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.

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 (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.

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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.

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 (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

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 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.

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 (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

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 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

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 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

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 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.

IMPORTANCE

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To Make Marketing Decisions: Marketing research helps the
marketers to make a decision about the product or service. Sometimes a
marketer might believe that the new product or service is useful for the
customers. However, research may show that customers do not need a
product or are meeting their needs with a certain competitor product and
so on. Similarly good marketing research strives to provide options for
the successful introduction of new products and services. This makes
the market entry of a new product or service less risky.

Survive the Competition: Marketing research helps in ascertaining and

understanding competitor information such as their identity, marketing
network, customer focus and scale of operations. This helps in surviving
and in certain cases, even leaving behind the competition. Moreover,
with market research you can also help understand the under-served
consumer segments and consumer needs that have not been met.

Helps to Decide Target Markets: Research helps provide customer

information in terms of their location, age, buying behavior and gender.
This helps the marketers zero in on the target markets and customers
for their products and services.

Maximize Profits: Apart from profit maximizing steps such as item

optimization, customer profitability analysis, and price elasticity,
marketing research allows you to find out methods that can help you
maximize profits. For example, a product's price elasticity research can
help you ascertain the impact of an increased price on the sales and the
profits of a product. This emphasis on profitability also helps the
company's focus to shift from maximizing sales to increasing the profits
of a company. This helps the company survive in the long run and
maximize its profits.

Increasing the Sales: Increasing the sales of your products or services

helps a company in maximizing its profits. By understanding the
customer's needs, wants and attitude towards the products and
determining whether your products fit the bill, marketers can increase
their sales. This helps in not only increasing the sales to the target
customers and people already using the product but also converting the
non users into customers for the product.

Read more on:

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Marketing is a versatile, competitive world, and when
developing your marketing plan, odds are you will not get it
right the first time. You need time to learn about the
demographics, geography, and psycho graphics of your
customers before your marketing can really be effective. That
is why it is important to not stick with your first plan, as you
will need to change it frequently for one reason or another.

A good phrase to live by in marketing is, "Learn from your

mistakes." Sometimes testing happens naturally. Some of your
marketing campaigns will fail, but instead of getting
discouraged, analyze what went wrong. Maybe you advertised
through the wrong medium, or to the wrong demographic.
Collect all the mistakes you have made and really look at
them; do not try to forget or ignore them, you have to face
your mistakes if you want to be successful.

If you hate making mistakes and want to get it right the first
time, there is a way, and that is market research. However, full
on market research is incredibly expensive and small
businesses cannot afford it, but light end market research is
possible. Basically, you just have to look at the demographic of
your competitors and make that your demographic. It's not
that easy, though. Demographics may vary between
businesses of the same nature, and that is where testing
comes in. You need to test if that demographic works for you,
and if it does not, you need to test another demographic.

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