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Master of Business Administration – MBA

Semester 3


Roll No.: 520947184

Subject: Marketing Management

Subject code: MK0013

Market Research
Assignment Set- 1
Q.1 a. Explain in detail how a marketing decision support system is helpful as a MIS tool.
Ans.: Marketing research is an important component of a formal network of information flow to marketing
management, known as a marketing information system (MIS). In the words of Philip Kotler, “a marketing
information system is a continuing and interacting structure of people, equipment and procedures designed to
gather, sort, analyze, evaluate and distribute pertinent, timely and accurate information for use by decision
makers to improve their marketing planning, execution and control.”
The figure on the next page shows the key components or subsystems of the marketing information system – 1)
The internal records system 2) The marketing research system 3) The marketing decision support system and 4)
The marketing intelligence system.
The marketing environment comprises target markets, marketing channels, competitors and macro-
environmental forces. Marketing managers use marketing information for planning, execution and control. Thus,
the marketing information system serves as a link between marketing managers and the marketing environment.
The Marketing Decision Support System (DSS) – This consists of two components – a) Advanced methods of
statistical analysis such as regression, correlation, factor, discriminant and cluster analysis techniques and b)
Computerized or mathematical models that are designed to help the marketing executive take decisions such as
establishing the optimum advertising budget, allocation of budget among various media types, evaluating the
progress of new products, or assigning sales representatives to their territories. Databases have no value if the
insights they contain cannot be retrieved. A decision support system not only allows the manager to interact
directly with the database to retrieve what is wanted, it also provides a modeling function to help make sense of
what has been retrieved. A common example of a DSS in action is that used by many industrial sales people –
especially those selling products that require significant customization. The salesperson frequently will be asked
whether or not the price and delivery time of a unique product configuration will meet or exceed a competitor’s
promises. Without leaving the customer’s office, the salesperson can plug a laptop computer into a phone jack
and begin communicating with a database stored in the company’s main computer memory. The salesperson
types in the product configuration and desired delivery data and these requirements are compared to the costs,
inventory, and assembly time contained in the data bank. In a matter of minutes, the sales person can propose a
price and delivery date – and perhaps close the sales. Each firm has to develop or adapt a model to support its
own decision problems. A sales force turnover model revealed that the most significant variable influencing the
turnover rate was the level of the appointment fee that representatives pay for initial materials. An order model is
that which explains the components of the average order and isolates the actionable variables such as the size
and timing of the catalogue and the gift incentives. A procurement model is that which helps determine how much
of a new product to buy, when to purchase it and the risks involved.
b. Give the meaning of internal records systems?
Ans.: Computer-based or manual system that transforms data into information useful in the support of decision-
making. Internal Record System can be classified as performing two functions:
(1) To generate reports-for example, financial statements, inventory status reports, or performance reports
needed for routine or non-routine purposes.
(2) A computer system designed to help managers plan and direct business and organizational operations.
Q.2a. Distinguish between market research and marketing research.
Ans.: Marketing Research:
The American Marketing Association officially defines marketing research as follows: Marketing research is the
function that links the consumer, customer, and public to the marketer through information - information used to
identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions;
monitor marketing performance; and improve understanding of marketing as a process. Marketing research
specifies the information required to address these issues, designs the method for collecting information,
manages and implements the data collection process, analyses, and communicates the findings and their
This definition highlights the role of marketing research as an aid to decision making. An important feature is the
inclusion of the specification and interpretation of needed information. Too often, marketing research is
considered narrowly as gathering and analyzing of data for someone to use. Firms can achieve and sustain a
competitive advantage through the creative use of marketing information. Hence, marketing research is defined
as information input to decisions, not simply the evaluation of decisions that have been made. Marketing research
alone, however, does not guarantee success; the intelligent use of marketing research is necessary for business
achievement. A competitive edge is more the result of how information is used than of who does or does not have
the information.
Marketing research has many different applications and covers different areas such as the following -
Market research – This refers to research to determine the structure for a given market (e.g. the two wheeler
market), which would include gathering information on the number of players in the market, market shares of the
different players, growth rate of the market, latest trends and developments in the market, market feasibility or
potential for new products launched, etc.
b. Distinguish between primary and secondary data sources.
Ans.: Sources of Data
The sources of data may be classified into (a) primary sources and (b) secondary sources.
1 Primary Source of Data
Primary sources are original sources from which the researcher directly collects data that has not been previously
collected, e.g., collection of data directly by the researcher on brand awareness, brand preference, and brand
loyalty and other aspects of consumer behavior, from a sample of consumers by interviewing them. Primary data
is first hand information collected through various methods such as surveys, experiments and observation, for the
purposes of the project immediately at hand.
The advantages of primary data are –
1.It is unique to a particular research study
2.It is recent information, unlike published information that is already available

