Marketing Research Jm53Pd3vl0 PDF

Marketing Research
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Marketing Research
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MARKETING RESEARCH
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COURSE DESIGN COMMITTEE
TOC Reviewer Content Reviewer

Mr. Vinod Mehta Mr. Vinod Mehta
Visiting Faculty, NMIMS Global Access - Visiting Faculty, NMIMS Global Access -
School for Continuing Education School for Continuing Education
Specialization: International Marketing, Specialization: International Marketing,
Services Marketing, Business Marketing, Services Marketing, Business Marketing,
Consumer Behavior, Organization Behavior, Consumer Behavior, Organization Behavior,
Business Communication, Research Methods Business Communication, Research Methods
Chief Academic Officer

Dr. Sanjeev Chaturvedi
NMIMS Global Access – School for Continuing Education
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Author: Sanjive Saxena

Reviewed By: Mr. Vinod Mehta
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Copyright:
2015 Publisher
ISBN:
978-93-5119-862-8
Address:
4435/7, Ansari Road, Daryaganj, New Delhi–110002
Only for
NMIMS Global Access - School for Continuing Education School Address
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NMIMS Global Access - School for Continuing Education

C O N T E N T S
CHAPTER NO. CHAPTER NAME PAGE NO.
Marketing Research – A Tool for Making Managerial

1 1
Decisions
2 MR Process 17
3 Data Collection in Mr 39
4 Sampling Concepts 61
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Attitude Measurement Techniques 89
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6 Questionnaire Design 117
7 Data Analysis Techniques 135

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8 New Product Development and Test Marketing 165

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9 Advertising Research 181
10 Brand Equity and Corporate Image Research 205
11 Research Report Preparation and Presentation 221
12 Emerging Concepts and Applications in Mr 235
13 Case Studies 249

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MA R K ETIN G R E SE AR CH
curricu l um
Marketing Research – A Tool for Making Managerial: Concept of Marketing Intelligence, Intro-
duction to Marketing Research, Types of Marketing Research, Application of Marketing Research
in Different Industries, Bassies to Effective Marketing Research, Ethical Aspects in Marketing Re-
search, International Marketing Research
MR Process: Concept of Data Collection, Types of Data, Research Design, Types of Research De-
sign, MR Process: An overview, Translating a Management Problem into an MR Problem, Deter-
mining Whether the Informing Already Exists, Determining Whether the Research Question can
be Answered by MR, Steps Involved in the MR Process, Managing the Research Process, Market-
ing Research Proposal, MR Process in an International Environment
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Data Collection in MR: Internal and External Sources of Secondary Data, Benefits and Limita-
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tions of Secondary Data, Sources of International Secondary Data, Internet as a Source of MR
Data, Qualitative Research Methods for Primary Data Collection - Focus Group, Depth Interview
and Projective Techniques, Quantitative Research Methods for Primary Data collection – Surveys
and Observational Methods, Opportunity Analysis
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Sampling Concepts: Concept of Sampling, Sampling vs. Census, Sampling Design Process, Prob-
ability and Non-Probability Sampling Techniques, Parameters and Statistics Sample Reliability
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Attitude Measurement Techniques: Concept and Measurement of Attitude, Components of Atti-

tude, Attitude Rating Scales, Comparative and Non-comparative Scaling Techniques, Developing a
Multi-Item Scale, Interpreting an Attitude Scale, Selecting an Attitude Scale, Accuracy in Attitude
Measurement
Questionnaire Design: Definition and Objectives of a Questionnaire, Designing Question Content,

Linking with the Required Information, Types of Questions, Question Wording, Order of Questions
and Questionnare, Managing Inability and Unwillingness of Respondent to Answer
Data Analysis Techniques: Statistical Analysis with Frequency Distribution, Measures of Loca-
tion, Variability and Shape, Hypothesis Testing, Cross-Tabulation, Data Analysis Techniques, Para-
metric and non-Parametric Tests, Advanced Techniques
New Product Development and Test Marketing: New Product Development Process, Techniques
for Product Testing, Test Marketing, Types of Test Marketing, Guidlines for Designing Market Tests

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Advertising Research: Concept of Adverting Research - Copy Testing and Recalling Ads, Comprehen-
sion, Opening and Punch/Base line Research, Designing Sample Ad Campaigns, Stages in Advertising
Research Research on Advertising Planning, Advertising Objectives and Media Experiments, Advertis-
ing Research for Monitoring and control, DAR Test and Tracking Studies, Consumer Panels, Campaign
Tracking Research, Types of Advertising Research, Determining Effectiveness of the Advertising Medi-
um for Different Products and Industries, Using NRS and IRS in Advertising Decisions
Brand Equity and Corporate Image Research: Brand Equity Research, Positioning Research, Corpo-
rate Image Measurement Research, Sales Promotion Research
Research Report Preparation and Presentation: Organising the Research Report, Interpreting the
Findings, Format of a Research Report, Presenting the Research Report, Differences between Oral and
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Written Reports
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Emerging Concepts and Applications in MR: Database Marketing, Steps in Database Marketing, Busi-
ness Intelligence, Analytics and Big Data, E-commerce, Social and Mobile Marketing
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C hapter
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MARKETING RESEARCH – A TOOL
FOR MAKING MANAGERIAL DECISIONS
CONTENTS
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1.1 Introduction
1.2 Concept of Marketing Intelligence
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Self Assessment Questions
Activity
1.3 Introduction to Marketing Research
1.3.1 Types of Marketing Research
1.3.2 Application of Marketing Research in Different Industries
1.3.3 Barriers to Effective Marketing Research
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Activity
1.4 Ethical Aspects in Marketing Research
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Activity
1.5 International Marketing Research
Activity
1.6 Summary
1.7 Descriptive Questions
1.8 Answers and Hints
1.9 Suggested Readings for Reference

2 MARKETING RESEARCH
Introductory Caselet
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MARKETING RESEARCH BY APPLE, INC.
Apple is one of the most widely respected and valued brands that
has shown its credibility through the continuous purchase and
repurchase of its products by customers. It has not only served
experienced users but has also catered to beginners, who require
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ease in operating products. Apple has successfully maintained
some of the topmost margins in the industry with a high level of
brand loyalty.
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When Apple had launched iPhone, it targeted consumers who
needed a great capacity for information storage, an ease of com-
munication and maximum entertainment. While undertaking
marketing research, Apple targeted four age groups between 15-
20, 20-25, 25-45 and above 45 years of age. The basis of the mar-
ket strategy was different for various target groups; for instance,
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the below 20 years target group was expected to get attracted to

the high quality use of social networking sites on the iPhone; and
the business application and social or personal use of the iPhone
were the focus points to attract the target group that was between
the 25-45 years category.
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Apple had decided to conduct market surveys through e-mail

campaigns and interviews. It had planned to bring the prod-
uct out into the business world where people could understand
the business usage of the product. Apple has considered brand
awareness as an important tool in creating it as ‘business cool’
brand. The marketing research plan focuses on getting feedback
from customers on the features of iPhone, implementing changes
wherever required and allowing users to design their own person-
alised iPhone.
Apple’s Ex. CEO, late Steve Jobs, had on several occasions giv-
en a lower profile to the value of marketing research. He argued,
You cannot ask consumers to decree the next big thing. Moreover,
customers cannot see the value or need until they see the product.
(Breillatt, 2010)
According to Steve Jobs, It’s not about pop culture, and it’s not
about fooling people, and it’s not about convincing people that they

MARKETING RESEARCH – A TOOL FOR MAKING MANAGERIAL DECISIONS 3
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want something they don’t. We figure out what we want. And I think
we’re pretty good at having the right discipline to think through
whether a lot of other people are going to want it, too. That’s what
we get paid to do. So you can’t go out and ask people, you know, what
the next big [thing] is? There’s a great quote by Henry Ford, right?
He said, ‘If I’d have asked my customers what they wanted, they
would have told me ‘A faster horse.’
Marketing research helped Apple to formulate an effective brand-

ing and positioning strategy; thereby achieving high customer
satisfaction and brand. There still remains the need for identify-
ing the target market before designing a campaign strategy as its
products, such as iPhone and iPad, compete with other well-es-
tablished brands at a very large level.
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learning objectives
After studying this chapter, you will be able to:

>> Explain the concept of marketing intelligence
>> Describe the concept of marketing research
>> Discuss ethical aspects in marketing research
>> Explain international marketing research
1.1 introduction
Stiff competition and ever-changing customer preferences have ne-
cessitated for organisations around the world to introduce innovative
products and services to gain high market share. However, introduc-
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ing innovative products and services for business organisations re-
quire a well-thought strategy and extensive research. Organisations
cannot afford to launch a new product or offer a service in the market
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and hope to attract customers without having a clear picture of the
market.
Marketing research is a process of collecting and analysing informa-

tion related to customers and competitors. Managers need this in-
formation to make informed marketing decisions and position their
products in a right manner. Moreover, this information helps organ-
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isations to determine the strengths and weaknesses of their existing

marketing strategy and take appropriate actions accordingly.
Organisations either conduct marketing research themselves or hire

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external agencies to undertake the research activity for them. The

marketing research process starts with defining the problem, identi-
fying alternative solutions to the problem, selecting the best course of
action and defining objectives. Thereafter, managers need to develop
research plans, collect and analyse market data and present the find-
ings in a manner that effective business decisions can be taken. They
may use primary data or secondary data or both for the research pur-
pose. In addition, there can be various approaches adopted by manag-
ers to collect data in the research process. Some of these approaches
are observations, focus groups, surveys, questionnaires, etc.
In this chapter, you will study the concept of marketing intelligence.

After that, the chapter explains the concept of marketing research.
Further, you will study ethical aspects in marketing research. Towards
the end, the concept of international marketing research is explained
in detail.

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Concept of Marketing
1.2
Intelligence
Marketing intelligence is a process of collecting information on day-
to-day events in the marketing environment of an organisation. For
example, for a convenience store, marketing intelligence can be col-
lecting information on the prices offered by competing stores and pro-
motional tools used by them. In other words, marketing intelligence is
a set of procedures that provides insight into the business marketing
decisions of the organisation.
Marketing intelligence can be derived from various sources, such as

books, newspapers, business articles, interaction with customers, sup-
pliers, distributers, social networking sites, blogs, meetings with other
professionals of different organisations and so on. Marketing intelli-
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gence is a complex function that involves a number of processes. Any
inaccuracy in information can directly affect the quality of marketing
decisions of an organisation. Thus, to have effective marketing intelli-
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gence in place and make informed decisions, managers must:
Motivate the sales staff to stay up-to-date with recent develop-
ments in the market. This is because salespeople are the ones who
get first-hand information on current market trends.
Encourage various parties in the supply chain, such as distribu-
tors, retailers and other intermediaries to provide information that
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can be useful for the organisation.

Purchase information from market research agencies. These
agencies provide information on relatively lower prices that may
not otherwise be possible if the organisation collects on its own.
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Build a marketing information centre internally where marketing

intelligence can be stored and retrieved as and when required.
Marketing research is the important component of effective market-

ing intelligence of an organisation and is conducted to meet specific
marketing objectives. A detailed explanation of marketing research is
given in the next sections.
self assessment Questions
1. __________ is a process of collecting information on day-to-

day events in the marketing environment of an organisation.
Activity
Suppose you have joined as a market researcher in an organisation.

You have been made responsible for marketing intelligence of the
organisation. What aspects would you consider to ensure effective
marketing intelligence of the organisation?

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Introduction to Marketing
1.3
Research
According to the American Marketing Association (AMA), market-
ing research refers to the systematic gathering, recording and analysing
of data about problems relating to the marketing of goods and services.
Marketing research can be defined as a systematic process of connect-
ing marketers, consumers and competitors through information. This
information contains details on current marketing opportunities and
threats, marketing actions taken by competitors, marketing perfor-
mance of the organisation and so on. Thus, it can be said that market-
ing research lays emphasis on understanding customers, the organi-
sation and competition.
It is of utmost importance for organisations to understand what cus-
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tomers need from their products and respond accordingly. However,
this relationship is majorly influenced by competitors and the way
their products are received in the market. Therefore, organisations
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need to clearly identify their customers and their competitors before
developing a research project. There are several factors that market-
ers need to consider before conducting marketing research. Some of
them are as follows:
Customers and market competition
Awareness and image of the product
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Usage of the product

Undiagnosed issues with the product
Customer needs and demands for new product development
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note
Marketing research is always confused with market research. How-

ever, they both are different concepts altogether. Marketing re-
search is a broader concept than market research. Market research
involves studying a specific market, whereas marketing research
deals with marketing issues such as research pricing and distribu-
tion of new products.
Organisations conduct marketing research to know the demands of

their customers, market requirements, degree of market competition,
performance of distribution channels, etc. Apart from this, marketing
research can be conducted by organisations to have insight into:
Changes in technology: In today’s dynamic business environment,
technology is subject to frequent changes. This largely affects the
development of new products and the production process of or-
ganisations. For example, marketing research can be conducted

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to understand the growth of e-books, which can minimise the de-

mand for printed books.
Changes in consumer tastes: Stiff competition in markets has led
to rapid changes in consumers’ tastes and preferences. If an or-
ganisation does not respond timely to these changing consumer
preferences, consumers may shift to other brands. Marketing re-
search helps marketers to determine these changing demands of
customers and fulfil them.
Changes in the product range of competitors: To survive in to-
day’s marketplace, organisations are coming with new products
with varied pricing policies almost on a daily basis. The introduc-
tion of new products can be a threat for organisations dealing in
similar products. For example, Microsoft X-Box has challenged
Sony’s PlayStation.
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Changes in economic conditions: Fluctuations can take place in
the economy of any country. Marketing research can help organi-
sations in having insight into current economic conditions and an-
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ticipating future changes, which may impact the sales of different
products of organisations. For example, in tough economic con-
ditions, consumers may opt for only products of necessity rather
than luxury items.
After providing insight into changes in technology, consumer tastes,

product range of competitors and economic conditions, marketing re-
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search can help organisations in:

Gaining a more detailed understanding of consumers’ needs:
Marketing research can help business organisations to have con-
sumers’ opinions on the prices of products, packaging of products,
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recent advertising campaigns, etc.

Reducing the risk of product/business failure: There is no guar-
antee that a new idea will be a commercial success. However, ac-
curate and up-to-date information on the market can enable busi-
ness organisations to make informed decisions, hopefully leading
to products that consumers want in sufficient numbers to achieve
a commercial success.
Forecasting future trends: Marketing research cannot only help
business organisations to provide information about the existing
state of the market, but also forecast future customer needs. Or-
ganisations can then make the required changes to their product
portfolios and levels of output in order to remain successful.
1.3.1 TYPES OF MARKETING RESEARCH
Organisations conduct marketing research by analysing both primary

and secondary data. Based on this, the classification of marketing re-
search can be of two types, as shown in Figure 1.1:

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Types of Marketing
Research
Qualitative Quantitative
Marketing Research Marketing Research
Figure 1.1: Types of Marketing Research
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Let us now study these types in detail.
Qualitative marketing research: This type of marketing research
is based on opinions, attitudes, beliefs and intentions of consumers
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regarding an organisation’s product. Here, the research deals with
why, what and how questions. It is primarily exploratory research
conducted by business organisations to understand why custom-
ers behave in a certain manner or how they may respond to a new
product. It is assumed that these opinions are often obtained from
a small group of people and thus, findings are not necessarily sta-
tistically valid. However, such findings can reflect potential issues
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that can be addressed in quantitative research. Focus groups and

interviews are the common methods used to collect qualitative
data. Although this kind of data is descriptive in nature, data
collection can be costly and time-consuming, particularly for a
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start-up or small business.

