Marketing Research by Geoff Lancaster ©

1 Introduction
The marketing concept states that the nature of the marketing orientated organisation, whether product or service based, profit or non profit based, is the identification and genuine satisfaction of customers needs and wants, more effectively and efficiently than the competition. The marketing concept has been defined as ‘the key to achieving organisational goals’ and the marketing concept rests on ‘market focus, customer orientation, co-ordinated marketing and profitability’. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. In a ‘not for profit’ organisation, management substitutes profit for some other criterion such as maximum social benefits; a political party would be likely to substitute maximising votes for financial profit. A university on the other hand may substitute ‘research excellence’, to purely financial profit. In order for organisations to be able to arrange their assets and resources in such a way that they are able to produce ‘bundles of satisfactions’ that satisfy the genuine desires of specifically defined target markets better than the competition, they need to know what the market regards as valuable. The concept of value is subjective and lies in the mind of the individual prospective customer. Hence, in a broad sense, marketing management needs to understand the ‘minds’ of their target markets, their attitudes and value systems. They need a formalised, managerial approach to this most important task. This is the fundamental role of marketing research. Without the information that marketing research provides, management cannot apply the marketing concept as an overriding business philosophy. It is not the intention to present a comprehensive treatment of marketing research, and indeed it would take an entire textbook to do this. The purpose of this material is simply to give you a ‘feel’ for the subject and relate how it fits into modern marketing practice.

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Definition of Marketing Research

Kotler (1999) defines marketing 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’. The American Marketing Association (AMA, 1961) defines it as ‘the systematic gathering, recording and analysing of data relating to the marketing of goods and services’. The emphasis is clearly on the improvement in marketing decision making. Marketing research is the ‘scientific’ approach to building value in the eyes of the organisation’s target market. The aim of research is to find, in a systematic way, reliable, unbiased answers to questions about the market for goods or services and to look at ideas and intentions on many issues. Marketing research is often concerned with the process of collecting, analysing and interpreting the facts to establish what it is that people want and why they want it. It is employed by marketing management in the planning, evaluation and control of marketing tactics and strategy, but it is also of use in helping to make policy decisions in the non-commercial public sector. Research must be carefully planned with a disciplined and systematic approach, and a series of steps should be taken in the development, planning and execution of research. The aim is to give an adequate, but general view of a number of topics without going into detailed methodological technicalities. On a simple definitions point, there is often confusion about the term ‘marketing research’ which is the overall descriptor and ‘market research’ which is a sub-set of marketing research and which concerns matters like ‘on street’ interviews.

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Marketing Research and Marketing Information Systems

Formal marketing research may provide a large proportion of the information requirements for a firm, but not their total requirements. There are other valuable sources of marketing information beside formal marketing research. The information requirements of the modern firm should be professionally managed in a systematic way in some form of formal system that will assist in the collection, storage, retrieval and analysis of various forms of marketing information not simply consist of information collected using formal marketing research. Such a system is known as a marketing information system or MkIS for short. This is made up of four parts. Three of these components actually collect or ‘produce’ information of various sorts in it’s ‘raw’ form. These are the ‘Internal Data’, ‘Intelligence Data’ and ‘Marketing Research Data’ components of the system. The information from these three component parts of the system are then fed in as ‘input data’ to the fourth component part, which can be described as ‘Models and Statistics’. This component of the system adds value to the data produced from the other three component parts by altering it or modelling it in some way. Basically the ‘Models and Statistics’ part of the system employs management science techniques to the data derived from the other three component parts, and in so doing, makes the information more useable and valuable for strategic marketing planning purposes.

