RESEARCH METHODOLOGY

LESSON 15: APPLICATIONS OF MARKET RESEARCH
Students, now we have covered various theoretical concepts in marketing research. We have dealt how to marketing research. Now today, we will discuss the various applications of marketing research. 1. Product Research 2. Price Research 3. Distribution Research 4. Promotion Research Perceptual maps can have any number of dimensions but the most common is two dimensions. Any more is a challenge to draw and confusing to interpret. The first perceptual map below shows consumer perceptions of various automobiles on the two dimensions of sportiness/conservative and classy/affordable. This sample of consumers felt Porsche was the sportiest and classiest of the cars in the study (top right corner). They felt Plymouth was most practical and conservative (bottom left corner).

Product Research
The main product decisions that need to be considered are the physical design of the product and its demand potential. Many companies spend millions of rupees onR & D in order to come up with a new product that will satisfy consumer needs. We cover various information requirements and techniques used for this purpose. A managerial decision to use a pretest market analysis is justified if sufficiently accurate predictions can be achieved, the timing of the analysis is before large investment commitments are necessary, useful diagnostics for improvement are generated, and the cost of the analysis is reasonable. In these situations failures can be reduced, time-to-market can be shortened, and products improved to increase customer satisfaction New Product Research New product development is critical to the life of most organizations as there will be uncertainties associated with them. Thus, the purpose of marketing research for them would reduce the uncertainties associated with the new products. Four stages of new product development could be seen:
• Generating New-Product Concepts • Evaluating and Developing those Concepts • Evaluating and developing the actual products • Testing in a Marketing Programme

Perceptual Map of Competing Products
Cars that are positioned close to each other are seen as similar on the relevant dimensions by the consumer. For example consumers see Buick, Chrysler, and Oldsmobile as similar. They are close competitors and form a competitive grouping. A company considering the introduction of a new model will look for an area on the map free from competitors. Some perceptual maps use different size circles to indicate the sales volume or market share of the various competing products. Displaying consumers’ perceptions of related products is only half the story. Many perceptual maps also display consumers’ ideal points. These points reflect ideal combinations of the two dimensions as seen by a consumer. The next diagram shows a study of consumers’ ideal points in the alcohol/spirits product space. Each dot represents one respondents ideal combination of the two dimensions. Areas where there is a cluster of ideal points (such as A) indicates a market segment. Areas without ideal points are sometimes referred to as demand voids. Perceptual Map of Ideal Points and Clusters A company considering introducing a new product will look for areas with a high density of ideal points. They will also look for areas without competitive rivals. Placing both the ideal points and the competing products on the same map best does this. Some maps plot ideal vectors instead of ideal points. The map below, displays various aspirin products as seen on the dimensions of effectiveness and gentleness. It also shows two ideal vectors. The slope of the ideal vector indicates the preferred ratio of the two dimensions by those consumers within that segment. This study indicates there is one segment that is more concerned with effectiveness than harshness, and another segment that is more interested in gentleness than strength. Perceptual Map of Competing Products with Ideal Vectors a. Perceptual maps need not come from a detailed study. There are also intuitive maps (also called judgmental maps or consensus maps) that are created by marketers based on their understanding of their industry. Management uses its best judgement. It is questionable how valuable this type of map is. Often they just give the appearance of credibility to management’s preconceptions.

Concept Generation There are two types of concept generation research:
• Need identification research: • Concept Identification

Need Identification Research

The emphasis in need research is on identifying unfilled needs in the market. Following are some examples: a. Perceptual Maps, in which products are positioned along the dimensions by which users perceive and evaluate, can suggest gaps into which new products might fit. Perceptual mapping is a graphics technique used by marketers that attempts to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition.