Quantitative marketing research: It is the systematic empirical
investigation of observable phenomena via statistical, mathemati-
cal or computational techniques. This type of marketing research
is based on larger samples and is therefore, more statistically valid
than qualitative marketing research. Quantitative marketing re-
search is concerned with numeric data and addresses questions,
such as ‘how many?’, ‘how often’, ‘who?’, ‘when?’ and ‘where?’
The results of quantitative marketing research are usually depicted in

a numerical pattern, for example:
30 per cent of customers rate a new product of an organisation
as ‘attractive’
70 per cent of potential customers use the Internet for booking
hotels in the UK
3 out of 5 customers will purchase a new food product on being
offered a free in-store sample

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In the quantitative marketing research method, the main source of

obtaining quantitative data include different forms of surveys, for ex-
ample, telephone, postal, face-to-face and online.
The above-mentioned quantitative and qualitative measures of mar-

keting research help an organisation in:
Obtaining data derived from previous marketing research activi-
ties and providing visibility to trends and patterns on several as-
pects.
Examining processes and procedures for the purpose of conduct-
ing marketing research and ensuring that they are suitable for
marketing research activities.
Determining sample size for conducting marketing research ac-
tivities.
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Applying various scaling measures for preparing questionnaires
used in marketing research.
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1.3.2 Application of marketing research in
Different Industries
As discussed earlier, marketing research is a process of collecting,

storing and analysing data that relates to a specific problem in mar-
keting products or services. Marketing research efforts can be made
in different industries to obtain information on current market trends.
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The following are the various industries where marketing research

can be performed:
Pharmaceutical industry: In the recent past, the pharmaceuti-
cal industry has been majorly affected due to changes in govern-
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ment laws and regulations. Marketing research provides in-depth

knowledge to organisations regarding market forecasts, trends,
patent analysis and profiles of major players within the market.
It also involves detailed analysis of clinical studies and provides
information on the prevention and treatment of certain diseases,
drug devices, instrumentation, etc., thereby enabling organisa-
tions to introduce medicines in the market accordingly.
Fashion industry: This is another area wherein marketing re-
search is widely applied and the findings are used to determine an
appropriate course of action. For example, the findings related to
demands by customers with respect to a particular type of apparel
based on age, geographical locations, cost of the apparels, the buy-
ing capacity of the buyers, etc. enable organisations to incorporate
changes in their business processes so as to increase their sales.
Banking industry: This service sector widely uses the findings of
marketing research activity. Banks conduct various activities with
the purpose to understand the dynamics of the market and cus-
tomers who avail different banking services. Based on their find-
ings, banks modify their processes to serve customers accordingly

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and thus increase the earnings of banks in the form of deposits

and advances to customers.
Tourism industry: This is another service sector area wherein
marketing research activities are widely applied so as to enable
customers receive the best possible tourism facility. Marketing
research provides useful data to tours and travel organisations
on the paying capacity and age group of tourists, role of travel
agents, destinations preferred by tourists, etc.
1.3.3 BARRIERS TO EFFECTIVE MARKETING RESEARCH
Despite many benefits of marketing research, many organisations

around the world fail to use it effectively due to various reasons. Some
of the important barriers to effective marketing research are as follows:
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Inefficient market researchers: The competency of market re-
searchers determine the effectiveness with which research is con-
ducted and results are obtained. Incompetent market researchers
with limited knowledge and skills may not be able to perform the
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desired task efficiently and attain the expected outcomes. Thus,
in such cases, the marketing research process proves to be futile.
Delayed submission of findings by marketing researchers: Most
often, it is noted that market researchers fail to submit the results
of the marketing research process in time to the concerned au-
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thority. This leads to a failed marketing research process.

Lack of clarity regarding marketing research objectives: If mar-
ket researchers are not clear about the marketing research ob-
jectives, they may not be able to prepare a questionnaire, choose
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a sample, conduct interviews and report results. In such a case,

marketing research objectives cannot be made.
Variations in presentation style: Line managers and market
researchers can have variations in their presentation style. For
instance, sometimes the final report presented by the market re-
searcher to the line manager may not be clearly understood by
them due to a complex presentation style.
2. __________ can be defined as a systematic process of connecting

marketers, consumers and competitors through information.
3. Name two types of marketing research.
4. The competency of market researchers determines the
effectiveness with which research is conducted and the
results are obtained. (True/False)
5. Line managers and market researchers do not have variations
in their presentation style. (True/False)

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Activity
Find information on the marketing research process of the follow-

ing organisations:
P&G
Amway
Hindustan Unilever Limited

Johnson & Johnson Private Limited
Ethical Aspects in Marketing

1.4
Research
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Ethics is a set of moral principles that organisations and marketers
need to follow while conducting marketing research. They are rules
that help marketers determine what is right and what is wrong. Ethics
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applies to marketing research in different ways, for example, it helps
to determine not only whether data are collected unethically, but also
presented and analysed in a manner that comply with industry stan-
dards. Some of the key ethical aspects in marketing research are as
follows:
Incorrect or non-reporting of exact findings from the marketing
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research process can be an ethical issue. For example, a market

researcher could be collecting data and change the result of their
findings in order to better prove their hypothesis on the matter.
Often it is observed that the process of data collection has not been
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followed in a systematic manner by market researchers. For ex-

ample, the market researcher has filled in false data or he/she has
misinterpreted the response of the customer regarding a particu-
lar product.
Organisations often face the ethical issue of privacy and confiden-
tiality during the marketing research process. For example, the
findings of the marketing research process are leaked by market
researchers to competitors for personal gains.
Market researchers quite often deliberately apply improper statis-
tical tests on the collected data so as to prove that the hypothesis
that was formulated is correct. In other words, they manipulate
the findings to prove the validity of the marketing research objec-
tive, which can be an ethical issue in various organisations.
Market researchers can also take a biased approach while con-
ducting the marketing research process. For instance, they delib-
erately select a biased sample so that the findings obtained will
tend to serve their personal objectives.

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The use of the Internet and various media channels has proved to be
a very useful medium in changing the mind-set of various classes and
categories of people in terms of raising awareness about the ethical
aspects in the marketing research process.
6. Incorrect or __________ of exact findings from the marketing

research process can be an ethical issue.
Activity
Find out the ethical aspects in the marketing research process of an

Indian supermarket firm. Prepare a report on your findings.
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International Marketing
1.5
Research
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International marketing research is all about evaluating consumer
and market patterns at a global level. It is especially vital to organi-
sations that are planning to expand their business in other countries.
Before venturing into international transactions, an organisation
needs to evaluate whether or not there is a demand for its products
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in other regions. International marketing research provides in-depth

knowledge of cultural, socioeconomic, political and geographic factors
to marketers.
Any potential cultural conflicts can hamper the profitability of the

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product or service that an organisation intends to export. For ex-

ample, a popular self-tanning product in several countries of North
America and Europe would not likely be a profitable product in China
where a suntanned appearance is usually not regarded as attractive
and where products are in fact sold to ‘reverse’ or ‘clean off’ a sun
tan. Statistical and demographic findings obtained from international
marketing research help organisations to make effective product-re-
lated strategies, decide the target market, analyse the profitability of
the product and so on.
However, organisations can quite often find problems in conducting

international marketing research, especially when attempting to col-
lect data from the remote parts of the world, where language differ-
ences and restricted accessibility to outsiders pose communication
barriers. The Internet plays a great role in solving these problems of
organisations to a great extent especially when secondary data are
required.

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7. International marketing research is all about evaluating

consumer and market patterns at a global level. (True/False)
Activity
Suppose you are the marketing manager of an apparel company.

Your company is planning to go global. What factors would you con-
sider while conducting international marketing research?
1.6 SUMMARY
Marketing intelligence is a process of collecting information on
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day-to-day events in the marketing environment of an organisa-
tion.
Marketing research can be defined as a systematic process of con-
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necting marketers, consumers and competitors through informa-
tion.
The two types of marketing research are qualitative marketing re-
search and quantitative marketing research.
Inefficiency of market researchers is one of the barriers to market-
ing research.
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Incorrect or non-reporting of exact findings from the marketing

research process can be an ethical issue.
International marketing research is all about evaluating consumer
and market patterns at a global level.
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Any potential cultural conflicts can hamper the profitability of the

product or service that an organisation intends to export.
key words
Advertising campaign: It is a set of activities that are aimed to

promote a product or service.
Primary data: It involves facts and figures collected through
original research from various sources, such as surveys, tele-
phone, mail, internet, in-person, etc.
Secondary data: It involves facts and figures gathered from
previous market reports such as government census.
Survey: It is a detailed study of a market or geographical loca-
tion to collect data on attitudes, opinions and satisfaction levels
of consumers by polling a segment of the population.
Questionnaire: It is a research instrument comprising a series
of questions and other prompts for the purpose of collecting
data from respondents.

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1.7 DESCRIPTIVE QUESTIONS

1. Explain the concept of marketing intelligence.
2. What are the barriers to effective marketing research?
3. Write a short note on international marketing research.
1.8 ANSWERS AND HINTS
answers for SELF ASSESSMENT QUESTIONS
Topic Q. No. Answers

Concept of Marketing 1. Marketing intelligence
Intelligence
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2. Marketing research
Introduction to 3. Quantitative marketing research
Marketing Research and qualitative marketing research
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4. True
5. False
Ethical Aspects in 6. Non-reporting
Marketing Research
International 7. True
Marketing Research
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hints for DESCRIPTIVE QUESTIONS

1. Marketing intelligence is a process of collecting information on day-
to-day events in the marketing environment of an organisation.
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Refer to Section 1.2 Concept of Marketing Intelligence.

2. Delayed submission of findings, lack of clarity regarding
marketing research objectives, inefficient market researchers,
etc. are some of the barriers to marketing research. Refer to
Section 1.3 Introduction to Marketing Research.
3. International marketing research is all about evaluating
consumer and market patterns at a global level. Refer to Section
1.5 International Marketing Research.
SUGGESTED READINGS FOR

1.9
REFERENCE
SUGGESTED READINGS
Avasarikar, P., D. and Chordiya, B., S. (2007). Marketing research.
1st ed. Pune: Nirali Prakashan
Gupta, L., S. (2007). Marketing research. Reprint ed. New Delhi:
Excel Books

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E-REFERENCES
Ama.org. (2015). Current issue. Retrieved 28 October 2015, from
https://www.ama.org/publications/JournalOfMarketingResearch/
Pages/current-issue.aspx
Marketingresearch.org. (2015). Marketing research association. Re-
trieved 28 October 2015, from http://www.marketingresearch.org/
Study.com. (2015). Marketing research: Definition, purpose and
role in marketing strategy - Video & Lesson Transcript | Study.
com. Retrieved 28 October 2015, from http://study.com/academy/
lesson/marketing-research-definition-purpose-and-role-in-mar-
keting-strategy.html
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C hapter
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MR Process
CONTENTS
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2.1 Introduction
2.2 Concept of Data Collection
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2.2.1 Types of Data
Activity
2.3 Research Design
2.3.1 Types of Research Design
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Activity
2.4 MR Process: An Overview
2.4.1 Translating a Management Problem into an MR Problem
2.4.2 Determining Whether the Information Already Exists
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2.4.3 Determining Whether the Research Question can be Answered by MR

Activity
2.5 Steps Involved in the MR Process
2.5.1 Creating Research Design
2.5.2 Selecting the Research Method
2.5.3 Choosing the Sampling Procedure
2.5.4 Collecting Data
2.5.5 Selecting Data
2.5.6 Preparing and Analysing Data
2.5.7 Preparing and Presenting the Report
Activity
2.6 Managing the Research Process
Activity

18 Marketing Research
CONTENTS
2.7 Marketing Research Proposal

Activity
2.8 MR Process in an International Environment
Activity
2.9 Summary
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MR Process 19
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IMPACT OF VOICE OF CUSTOMER ON HEWLETT

PACKARD
Hewlett Packard (HP) is a US information technology organisa-

tion with its headquarters in Palo Alto, California. HP wanted to
understand who is responsible for the purchase decision of busi-
ness buyers, from where business buyers acquire the required in-
formation and what kind of information they need. In order to find
answers to these questions, HP conducted an industry research
using Voice of the Customer (wherein a customer’s preferences,
expectations and aspirations are studied) research method.
HP used both qualitative and quantitative research methods to

increase awareness and develop preferences such as loyalty and
purchases of business buyers. The company hired 44 per cent of
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senior executives of other firms as its sales representatives. HP
focused upon delivering innovative goods and services as per the
requirement of customers.
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HP’s research on purchase decision of business buyers was a suc-
cess, as by using Voice of Customer research programme they
were able to make the maximum return on their original invest-
ment. HP’s audience reach jumped from 25 per cent to 75 per cent
of targeted customers. This helped in increased lead generation
and revenue.
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learning objectives

>> Describe the concept of data collection
>> Discuss the importance of research design
>> Describe the marketing research process
>> Explain the steps involved in the marketing research
process
>> Describe how to prepare a market research proposal
>> Discuss the marketing research process in an international
environment
2.1 INTRODUCTION
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In the previous chapter, you have studied about marketing research
and ethical aspects associated with it. In addition, you learned about
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international marketing research. In this chapter, you will study about
the market research process.
Market research is the process of evaluating the viability of a product

or service by using diverse techniques such as focus groups, personal
interviews and surveys. It is helpful in finding the target market and
the feedback of consumers on the product or service. The consumers
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are sometimes given samples of the product or a demonstration of the

service to help them to form their opinions in the market research
process. Market research can be performed by a company itself or it
may use the services of a third-party company, that is, a specialist in
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performing market research.
The market research process is time consuming in nature as it begins

with the creation of a research design. Afterwards, a research method
is chosen to conduct research and a sampling procedure is chosen to
carry it out. Later on, research data is collected from targeted custom-
ers and sent to a market research agency for verifying its accuracy and
reliability. The next step is the selection of data focusing upon the us-
age of correct data type and appropriate methods to collect data. After
that, the preparation and analysis of data is done wherein the data is
formatted by using statistical programmes such as Statistical Package
for the Social Sciences (SPSS) or Microsoft Excel to organise it in an
effective manner. Lastly, the market research report is prepared and
presented to the top management of the company.
This chapter covers the concept of data collection and the research
design of a market research. It describes the market research pro-
cess and the steps involved in it. It also explores how to manage the
research process and develop a market research proposal. In the end,
it discusses the market research process in an international environ-
ment.

MR Process 21
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2.2 CONCEPT OF DATA COLLECTION

A research can be conducted on any topic related to any stream, in-
cluding management, computers, science, medical engineering, astro-
physics, etc. However, every kind of research needs data that has to be
collected from a number of sources. The process of collecting data for
research purpose is known as data collection. Data collection has been
defined in several ways.
According to Esomar Market Research, data collection is defined as,

“The gathering of information (figures, words or responses) that de-
scribes some situation from which conclusions can be drawn.”
According to LIMS, “The act of bringing data from remote points to a

central location and organizing it into understandable information typ-
ically associated with discrete manufacturing.”
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No research can be performed without sufficient, correct and relevant
data. For example, if the researcher wants to perform a research on
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the success of a newly launched mobile phone, he/she would approach
mobile shows to collect data on the number of consumer purchasing
that particular model of the mobile phone. After collecting the data,
the researcher processes the data to organise it for analysis.
2.2.1 TYPES OF DATA

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A researcher needs to collect different types of data for different pur-

poses. There are mainly two types of data, namely primary data and
secondary data, as shown in Figure 2.1:
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Figure 2.1: Types of Data Collection
Primary Data
Primary data refers to the data that is collected by a researcher for

conducting a particular research. Primary data is the data that does
not have any prior existence and is collected directly from respon-
dents. It is considered to be reliable in comparison to all other forms
of data. However, its reliability may come under scrutiny for different
reasons. For example, it may happen that the researcher may be bi-
ased while collecting data, the respondents may not feel comfortable
to answer the questions, the researcher may influence the respon-
dents, etc. In all these scenarios, primary data would not be reliable.

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An example of primary data can be designing of a questionnaire by

the researcher himself.
Secondary Data
Secondary data refers to the data that is collected in the past but can
be utilised for conducting a research in the present scenario. The col-
lection of secondary data requires less time in comparison to primary
data. Government census reports, reference books, weather reports,
etc. are examples of secondary data.
1. The process of collecting data for research purpose is known

as ____________.
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2. __________ data does not have any prior existence and is
collected directly from respondents.
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Activity
Using the Internet, prepare a report on data collection techniques

used by KPMG when conducting a market research.
2.3 RESEARCH DESIGN

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Research design refers to the overall strategy that is chosen to assim-

ilate different parts of a study in a coherent and logical manner to ad-
dress the research problem effectively. It also establishes a blueprint
for analysis, collection and measurement of data. The function of a
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research design ensures that problems are addressed in a logical and

unambiguous way. In marketing research, gathering data related to
the research purpose involves clarifying the kind of evidence needed
to conduct a study or interpreting the gathered data.
Researchers often make a mistake of starting their investigations too

early before analysing the information that is required to answer the
questions posed by the research. These design issues need to be sorted
out before embarking on research otherwise conclusions drawn from
such a research would be inconclusive. A well-developed research de-
sign enables to:
Identify the market research problem distinctly and validate its
selection especially if any alternative research designs could have
been employed.
Review and incorporate any previously published material that
can be utilised while conducting the study.
Clear and explicit specification of hypothesis, i.e., research ques-
tions which relate to the crux of the problem of market research.