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increased competition. Such research is not intended to allow the researcher to establish causal relationships between marketing variables and sales or consumer behaviour. A survey of buyers’ intentions is a popular method of obtaining sales forecasting information. In order to achieve this kind of test it is necessary to use a formal experimental design in order to be able to test a specific hypothesis. etc. It is not designed to enable the researcher to draw firm conclusions about the research situation rather to enable him or her to establish the general parameters of the research situation. Similarly. 4.1 Exploratory Research This is usually undertaken at the initial stages of the overall research process.4 Conclusive research When using conclusive research techniques the researcher is attempting to establish causal relationships between marketing variables such as price. those data that are already in existence usually in printed for or on some kind of computerised data retrieval system. The use of secondary data i. Formal statistical and mathematical techniques specifically developed for forecasting exercises can also be used. Descriptive research merely examines ‘what is’. histograms. These general classifications are now examined in more detail. 4. For example. questionnaire surveys can be used to elicit responses. main competitors. Exploratory research lays down the foundations enabling the rest of the research exercise to be built soundly. Group interviews can be held in order to arrive at a consensus as to what might happen within a certain market in the future. When using qualitative research such as depth interviews or group discussions. All measures of central tendency such as the mean.e. Once the researcher has established the present situation in terms of market size. next year. Descriptive research usually makes use of descriptive statistics to help the user understand the structure of the data and any significant patterns that may be found in the data. greater import penetration in a particular market. 4. the salesforce could be surveyed and asked for their opinion concerning future sales or market conditions. then they will have to familiarise themselves with the general dynamics of that industry or research area in order for them to make an effective job of carrying out the main body of the research. predictive or conclusive in nature. purchasing behaviour as so forth.. the next five years. Secondary data obtained from existing sources as well as survey results or information derived from qualitative interviews can provide the forecaster with valuable input data for forecasting. they may then proceed to types of research of a more predictive and/or conclusive nature. Both of these interviewing techniques employ relatively small samples and hence by their very nature can only hope to provide general exploratory information.2 Descriptive Research This is intended to describe certain factors that marketing management is likely to be interested in such as market conditions. those data that are collected for the first time specifically for a particular research exercise. Such research is usually carried out at the beginning of the overall research project.. Descriptive research results are often presented using pictorial methods such as graphs. just like exploratory research. Exploratory research is basically ‘having a look’ type of activity. median and mode are often used along with measures of dispersion such as the variance and standard deviation. ‘pie charts’. Other research may produce data that are descriptive. 4. the researcher can interview individual salespeople or ‘experts’ in the industry. usually forms part of an on going research programme.e. to name but a few examples. then qualitative research method are more often employed than quantitative methods. Opinions can be elicited from respondents for various time periods. Depth interviews and group discussions allow the researcher to explore respondents’ opinions and attitudes on key issues. Some marketing research exercises are intended to produce results that are purely exploratory in nature. Such research.3 Predictive research The objective of predictive research is to enable the marketing researcher to predict something about future market conditions such as market growth or decline. or to enable the researcher to predict likely future conditions. etc. Let us assume that the marketing communications 2 . main segments. future price levels or changes in consumer taste. for example the next few months.4 Types of Marketing Research Marketing research activities can be classified by their purpose or general objective. customers’ feelings or opinions toward a particular company. In terms of primary data collection i. is an important part of the exploratory process. Many marketing research techniques can be used to generate information that might prove useful to the researcher in predicting such conditions. Unless researchers have experience of a particular industry or research area within a particular industry. Nonetheless information gained from qualitative exploratory research enables the market researcher to plan a more effective research program than would be the case if the exploratory stage were missing. advertising or packaging to some other variable such as sales or patterns of consumption.