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When detailed marketing research studies are done methodological problems can arise, but at least the information is coming directly from the consumer. There is an assortment of statistical procedures that can be used to convert the raw data collected in a survey into a perceptual map. Preference regression will produce ideal vectors. Multi dimensional scaling will produce either ideal points or competitor positions. Factor analysis, discriminant analysis, cluster analysis, and logit analysis can also be used. Some techniques are constructed from perceived differences between products, others are constructed from perceived similarities. Still others are constructed from cross price elasticity of demand data from electronic scanners. b. Social and environment trends can be analyzed. c. An approach termed benefit structure analysis has product users identify the benefits desired and the extent to which the product delivers those benefits, for specific applications. The result is an identification of benefits sought that current products do not deliver. d. Product users might be asked to keep a diary of a relevant portion of their activities. Analysing such diaries can provide an understanding of unsolved problems associated with a particular task. e. In focus-group interviews, product users might discuss problems associated with product-use situations. A focus group is a form of qualitative research in which a group of people, are asked about their attitude towards a product, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members. In the world of marketing, focus groups are an important tool for acquiring feedback regarding new products. In particular, focus groups allow companies wishing to develop, package, name, or test market a new product, to discuss, view, and/or test the new product before it is made available to the public. This can provide invaluable information about the potential market acceptance of the product. In traditional focus groups, a pre-screened (pre-qualified) group of respondents gathers in the same room. They are pre-screened to ensure that group members are part of the relevent target market and that the group is a representative subgroup of this market segment. There are usually 8 to 12 members in the group, and the session usually lasts for 1 to 2 hours. A moderator guides the group through a discussion that probes attitudes about a client’s proposed products or services. The discussion is unstructured (or loosely structured), and the moderator encourages the free flow of ideas. Although the moderater is seldom given specific questions to ask, he/she is often given a list of objectives or an anticipated outline. Client representatives observe the discussion from behind a oneway mirror. Participants cannot see out, but the researchers and their clients can see in. Usually, a video camera records the meeting so that it can be seen by others who were not able to travel to the focus group site. Researchers are examining more than the spoken words. They also try to interpret facial expressions, body language,

and group dynamics. Transcripts are also created from the video tape. Respondents often feel a group pressure to conform and this can contaminate the results. But group dynamics is useful in developing new streams of thought and covering an issue thoroughly. Types of Focus Groups Two-way focus group - one focus group watches another focus group and discusses the observed interactions and conclusions Dual moderator focus group - one moderator ensures the session progresses smoothly, while another ensures that all the topics are covered Dueling moderator focus group - two moderators deliberately take opposite sides on the issue under discussion Respondent moderator focus group - one or more of the respondents are asked to act as the moderator temporarily Client participant focus groups - one or more client representatives participate in the discussion, either covertly or overtly Mini focus groups - groups are comprised of 4 / 5 members. Telesession (or teleconference) focus groups - telephone network is used On-line focus groups - computers and internet network is used Traditional focus groups can provide accurate information, and are less expensive than other forms of traditional marketing research. There can be significant costs however : if a product is to be marketed on a nation-wide basis, it would be critical to gather respondents from various locales throughout the country since attitudes about a new product may vary due to geographical considerations. This would require a considerable expenditure in travel and lodging expenses. Additionally, the site of a traditional focus group may or may not be in a locale convenient to a specific client, so client representatives may have to incur travel and lodging expenses as well.

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Online Focus Groups
With the advent of large scale computer networks, such as the Internet, it is now possible to link respondents electronically. Respondents share images, data, and their responses on their computer screens. This avoids a significant amount of travel expenses. For instance, NFO Research, a large market research company, has a system of on-line focus groups which allows respondents from all over the country to gather, electronically, while avoiding countless logistical headaches. Online groups are usually limited to 6 or 8 participants. The biggest problem with online focus groups is ensuring that the respondents are representative of the broader population (including computer non-users). While such a system does eliminate some of the logistical headaches and travel expenses associated with conducting focus groups, it still requires one or more representatives from a client to be physically located with the moderator conducting the focus group. Only in this way can questions be added in real time to further probe a particular response. Thus, even the online system incurs some travel expenses since a client representative will need to travel to a research site or vice versa.