The disadvantages are –

1.It is expensive to collect, compared to gathering information from available sources
2.Data collection is a time consuming process
3.It requires trained interviewers and investigators

2 Secondary Sources of Data

These are sources containing data, which has been collected and compiled for another purpose. Secondary
sources may be internal sources, such as annual reports, financial statements, sales reports, inventory records,
minutes of meetings and other information that is available within the firm, in the form of a marketing information
system. They may also be external sources, such as government agencies (e.g. census reports, reports of
government departments), published sources (annual reports of currency and finance published by the Reserve
Bank of India, publications of international organizations such as the UN, World Bank and International Monetary
Fund, trade and financial journals, etc.), trade associations (e.g. Chambers of Commerce) and commercial
services (outside suppliers of information).
Q.3 What is a research design? Identify the steps involved in it. How many types of research designs are
there in marketing research?
Ans.: Research Design: A research design is a logical and systematic plan prepared for directing a research
study. It specifies the objectives of the study, the methodology and techniques to be adopted for achieving the
objectives. It constitutes the blue print for the collection, measurement and analysis of data. It is the plan,
structure and strategy of investigation, conceived so as to obtain answers to research questions. The plan is the
overall scheme or program of research. A research design is the program that guides the investigator in the
process of collecting, analyzing and interpreting observations. It provides a systematic plan of procedure for the
researcher to follow. According to Selltiz, Jahoda and Destsch and Cook, “A research design is the arrangement
of conditions for collection and analysis of data in a manner that aims to combine relevance to the research
purpose with economy in procedure.”
Steps in Marketing Research Design Process
Step 1 – Research Purpose It is in the best interest of both the researcher and managers paying for the
research to be sure that the research purpose is fully understood. One of the hallmarks of a competent
researcher is the ability to get to the heart of the management problem. The research purpose comprises a
shared understanding between the manager and the researcher of: 1. Problems or opportunities to be studied
which problems or opportunities are anticipated? What is the scope of the problems and the possible reasons?
2. Decision alternatives to be evaluated
What are the alternatives being studied?
What are the criteria for choosing among the alternatives?
What is the timing or importance of the decision?
3. Users of the research results
Who are the decision makers?
Are there any covert purposes?
Problem or Opportunity Analysis: In analyzing problems or opportunities to be studied, constant contact with
customers to monitor trends is very important. Research is often motivated by problem or opportunity. The fact
that people are consuming fewer sweets might be a problem or a potential opportunity for a candy company.
Increased leisure time might be viewed as an opportunity by a recreation oriented organization. In such cases,
the research purpose should specify the problem or opportunity to be explored. The manager should make sure
that the real problem is being addressed.
Decision Alternatives: For research to be effective, it must be associated with a decision. Marketing research is
committed to the principle of utility. In general, if the research is not going to have an effect on decisions, it is an
exercise in futility. The researcher should be always sensitive to the possibility that either there are no decision
alternatives – and therefore no decision – or that the research findings will not affect the decision, usually
because of resource or organizational constraints. In such circumstances, the research will have no practical
value and probably should not be conducted.
Criteria for Choosing among Alternatives: It is essential for the researcher to know how the decision maker
will choose among the available alternatives. Suppose the product manager is considering three possible
package redesigns for a health-care product with declining sales. The following criteria will be used to choose the
best of the three alternative packages:
1. Long run sales
2. Trial purchases by users of competing brands
3. Amount of shelf space assigned to the brand
4. Differentiation from competitive packages
5. Brand name recognition.
Research Users: When the research results will be used to guide internal problem solving, the researcher must
know the objectives and expectations of the actual decision makers. The bigger the problem, the more difficult
this becomes, for not only are a large number of people likely to be involved, but the contact person may simply
be acting as a liaison whose interpretation of the problem and the need for research may be second-hand. The
major benefit from making an effort to reach all the decision makers is that the research purpose is likely to be
specified more adequately.
Step 2 – Research Objective The research objective is a statement, in as precise terminology as possible, of
what information is needed. The research objective should be framed so that obtaining the information will ensure
that the research purpose is satisfied. Research objectives have three components. The first is the research
question. It specifies the information the decision maker needs. The second and the third elements help the
researcher make the research question as specific and precise as possible. The second is the development of
hypotheses that are basically alternative answers to the research questions. The research determines which of
these alternative answers is correct. It is not always possible to develop hypotheses, but an effort should be
made. The third is the scope or boundaries of the research.
Step 3 – Estimating the Value of Information Before a research approach can be selected; it is necessary to
have an estimate of the value of information – that is, the value of obtaining answers to the research questions.
Such an estimate will help determine how much, if anything, should be spent on the research. The value will
depend on the importance of the decision as noted in the research purpose, the uncertainty that surrounds it, and
the influence of the research information on the decision. If the decision is highly significant in terms of the
investment required, or in the long-run success of the organization, then information may have a high value.
However, uncertainty that is meaningful to the decision also must exist if the information is to have value. If the
outcomes are already known with certainty, or if the decision will not be affected by the research information, the
information will have no value.
Types of Research Designs There are a number of crucial research choices and various writers advance
different classification schemes, some of which are:
1. Experimental, historical and inferential designs (American Marketing Association).
2. Exploratory, descriptive and causal designs (Selltiz, Jahoda, Deutsch and Cook).
3. Experimental, and ex post facto designs (Kerlinger)
4. Historical method, and case and clinical studies (Goode and Scats)
5. Sample surveys, field studies, experiments in field settings, and laboratory experiments (Festinger and Katz)
6. Exploratory, descriptive and experimental studies (Body and Westfall)
7. Exploratory, descriptive and causal (Green and Tull)
8. Experimental and „quasi-experimental designs‟ (Nachmias and Nachmias)
9. True experimental, quasi-experimental and non-experimental designs (Smith).
10. Experimental, pre-experimental, quasi-experimental designs and Survey Research (Kidder and Judd)