MR Process 23
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Effectively describe data, i.e., required for effective testing of the

hypothesis along with the means of obtaining the given data.
Describe methods of analysis that were employed in the analysis of
data for determining the veracity of the hypothesis.
2.3.1 TYPES OF RESEARCH DESIGN
Research design means the overall strategy used to assimilate differ-

ent parts of a study in a meaningful and logical manner that effectively
resolves the research problem. It comprises a blueprint for the analy-
sis, collection and measurement of data. There are three main types of
research design which are depicted in Figure 2.2:
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Figure 2.2: Types of Research Design
Let us discuss these different types of research of design in detail.

Exploratory research: This kind of research design is used in cas-
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es where the researcher has a negligible understanding about the

problem that has to be researched due to a lack of sufficient infor-
mation. For example, a marketer might be aware of various social
media marketing techniques used by his/her competitors yet he/
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she is not able to use them for his/her products or services due to a
lack of familiarity about efficiently using them. In such a situation,
exploratory research needs to be employed to gain an understand-
ing about the situation.
An unstructured format is followed by exploratory research mak-
ing the use of experts’ opinions, qualitative research methods and
secondary research. For example, a marketer can make use of case
studies, focus groups, expert interviews and survey opinions to
perform exploratory research.
The purpose of exploratory research is to enable marketers to pre-
pare a competent marketing plan by supplying them with sufficient
information to develop a correct research design. For example, by
performing exploratory research a marketer can discern whether
competitors are using social media websites like Facebook, Twit-
ter or LinkedIn to reach their target consumers and develop a re-
search design to test his/her hypothesis.
Descriptive research: Descriptive research is conducted to test,
explain and supervise hypothesis developed by marketers to

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find accurate and clear-cut answers. It is well planned, rigid and

well-structured. Furthermore, it uses quantitative techniques such
as data analysis, questionnaires, structured interviews, etc. For
example, a marketer can use descriptive research to find out the
number of new customers acquired with the help of social media
marketing methods and check whether the competitors’ custom-
ers can be enticed to switch loyalty.
Causal research: It is employed by marketers to discover the
cause and effect relationship between different variables. Causal
research is also known as the “If…Then…” method. The market-
er undertakes to understand the effects of manipulating indepen-
dent variables in relation to other dependent variables. It employs
field and laboratory experimentation techniques. Causal research
is mainly used for testing and predicting hypothesis. For exam-
ple, a marketer will use causal research to determine the effects of
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advertising on the sales of the product, the effect of changing the
packaging on product sales, etc.
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3. _____________________ refers to the overall strategy that is

chosen to assimilate different parts of a study in a coherent and
logical manner to effectively address the research problem.
4. Descriptive research is conducted to test, explain and
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supervise hypothesis developed by marketers to find accurate

and clear-cut answers. (True/False)
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Activity
Describe briefly the research design used by Tata Motors when it

conceived Tata Nano.
2.4 MR PROCESS: AN OVERVIEW

In today’s highly competitive business world, the marketing research
process follows a highly structured and systematic process. Conse-
quently, marketing research is a process-driven methodology having
a well-defined and specific mechanism to ensure that market research
is a success.
Conducting market research is a complicated process as there are sev-

eral variables that need to be factored in the research. For example, if
a company wants to perform a research on a new kind of shampoo it
would have to analyse whether the respondents were being honest or
simply responding for formality.

MR Process 25
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2.4.1 TRANSLATING A MANAGEMENT PROBLEM INTO An

MR PROBLEM
The process of marketing research starts with the existence of a prob-

lem which a business unit is facing and for which executive manage-
ment is required to take an appropriate decision. This section is con-
cerned with the process of translating a management problem into
a market research problem. We will now explain what constitutes a
management problem and what constitutes a market research prob-
lem.
A management problem is an issue that is of immediate concern to

the executive management of a business unit and must be addressed
at the earliest. Failure to address the problem may have severe con-
sequences on the business unit. For example, the declining sales of a
particular class of vehicle over a period of six months is a management
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concern and an action plan to address the falling sales of the vehicle
must be developed. Thus, the management problem is concerned with
the following points:
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Decrease in sales volume
Determine the cause of decrease in the sales volume
Prepare an action plan to counter decrease in the sales volume of
the vehicle in question
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Thus, the management problem cannot be determined by simple ob-

servations or a systematic study to determine the root cause.
Now, we move onto the process of converting this management prob-

lem into a marketing research problem.
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A market research problem aims at the following points of consider-

ation:
Bringing clarity and a meaning to the management problem. For
example, for examining the decreasing sales of a particular class
vehicle, the marketing research problem would look into issues
such as type and class of vehicle, the features of the vehicle, the
customer’s response and their satisfaction level, etc. These ques-
tions bring in more clarity to the management problem.
Designing the research process includes the mechanism for con-
duct of research, the type of research, the questionnaire design,
the means and mechanism of collecting data, treatment of data
through statistical tools and the final preparation of the report.
2.4.2 DETERMINING WHETHER THE INFORMATION

ALREADY EXISTS
One of the primary concerns of every marketing research analyst is to

determine whether the information or data required in the marketing

n o t e s
research process is already available or not. And, if it is available, to

what extent that data can be utilised.
Thus, the process of determining the availability of the information

depends on the following factors:
Determining the authenticity of the data source: The available
data may address the management and the marketing research
problem: however, if the source of data and information is not
trustworthy, the data cannot be termed as authentic making the
entire exercise futile.
Determining the accuracy of data: The source of data may be au-
thentic but it may not be accurate and may contain errors such as
contradictory information and erroneous and invalidated informa-
tion.
Determining the life of data: The data must be current and not
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obsolete. In case, the data is outdated or obsolete, it would make
the market research erroneous.
Determining the cost of obtaining data or information: Data can
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either be costly or cheap depending on the quality of the source,
the research method used to conduct the research, duration of the
research, etc. The cost of obtaining data has a discernible impact
upon the quality aspect of the research.
2.4.3 DETERMINING WHETHER THE RESEARCH

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QUESTION CAN BE ANSWERED BY MR
An organisation will conduct a market research only when it is confi-

dent that it will help to find answers to research questions such as will
the product fulfill the targeted customer group’s requirements, etc.
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that are being raised in the conception stage related to the functioning
of the product or service produced by it.
These research questions can be related to finding out whether or not

there exists a need for a product or service that the company is willing
to offer. Furthermore, the company’s manufacturing facilities should
be capable enough to handle a customer demand if the product be-
comes successful. These questions can be answered by conducting
market research.
5. The management problem can be determined by simple

observations or by systematic analysis of the problem. (True/
False)
Activity
Using the Internet, find information on the market research pro-

cess used by Apple.

MR Process 27
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2.5 STEPS INVOLVED IN THE MR PROCESS

According to the American Marketing Association (AMA), market re-
search is defined as, “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 im-
prove understanding of marketing as a process.”
The steps involved in the market research process are shown in Fig-
ure 2.3:
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Figure 2.3: Steps involved in Market Research Process
Let us discuss these steps in detail.

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2.5.1 CREATING RESEARCH DESIGN
The marketing process begins with the identification of the problem

and giving it a concrete shape. Research design is a set of collection
of activities executed after consultation, discussions and interactions
with focus groups with the objective of providing a more concrete
shape and design to the marketing research process. It deals with the
issues of selecting the type of research and its feasibility; the design
of sample plans and their relevance with the research objective; the
means and mechanism for the design of questionnaire and the data
collection methodology.
2.5.2 SELECTING THE RESEARCH METHOD
Every research problem is unique that makes it necessary to be han-

dled and managed in a different manner. The process and methodol-
ogy applied to an earlier marketing problem may not be applicable
to another marketing problem in spite of the similarity that they may
share. However, there are certain common features that are applica-

n o t e s
ble when it comes to the selection of a research design. These common

features are as follows:
Basic research design for a marketing research problem which
can be in the form of an exploratory research design, descriptive
research design and causal research design.
The selection of the research design is based on the objective of
the marketing research process.
Thus, having understood the type of the research methodology that is

generally deployed in the marketing research process, the selection of
a research method is dependent upon:
Research objective
Time and cost factor of the research process in general
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Availability of data and the means which may be deployed for
treatment and analysis of data for the market research process
Target customers and effectives of present marketing efforts of the
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company
2.5.3 CHOOSING THE SAMPLING PROCEDURE
Sampling is a process used in statistical analysis wherein a number

of observations are taken from a large population. The methodology
utilised to take samples from a large population is dependent upon the
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kind of analysis being conducted for methods such as simple random

sampling, systematic sampling, observational sampling, etc. For exam-
ple, when we buy one unit of a product which has recently come into
the market to assess its usability, it is said that we are sampling the
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product which we have purchased from the market. Sampling plays

an important role in data collection activities and thus, the process
of picking the sample from a large population becomes significant. It
is possible to make errors while performing the sampling procedure
which may later on affect the research process. The main purpose of
selecting a sample is to ensure that it is representative of the popula-
tion.
Some of the sampling procedures used by researchers are as follows:

Simple random sampling: In this sampling procedure, each of the
samples has an equivalent opportunity of being selected as a sam-
ple. For example, the selection of a single candidate for a sporting
event out of 10 probable candidates. Here, each of the 10 candi-
dates has an equal chance of being selected which is represented
in the sample. In this sampling procedure, individual preferences
or bias does not occur.
Stratified sampling: In the case of stratified sampling, the entire
population is divided into several strata having homogenous char-

MR Process 29
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acteristics. For example, the division of students at a particular

class into boys or girls. The division of income tax payers on the
basis of the taxable income as used in the Indian income tax struc-
ture is another example of stratified sampling. Individuals whose
income does not exceed ` 2 lakhs are not required to pay tax but
those earning between ` 2-5 lakhs are required to pay tax at the
rate of 10 per cent.
Systematic sampling: In this type of sampling procedure, the
samples are selected at specified intervals. For example, every
third house must be included for conducting a survey for the mar-
keting research activity. Another example can be taking a sample
of blood after every two hours so as to study the effect of the med-
icine which has been given to the patient.
Cluster sampling: In this type of sampling procedure, the popula-
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tion is divided into groups or clusters comprising of homogenous
elements and from these groups a simple random sample is se-
lected. For example, a group of population uses the same brand of
toothpaste.
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Judgmental sampling: This sampling procedure is based on the
experience or individual judgment of the researcher. For exam-
ple, a particular sportsman must be selected to the exclusion of
other probable sportsperson. This sampling process is not recom-
mended in the research process due to the fact that it induces an
element of bias in the sample and hence, the results may not be
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accurate. Judgmental sampling is used when there is little or no

information related to the characteristics of the population.
2.5.4 COLLECTING DATA

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Once the sampling procedure has been identified, the next stage com-
prises the collection of data. Data collection is the process of collect-
ing and evaluating information on selected variables in a systematic
manner enabling the researcher to answer queries to relevant ques-
tions and measuring outcomes. It is an important stage of the research
process since without data a market research process cannot be per-
formed.
Accurate data collection is critical to the reliability of research irre-

spective of the field of research or preference for definition of data in
qualitative or quantitative terms. However, the occurrence of errors
can be reduced by selecting correct data collection methods and using
clearly defined instructions. The consequences of improperly collect-
ed data are:
Inability to accurately answer research questions
Inability to corroborate the research
Distorted findings that lead to the wastage of resources

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2.5.5 SELECTING DATA
The process of selecting data is the most important activity in the re-
search process. Unless the data is selected properly and appropriately,
it will generate incorrect results which will make the whole research
process activities futile.
Data selection means the process of establishing the correct data type
and source along with apt methods to collect data. The considerations
that should be determined while selecting data are as follows:
Appropriate sources of data need to be selected that allow re-
searchers to sufficiently answer the stated research questions.
Appropriate methods to obtain a representative sample that re-
flects the entire population.
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Suitable instruments needed to collect data wherein there must be
compatibility between the source of data and the methods used to
collect it.
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2.5.6 PREPARING AND ANALYSING DATA
After the collection of data is completed, it must be analysed by the

researcher. A database or a statistical programme such as Microsoft
Excel, SPSS, etc. is used to format the data so that it can be organised
effectively. Correct organisation of data can help save time and pre-
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vent errors. All data is entered in the same format and same database
to prevent confusion while performing statistical analysis at a later
stage.
After the data has been entered, it is critical that it must be checked
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for accuracy. This is possible by conducting a random spot-check of

different participant data groups, however, it is not as effective as
re-entering data again to find discrepancies. It is easier to perform
this method while using numerical data as the database programme
can be used to tally the columns of the MS Excel spreadsheet to find
differences in totals. But the best method for checking accuracy is
using a specialised computer programme or software that looks for
discrepancies by cross-checking double entered data. However, these
programmes require extra training to be used in a correct manner and
are not easily available.
2.5.7 PREPARING AND PRESENTING THE REPORT
The final step in the market research process is the preparation of the
research report. The research report describes the summary of the
entire research process. It lays emphasis on the interpretation and
findings of the data. The main purpose of the research report is to
enable stakeholders and the management to understand various fac-
ets of the market research process. These are the reasons as to why

MR Process 31
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this research project was undertaken and what the management and
stakeholders want to achieve by performing the research. Moreover,
the manner in which the interpretation of findings will assist the man-
agement in taking decisions will provide a new insight into the busi-
ness.
The marketing research report contains a description of the research

process, findings, conclusions and recommendations made by the
researcher. It should contain all information that is needed to un-
derstand and resolve the research problem for which the market re-
search was conducted. The research report should be written in an
easy-to-understand language. There should be a balanced approach
while preparing the market research report as it should not be too
concise or too lengthy. It should cover all relevant and necessary infor-
mation without being overly technical.
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6. ____________ is a process used in statistical analysis wherein a

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number of observations are taken from a large population.
Activity
Using various sources, find information on the research design

used by Apple for developing IPhone.
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2.6 MANAGING THE RESEARCH PROCESS

Marketing research is a systematic process; thus, it must be structured
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and adequate management controls must be deployed.
The following are the important aspects of managing the research

process:
Setting the research objective: The research objective sets the di-
rection of the research process and ensures that every stakeholder
involved in research activities knows the general direction of the
entire research process.
Planning research activities: It ensures that the entire research
exercise is planned before the execution process commences. Re-
search planning includes various aspects of the research process
such as setting the scope of the research and the reasons behind
its selection. Moreover, the schedule of various activities which is
to be undertaken during the research process and the size of team
that would be working in research activities is also considered. It
also takes into account risks, assumptions, dependencies and con-
straints of various components involved in the research execution
phase.

n o t e s
Developing the work breakdown structure for research activi-

ties: This activity is concerned with outlining work, tasks and the
activities which need to be conducted. It lists resources and the
means and mechanisms for tracking, monitoring and controlling
tasks and activities of the research process. This activity explains
the steps involved in the data collection and verification process
including data treatment by statistical analysis.
Preparing the final report and applying appropriate manage-
ment controls in the research process: This is the stage concerned
with the process of preparing the final report and interpretation of
the findings of the report along with the recommendations made
by the research analyst. It also deals with the application of appro-
priate measures to ensure the completion of the market research
process.
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7. The research objective sets the direction of the research

process and ensures that every stakeholder involved in
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research activities knows the general direction of the entire
research process. (True/False)
Activity
Using the Internet, discuss the management of the research pro-

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cess by Toyota.
2.7 MARKETING RESEARCH PROPOSAL

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A marketing research proposal can be defined as a plan that offers

ideas for conducting research. In either words, “a marketing research
proposal details the who, the what, the where, the when and the how
of research and the information and costs associated with it.”
The market research proposal deals with issues related to the process
of answering questions such as:
Why this research is required to be conducted?
When this research is required to be conducted?
What are the benefits of conducting research?
What are the timelines for conducting this research?
What are the cost implications of this research?
Who all would be involved in conducting this research process?
Some of the components of the research proposal document are enu-

merated below:
Executive summary

MR Process 33
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Background of the problem including the literature review and

analysis of the problem, which the management is facing
Objective of the research
Timelines of the research
Work breakdown of the research process
Data collection and data treatment methodology
Criterion required for selecting the sample size
Preparation of the report of the research activity
Thus, a marketing research proposal provides a layout for the entire

marketing research process, which assists various stakeholders in the
process of understanding the research roadmap and the direction in
which the research will proceed.
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8. A marketing research ____________ provides a layout for

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the entire marketing research process which assists various
stakeholders in the process of understanding the research
roadmap and the direction in which the research will proceed.
Activity
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Prepare a brief report on the market research proposal used by

Xioami.
MARKETING RESEARCH IN AN
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2.8
INTERNATIONAL ENVIRONMENT
The process of conducting marketing research in an international en-
vironment is complex, complicated and cumbersome due to several
forces operating simultaneously which, makes the marketing research
process challenging.
The marketing research process in an international environment is

made challenging and interesting by the following points:
Unfamiliar parameters: While conducting research in an interna-
tional environment, the researcher would have to deal with differ-
ent regulations affecting the foreign market when compared to the
domestic market. These regulations are regarding the import du-
ties, foreign currency fluctuations, logistics such as port facilities,
etc. Information with regard to these factors needs to be acquired
as they these factors directly influence the business decisions.
Cultural bias: Conducting research internationally has to take
into account cultural bias. This is so because it usually involves re-

n o t e s
searchers belonging to a particular culture performing research in

a different cultural environment. Due to this, interaction between
the researcher and the local respondent may require services of a
local individual for gathering data.
Changing assumptions: When performing market research on an
international level, researchers need to work under different cul-
tural, economic, political and social environments.
Management of the marketing research process on an interna-
tional scale: The researcher needs to coordinate with all the exec-
utives participating in the research process and collect, collate and
store the data provided by them.
9. The process of conducting marketing research in an
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international environment is simple, easy and enjoyable due
to several forces operating simultaneously which makes the
marketing research process challenging. (True/False)
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Activity
Using the Internet, prepare a report on market research performed

by Tata Steel during its acquisition of Corus.
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2.9 SUMMARY
A research can be conducted on any topic related to any stream,
including management, computers, science, medical engineering,
N
astrophysics, etc. However, every kind of research needs data that

has to be collected from a number of sources. The process of col-
lecting data for a research purpose is known as data collection.
Primary data refers to the data that is collected by a researcher
for conducting a particular research. Primary data is the data that
does not have any prior existence and is collected directly from a
respondents. It is considered to be reliable in comparison to all
other forms of data.
Secondary data refers to the data that is collected in the past but
can be utilised for conducting a research in the present scenario.
The collection of secondary data requires less time in comparison
to primary data.
Research design refers to the overall strategy that is chosen to as-
similate different parts of a study in a coherent and logical manner
to effectively address the research problem.

