.
Is the result of an experiment occurring merely by chance,
or is it due to the intervention of some variables we have no
data on, or is it a valid relationship between the variables
under study?
To obtain a reasonably valid result, a researcher must be
aware of all likely variables (assume these are a, b and c)
affecting the variables being studied (let us assume these are
Price and Sales), be able to control or keep constant a, b and
c, and vary the independent variable (price) to find its
impact on the dependent (sales).

Slide 14

Experiments

Experiments can be conducted with varying designs and

varying amounts of controls or rigour. Laboratory
experiments typically have the best controls, and field
experiments have the least.

Simulations done on a computer can control any

variable, which may not be possible when we deal with
human beings in a contrived setting in an experiment
designed to measure the effect of price, packaging and
promotion on sales.
Human or psychological factors such as the effect of
brand name, ambience of the simulated store etc. may
affect human respondents participating in an experiment.
Test Marketing is the name used for a class of
controlled experiments in marketing research. Its
objective is to predict sales (either absolute in terms of
units, or relative in terms of market share), based on
changes in marketing variables such as price,
distribution, promotion, advertising etc.

Slide 15

Disadvantages of Test Marketing

Although a good method for testing the product in a limited

geographical area (one city, or one region) before going for a
national launch, test marketing can have a few problems.
For example, novelty of the product being tested may result in
high one-time sales due to curiosity. Once having tried the
product, there may be no repeat sales of the same magnitude as
trial sales.

Another disadvantage that when you are test marketing, your

competitors become aware of your product design, and may
counter your efforts by introducing a similar product before
you. For example, before Procter and Gamble could launch
their concentrated detergent Ariel in the Indian market and
while they were test marketing it a few years ago, Hindustan
Lever launched their brand called Surf Ultra.
There have also been allegations of an outright sabotage of test
markets by competitors. For example, they may buy up big
quantities of your brand to give the impression of a huge
success, and mislead you into launching a product nationally.
It is also a common tactic for a competitor to launch special
promotional offers in your test market area to reduce your
sales. There is also the question of which centre or centres to
use for test marketing, because the wrong choice of centres can
affect the generalisability of your interpretation, leading to
wrong estimates of national sales.

Slide 16

STM

Some of these disadvantages, along with long lead times,

have encouraged marketers to use Simulated Test
Marketing (STM).
In a simulated test market for FMCG products, consumers
are shown product information, are sometimes exposed to
commercials (advertisements) for the brand, and then
given money or coupons to buy the products made
available in a simulated store containing all the major
competing brands in the product category.
Non-purchasers of the sponsor's brand are given free
samples. After a use period, the users are interviewed to
gauge reactions and repeat purchase intention.
A computer model is then used to predict real world
market share and penetration based on simulated data on
many market and product variables. A few years ago,
Mahindra and Mahindra, the multi-utility vehicle
manufacturer, did a Simulated Test Marketing exercise for
their new brand called ARMADA.
Experimental designs are discussed in greater detail, with
numerical examples, in the chapter titled ANOVA in Part 2
of the book.