These different categorizations exist, because „research design‟ is a complex concept. In fact, there are different
perspectives from which any given study can be viewed. They are:
1) The degree of formulation of the problem (the study may be exploratory or formalized)
2) The topical scope - breadth and depth - of the study (a case or a statistical study)
3) The research environment: field setting or laboratory (survey, laboratory experiment)
4) The time dimension (one-time or longitudinal)
5) The mode of data collection (observation or survey)
6) The manipulation of the variables under study (experimental or ex post facto)
7) The nature of the relationship among variables (descriptive or causal).

Q.4 a. List the benefits & disadvantages of mail questionnaire.

Ans.: Advantages of mail questionnaire:
It is an efficient way of collecting information from a large number of respondents. Very large samples are
possible. Statistical techniques can be used to determine validity, reliability, and statistical significance.
 Surveys are flexible in the sense that a wide range of information can be collected. They can be used to study
attitudes, values, beliefs, and past behaviors.
 Because they are standardized, they are relatively free from several types of errors.
 They are relatively easy to administer.
 There is an economy in data collection due to the focus provided by standardized questions. Only questions of
interest to the researcher are asked, recorded, codified, and analyzed. Time and money is not spent on tangential
 Sample surveys are usually cheaper to conduct than a full census.

Disadvantages of mail questionnaire:

 They depend on subjects’ motivation, honesty, memory, and ability to respond. Subjects may not be aware of
their reasons for any given action. They may have forgotten their reasons. They may not be motivated to give
accurate answers; in fact, they may be motivated to give answers that present themselves in a favorable light.
 Structured surveys, particularly those with closed ended questions, may have low validity when researching
affective variables.
 Although the individuals chosen to participate in surveys are often randomly sampled, errors due to
nonresponse may exist. That is, people who choose to respond on the survey may be different from those who
do not respond, thus biasing the estimates. For example, polls or surveys that are conducted by calling a random
sample of publicly available telephone numbers will not include the responses of people with unlisted telephone
numbers, mobile (cell) phone numbers, people who are unable to answer the phone (e.g., because they normally
sleep during the time of day the survey is conducted, because they are at work, etc.), people who do not answer
calls from unknown or unfamiliar telephone numbers. Likewise, such a survey will include a disproportionate
number of respondents who have traditional, land-line telephone service with listed phone numbers, and people
who stay home much of the day and are much more likely to be available to participate in the survey (e.g., people
who are unemployed, disabled, elderly, etc.).
 Survey question answer-choices could lead to vague data sets because at times they are relative only to a
personal abstract notion concerning "strength of choice". For instance the choice "moderately agree" may mean
different things to different subjects, and to anyone interpreting the data for correlation. Even yes or no answers
are problematic because subjects may for instance put "no" if the choice "only once" is not available.

b. What are the criteria for a good research design?