beliefs. Differences between stores will be accounted for in the experiment. 5 Stages in the research process Marketing research is a planned formal approach to the collection of marketing information and it has a number of distinct stages. behaviour. actions • Demographic. values. These effects are usually sales. personal • Motivational research techniques . opinions • Evaluations. previous research • Trade associations. feelings.manager wanted to establish which set of merchandising materials. The results are then analysed and used to see if the hypothesis that one set of experimental treatments has been more effective in generating sales than the others were in fact true or false. All experimental exercises that enable the researcher to establish causation in tests have a number of factors in common. products) This information is required for: • Exploration. but might be something else such as behavioural changes of some kind e. The experiment will be allowed to run until sufficient data has been generated. attitudes. intentions • Knowledge. which price promotion and which shelf configuration would be most effective in achieving sales within a multiple grocery store chain. these are known as the ‘independent variables’. both internal and external to a company • Primary data sources (i. reports. statistics.g. 3 Select the research approach for collection of new/primary information through a combination of: • Experimentation • Observation • Surveys . The marketing researcher wants to know whether the experimental effects caused by the independent variables acting upon the dependent variables are in any way commercially exploitable.e. (on/from people. description. stores. periodicals. store loyalty.g. projective techniques 3 . companies. four merchandising ‘sets’. using statistical tests. theses. The researcher starts with the marketing variables that are to be tested. telephone.mail.depth interviewing. These variables are then applied to a given situation and certain effects are monitored. The researcher sets up an experiment where each permutation of experimental treatments is randomly allocated to retail stores. research organisations • Advertising/market research agencies • Books. socio-economic etc. Let us also assume that there are four different versions of each of the marketing variables e. whether the effects seen in the dependent variables are in fact attributable to changes in the independent variables (i. facts. The researcher wants to know which permutation of these three marketing variables is most effective. 1 Problem definition leading to a preliminary statement of research objectives to provide information. group interviewing. brands. conference proceedings. These effects are regarded as ‘dependent variables’ because they are dependent on the marketing variables discussed earlier. government agencies. four price promotions that could be used in store and four different shelf configurations. etc.e. making this stage an identification of information needs which are: • Motivations. prediction or evaluation It comes from: • Secondary data sources. the marketing variables) and if so what are the nature and strength of these effects. from field work) 2 Review of secondary data sources such as: • Company records. Statistically designed experimental methods such as Analysis of Variance (ANOVA) would be used in such a situation. Experiments are set up with the purpose of trying to establish scientifically.

the researcher will take much longer than this in preparation. Techniques used include: 1. They are concerned with collecting information on people’s beliefs. Use a non-probability ‘purposive’ sample as it is not intended to use the ‘results’ in the final data set. etc.methods. Questionnaires can be self-administered or used in an interview situation.1 Tools of marketing research Motivational research techniques The aim here is to uncover underlying motives. depending on: • Cost • Timing • Type of information needed • Amount of information needed • Ease of questioning • Accuracy required The practicability of any survey by questionnaire is best checked by a pilot study. Such an exercise would merely be the administering of a questionnaire by personal interview. The depth interview is not intended to be a formal question and answer session using a structured questionnaire. Focus groups or group discussions are where the interviewer stimulates and moderates group discussion. In this method freedom of expression and interaction between individuals are encouraged. etc.4 5 6 7 Determine details of the research design . They are expensive and time consuming. Depth interviewing is based on the psychoanalytical principle of ‘free association’ interviewing. Topics for discussion are chosen by the interviewer and indirect questioning leads the respondent to free expression of motives. brands. 3. Although the interview may only take an hour or so to actually conduct. experiences and habits in relation to adverts. Depth interviews fall under the heading of qualitative research. listening to tapes and making transcripts and analysing the information. 6. These techniques often penetrate below the level of the conscious mind and there are two approaches: • • the psycho-sociological approach which relies on group behaviour of consumers and the impact of culture and environment on their opinions and reactions. attitudes and opinions rather than more quantitative information that might more readily lend itself to statistical analysis. 4 . telephone or personal interview. sample design Data collection Analysis and interpretation of data Evaluation of results and recommendations 6 6. opinions. To check the questionnaire: 1. desires and emotions of consumers that influence behaviour. making the appointment. services. ordering of questions. 2.2 Surveys (using questionnaires) This is the most commonly used method of data collection that can be conducted by mail. advertisements etc. A depth interview is intended to be something far more subtle and sophisticated. Depth interviewing and observational methods. Depth interviews usually involve small samples. attitudes. Sensitivity Panels are a form of group discussion or focus group where respondents are trained to take part in such groups and the members of the group are used again and again for different research subjects such as different products or packages. the psychoanalytical approach which relies on information drawn from individual respondents in depth interviews and projective tests. products. At this stage we are only testing the design of the questionnaire. whether the questions are easily understood. whether it is of a suitable length.