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Accordingly, there is a need for a system and method of conducting focus groups using remotely located participants, including one or more moderators, one or more clients and one or more respondents, who are all physically remote from each other. In order to do this, such a system must allow for the implementation of at least two separate chat discussions to be conducted simultaneously between the three classes of focus group participants to provide an electronic analog to a one-way mirror segregating clients from respondents. In addition, such a system must allow and prohibit participation in the different chat discussions based on the class of the participant. f. In Lead user analysis, instead of just asking users what they have done, their solutions are collected more formally. Lead users are those who face needs early that later will be general in a market place; they are positioned to benefit significantly by solving problems associated with these needs. Once a lead user is identified, the concepts that company or person generates are tested. Lead users are an extremely valuable cluster of customers and potential customers who can contribute to identification of future opportunities and evaluation of emerging concepts. Understanding these users can provide richness of information relatively efficiently. Eric von Hippel introduced the concept of ‘Lead Users’ in the mid 1980s. He defined the lead user as those users who display the following two characteristics: They face the needs that will be general in the market place, but face them months or years before the bulk of that marketplace encounters them They are positioned to benefit significantly by obtaining a solution to those needs Where a company has experience within a market place, it should be relatively straight forward to identify those customers who demand special solutions, push existing solutions to the limit or who have customized standard products to satisfy their own desires. Von Hippel suggests that a key element in identifying lead users is to first identify the underlying trends, which result in these users or customers having a leading position. The lead users are those who are at the leading edge of these trends. Where possible, lead users should not necessarily be sought from within the usual customer base, it can be useful to look beyond existing customers perhaps to users of complementary or substitute goods or in analogous markets. In addition, the lead users may only have an interest in improvements or changes to specific elements or attributes of a product. There are few industries of product types where there are no lead users who have requirements or demands ahead of the rest. By targeting these clusters, it is possible to identify opportunities for future products and evaluate emerging concepts. Where possible, if lead users are sufficiently interested, then they can be considered as a part of the extended product design team. They may even be prepared to share the burden of investment in order to find a suitable solution. Furthermore, if today’s lead users do not find appropriate solutions from existing suppliers, then they could well turn into tomorrow’s competitors.

Concept Identification During a New-product development process there is usually a point where a concept is formed but there is no tangible usable product that can be tested. The concept should be defined well enough so that it is communicable. There may be simply a verbal description, or there may be a rough idea for a name, a package, or an advertising approach. The aim is to determine if the concept warrants further development and to provide guidance on how it might be improved and refined. Conjoint analysis typically is used to obtain an ideal combination of the concept’s various features. Thus, research questions might include:
• Are there any major flaws in the concept? • What consumer segments might be attracted to it? • Is there enough interest to warrant developing it further? • How might it be altered or developed further?

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Most concept testing, however, involves exposing people to the concept and getting their reactions. In exposing people to the concept, the market researcher needs to address a series of questions:
• How are the concepts exposed? • To whom are the concepts exposed? • To what are they compared? • What questions are asked?

It is important to make a distinction between the different types of testing applied at different stages of the development process. This helps the development team to understand the purpose of each test and consider how data is to be captured. Different testing methods will have different objectives, approaches and types of modeling. Four general types of testing are described in more detail:
• Exploratory tests • Assessment tests • Validation tests • Comparison tests

ISO 9000 tests are also briefly summarised. Exploratory Tests Carried out early in the development process during the fuzzy front end, when the problem is still being defined and potential solutions are being considered, preferably once the development team has a good understanding of the user profile and customer needs. The objective of the exploratory test is to examine and explore the potential of preliminary design concepts and answer some basic questions, including:
• What do the users think about using the concept? • Does the basic functionality have value to the user? • Is the user interface appropriate and operable? • How does the user feel about the concept? • Are our assumptions about customer requirements correct? • Have we misunderstood any requirements?