Ans.: Characteristics of a Good Research Design:
1) It should provide the researcher with a sense of direction.
2) It should reduce wastage of time and cost.
3) It should encourage coordination and effective organization.
4) It should be a tentative plan, which undergoes modifications as circumstances demand, when the study
progresses, new aspects, new conditions and new relationships come to light and insight into the study deepens.
5) It should be geared to the availability of data and the cooperation of the informants.
6) It should also be kept within manageable limits.

Q.5 Lock gates Ltd. is carrying out quantitative as well as qualitative research to improve its products
image and sales in the market. The management wants to communicate its employees about the different
methods including the latest techniques available for qualitative research. Management has asked your
advice on carrying out this task. Please advice.
Ans.: Qualitative Research:
Qualitative research involves an in-depth understanding of consumer behavior and the reasons that govern that
behavior. Unlike quantitative research, qualitative research aims to understand the reasons behind various
aspects of behavior. Simply put, it investigates the why and how of decision-making, as compared to what, where
and when of quantitative research. Hence, the need is for smaller but focused samples, rather than large random
samples. Qualitative research categorizes data into patterns as the primary basis for organizing and reporting
results. Unlike quantitative research, which relies exclusively on the analysis of numerical or quantifiable data,
data for qualitative research comes in many forms, including text, sound, still images, and moving images.
In qualitative research, the method does not ask the consumer to limit his or her answers to pre-assigned
response categories. The responses are verbal rather than numerical and the respondent is asked to rate the
answer in his or her own words. If the answer is a true/false or a multiple-choice category, this is a quantitative
answer. If the answer is in terms of an essay, it is qualitative. In this method, the researcher may not even know
what the possible answers could be and in fact this method is adopted precisely for that reason. This approach
allows the researcher to discover the consumption motives, attitudes, opinions, perceptions, preferences,
experiences, actions, future intentions, etc. There are different techniques in qualitative research. Some of them
are described in the following paragraphs:
Focus Groups
A focus group is a form of qualitative research, in which a group of people is asked about their attitude towards a
product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting,
where participants are free to talk with other group members. Focus groups are seen as an important tool for
acquiring feedback regarding new products, as well as various topics. 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 screened (qualified) group of respondents gathers in the same room. They are
screened to ensure that they are part of the relevant target market and that the group is a representative
subgroup of this market segment. There are usually 6 to 10 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 loosely structured, and the moderator encourages the free flow
of ideas. The moderator is typically given a list of objectives or an anticipated outline. He/she will generally have
only a few specific questions prepared prior to the focus group. These questions will serve to initiate open-ended
Client representatives observe the discussion from behind a one-way 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 site. Transcripts can be created from the videotape. If the participants
speak a different language than the clients, a simultaneous interpreter may be used.
Researchers examine more than the spoken words. They also try to interpret facial expressions, body language,
and group dynamics. Moderators may use straight questioning or various projective techniques, including fixed or
free association, story telling and role-playing. Focus groups are often used to garner reaction to specific stimuli
such as concepts, prototypes and advertising.
It is often suggested that, respondents feel group pressure to conform and this can contaminate the results.
Others hold that, by using trained and experienced moderators who appropriately manage the discussion, this
potential problem can be mitigated. Further, despite the potential for groupthink, marketers and sociologists find
that group dynamics are useful in developing new streams of thought and covering an issue thoroughly.
Focus group discussions are not representative of the total population of the target consumers, since this sample
is not representative. This group is a window to the customer’s mind, bringing to surface those things, which the
marketer may not have known about the consumer and his/ her views on many issues.
Types of focus groups: Different types of focus groups include:
i. Two-way focus group – one focus group watches another focus group and discusses the observed interactions
and conclusions.
ii. Dual moderator focus group – one moderator ensures the session progresses smoothly, while another ensures
that all the topics are covered.
iii. Dueling moderator focus group – two moderators deliberately take opposite sides on the issue under
iv. Respondent moderator focus group – one or more of the respondents are asked to act as the moderator