Questions concerning prestige goods may not be answered truthfully. Remember that direct questions will not always elicit the expected response . 9. Do not ask leading questions (e. Only questions that the respondent can answer from knowledge or experience should be asked.g. However. It should consist of questions that have the same meaning. It is possible that a number of versions of the questionnaire will need to be tested before it is right. Unaided recall questions do not mention the nature of the answer material and avoid asking leading questions.2. ‘Does this product last a reasonable length of time?’). shopkeeper not retailer).?’ will bring forth large amounts of data which cannot always be satisfactorily summarised.. 2. ‘Have you a radio and/or television set?’). 11. e. so the design of a questionnaire is of great importance.. 6. 2. 12. separation. Multiple-choice questions (‘cafeteria’ questions) offer a graduated range of possible answers. Questions should not depend on the respondent’s memory. Pilot testing should involve well-trained experienced staff because it is important to get the questionnaire right as the success of the entire survey depends on it. 7 Questionnaire design The information collected must be accurate. Thermometer questions ask informants to rate their feelings on a numerical scale. ‘How did you travel to the station to catch this train?’ 3. Careful rewording can avoid this (e. Questions should be numbered and have instructions to the investigator concerning the conduct of the interview in bold face.. 7. This type of question seeks to minimise the disadvantage of discrete classification in the multi-choice type question. 5. Keep questions short. 13.g.e. listed in order from one extreme to the other.g.. Do not mention brand names (e. A question which begins ‘What do you think of. Avoid using catch phrases or colloquialisms. Answer codes should be as near to the right-hand side as possible.) 10. 4.g. 7. ‘Do you work or are you a housewife?’).?’ 5 . Open-ended questions give the informant a hint of what answer might be expected. Use simple words that are familiar to everyone (i. capital letters and underlined. and lines drawn at suitable intervals can bring clarity to the design. ‘Have you a television capable of receiving teletext transmissions?’ might be better asked by ‘How many hours per week do you watch television?’. ‘Do you buy instant coffee because it is the quickest way to make coffee?’).g. 3.g. 5. followed by: ‘Do you watch teletext transmissions?’). e. brand leaders may be selected more frequently because of the weight of advertising. a single meaning and the intended meaning to everyone.g. ‘Do you consider Sony to be the best audio equipment?’).perhaps not all possible answers have been foreseen (e. 0-10. Avoid words that are not precise in their meanings (e. Checklists are a standard way of prompting the memory of a respondent without being biased by the interviewer. shop not outlet.1 Rules for question design 1. but this type of question is useful in the pilot stage to show the range of likely answers. 6. etc. 8. the question ‘Are you married?’ does not cover the possibilities of divorce. 4. usually ‘yes’ and ‘no’..g. 1. Dichotomous questions offer two choices of answer. Avoid asking double-barrelled questions (e.g. This particularly applies to questions beginning with ‘Why. The types of questions most commonly used are as follows. Questions should only allow one thought to be created in the respondent’s mind to avoid confusion and inappropriate answers. Do not ask questions that may offend (e. The last pre-test should use the final approved questionnaire.