This type of early analysis of concepts is potentially the most critical of all types of prototyping and evaluation, for if the development is based on faulty assumptions or misunderstanding

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about the needs of the users, then problems are almost inevitable later on. Data collection will tend to be qualitative based on observation, interview and discussion with the target audience. Ideally, the customer should be asked to use the product without training or prompting, to assess the intuitiveness of controls and instructions. Some quantitative measures may be appropriate, such as time to perform tasks, number of failures or errors.

but with team input on developing standards and measurement criteria. Data from a validation test is likely to be quantitative, based on measurement of performance. Normally, this is carried out against some benchmark of expected performance. Usability issues may be scored in terms of speed, accuracy or rate of use, but should always be quantified. Issues such as desirability may be measured in terms of preference or user ranking. Data should also be formally recorded, with any failures to comply with expected performance logged and appropriate corrective action determined. Comparison Tests A comparison test may be performed at any stage of the design process, to compare a concept, product or product element against some alternative. This alternative could be an existing solution, a competitive offering or an alternative design solution. Comparison testing could include the capturing of both performance and preference data for each solution. The comparison test is used to establish a preference, determine superiority or understand the advantages and disadvantages of different designs. ISO 9000 tests ISO 9000 defines a number of test activities: Design Review A design review is a set of activities whose purpose is to evaluate how well the results of a design will meet all quality requirements. During the course of this review, problems must be identified and necessary actions proposed. Design Verification Design verification is a process whose purpose is to examine design and development outputs and to use objective evidence to confirm that outputs meet design and development input requirements. Design Validation Design validation is a process whose purpose is to examine resulting products and to use objective evidence to confirm that these products meet user needs.

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Assessment Tests
While the exploratory test aims to explore the appropriateness of a number of potentially competing solutions, the assessment test digs into more detail with a preferred solution at a slightly later stage of development. The main aim of an assessment test is to ensure that assumptions remain relevant and that more detailed and specific design choices are appropriate. The assessment test will tend to focus on the usability or level of functionality offered and in some cases, may be appropriate for evaluating early levels of performance. Assuming that the right concept has been chosen, then the assessment test aims to ensure that it has been implemented effectively and answer more detailed questions, such as:
• Is the concept usable? • Does the concept satisfy all user needs? • How does the user use the product and could it be more

effective?
• How will it be assembled and tested and could this be

achieved in a better way?
• Can the user complete all tasks as intended?

Assessment testing typically requires more complex or detailed models than the exploratory test. A combination of analytical models, simulations and working mock ups (not necessarily with final appearance or full tooling) will be used. The evaluation process is likely to be relatively informal, including both internal and external stakeholders. Data will typically be qualitative and based on observation, discussion and structured interview. The study should aim to understand why users respond in the way that they do to the concept. Validation Tests The validation test is normally conducted late in the development process to ensure that all of the product design goals have been met. This may include usability, performance, reliability, maintainability, assembly methods and robustness. Validation tests normally aim to evaluate actual functionality and performance, as is expected in the production version and so activities should be performed in full and not simply walked through. It is probable that the validation test is the first opportunity to evaluate all of the component elements of the product together, although elements may have been tested individually already. Thus, the product should be as near to representing the final item as possible, including packaging, documentation and production processes. Also included within validation tests will be any formal evaluation required for certification, safety or legislative purposes. Compared to an assessment test, there is a much greater emphasis on experimental rigour and consistency. It may be preferable for evaluation to be carried out independently from the design team,

Product Evaluations and Development
The aim is to predict market response to determine whether or not the product should be carried forward. Use Testing This gives the users a reasonable time to feel the product and inquires their reactions and their intentions to buy it. Researchers can contact respondents in shopping centers, by personal visits to their homes or offices, or on telephone. Limitations
• Due to unclear instructions, a misunderstanding, or lack of

cooperation, the respondents may nor use the product correctly and may therefore report a negative opinion. • The fact that they were given a free sample and are participating in a test may distort their impressions.
• Even when repurchase opportunities were made available,

such decisions may be quite different than when they are made in a more realistic store situation.
• The users will not accept the product over a long period of

time.
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• They may inflate their intention to buy. Consumers may say

that they will buy the product but may end up not doing so.
Blind-use Testing

Even though a product may be proved superior in the laboratory, the consumer may not perceive it to be superior. For e.g., Amul sweets, which was perceived as a superior by the company by all standards, were introduced in the market. It was supposed to be hit during Diwali time and advertisements were released to prop up sales. Unfortunately the consumers perceived the product as a premium product and did not substitute their purchases from the local Halwai.
Predicting Trial Purchase