MR Process 35
n o t e s
There are three types of research design, namely, descriptive re-

search, exploratory research and causal research.
In today’s highly competitive business world, the marketing re-
search process follows a highly structured and a systematic pro-
cess. Marketing research is a process, driven methodology having
a well-defined and specific mechanism to ensure that market re-
search is a success.
The steps involved in the market research process are creating
research design, selecting the research method, choosing the sam-
pling procedure, collecting data, selecting data, preparing and an-
alysing data and preparing and presenting the report.
As a part of managing the marketing research process, the activi-
ties that are important are setting the research objective, planning
research activities, developing the work breakdown structure for
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research activities and preparing the final report and applying ap-
propriate management controls in the research process.
A marketing research proposal provides a layout for the entire
IM
marketing research process that assists various stakeholders in
the process of understanding the research roadmap and the direc-
tion in which the research will proceed.
The marketing research process in an international environment
is made challenging and interesting by unfamiliar parameters, cul-
tural bias and management of the marketing research process on
M
an international scale.
key words
N
Causal research: It is a research design used by marketers to

discover the cause-and-effect relationship between different
variables.
Cluster sampling: In this type of sampling procedure, the pop-
ulation is divided into groups or clusters comprising of homog-
enous elements and from these groups a simple random sample
is selected.
Descriptive research: It is a research design conducted to test,
explain and supervise hypothesis developed by marketers to
find accurate and clear-cut answers.
Exploratory research: It is a research design used in cases
where a researcher has negligible understanding about the
problem that has to be researched due to a lack of sufficient
information.
Stratified sampling: In this sampling procedure, the entire
population is divided into several strata having homogenous
characteristics.

n o t e s

1. Briefly describe the concept of data collection. Also, explain
different types of data.
2. What is research design? Discuss different types of research
design.
3. Describe steps involved in the marketing research process in
detail.
4. Describe how the research process can be managed.
5. Describe how marketing research is challenging and interesting
in an international environment.
S
IM
Topic Q. No. Answer
Concept of Data Collection 1. Data collection
2. Primary
Research Design 3. Research design
4. True
MR Process: An Overview 5. False
M
Steps Involved in the MR Process 6. Sampling

Managing the Research Process 7. True
Marketing Research Proposal 8. Proposal
N
MR Process in an International Environment 9. False

1. The process of collecting data for a research purpose is known
as data collection. Data is of two types namely, primary data and
secondary data. Refer to Section 2.2 Concept of Data Collection.
2. Research design refers to the overall strategy that is chosen to
assimilate different parts of a study in a coherent and logical
manner to effectively address the research problem. There are
three types of research design, namely, descriptive research,
exploratory research and causal research. Please refer to Section
2.3 Research Design.
3. The steps involved in the market research process are creating
research design, selecting the research method, choosing the
sampling procedure, collecting data, selecting data, preparing
and analysing data and preparing and presenting the report.
Please refer to Section 2.5 Steps Involved in the MR Process.

MR Process 37
n o t e s
4. As a part of managing the marketing research process, the

activities that are important for managing it are setting the
research objective, planning research activities, developing the
work breakdown structure for research activities and preparing
the final report and applying appropriate management controls
in the research process. Please refer to Section 2.6 Managing
the Research Process.
5. The marketing research process in an international environment
is made challenging and interesting by unfamiliar parameters,
cultural bias and management of the marketing research process
on an international scale. Please refer to Section 2.8 MR Process
in an International Environment.

2.12
S
REFERENCE
SUGGESTED READINGS
IM
Beri, G.C. (2005). Marketing Research. Tata McGraw Hill.
Wright, L.T. and Crimp, M. (2000). The Marketing Research Pro-
cess. Financial Times Prentice Hall.
Cant,M.C. et al. (2009). Marketing Management. Cape Town, Juta
and Company Limited.
M
E-REFERENCES
Whatismarketresearch.com,. ‘What Are Different Types Of Mar-
keting Research’.
N
Roberts,John. H, Kayande, Ujwal, From academic research to

marketing practice: Exploring the marketing science value chain.
Esomar.org,. ‘Market Research Explained - ESOMAR’.

N
M
IM
S
C hapter
3
DATA COLLECTION IN MR
CONTENTS
S
3.1 Introduction
3.2 Sources of Secondary Data
IM
3.2.1 Internal and External Sources of Secondary Data
3.2.2 Benefits and Limitations of Secondary Data
Activity
3.3 Sources of International Secondary Data
M
Activity
3.4 Internet as a Source of MR Data
Activity
N
3.5 Qualitative Research Methods for Primary Data Collection

3.5.1 Focus Group
3.5.2 Depth Interview
3.5.3 Projective Techniques
Activity
3.6 Quantitative Research Methods for Primary Data Collection
3.6.1 Surveys
3.6.2 Observational Methods
Activity
3.7 Opportunity Analysis
Activity
3.8 Summary

n o t e s
KELLOGG’S: DATA COLLECTION AND MARKET RESEARCH
Kellogg’s is one of the largest producers of cereals. Its products

are sold in more than 180 countries and are manufactured in
around 18 countries. It is a leader in health and nutrition provid-
S
ing food items for more than 100 years.
To avoid any risk, Kellogg’s focuses considerably on market re-

search. For example, Kellogg’s wanted to collect information
IM
about the impact of design on shelf with respect to the ease level
of consumers to recognise the brand name clearly. The compa-
ny surveyed around thousand customers for this purpose. It con-
cluded that the ‘K’ logo, which is an original signature of W.K. Kel-
logg, should be highlighted. A strong branded look was designed
to cover the box on each of its sides. The purpose of the research
M
was to familiarise consumers with new designs and maintain in-

dividuality of each brand.
Kellogg’s always focuses on sustainable growth that includes

meeting the consumer’s need while expanding the product port-
N
folio and their cereal business. Market research helps the com-
pany in determining consumer needs, methods to develop best
products to fulfil those needs and means to communicate with
consumers about its offerings. It sometimes goes beyond the pres-
ent thinking of customers and works on what they might need
in the future. Thus, it helps in developing well-informed choices,
which increases the probability of acceptance of the product by
consumers when it comes into the market.
Kellogg’s focuses on both—business as well as consumers’ needs.

It also helps in improving a competitive advantage by looking at
ways to strengthen the portfolio. Launching a new product with-
out having proper market study can be a risky business. While de-
veloping the new crunchy nut brand, Kellogg’s preferred primary
data collection for its market research. It is a time-consuming and
expensive method for data collection. However, Kellogg’s consid-
ered it as a reliable source of information and designed it in such
a way that it may help in meeting the objective of the project.

DATA COLLECTION IN MR 41
n o t e s
Street interviews and questionnaires were used to obtain feed-

back from customers. It involved qualitative and quantitative
kinds of research work. Where, on one hand, qualitative data fo-
cused on opinions, feelings and attitude; while on the other, the
quantitative data focused more on numerical facts and figures.
In addition, the organisation also collected a bulk of secondary
data from the Internet, books, journals and government statistics.
There were several agencies that helped Kellogg’s in collecting
the relevant information.
Information was gathered to find new trends in the cereal market,

flavours and competitive products. For qualitative research, focus
groups were used to provide customers with different new food
ideas. This helped Kellogg’s in eliminating a few ideas, refining a
few ideas and coming up with appealing ideas. After selecting the
S
best suited idea, Kellogg’s tried to convert it into a real product.
Qualitative research helped in coming up with different tastes

IM
and textures for new products in detail. It also helped in selecting
the best-suited pack design for the new Crunchy Nut Bites. Be-
fore launching the product in the market, the product had been
given to consumers for feedback. This enabled Kellogg’s to see
and assess the first reaction of the users, even before the actual
launch of the product.
M
The collection of data was also focused on making sales forecasts

for the product’s first and second year in the market. These fore-
casts were used by the finance department in setting budgets and
preparing schedules for production. This further helped in mak-
N
ing a strategic decision for the new product.

n o t e s
learning objectives

>> Discuss the sources of secondary data
>> List the sources of international secondary data
>> State the importance of the Internet as a source of MR data
>> Discuss qualitative research methods for primary data col-
lection
>> Explain quantitative research methods for primary data col-
lection
>> Describe the significance of opportunity analysis
3.1 introduction
S
In the previous chapter, you have studied various facets of the mar-
keting research process. However, the findings and recommendations
IM
of any research process are based on the collected data. Data is the
basis of every type of research conducted in any area, including fi-
nance, human resource, health care and science and technology. If
the compiled data is not relevant, reliable and valid; the results of the
research would not be very useful. Therefore, the researcher should
be very prudent, cautious and careful while collecting data for any
M
type of research.
Therefore, marketing research is driven by data as it provides the

most valuable information to marketing researchers. The data pro-
vides objective evidence and further leads to assisting the manage-
N
ment in taking crucial decisions.
Based on the means of collection, data can be categorised as primary

or secondary. Primary data is collected by the researcher for a partic-
ular research; while secondary data is the data that has been collected
in the past by some other researcher, as primary data. Both data types
have their own advantages and disadvantages. For example, prima-
ry data provides first-hand information to researchers through inter-
views, surveys, etc. However, collecting primary data is not an easy
task as it is a costly and time-consuming affair. Secondary data, on
the other hand, saves time and cost. One can easily get such data from
the Internet, print media or government records. However, there is
always a question on the authenticity, reliability and accuracy of the
secondary data.
This chapter begins by explaining the sources of secondary data. The

chapter also discusses various sources of international secondary
data. Next, the chapter explains the Internet as a source of marketing
research data. The qualitative and quantitative research methods for
primary data collection have also been discussed in the chapter. To-

n o t e s
wards the end, the chapter explains the significance of data for differ-
ent organisations in analysing a market opportunity.
3.2 SOURCES OF SECONDARY DATA

Secondary data is the data that has been collected in the past as pri-
mary data and is then used for some research work. For example, pop-
ulation census data is collected as primary data by the government to
serve its own purpose. However, other agencies may use this data as
secondary data to serve their own specific purpose. Similarly, nation-
alised banks may use this census data to determine the percentage of
the population that is likely to be interested in availing the benefits of
the pension policy floated by the banks.
In a research work, secondary data is used for various purposes. Some
S
of the purposes of secondary data include the following:
Calculates sales trend and forecasts an organisation’s growth,
profit and revenue.
IM
Helps in getting an overview and understanding the scope of a re-
search topic.
Allows the researcher to save time, money and efforts spent in
data collection.
Though the collection of secondary data is easy and takes relatively

M
less time in assortment, it may not be always authentic, reliable and

accurate. Since the secondary data is collected for different purposes;
therefore, the researcher should carefully scrutinise the data before
using it in his/her research. The researcher should consider the fol-
N
lowing aspects before using such data in his/her research:

Ensure that the data is collected from a reliable source by using a
suitable method of data collection.
Verifythe suitability of data in your research. The secondary data
should be able to fulfil the objectives of the research.
Ensure the adequacy and sufficiency of data before using it in the
research.
Investigate whether data is properly processed and analysed.
Let us now discuss various internal and external sources of secondary

data.
3.2.1 INTERNAL AND EXTERNAL SOURCES OF

SECONDARY DATA
The two major sources of secondary data are of the following types:
Internal sources of secondary data: This type of data is generated
within an organisation. Internal sources of secondary data provide

n o t e s
information in the form of balance sheets and sales records. This

information is used to perform a trend analysis of data and forecast
the overall growth of an organisation in the future. It also helps in
deciding whether the organisation is moving on the right track to
achieve its vision or not. Such records are maintained every year
by organisations . Information pertaining to sales operation of the
sales department, such as sales by territory, sales by client, sales
by product type, etc., are some examples of internal sources of sec-
ondary data.
External sources of secondary data: External sources of second-
ary data are generated by an external agency so that it can be used
by a large number of organisations and other entities. External
sources of secondary data consist of government agencies, re-
search and consulting companies, commercial institutions, such
as Indian Marketing Research Bureau, etc. The external sources
S
of secondary data can be broadly categorised into the following:
Internet: It is an important medium that gives information re-
garding the previous research done on the same topic. The In-
IM
ternet also provides considerable data related to research from
different sources.
Print media: It offers information that is publicised. Print me-
dia includes newspapers, magazines, books, research papers
and journals. The data collected from print media is used to
get an overview of the present market situation and experts’
M
opinions on different topics.

Census and other government records: It is one of the major
sources to provide a large data of each and every individual of a
N
state or country. This data contains the personal information of

respondents. It is mostly used by government and big organi-
sations. This type of data helps in conducting research on a big
scale. For example, how many villages in the country are yet to
receive electricity?
3.2.2 BENEFITS AND LIMITATIONS OF SECONDARY DATA
Secondary data has its own benefits and limitations. Let us first dis-
cuss the benefits of secondary data in detail.
Secondary data is helpful in defining the structure of the sample to be
used during the primary data collection process. For example, cen-
sus data published by the government can be used as a reference to
define the structure of future samples. Once the structure is defined,
the primary data collection process can be planned accordingly.
It plays a significant role in the exploratory phase of the research
process as it helps in formulating the research hypothesis. For
example, by obtaining statistics on the number of therapeutic
cases suffering from dengue from various hospitals and private

n o t e s
nursing homes, a hypothesis may be formulated that hot and hu-

mid climate is responsible for breeding of mosquitoes, spreading
dengue.
It is easier to collect as compared to the primary data.
Collecting secondary data is usually cheap. One can easily find
such data through the Internet or print media with a minimal cost.
Usually, secondary data is collected in the form of primary data
by reliable organisations, such as government agencies; they are
more accurate in nature. This is because large organisations and
research agencies use a large sample size. This leads to more ac-
curate results as compared to results generated from smaller
sample size.
Let us now discuss a few limitations of secondary data.
S
As the secondary data is collected by others, one cannot complete-
ly rely on the trustworthiness of such data.
Itis also possible that the available secondary data, when collect-
IM
ed, consists of some inclined or biased approach. In other words,
the data might have been manipulated to suit the hypothesis or the
research objective. Biased primary data may negatively affect the
results of future research work that may use it as secondary data.
Many a times, secondary data is incomplete and therefore, lacks
in presenting the core aspects of the data collection process. Using
M
such data is harmful as it may misguide the researcher.