Answers should be recorded in one of the following ways: • Writing a number. Test markets can be expensive.and post-testing of advertising themes and copy. The first questions asked should gain the interest of the informant. • Underlining correct answers. It can be carried out in an artificial ‘laboratory’ type setting or as a field experiment. • Crossing out incorrect answers. Transition from question to question should be smooth and logical. Will the answers to each question be in a form in which they can be cross-tabulated against other data on the same or other questionnaires? 9. there are certain techniques used in the pre. Are all the possible answers allowed for? 7. Are the questions ones that will elicit the answers necessary to solve the research problem? 5.14. The test market is like a ‘model’ of the total market. Does it break any of the basic rules of question design? 3. with those of greatest importance being about a third of the way through. In addition. such as depth interviews and group discussions. Is each question unambiguous . Details of the respondent. address. There are a number of basic questions that should be asked about any questionnaire: 1.) should appear at the end. • Ringing a number or letter. • Writing in a predetermined symbol. Is each question clearly worded? 2. occupation etc. information collected for the first time specifically for a particular research exercise. Observation such as retail audits and consumer panels and Surveys such as a postal questionnaire of telephone surveys. Are the recording arrangements foolproof? 8. 9 Observational Techniques 6 . Will the answers be in a form that will allow at least some to be checked against established data? 8 Marketing experiments An experiment is a way of gathering primary data in which the researcher is able to establish cause and effect amongst the variables being experimentally tested. Avoid questions or words with an emotional bias. The other three classes of techniques are Interviews. Marketing experiments are one of the four main classes of research methods whereby marketing researchers collect primary information i. along with the interviewing district identification. the best example of which is the test market where researchers choose a representative geographical area or one where they can statistically adjust data to make them representative of a wider market area. • Putting a cross or a tick in a box. Open-ended questions should be followed by enough space to allow for answers to be recorded word for word. Is each question concerned with one factor only? 4.e. ‘blind’ and simple placement tests. Another experimental technique involves surveying a small sample of consumers and showing them pictures or samples of products and ascertaining their preference as if they were really ‘shopping’. Other techniques include extended user tests. name. More difficult questions should come later. and should be easy to answer in a factual way. but being a field experiment they have the advantage of realism or ‘external validity’ over laboratory experiments. the place and date of the interview and the interviewer’s name. The questionnaire must have a title and contain cross-references to others if needed. if they are needed (age.will both the investigator and the informant have the same understanding of the question? 6.

Smaller shops that do not have the technology still have to be audited ‘manually’. • see what kind of price consumers associate with different product variations (e. For example. • establish market segments in relation to price. Marketing research has an important role to play in evaluating the efficiency of existing channels and forecasting likely future retail developments both in terms of the channel formats likely to be used in the future and the technology used within such channels. packaging). Company product managers can buy the retail sales data and other supporting information on a ‘continuous’ month by month basis. family size and stage in the family life cycle. Retail audits conduct product audits in a large number of retail stores every month. the shopping areas within petrol stations has grown considerably in the last decade in terms of the amount of turnover and especially in terms of the range of products on offer.g. mortgages and personal banking. Television shopping is very popular in the United States and is gaining in popularity elsewhere. Retail audits and consumer panels are also classified as observational techniques. but interrelated facets of the subject. Qualitative research such as depth interviews and group discussions as well as larger 7 . Other related information on competitors’ products is also available. 10 Main research areas 10. Channels of distribution are evolving over time and new channel formats are being developed. electro-mechanical devices such as cameras or tape recorders etc. these are channels of distribution and physical distribution. 10.1 Product research This involves all aspects of design.g. cars). Observational techniques are a useful source of primary data and this method is often used in conjunction with other research methods. marketers are continually attempting to create a competitive advantage by selecting innovative.2 Pricing research Here what is termed the buy-response model can be used to: • assist in establishing a more market-orientated pricing strategy. In the retail audit most stores use electronic point of sale (EPOS) and again can send retail sales information down the telephone line to the auditing company. They can also tell which channels are likely to experience considerable future development and a growth in popularity. They can identify which channels are in relative decline in terms of their efficiency in retailing certain products. For example the Internet now holds out a lot of promise as a shopping medium particularly for financial services like insurance. Respondents are of different socio-economic groups.3 Distribution research Distribution research is concerned with two separate. Other retail formats have become increasingly important such as ‘out of town’ shopping complexes. 10. as well as the improvement and modification of existing products and its activities include: • Comparative testing against competitive products • Test marketing • Concept testing • Idea generation and screening • Product elimination/simplification • Brand positioning Brand positioning is particularly important when one considers modern day competitive pressures. Such techniques as the retail audit can monitor the effectiveness of different types of distribution channels and detect any regional variation.Sometimes it only possible to collect the kind of data required by observation. They record their purchases using a special bar code reader and send the data to the research company’s headquarters using a coupler. observing objects or people. development and testing of new products. Other forms of ‘non shop shopping’ are also growing in popularity such as the use of mail order tied in with the large growth in direct mail. humans observing objects (e. The consumer panel is a home audit where a wide range of households are monitored as to their purchasing habits. In terms of channels of distribution. It may be humans observing humans. creative and more effective channels.