Test Marketing Test marketing allows the researcher to test the impact of the total marketing program, with all its interdependence, in a market context as opposed to the artificial context associated with the concept and product tests that have been discussed.
Functions
• To gain information and experience with the marketing

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program before making a total commitment to it. • To predict the program’s outcome when it is applied to the total market.
Types of Test Market

To predict trial levels of new, frequently purchased consumer products, ESP (Estimating Sales Potential) model has been developed. Trial levels were predicted on the basis of three variables:
• Product class penetration (PCP), the percentage of

The sell-in test markets are cities in which the product is sold just as it would be in a national launch. The product has to gain distribution space. The controlled-distribution scanner markets (CDSM) are cities for which distribution is pre-arranged and the purchases of a panel of customers are monitored using scanner data.

households purchasing at least one item in the product class within one year.
• Promotional expenditures-total consumer-directed

promotional expenditures on the product.
• Distribution of the product-percentage of stores stocking

Certain parameters that have to be looked into while deciding sell-in test market:
• Representativeness: Ideally, the city should be fairly

the product (weighted by the store’s total sales volume). Once the model is estimated, it can be applied to other new products. The researcher simply estimates the percentage of household using the product class, the total expenditures planned for the new product, and the expected distribution level. The model will then estimate the trial level that will be obtained. Trial also can be estimated directly using controlled shopping experience. A respondent is exposed to the new product promotion and allowed to shop in a simulated store or in an actual store in which the product is placed. The respondents then have an opportunity to make a “trial” or first purchase of the product. Pretest Marketing Two approaches are used to predict the new brand’s market share:
Preference Judgments

representative of the country in terms of characteristics that will affect the test outcome, such as product usage, attitudes and demographics.
• Data Availability: Information about Store audit is helpful

in evaluating the test. The selected cities should contain retailers who will cooperate with store audits. • Media isolation and Costs: It is desirable to avoid media spill-over. Using media that “spill-out” into nearby cities is wasteful and increases costs. Conversely, “spill-in” media from nearby cities can contaminate a test. Media cost is another consideration.
• Product flow: It may be desirable to use cities that don’t

have much “product-spillage” outside the area.
• Number: A single city can lead to unreliable results because

Here the preference data are used to predict the proportion of purchases of the new brand that respondents will make given that the new brand is in their response set. These estimates for the respondents in the study are coupled with an estimate of the proportion of all people who will have the new brand in their response set., to provide an estimate of market share. This is also used to analyse the concomitant market share loses of other brands. If the firm has other brands in the market, such information can be critical. Trial and repeat purchase levels: This is based on the respondent’s purchase decisions and intentions-to-buy judgments. A trial estimate is based on the percentage of respondents who purchase the product in the laboratory, plus an estimate of the product’s distribution, advertising (which will create product awareness), and the number of free samples to be given away. The repeatpurchase rate is based on the proportion of respondents who make a mail order repurchase of the new brand and the buyingintentions judgments of those who elected not to make a mail order repurchase. The product of the trial estimate and the repeat purchase estimate become a second estimate of market share.
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of the variations across cities of both brand sales and consumer response to marketing programs.
• Implementing and controlling: The test should be

controlled in such a manner that it ensures the marketing program is implemented in the test area so as to reflect the national program. The test itself may tend to encourage those involved to enhance the effectiveness of the marketing program. Salespersons may be more aggressive. Retailers may be more cooperative. The competitors may react by deliberately flooding the test areas with free samples or instore promotions. Even they can retaliate or can also monitor the results themselves.
• Timing: Normally, a test market should be in existence for

one year, so that all important seasonal/cultural factors can be observed and estimated.
• Measurement: The basic measure is sales based on