The biggest limitation of using secondary data is the fact that it be-
longs to a certain period of time. It might not be relevant for future
research work. For example, the population census data is taken
N
once in every 10 years. Therefore, it cannot be regarded as accu-

rate current population data for each passing year. In this way, the
data, that was accurate for a certain period of time may become
inappropriate for another period of time.
1. The collection of _______ data is easy and takes relatively less

time in assortment.
2. Internal sources of secondary data provide information in the
form of balance sheets and sales records. (True/False)
3. Which of the following is the major source to provide a large
data of each and every individual of a state or country?
a. Internet
b. Print media
c. Sales record
d. Census and other government records

n o t e s
Activity
Using the Internet, find various other benefits and limitations of

secondary data. Prepare a report based on your findings.
SOURCES OF INTERNATIONAL
3.3
SECONDARY DATA
Collection of secondary data is an important step in the international
research process. As the secondary data is created in the past, it is
easily available and can be used for many purposes. When it comes to
international research process, collecting data from primary sources
could be extremely expensive. In addition, it is not always feasible to
collect primary data from different parts of the world. These limita-
S
tions of primary data in the international research process give sec-
ondary data a much larger role.
International secondary data may help a marketer in assessing foreign

IM
market opportunities and finding countries for international entry the
intelligent use of secondary data may offer marketers to conduct low-
cost research programmes in the foreign market. The international
secondary data can be obtained free of cost or at a small price from
governments of many countries and international agencies, such as
the World Bank, The Organisation for Economic Cooperation and De-
M
velopment (OECD), the International Monetary Fund (IMF), etc. In

addition, many publications, magazines and journals also give vast
informative data on international industry, trade and commerce prac-
tices followed across the globe.
N
The international secondary data can be classified into two catego-

ries—internal secondary data and external secondary data. The in-
ternal data sources are available within the organisation, while the
external data sources are present outside of the organisation. Most
of the time, the internal secondary data does not relate to the same
problem but it can be used to resolve similar problems. For example, a
refrigerator manufacturer conducts a research to identify the market
condition of a foreign country to sell its refrigerators. The research
helps the manufacturer in obtaining primary data on target custom-
ers, demographical set up, economic conditions and life style. Now, if
the same manufacturer launches washing machines in the same coun-
try, it need not conduct a fresh research to obtain data on the market
condition. It can use the primary data collected at the time of launch-
ing the refrigerator, as secondary data. However, the validation of the
secondary data is necessary in order to ensure accuracy.
External sources of international secondary data vary from government
information systems to independent research agencies, international
development associations and institutions. Let us discuss a few
external sources of international secondary data:

n o t e s
International marketing research firms: There are several inter-

national marketing research firms, such as AC Nielson Corp., US;
Cognizant Corp., US; Information Resource Incorp., US; GFK AG,
Germany; IPSUS Group S.A., France; PMSI Source Informatics,
US and The Arbitration Company, US. These firms provide inter-
national secondary data to an organisation that deals in interna-
tional business.
International agencies data: United Nations Reports, OECD
Trade Statistics, United Nations Statistics Year Book, United Na-
tions Monthly Bulletin of Statistics, IMF, World Bank Project Re-
ports, etc., can also be used as external reports sources of interna-
tional secondary data.
Country-related specific data: One can contact embassies, high
commissions and trade representatives of any specific country to
S
gain precise data about that country, its market conditions and
business prospects. In addition, trade journals of high commis-
sions, associations of trade and industries, directorates and min-
istries of trade may help as external sources of international sec-
IM
ondary data.
Publications: These are other important external sources of in-
ternational secondary data. Publications issued by government
sources and industry associations on various industries, taxation
policies, fiscal levies and economic development may help an or-
ganisation to gain important data on international trade practic-
M
es and market conditions of any country. There are several trade

journals, national and international newspapers, almanacs, statis-
tical year books, encyclopaedias, press bulletins and other interna-
tional research reports that could also be used as external sources
N
of international secondary data.
4. When it comes to the international research process, collecting

data from secondary sources could be extremely expensive.
(True/False)
5. Research data provided by independent international
research agencies comes under the _________________ sources
of international secondary data.
Activity
Using the Internet, find some sources of international secondary

data that can be used by a hotel chain, running its operations in
different Asian countries. Prepare a report based on your findings.

n o t e s
3.4 INTERNET AS A SOURCE OF MR DATA

In today’s technology-driven competitive world, the Internet is con-
sidered as one of the most important sources of secondary data. This
is due to certain facts, which provide the Internet, a competitive edge
over the other sources of secondary data. Let us discuss these factors
in detail:
The Internet has proved to be a boon for spreading information
across the world swiftly and with much ease. For example, today a
researcher, who wants to get some information as secondary data,
need not run around libraries and government offices to access
large and voluminous data. He/she can easily access information
through the Internet and locate the required information without
much difficulty.
S
The Internet may help a researcher in integrating multiple types
of information from various websites at a single point of time. The
data obtained through the Internet may help organisations in
IM
evaluating customer feedback. This further helps them to design,
manufacture and distribute the best quality products and services.
The Internet has revolutionised the world as it spreads the data
and information quickly and easily. Further, various discussion
groups on the Internet assist the researcher in using the second-
ary data in an optimal manner. These groups thus save time and
M
provide new insight into research activities.

The advent of the Internet has raised the need for ensuring high
quality of data. This is because any false representation of infor-
mation generates a bad reputation and thereby, hindering further
N
prospects of the research work.
However, despite several advantages of the Internet as a source of

marketing research data, the Internet is not free from certain limita-
tions and drawbacks. For example, the data posted on the Internet
may not be accurate and reliable due to the possibilities of manipu-
lation by some hackers. Thus, a market researcher will never know
whether the data is correct or distorted due to hacking, etc.
Apart from this, there are several disadvantages in the form of simul-
taneous updating of the data. If changes in the data are not made si-
multaneously, the whole purpose of research work is defeated. For ex-
ample, the data pertaining to Below Poverty Line (BPL) is required
to be updated as and when the changes take place. Failure to update
such changes may have a disastrous effect on research findings.
One of the biggest limitations of the Internet as a secondary source

of data is that it the potential to generate misinformation or biased
information. This may affect the accuracy of the research work. In

n o t e s
other words, the data available on the Internet may be distorted due
to thoughts, debates, individual interests, etc.
6. The ___________ has revolutionised the world as it spreads the

data and information quickly and easily.
7. The data available on the Internet may be distorted due to
thoughts, debates, individual interests, etc. (True/False)
Activity
Using the Internet, collect secondary data related to promotion and

packaging techniques of a reputed electronic goods company. By
using the data, prepare a short market research report depicting
S
the effectiveness of promotion and packaging techniques used by
that company.
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QUALITATIVE RESEARCH METHODS
3.5
FOR PRIMARY DATA COLLECTION
Data is the driving force for any marketing research process. Based on
the nature, a primary data can be of two types—qualitative data and
quantitative data. Let us first discuss the qualitative data.
M
Qualitative data is subjective in nature and depends on detailed de-

scription/feedback provided by respondents. Therefore, qualitative
data cannot be meaningfully counted or summarised in the form of
N
numbers. This data provides a generalised set of data based on in-

dividual perspectives or observation of the data collector. Qualitative
data is usually collected for examining attitude, motivation, percep-
tions, understanding, etc.
Qualitative data answers the following types of questions:

Have you paid your library fine? (Y/N)
What is the satisfaction level of the product that you have bought?
(Not at all satisfied; Satisfied; Very much satisfied)
How many hours of TV do you watch? (0–2 hours; 3–5 hours; 6–8
hours)
Thus, you can see that qualitative data is used to determine the de-
gree of response. In other words, qualitative data is used to assess the
depth of the parameter in question.
Let us now discuss some qualitative research methods for primary

data collection.

n o t e s
3.5.1 FOCUS GROUP
This is one of the oldest methods of data collection. In focus groups,

there are 8 to 12 members in a group and they are provided with a
topic for discussion. They are informed about the motive of taking the
interview, the various aspects that would be covered during the dis-
cussion and the guidelines for the interview. The group is moderated
by a group leader. The members of the focus group give their views on
the given topic.
Focus groups are widely used to:

explore the possibility of new areas of research
know more on the topic of research, which is difficult to observe
determine new areas of exploration, such as sensitive topics
S
When combined with other methods, focus groups are used to:
gather primary data
IM
assist in the development of surveys and interview guides
clarify research findings from any other method
3.5.2 DEPTH INTERVIEW
Depth interviews are the types of interviews in which a researcher

M
takes the interview of one respondent at a time. Such interviews prove

very useful in getting in-depth knowledge of the topic under study
from each respondent. The method offers an opportunity to collect a
large amount of descriptive data pertaining to people’s behaviours,
attitudes and their perceptions. This thereby, unfolds various complex
N
processes of their approach and behaviour. However, depth interviews

are usually time-consuming and thereby require ample time to be
conducted effectually.
Depth interviews provide liberty to both the interviewer and the inter-
viewee to explore the possibility of other additional points of research.
It also helps to change the direction of the data collection process, if
required.
3.5.3 PROJECTIVE TECHNIQUES
Projective techniques are another qualitative techniques used to col-

lect primary data. These techniques includes different methods, such
as word association, story completion, sentence completion and pic-
ture completion. These methods are used to understand the hidden
motive or behaviour of people with respect to a product or brand. In
the word association technique, a list of well-known words, relating to
quality is given and respondents have to associate these words with
different brands. In story, sentence or picture completion, an incom-

n o t e s
plete story, sentence or picture is given and the respondents have to

complete it according to their understanding.
Based on their response, the data analyst collects the data and pro-
vides appropriate interpretations. These methods help a researcher
to find out the image of any brand or product in the minds of consum-
ers. This helps an organisation in forming strategies to increase their
customer base.
Projective techniques require utmost care and attention due to the

fact that this technique deals with the abstract nature of questions and
any wrong interpretation of responses may lead to wrong conclusions.
8. Based on the nature, primary data can be of two types—________
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and __________.
9. ___________ data is subjective in nature and depends on
detailed description/feedback provided by respondents.
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10. Which among the following methods are used to understand
the hidden motive or behaviour of people with respect to a
product or brand?
a. Focus groups b. Depth interviews
c. Projective technique d. Survey
M
Activity
Using the Internet, find some advantages and disadvantages of us-

N
ing projective techniques to collect primary data. Prepare a report

based on your findings.
QUANTITATIVE RESEARCH METHODS

3.6
FOR PRIMARY DATA COLLECTION
Quantitative data is numeric in nature and can be easily subjected
to statistical treatment. This type of data provides objective evidence
and forms the basis of taking decisions for executive management.
As the quantitative data relies more on numbers, calculations and

measurements; it tends to be more structured than qualitative data.
This makes it easier to measure and evaluate responses. Quantitative
data is usually preferred by management executives and researchers
as such type of data is free from biasedness and is based on quantifi-
able facts.
Let us now discuss the survey and observation method as two major
methods of quantitative research, used for primary data collection.

n o t e s
3.6.1 SURVEYS
A survey is a means of collecting primary data from large and varied

section of the population. The data is collected by using questionnaires
that have been specially drafted for the purpose of carrying out mar-
keting research. The questions in such questionnaires are mostly in
the quantitative form. Therefore, they are presented in a well-planned
and systematic manner.
A survey is useful when a researcher wants to include a large section

of the population in the research process. The researcher can fill the
questionnaires either by directly approaching respondents or through
mails. In addition, the researcher can create an online questionnaire
for the respondents. In this way, a survey allows a researcher to reach
a large part of the population to get a desired response.
S
The survey method of collecting information has several benefits as
well as limitations. The biggest advantage of using surveys is that there
are several channels, such as telephone, e-mails, direct interviews,
etc., that may help a researcher in conducting surveys. In addition,
IM
a survey includes a large sample size that provides a more accurate
estimation and prediction to the research process. Another advantage
of using the survey method is that it helps in determining the general
trends and patterns of respondents on various parameters. For ex-
ample, in a survey to determine the satisfaction level of the usage of a
particular variety of soap, the survey method can include the details,
M
such as the age group, education level, etc.
Apart from all these benefits, the survey method has its own limita-
tions. Sometimes when the questionnaire is not designed properly,
respondents are unable to understand the intended meaning of the
N
question. In such a case, they answer as per their understanding. This

happens because the understanding level of every person is differ-
ent and depends on his/her educational and cultural background, age
group and experience. Therefore, it enhances the chances of getting
wrong data.
In addition, the survey method demands a lot of time of the researcher

if the sample size is large. It also becomes difficult for the researcher
to motivate people to fill up the lengthy questionnaires and interpret
the collected data, if the questions are qualitative in nature.
Thus, from this discussion, you can conclude that the survey method
of collecting data is useful, but it needs to be managed so as to derive
full benefits of collecting data.
3.6.2 OBSERVATIONAL METHODS
In the observation method, a researcher observes the population of

interest to find out relevant facts and figures. Observing a person is

n o t e s
an art because it requires special skills to study the behaviour of a

person. The way a common person observes something is entirely dif-
ferent from the way a researcher observes things. A common person
observes something just for the sake of interest; whereas a researcher
observes things for a particular reason.
The researcher not only observes how things are happening rather
he/she studies in depth the reason for such things to happen. If he/she
is analysing a situation; then the researcher would take into consid-
eration the behaviour of individuals in that situation, the reason for
their behaviour and the impact of their behaviour on other individuals
and society. For example, a researcher observes that in a retail show-
room, some people are buying products while others are not buying
anything. In this case, he/she would try to find out reasons behind why
and how some people buy products and why some people do not buy
anything. The researcher would also observe the behaviour of a shop-
S
keeper with the people.
The observation method is divided into various sub-methods. This in-

IM
cludes:
Natural method: In this method, the researcher observes the
behaviour of people without any intervention. For example, a re-
searcher may observe bikes passing on the road to study the most
popular brand in the city.
Contrived method: In this method, researcher takes information
M
from people indirectly. For example, a researcher approaches dif-

ferent shopkeepers as a customer to buy some products. In this
way, the researcher observes how different shopkeepers treat
their customers.
N
Direct method: In this method, researcher waits for a particular

experiment or behaviour to occur. This process takes a longer time
to get a single response. For example, a researcher observes the
sale of new products in an automobile showroom. In this case, the
researcher waits till the time a customer comes in the showroom
and asks for the new product. When a customer comes and sees
the new product, he/she may or may not purchase it on the same
day. In such a situation, the researcher has to wait till that cus-
tomer returns to buy the product and other customers come for
the same purpose. Even if the first customer buys the product, the
researcher has to wait for other customers because nothing can be
concluded by observing one customer.
Indirect method: In this method, a researcher observes the be-
haviours that have occurred in the past. This method consumes
less time and cost, as compared to other methods. Let us under-
stand the application of indirect method with the help of an exam-
ple. A researcher needs to know the sale of a particular brand in a
store. In this case, data can be collected from registers showing the
sale of different products in the store.

n o t e s
Structured method: In this method, the researcher follows a

structured approach to observe a particular entity. For example,
if a researcher needs to know about a particular brand of car, he/
she would observe only that brand and does not pay any attention
to other brands. The structured method consumes less time and
makes it easier for the researcher to analyse data.
Unstructured method: In this method, the researcher does not
know what exactly he/she has to observe. The unstructured meth-
od is used in exploratory research. In this method, the researcher
wants to search for all aspects that can affect a particular prob-
lem in detail. For example, the researcher observes the buying be-
haviour of people for different brands of the same product. He/she
would study all the factors that can affect the buying decision of
the people. After that, he/she would analyse the buying decision
for a particular brand.
S
Mechanical method: In this method, the researcher uses some de-
vices to observe people’s response. Examples of these devices are
video cameras and audiometers.
IM
The process of observation involves three steps, which are as follows:
1. Sensation: It is the first step in which researcher uses five
senses to gather information. The collected information is then
processed to find out its relevancy. If the information is relevant,
the researcher proceeds to the next step; otherwise, discard the
M
information.
2. Attention: It is the second step in which the researcher
attentively gathers only the relevant information. In the first step,
the information is gathered by chance; however, in this step, the
N
researcher makes conscious efforts to get relevant information.