4 Marketing Communications Research Marketing communications research is concerned with the appraisal and evaluation of each element in the marketing communications mix. ‘ethical’ or ‘healthy’. journals or commercial radio programmes will be most effective in getting the message across? Marketing communications involves business to business communication as well as communicating with householders.campaign level to put the actual communications message together. Many consumer goods are sold through marketing intermediaries such as wholesalers or other ‘middlemen’. so this is a techniques that could have been predicted long before it became established outside of Japan. transport livery. selecting the most effective communication media. the activities of the competition and important changes in the external business environment. communication on the Internet and many other aspects of communications. magazines. effective marketing is impossible. Firms that are market driven and customer focused in this way are said to be ‘marketing oriented’ firms. To remain competitive marketing firms have to create customer value more effectively and efficiently than the competition. In the first instance a firm will need to research the characteristics of customers or potential customers for their product or service. whereas in the late 1990’s most people express some concern about such issues. Long term corporate and marketing strategy and marketing plans at the more tactical and operational levels need information. personal selling. identifying the target audiences. can be used in the appraisal of existing channel efficiency and in predicting likely future developments. These customers may form distinct groups or market segments. New developments in the area of physical distribution can also be monitored and to some extent predicted using marketing research techniques. direct mail. Once the target audiences have been identified and the most appropriate communications media have been established. This activity needs some kind of appraisal research to establish its potential and actual effectiveness. In order to keep up with the changing tastes and changing value systems of customers. evaluation of below the line sales promotions. corporate work-wear. What might be regarded as unimportant say ten years ago may become more important a decade later. For example the concept of ‘just in time’ delivery systems which is used by a large number of organisations originated in Japan. This includes advertising research. For example what is regarded as fashionable in terms of clothing or popular music might not be next year. and people in these organisations need some form of communication. Materials handling and vehicle technology is continuously developing with implications for the logistics industry especially transport. sponsorship. ‘green’ and environmental issues were not something that concerned the majority of people a decade ago. Value changes all the time within people’s minds. further research is needed at the pre. telephone marketing and trade journals are also important business to business marketing communication ‘tools’. Once the target audiences have been defined it is necessary to establish the most effective medium or media to use to send a marketing message to these audiences. In many industrial firms up to 90% of the overall marketing budget is spent on personal selling. For example. In business to business communications. sponsorship evaluation and the evaluation of direct mail. Such information is the life-blood of the marketing orientated firm. corporate communications. exhibitions. telephone marketing. Marketing research provides the 8 . In the value creation process marketing firms attempt to at least meet. In terms of marketing communications planning these represent the target audiences for any future campaigns. What television programmes are the target audiences most likely to watch? What newspapers. trade journals. Computer technology has now made available ‘tracking systems’ so that customers can establish exactly where their order or delivery is in the order processing cycle and even establish exactly where a particular consignment is anywhere in the world. Trade exhibitions. 10. but preferably exceed. customers’ expectations. Marketing research thus has an important part to play at every stage of the communications process. However ‘value’ is somewhat subjective and lies in the minds of individuals and groups of people. This concern is reflected in a wide range of products that claim to be ‘environmentally friendly’.scale sample surveys using questionnaires. Without the right kind of information. 12 Summary Marketing is the business process whereby organisations strive to create ‘bundles of values or satisfactions’ in the form of products and services that their customers will willingly buy. developing the message and evaluating how well the message has been communicated to the target audience and with what effect. personal selling is particularly important. the marketing orientated firm needs information.

it must form an intrinsic part of the wider marketing information system. 9 . but marketing research on its own is insufficient at a strategic level.organisation with a wide range of useful information.

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