shipments or warehouse withdrawals. Store audit data provide actual sales figures and are not sensitive to inventory fluctuations. They also provide information on: distribution,
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shelf-facings, and in-store promotional activity. Measures such as brand awareness, attitude, trial purchase, and repeat purchase are obtained directly from the consumer. This information helps evaluate the marketing program and can help interpret sales data. The most useful information obtained from consumers is whether they bought the product at least once, whether they were satisfied with it, and whether they repurchased it or plan to.
• Costs: Costs which are quantifiable, include - development

between total revenues and total costs. This implies that the researcher’s major tasks are to forecast the costs and the revenues over the relevant range of alternative prices. Research for Penetration Pricing This is based on the concept that average unit of production costs continue to go down as cumulative output increases. Potential profits in the early stages of the product life cycle are sacrificed in the expectation that higher volumes in later periods will generate sufficiently greater profits to result in overall profit for the product over its life. Following pricing pattern is adopted to increase market share: a. Offer a lower price (even below cost) when entering the market. b. Hold that price constant until unit costs produce a desired percentage markup. c. Reduce price as costs fail to maintain markup at the same desired percentage. Despite the ubiquitous nature of the above questions, researchers commonly encounter four limitations when using this approach for pricing research: I. it provides no competitive information. II. it relies on price awareness. III.it is inefficient when evaluating numerous product specifications. IV.it relies on aggregate-level analysis. Each limitation is discussed below. Provides no Competitive Information A concept test asks respondents to evaluate how likely they would be to purchase a specific product without any information about other products that might be available in the market. When shopping, consumers generally have the chance to see a set of competing products and pick one from the set. When presented with a set of products to select from, consumers can make tradeoffs between features and price to determine their preferred product. In the absence of this comparative task, respondents may have difficulty answering reliably. Relies on Price Awareness The respondent compares the price presented in the concept to an internal reference price to determine if the price is fair or not. This determination is based on a respondent’s awareness of the current pricing in the category.
Inefficient to Evaluate Various Product Specifications

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and implementation of the marketing program; preparation of test products; administration of the test and collection of data associated with the test. The costs and risks that may delay the launch of a new product are more difficult to quantify. If a new product launch is delayed, an opportunity to gain a substantial market position might be lost. Pricing Research Research may be used to evaluate alternative price approaches for new products before launch or for proposed changes in products already in the market. Pricing Approaches
• Gabor and Grainger Method (Price skimming strategy),

where different prices for a product are presented to respondents, who then are asked if they would buy. A “buyresponse” curve of different prices, with the corresponding number of affirmative purchase intentions, is produced. The objective is to generate as much profit as possible in the present period.
• Multibrand-choice Method (Share penetration strategy),

where respondents are shown different sets of brands in the same product category, at different prices, and are asked which they would buy. This allows the respondents to take into account competitors’ brands, as they normally would outside such a test. Thus, this technique represents a form of simulation of the point of sale. The objective is to capture an increasingly larger market share by offering a lower price. Pricing research for the two different approaches differs substantially in terms of the information sought. Following questions are generally asked with regard to pricing research:
• At what price would you consider the product to be so

expensive that you would not consider buying it? (Too expensive)
• At what price would you consider the product to be priced

so low that you would feel the quality couldn’t be very good? (Too cheap)
• At what price would you consider the product starting to get

expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive) • At what price would you consider the product to be a bargain-a great buy for the money? (Cheap)

Research for Skimming Pricing
This is based on the concept of pricing the product, at the point at which profits will be the greatest until market conditions change or supply costs dictate a price change. Under this strategy, the optimal price is the one that results in the greatest positive difference
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Often, a researcher would like to evaluate a small number of specific product variations at the same time price is being evaluated. For instance, there might be an interest in the market’s willingness to pay for a specific feature or how the inclusion or exclusion of a product characteristic influences purchase likelihood. The concept test can be used to evaluate these various specifications. However, most researchers would suggest that each respondent only evaluate one concept. Therefore to evaluate various product specifications, the total sample size must grow. To illustrate, if we wished 200 observations per cell, and we are only testing three prices (three cells), we would require 600 respondents. However, if we have