3. Perception: It is the last step in which the researcher form a
perception from the gathered information.
11. As the quantitative data relies more on numbers, calculations

and measurements; it tends to be less structured than the
qualitative data. (True/False)
12. __________ is a method in which a researcher takes information
from the people in an indirect way.
a. Contrived method
b. Natural method
c. Unstructured method
d. Mechanical method

n o t e s
Activity
As a researcher, you want to know the behavioural change pattern

of people when they are in public and alone, given the same cir-
cumstances. Which observation method would you use to conduct
your research and why?
3.7 OPPORTUNITY ANALYSIS

Data on its own has no meaning. In order to derive useful information
from the data, it must be subjected to a scientific treatment by deploy-
ing statistical tests and other tools to carry out data analysis. These
tools generate meaningful information that assists researcher in ac-
complishing the research work and come to a substantial conclusion.
S
In this way, data is used as an opportunity to provide an organised
flow of information and support the marketing activities of an organi-
sation. In other words, the collected data is used by an organisation to
IM
sense opportunities and prepare action plans to convert those oppor-
tunities into reality.
In general, opportunity analysis assists the management in analysing

the available data to:
M
Identify the potential market: The collected data may help an or-
ganisation to identify those customers who hold interest in a mar-
ket offering but their interest is not sufficient enough to convert
them into a purchaser for that particular product. Research data
may provide various reasons for this. One such reason could be
N
that the customer might not have sufficient purchasing power and
capability to obtain offerings.
Examine the current market: This provides the organisations
an opportunity to sense their performance in their current mar-
ket, where they operate. The research data that aims to examine
the current market aims at identifying customers who fulfil every
standard, such as interest, income and access to the offering.
Define the industry and demand pattern: The available data can
be used to define the current industry performance. In addition,
the data can also help in the assessment of market opportunities
to understand the total market demand. It shows the demand in
terms of total volume made by a defined group of customers for a
product in terms of:
Geographical area
Time period
Marketing environment
Marketing strategy

n o t e s
The data obtained in marketing research aims at identifying market

opportunities to measure and forecast the size and growth of each
market. It also helps in forecasting the demand related with each
market. Such data could be further used in taking pricing decisions,
evaluating future volume requirements or taking decisions related to
entering into new markets.
Know the competitors: The collected data may also help an or-
ganisation to identify its competitors and their sales. This may
provide a basis to compare and assess their performance against
competitors.
Identify the target market: The data collected from marketing re-
search may give an organisation a detailed idea about the quantity,
appearance and trends of their target market. The target market is
the market available for a particular offering presented by an or-
ganisation. The organisation identifies its target market and tries
S
to focus on it for selling its offerings.
Project future course of action: Marketing research data may
help an organisation in projecting the quantity of any product or
IM
service that is expected to be demanded for purchase in a defined
period of time. This further helps in determining the future course
of actions to be taken to achieve the desired results.

M
13. The __________ market is the available market for a particular

offering presented by an organisation.
14. The data obtained by marketing research could be further
used in taking pricing decisions and evaluating future volume
N
requirements. (True/False)
Activity
How does MR data help a retail organisation in analysing oppor-

tunities and converting those opportunities into reality? Prepare a
report using some real-life examples.
3.8 SUMMARY
Secondary data is the data that has been collected in the past as
primary data and is now being used in the present research work.
The collection of secondary data is easy and takes relatively less
time in assortment; however, it may not always be authentic, reli-
able and accurate.
The two major sources of secondary data are:
Internal sources of secondary data
External sources of secondary data

n o t e s
The external sources of secondary data can be broadly categorised

into:
Internet
Print media
Census and other government records
When it comes to the international research process, collecting
data from primary sources could be extremely expensive.
International secondary data may help a marketer in assessing
foreign market opportunities and finding countries for the inter-
national entry.
Few external sources of international secondary data include:
S
International marketing research firms
International agencies data
Country-related specific data
IM
Publications
The Internet may help a researcher in integrating multiple types

of information from various websites at a single point in time.
Qualitative
data is one that cannot be meaningfully counted or
M
summarised in the form of numbers.

Some qualitative research methods for primary data collection in-
clude:
Focus groups
N
Depth interviews
Projective techniques
In focus groups, there are 8 to 12 members in a group and they are
provided with a topic for discussion. Each member gives his/her
own views.
Depth interviews are the types of interviews in which researcher
takes the interview of one respondent at a time.
Projectivetechniques are used to understand the hidden motive
or behaviour of people with respect to a product or brand.
Quantitative data is the data that is numeric in nature and can be
easily subjected to statistical treatment.
Survey and observation methods are two major methods of quan-
titative research used for primary data collection.
A survey is a means of collecting primary data from a large and
varied section of the population.

n o t e s
In the observation method, a researcher observes the population

of interest to find out relevant facts and figures.
The data is used as an opportunity to provide an organised flow
of information and support the marketing activities of an organi-
sation.
Opportunity analysis assists the management in analysing the
available data to:
Identify the potential market
Examine the current market
Define the industry and demand pattern
Know competitors
S
Identify the target market
Project the future course of action
IM
key words
Observation method: A method to collect data by observing

people.
Primary data: It is the fresh data collected for a research work.
Quantitative marketing research: Research in which outputs
M
are obtained in the form of numbers.

Questionnaire: It is a set of questions in a written form.
Secondary data: It is the past or existing data.
N

1. Discuss major sources of secondary data.
2. Explain external sources of international secondary data.
3. Why the Internet is considered to be one of the most important
sources of secondary data?
4. Discuss some qualitative research methods for primary data
collection.
5. Define survey as a quantitative research method for primary
data collection.
6. How does the collected MR data help an organisation in
opportunity analysis?

n o t e s
ANSWERS FOR SELF ASSESSMENT QUESTIONS

Sources of Secondary Data 1. Secondary
2. True
3. d. Census and other govern-
ment records
Sources of International 4. False
Secondary Data
5. External
Internet as a Source of MR Data 6. Internet
S
7. True
Qualitative Research Methods 8. Qualitative data; Quantitative
for Primary Data Collection data
IM
9. Qualitative
10. c. Projective technique
Quantitative Research Methods 11. False
for Primary Data Collection
12. a. Contrived method
Opportunity Analysis 13. Target
M
14. True
Hints for Descriptive Questions

N
1. The two major sources of secondary data include internal sources

of secondary data and external sources of secondary data. Refer
to Section 3.2 Sources of Secondary Data.
2. International marketing research firms, international agencies
data, country-related specific data and publications are few
external sources of obtaining international secondary data. Refer
to Section 3.3 Sources of International Secondary Data.
3. The Internet has proved to be a boon for spreading information
across the world swiftly and with much ease. A researcher can
easily access information through the Internet and locate the
required information without any difficulty. Refer to Section
3.4 Internet as a Source of MR Data.
4. Some qualitative research methods for primary data collection
include focus groups, depth interviews and projective techniques.
Refer to Section 3.5 Qualitative Research Methods for Primary
Data Collection.

n o t e s
5. A survey is a means of collecting primary data from a large and

varied section of the population. Refer to Section 3.6 Quantitative
Research Methods for Primary Data Collection.
6. The collected MR data helps an organisation in opportunity
analysis by identifying the potential market, examining the current
market, defining the industry and demand pattern, identifying
the target market, etc. Refer to Section 3.7 Opportunity Analysis.

3.11
REFERENCE
SUGGESTED READINGS
Aaker D., Kumar V., Day G. (1998). Marketing research. New York:
S
Wiley.
Burns A., Bush R. (2000). Marketing research. Upper Saddle Riv-
er, NJ: Prentice Hall.
IM
Parasuraman A. (1991). Marketing research. Reading, MA: Addi-
son-Wesley.
E-REFERENCES
Atlas.ti(2015). Observational research—Definition, methods & ex-
M
amples. Retrieved 27 October 2015, from http://atlasti.com/obser-

vational-research/.
Library.rochester.edu (2015). Primary and secondary sources |
River Campus Libraries. Retrieved 27 October 2015, from http://
N
www.library.rochester.edu/Primary-secondary%20sources.
McLeod S. (2015). Observation methods in research | Simply Psy-
chology. Simplypsychology.org. Retrieved 27 October 2015, from
http://www.simplypsychology.org/observation.html.
Preservearticles.com (2015). What are the sources of secondary
data? Retrieved 27 October 2015, from http://www.preservearti-
cles.com/201107189294/what-are-the-sources-of-secondary-data.
html.
Study.com (2015). Secondary data in marketing research: Defini-
tion, sources & collection—Video & Lesson Transcript | Study.
com. Retrieved 27 October 2015, from http://study.com/academy/
lesson/secondary-data-in-marketing-research-definition-sourc-
es-collection.html.
Web.calstatela.edu(2015). What are primary sources. Retrieved
27 October 2015, from http://web.calstatela.edu/library/guides/
pswhat.htm.

C hapter
4
sampling concepts
CONTENTS
S
4.1 Introduction
4.2 Concept of Sampling
IM
4.2.1 Sampling vs. Census
4.2.2 Sampling Design Process
Activity
4.3 Probability Sampling
4.3.1 Simple Random Sampling
M
4.3.2 Systematic Sampling

4.3.3 Stratified Sampling
4.3.4 Cluster Sampling
N
Activity
4.4 Non-Probability Sampling
4.4.1 Convenience Sampling
4.4.2 Judgmental Sampling
4.4.3 Quota Sampling
4.4.4 Snowball Sampling
Activity
4.5 Parameters and Statistics
Activity
4.6 Sample Reliability
Self Assessment Question
Activity
4.7 Summary

n o t e s
sampling process at national audit office (NAO)
NAO is a government-owned agency, which is into auditing of

several government organisations. It has a yearly plan in which
it conducts the audit. In order to audit a particular department,
if resorts to sampling process for data collection activities. Thus,
the first step is the sample design process wherein the agency dis-
cusses the means and mechanism for selecting the sample struc-
ture and development of plans for analysing and interpreting the
results. The design of the sample can range from simple to com-
plex, covering several aspects of the audit process objective. NAO
ensures to collect data from the sample design that facilitates the
relevance of the collected data on the characteristics of the popu-
lation. In general, the more the precision required for the gener-
ation of the data, the complex and rigid is the process of sample
S
selection covering various aspects of the population.
Depending on the population characteristics, random sample

IM
remains the most preferred method of sample selection by the
organisation. However, in some cases, depending on the require-
ments of the audit cycle, expert or judgmental sampling is also
used in the audit cycle. Once the choice of the sample methodol-
ogy is fixed, the next process is the determination of the sample
size for the audit cycle.
M
The choice of the sample size is determined on the basis of five

factors that include margin of error, amount of variability within
and across the samples, confidence level, size of the population
and proportion of the population that is displaying the attribute
N
under research objective. In addition, a due diligence is paid to-

wards all the concerned practical considerations. Thus, depend-
ing on the research objective and practical considerations, the
choice of the relevant methods of sample design and selection are
taken into consideration.

sampling concepts 63
n o t e s
learning objectives

>> Explain the concept of sampling
>> Describe various types of probability sampling
>> Explain the concept and types of non-probability sampling
>> Discuss the concept of parameters and statistics
>> Explain sample reliability
4.1 INTRODUCTION
In the previous chapter, you studied the significance of data collection
in the marketing research process. However, data collection needs to
S
follow a focussed and planned approach. There are some steps in the
MR process that are taken in the preparation of a framework, which
facilitates the researcher to collect data scientifically and logically.
IM
Sampling is one such step. As a process, sampling identifies certain
samples or groups that are further used to collect data for carrying
out marketing research. In this chapter, let us discuss the various sam-
pling concepts used in the marketing research process.
Sampling refers to selecting a subset of an entire population for the

M
purpose of research study. Sampling is helpful in cases where studying

each and every element of the population is not feasible. For example,
in order to judge the quality of wine in a container, a wine taster may
taste a small quantity of it to judge its flavour, aroma and other general
characteristics. In this case, a small quantity of wine represents the
N
sample, and this process is known as sampling.
Most decisions in an organisation are taken on the basis of sampling.

For example, a manufacturing organisation cannot take feedback for
its new product from each and every customer. Therefore, it is more
practical and feasible to select a sample and then generalise the result.
Today, knowledge of sampling and its various methods is mandatory
to conduct marketing research. It helps in finding solutions to various
marketing problems in the least possible time with greater efficiency.
This chapter begins by explaining the concept of sampling in detail.

Further, it describes various types of probability and non-probability
sampling. The chapter also explains the concepts of parameters and
statistics. Towards the end, it explains the significance of sample reli-
ability.
4.2 concept of sampling

Sampling refers to the process of selecting a small part, which would
then be known as a sample from the bigger or larger part, known as

n o t e s
population. Sampling is a process in which sufficient number of el-

ements are selected from a population for the purpose of study. The
characteristics and properties of the selected sample are generalised
for the whole population. For example, suppose some university is
curious for a feedback of students on the grading system. Since the
university has enormous number of colleges over a wide area, it is not
feasible to take feedback from each and every student. A sample, rep-
resenting this wide range of students (known as population), would
be selected, and on that basis, an overall feedback would be known.
However, the chancellor should ensure that the selected sample truly
represents all types of students. For example, if the university organ-
ises classes in 18 disciplines, the sample should contain students from
all disciplines to make it an appropriate representative of the whole
population. A representative sample results in better accuracy and
precision of results.
S
Usually, sampling is done if the population is massive and contains
several hundreds and even thousands of elements. In such a case, data
collection from each and every element of the population is either im-
IM
possible or requires huge time, cost, efforts and other resources.
According to Webster, a sample is a finite part of a statistical popula-

tion whose properties are studied to gain information about the whole.
According to Bogardus, sampling is the selection of certain percentage

M
of a group of items according to a predetermined plan.
According to Mildred Patron, sampling is the process or method of

drawing a definite number of individuals, cases or observations from
a particular universe, selecting part of a total group for investigation.
N
According to P. V. Young, a statistical sample is a miniature picture of

cross selection of the entire group or aggregate from which the sample is
taken.
According to Frank Yates, the term sample should be reserved for a set
of units or portion of an aggregate of material which has been selected in
the belief that it will be a representative of the whole aggregate.
According to Goode and Hatt, a sample, as the name applies, is a small-

er representative of a larger whole.
In simple words, a sample refers to a set of selected individuals (re-

spondents) from a larger population so that the findings of the survey
can be retrieved on the basis of those responses.

n o t e s
note
A list of important terms related to sampling is given as follows:

Population: Refers to a complete group containing all the ele-
ments on which the research is based. For example, if the ce-
ment industry wants to study the production process of all ce-
ment organisations, all organisations together would constitute
the entire population.
Element: Refers to a single member of the population. For ex-
ample, if 500 people constitute the population for a particular
study, each person therein would be the element. Sometimes,
the element is also called a subject.
Population frame: Refers to the list of all elements in a popula-
tion. For example, a register containing all employees working
S
in an organisation serves as a population frame for the study re-
lated to employees. However, population frame may not always
be an updated document. For example, the register of employ-
IM
ees in an organisation may not contain the names of those who
have joined recently or have left the organisation.
Sample: Refers to a subset of the population. For example, if
the population contains 1000 elements, 200 selected members
would be considered the sample of the entire population.
M
Perhaps the main reason as to why researchers resort to sampling is

the fact that they want to determine the nature and characteristics
of the population from the sample. In some cases, the reverse pro-
cess is also followed for the purpose of carrying out research. This
N
means from the population, the researcher wants to determine the

behaviour of the samples.
Let us take an example to illustrate this concept.
Suppose a firm wants to assess the customer satisfaction level of res-

idents in a particular locality for a new product, which was launched
say 4 months back. Considering the practical scenario, it would be
extremely difficult and time consuming to interview each and every
person in the locality. Hence, one feasible option is to take a limited
number of people, determine their satisfaction level and estimate the
findings for the entire locality.
Let us take another scenario wherein the reverse process is also fol-
lowed when dealing with samples. Let us take the case of a particular
locality of a city wherein most people are unable to read and write, that

n o t e s
is, they are illiterate. A researcher picks up a handful of persons from

the locality. He/she wants to estimate the proportion of the persons
who are literate in the locality on the basis of this handful number of
people. This type of sampling is widely used in the medical field that
has large-scale reports of an infectious disease in a particular locality.
This locality also has people who are not infected by the said disease.
Thus, sampling helps to estimate the reasons why these people are not
infected.
4.2.1 sampling vs. census
In the previous chapters, we discussed various issues related to mar-

ket research. Also, we discussed the core issue related to market re-
search in the sense that every research is driven by data and that the
data collection process is in itself a core activity. This is owing to the
S
fact that it needs to be planned, designed, implemented and then
treated in accordance with the research objectives.
However, when it comes to data collection, there are two core methods
IM
that are widely discussed and deployed based on the objective of re-
search. These two methods are known as sampling and census.
In simple terms, census refers to the process of collecting data from

each and every individual or an entity from which the data is required
to be collected. Sampling, on the other hand, refers to the process of
collecting data from some of the elements or entities or units. The
M
choice of selection of these samples is based on a defined criterion.
Let us take an example to illustrate the concept that we have already

discussed. Suppose a newspaper publishing unit wants to publish a
N
new magazine. However, prior to launching the magazine, it wants to

assess the expectation of the readers as to what is it that they would
like to have in the magazine. In other words, it wants to collect data.
Now, the publishing unit has two choices for collecting data. Firstly, it
can go to each and every house where the boy delivers the newspaper
and collect the data. Secondly, it can select some of the houses where
the newspaper is delivered, collect the data and then estimate the
findings by applying statistical techniques to determine the contents
of the proposed magazine.
Thus, the first case uses the census means of collecting data, while the
second uses the sampling means of collecting data. In other words,
census includes each and every element in the entire data set, which
is known as population or census. Similarly, in the second case, only
the selected elements are included, also known as samples.
Alternatively, we can say that sample is the subset of the population

data set, i.e., universal set.