v. Client participant focus groups – one or more client representatives participate in the discussion, either covertly
or overtly. vi. Mini focus groups – groups are comprised of 4 or 5 members rather than 8 to 12. vii.
Teleconference focus groups - telephone network is used. viii. Online 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 nationwide 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 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. The use of focus groups has steadily evolved over time and is becoming increasingly more widespread.
Quantitative Research :
Quantitative marketing research is the application of quantitative research techniques to the field of marketing. It
has roots in the modern marketing viewpoint that marketing is an interactive process in which both the buyer and
seller reach a satisfying agreement on the "four P's" of marketing: Product, Price, Place (location) and Promotion.
As a social research method, it typically involves the construction of questionnaires and scales. People who
respond (respondents) are asked to complete the survey. Marketers use the information so obtained to
understand the needs of individuals in the marketplace, and to create strategies and marketing plans. Both
descriptive and inferential statistical techniques can be used to analyse data and draw conclusions. It involves a
quantity of respondents, sometimes ranging in number from ten to ten million, and may include hypotheses and
random sampling techniques to enable inference from the sample to the population. Marketing research may
include both experimental and quasi-experimental research designs.
Steps involved in Quantitative Research: There are five important steps involved in the research process:
a. Defining the Problem: This involves problem analysis and problem definition i.e. – What is the problem?
What are the various aspects of the problem? What information is needed?
b. Research Design: This involves conceptualization and operationalisation i.e. – How exactly do we define the
concepts involved? How do we translate these concepts into observable and measurable behaviors?

Q.6 Dinesh is a sales analyst. Recently he was asked to undertake a training session for the newly joined
recruits. Dinesh wants to highlight the importance and methods of sales forecasting and why sales
forecasting is considered as an important marketing research technique. But, on the day of the training,
Dinesh has to attend an urgent sales meeting with the top management. You are asked to take over the
session. How will you achieve Dinesh’s training objectives? Apart from that, you also want to the recruits
to know about customer profiling, product and new product research.
Ans.: Importance of Sales Forecasting:
A retailer estimates its expected future revenues for a given period by sales forecasting. Forecasts may be
company wide, departmental, and for individual merchandise classifications. Perhaps the most important step in
financial merchandise planning is accurate sales forecasting, because an incorrect projection of sales throws off
the entire process. That is why many retailers have state-of-the art forecasting systems. Longs Drug Stores has
dramatically improved its cash flow by using a system from Event.
Larger retailers often forecast total and department sales by techniques such as trend analysis, time series
analysis, and multiple regression analysis. Small retailers rely more on “guesstimates”, projections based on
experience. Even for larger firms, sales forecasting for merchandise classifications within departments (or price
lines) relies on more qualitative methods. One way to forecast sales for narrow categories is first to project sales
on a company basis and by department, and then to break down figures judgmentally into merchandise
External factors, internal company factors, and seasonal trends must be anticipated and taken into account.
Among the external factors that can affect projected sales are consumer trends, competitors‟ actions, the state of
the economy, the weather, and new supplier offerings. For example, Paralytics offers a patent.
Methodology to analyze and forecast the relationship among consumer demand, store traffic, and the weather.
Internal company factors that can impact on future sales include additions and deletions of merchandise lines,
revised promotion and credit policies, and change in hours, new outlets, and store remodeling. With many
retailers, seasonality must be considered in setting monthly or quarterly sales forecasts. Handy’s yearly snow
blower sales should not be estimated from December sales alone.
A sales forecast can be developed by examining past trends and projecting future growth (based on external and
internal factors). It is an estimate, subject to revisions. Various factors may be hard to incorporate when devising
forecast, such as merchandise shortages, consumer reactions to new products, the rate of inflation, and new
government legislation. That is why a financial merchandise plan needs some flexibility.
After a yearly forecast is derived, it should be broken into quarters or months. In retailing monthly forecast are
usually required. Jewelry stores know December accounts for nearly one-quarter of annual sales, while
drugstores know December sales are slightly better than average. Stationery stores and card stores realize that
Christmas card generate 60 percent of seasonal greeting card sales, while Valentine’s Day card are second with
about 25 percent. To acquire more specific estimates, a retailer could use a monthly sales index, which divides
each month’s actual sales by average monthly sales and multiplies the results by 100 is actual monthly sales and
monthly sales indexes. The store is seasonal, with peaks in late spring and early summer (for lawn mowers,
garden supplies, and so on), as well as December (for lighting fixtures, snow blowers, and gifts). Other monthly
indexes are computed similarly. Each monthly index shows the percentage deviation of that month’s sales from
the average months. A May index of 160 means May sales are 60 percent higher than average. October indexes
of 67 means sales in October are 33 percent below average.
Product research – This includes testing of new products through methods such as test marketing (introducing a
new product in one or two select markets and evaluating the response in those markets), and concept testing
(testing consumer reactions to a description of a product concept, rather than the actual product); testing of
alternative packaging concepts (e.g. iced tea in cans vs. tetra packs), brand name testing, product
attribute/feature testing (e.g. testing different combinations of product features among consumers, such as level
of sweetness and level of fizz in an iced tea drink) and assessing consumer perceptions of a product’s strengths
and weaknesses. In addition, product research also includes research on services, since service industries are
also users of marketing research.