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three alternative product variations, with each variation at three prices, we now have nine cells and would require 1800 respondents. Relies on aggregate-level analysis A concept test will rely on aggregate, or at most subgroup-level analysis. That is, this approach will make respondent’s heterogeneity difficult to detect and measure. The traditional concept test can be effectively used in pricing research when the product features are already determined, the level of price awareness is high, and the competitive context is such that evaluating a single product is not too limiting. Distribution Research Traditionally, the distribution decisions in marketing strategy involve:
• The number and location of salespersons, • Retail outlets, • Warehouses, and • The size of discount to be offered.

each territory. An analysis of actual sales versus market potential for each sales representative can be made. Also, following inferences can be made: i. Average market potential is less as per each sales representative ii. Territory, which have too many sales representatives iii. Market potential is more but have too few sales representatives • Field Experiment approach- is also applicable only after the sales program has begun. Experiments are done with the calls made, to determine the number and location of sales representatives. This is done in two ways: i. Making more frequent calls on some prospects and less frequent calls on others, in order to see the effect on overall sales, keeping the number of sales representatives unchanged. ii. Increasing the number of representatives in some territories and decreasing them in others to determine the sales effect.

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The discount to be offered to the members in the channel of distribution usually is determined by what existing or similar products are offered, and also whether the firm wants to follow a “push” or a “pull” strategy.
Warehouse and Retail Location Research

Promotion Research
Here the focus is on the decisions that are commonly made when designing a promotion strategy. The decision for the promotion part of a market strategy can be divided into:
• Advertising decisions, which have long-term effects. • Sales Promotion decisions, which affect the company in

Location decisions include: “What costs and delivery time would result, if we choose one location over another?” The approximate location (optimal location), that will minimize the distance to customers, weighted by the quantities purchased, will have to be determined. Chain shops with multiple outlets and franchise operations must decide on the physical location of their outlets. Data about surrounding residential neighbourhood, income levels, and competitive stores would help in choosing optimal location.
Number and location of Sales Representatives

the short term. Companies spend more time and resources on advertising research than on sales promotion research because of the greater risk and uncertainty in advertising research. Advertising Research: Advertising decisions are more costly and risky. Advertising research involves generating information for making decisions in the: • Awareness stage
• Recognition stage • Preference stage, and • Purchasing stage

How many sales representatives should be there in a given territory?
Approaches
• Sales effort approach- when the product line is first

introduced and there is no operating history to provide sales data. This is done by: ii. Estimating the number of sales calls required to sell to, and to service, prospective customers in an area for a year. This will the sum of the number of visits required per year to each prospect (customer) in the territory. iii. Estimating the average number of sales calls per representative that can be made in that territory. iv. Divide the estimate in step (i) by the estimate in step (ii) to obtain the number of sales representatives required. • Statistical analysis approach- is used after the sales program is under way. Once a sales history is available from each territory, an analysis can be made to determine if the appropriate number of sales representatives is being used in

Most often, advertising research decisions are about advertising copy. Marketing research helps to determine how effective the advertisement will be. Research on media decisions is separate from advertising research. The effectiveness of an advertisement depends upon the brand involved and its advertising objectives. Four categories are used in advertising research:
• Advertisement recognition • Recall of the commercial and its contents • The measure of commercial persuasion, and • The impact on the purchase behavior.

Advertising Recognition The respondents are tested whether they can recognize the advertisement as one they have seen before.

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References
Donald R. Cooper – Business Research Methods, Tata McGraw – Hill Publication Easterby-Smith M et al- Management Research-an introduction (Sage Publications, 1991) Gallagher, J. William, “Report Writing for Management”, AddisonWesley Golen, P. Stevan, “Report Writing for Business and Industry”, Business Communication Service Kothari C R – Quantitative Techniques (Vikas Publishing House 3rd ed.) Levin R I & Rubin DS - Statistics for Management (Prentice Hall of India, 2002) Nargundkar R – Marketing Research Text and Cases (Tata McGrawHill 2002) Miller D C- Handbook of Research Design and Social Measurement (Sage Publications, 1991) Paul D. Leedy, Practical Research: Planning & Design, Prentice Hall R. Lesikar and John Pettit, Report Writing for Business Notes

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