n o t e s
However, there are certain points that need to be considered with re-
spect to sampling or census. These are discussed as follows:
The means of census requires a lot of time, cost and has other
practical implications. The sampling means requires less time and
cost but has several other practical constraints.
In the case of census means of data collection, the result is more
or less accurate. On the other hand, in the case of sampling, the
result is only an estimated one. Hence, it may show sharp contrast
to the actual observations as obtained from census as it is only an
estimated value.
If the units are heterogeneous in nature, census is widely recom-
mended provided time, cost and other practical considerations are
feasible. This is owing to the fact that this method includes each
and every unit and leads to a more robust, reliable and accurate
S
findings. On the other hand, if the units are homogenous in nature,
sampling is the recommended solution.
The census type of data collection is carried out at fixed periodici-
IM
ty, while sampling form of data collection is done on the need basis.
For example, the population census data is performed after every
10, years whereas the effect of a particular vaccine on certain num-
ber of animals is determined through the sampling method.
In census type of data, the findings or the results are obtained from
ground operations, whereas in sampling method, the findings in
M
the end may totally differ from the observations of the sample
data. For example, a sample of some food stuff, such as a biscuit,
may taste good initially. However, when we buy the same biscuits
in bulk, they may taste awful due to the fact that only a limited
N
number of biscuits were prepared to taste good. Thus, the findings

have wavered from the initial sample finding.
4.2.2 Sampling Design Process
The sampling design process simply refers to the techniques that are
deployed for choosing samples. The design of the sample is generated
according to the needs and requirements of the research process and
the feasibility of the methods in the current scenario. In other words,
there is a defined criterion and practical conditions that prevail while
designing the sample process.
Sampling design refers to a methodological plan to obtain a sample

from the given population. The considerations involved in sampling
are listed as follows:
Type of population: It refers to the first step in developing sample
design. At this stage, the researcher must take care of the type of

n o t e s
population according to his/her research study. Population can be

finite or infinite. In finite population, the number of elements are
certain and countable. Examples of finite population are the set
of vowels, number of houses on a street and number of books in a
library. In an infinite population, no idea can be obtained about the
number of elements in the population. Examples of infinite popu-
lation are the set of integers and number of stars.
Sampling frame: It refers to the list of all elements in a popula-
tion from which a sample is taken. If the sampling frame is not
available, then it should be prepared by the researcher. It is better,
if the sampling frame is comprehensive, correct and appropriate.
The researcher should make the sample as representative as pos-
sible. The types of frames can be described as follows:
Incomplete frame: It refers to a frame in which genuine sam-
S
pling units of the population are absent. For example, suppose
a researcher wants to collect information regarding the politi-
cal opinion of a group of voters. In this case, a complete list of
voters is mandatory for sample selection. If the frame does not
IM
contain the complete list of voters, it would be an incomplete
frame.
Inaccurate frame: It refers to a frame in which some of the
elements are mentioned incorrectly. For example, suppose a
researcher wants to collect some information about a group of
people on the basis of their ration cards. It would be an inac-
M
curate frame because usually the details, such as age and ad-
dress, are not updated in ration cards.
Inadequate frame: It refers to a frame that does not include a
list of all elements in the population. Telephone directory is a
N
good example of an inadequate frame, as it contains the names

of only those persons who have telephone connections in their
homes. It does not provide information about all the residents
of a city.
Sampling unit: It refers to a division of the population. For exam-
ple, suppose a researcher wants to survey the whole country for
some purpose. In this case, a sampling unit may be states, districts,
blocks or villages.
Sampling methods: It refers to the methods through which sam-
pling units are selected. Different sampling methods are discussed
in detail later in this chapter.
Sample size: It refers to the number of items in a sample. The re-
searcher should pay a good deal of attention in deciding the sam-
ple size. A sample size should be neither too large nor too small.
Before selecting the sample size, the following points should be
considered:
Flexibility: It implies that the sample size should be flexible to
accommodate changes to some extent, if required.

n o t e s
Population variance: It refers to the amount of variation in the

items of the population. If the population is highly diverse, the
sample size should be large so that all the characteristics of
the population can be represented by the sample size. If the
population is less diverse, sample size should be kept small-
er because it can represent all the characteristics of such a
population.
Parameters of interest: They refer to the factors that are of inter-
est to the researcher in obtaining a sample of the population. For
example, the researcher may be interested in knowing the mean
or average of the population. In this example, mean is the param-
eter of interest.
Budgetary constraint: It refers to cost-related constraints. While
developing sampling design, the researcher must consider the fi-
S
nancial aspects that greatly affect not only the size of the sample
but also its type.
The process of sampling design is shown in Figure 4.1:

IM
• Specify the Target Population
Step 1
• Define Sampling Frame

Step 2
M
• Select Sampling Technique

Step 3
• Decide the Sample Size

N
Step 4
• Implement the Sampling Design

Step 5
Figure 4.1: Sampling Design Process
Let us discuss this process in detail:

1. Specifying the target population:
During the course of the sampling process, the target population
needs to be specified during the market research process. This
consideration is of prime importance. Unless and until the
target population is correctly identified and specified, the whole
purpose of marketing research will be defeated.
In general, while specifying the target population, the following
points are taken care of:
The target population must meet the scope of research as
well as the objectives of sampling, the data analysis process.

n o t e s
If any of the objectives are not met, the process of selecting

the target population is defeated. For example, if we select
the target population to determine the number of persons
who can read newspaper, whereas the data analysis objective
is to determine the variation among the semi-literate or illit-
erate persons, the objectives are not met.
The selected target population must follow some mathemat-
ical or statistical distribution. This distribution can be in the
form of normal distribution or any other distribution. The
distribution assists the researcher to apply statistical tech-
niques and to draw out inferences.
The target population must neither be skewed nor be biased.
2. Defining sampling frame:

This technique is deployed during the course of selection of
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samples. A sampling frame is the composition of all the elements
of the population having distinct identification for selection
at any stage of sampling. In other words, defining a sampling
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frame refers to the process of identifying components from the
population for the purpose of research.
An example of a sampling frame includes the students who
are registered in the statistics class in a given university. The
advantage of identifying a sampling frame is to allow the
researcher to focus on the research objective.
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3. Selecting sampling technique:

Having discussed the various facets of sampling, let us now dwell
on the process of selecting the sampling technique. The sampling
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technique that needs to be applied in the marketing research

process is based on several factors. These are enumerated as
follows:
This technique depends on the practical consideration of
data collection process.
It depends on the type of population and the amount of vari-
ability in the population.
It is also dependent on the amount of the spread of the pop-
ulation distribution. For example, if the population is skewed
or sparsely distributed, the sampling technique is chosen ac-
cordingly.
It is also dependent on the accessibility of the population el-
ements.
4. Deciding the sample size:
During the course of sample selection process, the vital problem
that arises is the determination of the sample size. This is the
most important factor for data collection process on account
of the fact that it can impact the findings of the research. For

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example, if the sample size is too large, the findings will be more
or less accurate. However, then it may have the element of bias
in it. On the other hand, if the sample size is small, the findings
will not generate a proper result.
Before we move further, let us take an example to denote the
concept of sample size. A researcher wants to determine the
effectiveness of a new teaching tool that the management
has implemented in class 5th. In order to collect the data, the
researcher is required to pick up three samples of size 6 from
each of the classes. The three samples so chosen must have the
following characteristics: One sample of 6 students will comprise
all boys, another sample comprising 6 girls, and the other sample
of 6 students must include both boys and girls in equal proportion.
Thus, in this case, 6 is the sample size.
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Further, the process of determining the sample size is based on
certain factors. Some of these are enumerated as follows:
Sample size is based on research objective as well as the ob-
IM
jective of data collection process. Thus, if the research objec-
tive is to study the effect of a particular fertiliser on plants
that requires desert-like climate, the sample size must be
large.
Sample size is based on the type of population characteris-
tics. Thus, if the population is sparse, large sample size is
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required. On the other hand, if the population is dense, small

sample size would be sufficient. However, the number of
samples required may be more. For example, if the research-
er is required to study the food preferences of people living
in Ladakh, the sample size must be large as the population is
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very sparse. On the other hand, if the same is required to be

conducted in Uttar Pradesh, the sample size may be small as
the population is dense.
Sample size is based on the confidence limits of the research
process. This is a statistical technique that is applied for the
purpose of data collection and the accuracy of the results ob-
tained in the research process as a whole.
Sample size is determined on the basis of the limits of the
margin error that is set for the research process.
5. Implementing the sampling design:
Once the sampling techniques have been identified, they are
required to be implemented and put into operation. This is the
most important consideration in the data collection process.
For retrieving more relevant results, the sampling techniques
are required to be controlled and managed. In other words,
appropriate management controls must be deployed so that the
sampling technique produces the desired results.

n o t e s
Following are the reasons that make the management of the sampling
design mandatory:
The data is often collected by data collectors, and therefore, the
data shows the reflection of the practices done by them while col-
lecting it. For example, if the sampling design is systematic sam-
pling, due to comfort or convenience, the data collector may not
follow the systematic sampling design. He/she may just collect
sample from the nearby respondents and pass on the data as sys-
tematic sampling data. Therefore, it is important to consider this
fact while implementing sample design.
The data collector may find that the sample design, which was ini-
tially chosen, does not exist as the respondents are unavailable.
In such scenario, the data collector adopts the sampling design
process that is feasible in the current context. Hence, it may not
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provide the intended results. For example, if the data collector de-
cides to use cluster sampling but finds that the heterogeneity of
the cluster is missing, he/she takes the most appropriate decision.
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The sampling design so chosen must be implemented in phases
so as to ensure that the intended results are forthcoming. It is re-
quired to be altered if the results are not encouraging.
The sampling designs must be implemented by considering vari-
ous practical aspects, such as cost and time.
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1. Sampling refers to the process of selecting a small part that

would then be known as a sample from the bigger or larger
part, known as population. (True/False)
N
2. _____ is the subset of the population data set, i.e., the universal
set.
3. Sample size is based on the _____ limits of the research
process.
a. Confidence b. Stratified
c. Systematic d. Margin
4. The chosen target population must not follow any mathematical
or statistical distribution. (True/False)
Activity
With the help of the Internet, gather data regarding any two in-
ternational marketing research organisations. Find out their modi
operandi towards developing the sample design.

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4.3 Probability Sampling

From previous discussion, it has become imperative that the process
of selecting samples is based on a defined criterion. One of the crite-
rions that are widely deployed in the process of selecting sample is
probability sampling.
Probability sampling refers to the method of sampling in which the

probability of selecting each item in the sample is present. In other
words, any method of sampling, which utilises some form of random
sampling, is known as probability sampling. Under random sampling,
a sample from the given population is selected on a random basis;
therefore, there is a probability of selecting each item in the sample.
Tossing the coin, selecting a candidate out of hundred candidates or
selecting a chit out of a cluster of chits are examples of probability
S
sampling.
Thus, the probability sampling criterion for the selection of samples

is based on the basic concept that no matter what techniques are de-
IM
ployed in the process to select a sample, each and every element or
entity has a chance of being included in the sample.
Let us now discuss the different types of probability sampling.
4.3.1 Simple Random Sampling

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Simple random sampling is a type of probability sampling in which

each element in the population has an equal chance of being selected
in the sample. For example, a researcher needs to select 5 elements
out of the total population of 10. In this case, the probability of selec-
N
tion of each element is equal because elements would be selected on

a random basis. This type of sampling is also known as unrestricted
sampling.
The main objective of simple random sampling is to select certain

number of units from a given population comprising certain number
of entities without any biasedness. For example, if there are 10 balls of
different colours in a box and any 2 balls are required to be selected,
then one can select the balls by using permutation and combination
of 45 ways to select the two balls, i.e., 10C2. In other words, these 45
combinations have an equal chance of being selected in the process.
4.3.2 Systematic Sampling
Systematic sampling refers to a sampling design in which, from ele-

ments between 1 and n, every pth element is selected to form the sam-
ple. For example, suppose a researcher wants to know the purchas-
ing habits of customers in a market. He/she can select every 5th or
10th customer to obtain a sample. In systematic sampling, first point
is selected at random and subsequent items are selected after regular

n o t e s
intervals. As shown in the previous example, the starting point (5th

or 10th) would be selected randomly. Suppose a researcher wants to
select a sample of 8 houses from a street of 128 houses, 128/8=16, so
every 16th house would be surveyed after the random selection of first
house.
However, systematic sampling has certain disadvantages. These are

mentioned as follows:
Includes more bias because in systematic sampling, every item
does not have an equal chance of being selected
Leads to either over-representation or under-representation of the
population
4.3.3 Stratified Sampling
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Stratified sampling refers to a sampling method in which the sample is
selected by dividing the entire population into different sub-groups or
strata. In other words, in stratified sampling, the population is divided
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in the form of strata comprising homogenous elements. For example,
a human resource manager wants to assess the need of training for
employees working in his/her organisation. In this case, total popu-
lation of that organisation constitutes the total number of employees.
Since different levels of employees have different needs for training,
the manager divides the population into exclusive sub-groups. These
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include clerical workers, computer administrators, supervisors, low-

er-level managers and middle-level managers. Data would be collect-
ed in such a way that could help in knowing the training needs of each
sub-group in the population. Therefore, in stratified sampling, there
is an equivalent chance of the elements getting selected within each
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stratum. This can be ensured by selecting the elements of each sub-

group in the sample with the help of two ways given as:
Proportionate stratified sampling: In this method of stratified
sampling, elements from all sub-groups of the population or strata
are selected in an exact proportion. An example of proportionate
stratified sampling is shown in Table 4.1:
Table 4.1: Proportionate Stratified Sampling

Employees Number of Proportionate Sampling
Elements (Number of Elements
(In Population) Selected in Sample)
Clerical workers 500 100
Computer administrators 400 80
Supervisors 200 40
Low-level managers 150 30
Middle-level managers 40 8
Top-level managers 10 2
Total 1300 260

n o t e s
Table 4.1 shows the process of obtaining sample by proportionate

stratified sampling. A proportion of 20% employees has been se-
lected in the sample from each sub-group. However, the research-
er might feel that only two members from top-level management
cannot reflect the views of all 10 top-level managers and only 8
members from middle management cannot truly reflect the views
of all 40 members. Therefore, he/she may alter the number and
might decide to use disproportionate method instead.
Disproportionate stratified sampling: In this method, there is no
proportionate allocation of elements in the sample. Usually, dis-
proportionate sampling is done in case of difference in the size of
stratum and its variability. An example of disproportionate strati-
fied sampling is shown in Table 4.2:
Table 4.2: Disproportionate Stratified
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Sampling
Employees Number of Disproportionate Sam-
Elements (In pling (Number of Ele-
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Population) ments Selected in Sample)
Clerical workers 500 70
Computer administrators 400 60
Supervisors 200 50
Low-level managers 150 50
Middle-level managers 40 24
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Top-level managers 10 6
Total 1300 260
In disproportionate sampling, as shown in Table 4.2, elements are not

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selected on the basis of their proportion. Disproportionate method is

preferred when the researcher feels that the proportionate method
may not derive true conclusion.
Stratification as a sampling method is widely used in market research.

For example, suppose a researcher wants to know customer preferenc-
es for a given product. The population containing all the consumers in
a particular area is divided into sub-groups on the basis of geography,
age and income level. It would make the sample more informative and
representative of the population.
4.3.4 Cluster Sampling
This is another process of selecting samples based on probabilistic ap-

proach. Cluster sampling refers to a sampling method in which entire
population is divided into groups or clusters having heterogeneous
features. Subsequently, these clusters are selected on the basis of ran-
dom sampling. All elements of selected clusters should be included in
the sample leaving all the elements of non-selected clusters. For ex-
ample, suppose a population has been divided into 10 clusters named

n o t e s
a, b, c, d, e, f, g, h, i and j. The researcher requires only 3 clusters for

his/her sample out of 10 clusters. Suppose 3 clusters, namely a, i and
d, are selected randomly. In the sample, all elements from these 3 clus-
ters would be included.
Cluster sampling seems to be similar to stratified sampling but in

reality, it is not. In stratified sampling, elements from all groups are
selected. However, in cluster sampling, clusters are selected and all
elements from selected clusters are included in the sample.
However, this is the case of single-stage cluster sampling. There can

be more than one stage in cluster sampling, which is called multi-stage
cluster sampling. For example, suppose a research needs to be done to
find the average income of people in the country. In first stage, states
can be considered clusters. On the basis of random selection, some of
the states would be selected for the study. In the next stage, particular
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districts from the selected states would be selected. In case clusters
are selected on the basis of geographical area only, it is termed area
sampling.
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Cluster sampling is less costly, especially when the population is
scattered over a wide area. For example, a researcher intends to sur-
vey schools in a particular area. In simple random sampling, the re-
searcher might visit all schools in the area to select sample. However,
in cluster sampling, few schools would be selected first and then the
researcher would visit these schools to collect the information. In this
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way, cluster sampling involves less cost and saves time as well.
However, in cluster sampling, due care should be taken to make clus-

ters as heterogeneous as possible. However, there should be more uni-
formity among the clusters. For example, suppose the total population
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has been divided into five clusters for getting response from custom-
ers on a particular product. Individually, the clusters should include
as many diverse customers as possible, such as female, male, young
and old. Usually, it is very difficult to make clusters with this require-
ment. Therefore, cluster sampling often ends up with biased results.
5. __________ refers to the method of sampling in which the

probability of selecting each item in the sample is present.
6. In simple random sampling, each element in the population
has an equal chance of being selected in the sample. (True/
False)
7. Which of the following is also known as unrestricted sampling?
a. Systematic sampling b. Simple random sampling
c. Stratified sampling d. Cluster sampling

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8. ___________ refers to a sampling design in which, from

elements between 1 and n, every pth element is selected to
form the sample.
Activity
Using the Internet, enumerate various other benefits of probability

sampling.
4.4 Non-Probability Sampling

Non-probability sampling refers to the type of sampling in which ele-
ments from the population are selected deliberately by the researcher
to constitute a sample. In other words, non-probability sampling se-
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lects samples on the basis of the expert judgement of an individual.
In this type of sampling, the probability of getting a particular sample
may not be calculated. Thus, the researcher should be cautious while
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using non-probability sampling techniques. The major advantage of
this sampling is that it is less expensive. However, the results obtained
from non-probability sampling cannot be generalised with much con-
fidence.
The non-probability sampling is widely used in the process of select-

ing sample for the purpose of data collection. For example, suppose
M
a researcher wants to know the fondness of a particular toffee brand

among the students studying in grade II. The researcher may select at
his/her discretion 2 students from section A, 3 students from section
B and so on. The researcher may exercise his/her own judgement to
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include specific students in the selection process.
Let us now discuss the important types of non-probability sampling.
4.4.1 Convenience Sampling
Convenience sampling refers to a non-probability sampling technique

in which elements from the population are selected because of their
easy accessibility to the researcher. For example, suppose in a col-
lege, volunteers are required to organise a tree plantation camp. The
strength of the college is 2000 and the number of volunteers required
is 50. In this case, the easiest way to select volunteers is their accessi-
bility. The researcher can select those students as volunteers who are
easily accessible to him/her.
Therefore, in convenience sampling, samples are selected on the basis

of the convenience of the researcher. The merit of convenience sam-
pling is that it helps in conducting pilot studies by facilitating the re-
searcher to obtain basic data with fewer complications. However, the
convenience sampling method has certain disadvantages also that are:

n o t e s
It may include sampling bias. In convenience sampling, the re-

searcher selects the sample according to his/her own convenience,
which may not truly represent the population. Therefore, it may
consequently lead to erratic results.
It is difficult to generalise the results obtained from the sample.
Since the sample is not the true representative of the population,
the result of the study cannot be generalised for the whole popu-
lation.
4.4.2 Judgmental Sampling
Judgmental sampling is a sampling wherein expert judgement is used

to include or exclude a particular entity in the sample. In other words,
judgement sampling refers to a non-probability sampling technique in
which the researcher selects the sample on the basis of sound judge-
S
ment. Usually, he/she selects the elements in the sample that can pro-
vide the best information to the researcher. For example, suppose a re-
searcher wants to know the reason that made successful women reach
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the top position in any field. In this case, the best information can be
provided by women who are placed on top positions in various fields.
Thus, the researcher, on the basis of expertise or wisdom, would judge
who can provide the best information about the study and collect data
from the selected people.
Let us understand the concept of judgement sampling with the help of

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an example. Suppose an organisation has five members in the Board

of Directors. If one of them quits, the Chairperson may appoint anoth-
er member based on his/her own judgement regarding knowledge and
expertise of the new member.
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The merits of judgement sampling are as follows:

Helps in collecting effective data
Requires less time and efforts
The demerits of judgement sampling are as follows:

Requires expertise in sample selection
Decreases the possibility of getting generalised results as the
researcher is usually very specific in data collection. He/she ap-
proaches only those people who can give him/her the best infor-
mation. In such a case, the selected data may not represent the
whole population.
4.4.3 Quota Sampling
Quota sampling refers to a sampling method in which the population is

first divided into mutually non-overlapping sub-groups. Subsequent-
ly, the sample is formed by selecting members from each sub-group

n o t e s
according to the proportion of each sub-group in the total population.

Let us understand the concept of quota sampling with the help of an
example. Suppose a population contains 1000 people in which there
are three sub-groups of 500 males, 300 females and 200 children. The
researcher has to select a sample of 100 people from the population to
take interviews for knowing their views about increase in prices. Ac-
cording to proportion in the selected sample, there would be 50 males,
30 females and 20 children.
Quota sampling is similar to stratified sampling. The only difference

between the two is that the stratified sampling is a form of probability
sampling in which random selection of the sample is done. Howev-
er, in quota sampling, there is no random selection of the sample. If
you take the preceding example, according to quota sampling, the re-
searcher has to select 50 males out of 500 for taking interview; he/she
may interview the males who seem to be more responsive and cordial.
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In this way, quota sampling sets a quota or limit on the number of en-
tities to be selected from the population and then selects the samples
IM
based on this quota. Quota sampling is a step-by-step process of sam-
pling. It includes the following steps:
1. Divide the population in exclusive sub-groups.
2. Identify the proportions of sub-groups in the population.
3. Select elements from each sub-group of the population in exact
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proportion.
Quota sampling is considered one of the easiest methods of sampling.

In addition, it has certain advantages. These are discussed as follows:
Results in representative sample because it contains elements
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from all sub-groups of the population in exact proportion

Suitsthe studies in which the researcher aims to investigate the
characteristics of a certain sub-group from the population
Apart from several advantages, quota sampling has certain disadvan-

tages also. Sometimes, quota sampling results in non-representative
sample as while forming sub-groups of the population, only a few
traits of the population are considered. In case of the preceding exam-
ple of quota sampling, there are three sub-groups of the whole popula-
tion (male, female and children). However, there may be various other
traits, such as age, income and consumption. All characteristics of the
individuals of the population are difficult to consider while forming
sub-groups. Therefore, the selected sample may not represent the
population accurately.
4.4.4 Snowball Sampling
Snowball sampling refers to a non-probability sampling in which

snowball effect occurs as referrals increase. Snowball effect is a pro-

n o t e s
cess that starts from an initial state of small significance. Later, it builds
upon itself and becomes larger. For example, suppose for a research
study, a researcher needs wildlife photographers. The researcher
finds only four photographers and asks them to provide information
on such photography. On the basis of their information, contacts are
increased and sufficient data is collected. Snowball sampling is also
known as chain sampling or referral sampling. In snowball sampling,
the researcher aims to determine the population characteristics on
the basis of the response that is given by the participants.
9. ______________ refers to the type of sampling in which

elements from the population are selected deliberately by the
researcher to constitute a sample.
S
10. In convenience sampling, the researcher selects the sample
according to his/her own convenience; therefore, it truly
represents the population and leads to accurate results. (True/
False)
IM
11. In which type of sampling method is the population 4 first
divided into mutually non-overlapping sub-groups, and
subsequently, the sample is formed by selecting the members
from each sub-group according to the proportion of each sub-
group in total population?
M
a. Systematic sampling b. Snowball sampling

c. Quota sampling d. Cluster sampling
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Activity
As a researcher, you need to study how many kirana shops in Delhi

sell cigarettes of GoldFlake brand. Which non-probability sampling
method would you use to complete your research with utmost ac-
curacy? Give reasons.
4.5 Parameters and Statistics

From this discussion, it becomes imperative that when we are dealing
with the sampling process, we are dealing with two different sets of
data. One set is related to the entire population or census and the oth-
er is related to the sample.
Thus, each of these entities, viz. population and sample, has its own
numbers that are used to achieve the research objective. Thus, the
number that relates to the population is known as a parameter, while
the number that relates to the sample is known as statistics.

n o t e s
The measurable characteristics of a population are termed parame-

ters, such as mean or standard deviation related to the population. On
the other hand, the measurable characteristics of a sample are termed
statistics, such as mean or standard deviation related to the sample.
Let us take an example to illustrate the concept of parameters and

statistics.
A residential society in a particular area of Delhi has 400 flats. The to-
tal number of inhabitants in the society is say 1000. This means that a
total number of 1000 persons are living in these 400 flats. Thus, the av-
erage number of persons living in a flat comes to 1000/400 = 2.5. This
figure of 2.5 is the parameter that represents the population mean as
the central figure of the population. Similarly, if we calculate the stan-
dard deviation for the concerned population, then it would be termed
population variance.
S
Now, suppose the researcher selects 10 houses with the number of
persons in each of the houses as given in Table 4.3:
IM
Table 4.3: Number of Family Members in a Sample
Flat No. Number of Persons
1. 3
2. 4
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3. 5
4. 1
5. 3
6. 4
N
7. 6
8. 7
9. 3
10. 2
Taking the average of this sample, we get 3.8 as the figure. Thus, this
is the statistics as it pertains to the sample. Further, when we deal with
standard deviation, it is known as sample variance as it relates to the
samples.
Further, during the data treatment process, we would invariably deal

with two parameters—mean and variance – for the population as well
as for the sample.
The population mean is denoted by µ and the population variance is

denoted by σ. The sample mean is denoted by x and the sample vari-
ance by S2.

n o t e s
12. The measurable characteristics of a population are termed

____, such as mean or standard deviation related to the
population.
13. The measurable characteristics of a sample are termed
statistics, such as mean or standard deviation related to the
population. (True/False)
Activity
Find out other statistics as well as parameters that are used in the
sampling process. Prepare a report on your findings.
S
4.6 Sample Reliability
Sampling is the essence of research objective, and the researcher may
IM
adopt any means or mechanism to determine the type of sampling to
get an accurate result for the research objective. However, all these
efforts may fail if the samples are not reliable. In other words, sample
reliability becomes one of the major issues in the sampling process.
Sample reliability refers to the ability of the sample to produce con-

sistent results when the process is repeated for a long period of time.
M
In other words, reliability is a measure of consistency. For example,

Table 4.4 depicts the marks scored by 10 students in a quiz test. The
same test is repeated after a gap of 1 month and the marks are again
noted down:
N
Table 4.4: Marks in Two Different Tests

Marks in the Previous Test Marks in the Last Test
89 98
67 78
87 87
56 68
76 98
85 78
67 67
87 98
45 78
89 67
Mean 74.8 Mean 81.7
Standard error 4.90985404 Standard error 4.063523375
This table shows that there is a variation of mean. It has changed from
74.8 in the first attempt of the test to 81.7 that is conducted after a

n o t e s
month. The same set of questions was given to the same participants.
Also, the change in the standard error has been observed. Thus, these
findings indicate that the sample was not reliable. In other words, the
sample has also failed in the reliability testing factor.
The reliability of the sample is directly proportionate with the reliabil-

ity of the findings of the research. Therefore, it is important for the
researcher to ensure the reliability of each of the aspects related to the
sample that includes reliability of the respondent and reliability of the
tools used for measurement.
There are several forms of reliability testing. Some of the types of reli-
ability testing are given as follows:
Test-retest reliability: It refers to the reliability that is measured
on administering the same test again and again over a sufficient
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period of time. Table 4.4 is an example of test retest reliability.
Parallel form of reliability: This is the reliability that is measured
on administering different versions of the test to the same group
IM
of participants. For example, in Table 4.4, if another version of the
test is given to the same participants assessing the same variables,
then it is said to exhibit parallel form of reliability.
Inter-rater reliability: This is a reliability in which different judg-
es agree in their assessment decisions regarding the decision vari-
able under observation.
M
14. Sample reliability refers to the ability of the sample to produce

consistent results when the process is repeated for a long
N
period of time. (True/False)
Activity
With the help of various sources, find out an example of any three
organisations that collect data for a sample. Evaluate the methods
used by them to ensure sample reliability.
4.7 SUMMARY
Sampling refers to the process of selecting a small part which
would then be known as sample from the bigger or larger part,
known as population.
Census refers to the process of collecting data from each and ev-
ery individual or an entity from which the data is required to be
collected.
Probability sampling refers to the method of sampling in which
the probability of selecting each item in the sample is present.

n o t e s
Simple random sampling, systematic sampling, stratified sampling

and cluster sampling are different types of probability sampling.
Simple random sampling is a type of probability sampling in which
each element in the population has an equal chance of being se-
lected in the sample.
Systematic sampling refers to the sampling design in which, from
elements between 1 and n, every pth element is selected to form
the sample.
Stratified sampling refers to the sampling method in which the
sample is selected by dividing the entire population into different
sub-groups or strata.
Cluster sampling refers to the sampling method in which entire
population is divided into groups or clusters having heterogeneous
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features.
Non-probability sampling refers to the type of sampling in which
elements from the population are selected deliberately by the re-
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searcher to constitute a sample.
The important types of non-probability sampling includes conve-
nience sampling, judgmental sampling, quota sampling and snow-
ball sampling.
Convenience sampling refers to a non-probability sampling tech-
nique in which elements from the population are selected because
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of their easy accessibility to the researcher.

Judgmental sampling is the sampling wherein the expert judge-
ment is used to include or exclude a particular entity in the sample.
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Quota sampling refers to the sampling method in which the pop-

ulation is first divided into mutually non-overlapping sub-groups.
Subsequently, the sample is formed by selecting members from
each sub-group according to the proportion of each sub-group in
the total population.
Snowball sampling refers to a non-probability sampling in which
snowball effect occurs as referrals increase.
The measurable characteristics of a population are termed param-
eters, such as mean or standard deviation related to the popula-
tion.
The measurable characteristics of a sample are termed statistics,
such as mean or a standard deviation related to the sample.
Sample reliability refers to the ability of the sample to produce
consistent results when the process is repeated for a long period
of time.

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key words
Confidence level: It refers to the percentage of all possible sam-

ples that are expected to show reliability of the parameters of
the population.
Heterogeneous: It refers to the differentiation between differ-
ent aspects.
Margin error: It refers to the maximum expected difference be-
tween the parameters obtained from the population and sam-
ple.
Snowball effect: A process that originates as a state of small
significance and later becomes larger by building upon itself.
Stratified sampling: A sampling method that selects a sample
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by dividing the population into different sub-groups or sections.

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1. Define the concept of sampling.
2. Differentiate between sample and census.
3. Discuss the different types of probability sampling.
4. Write a short note on judgmental sampling.
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5. Differentiate between parameters and statistics.

6. Define sample reliability.

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Topic Q. No. Answer
Concept of Sampling 1. True
2. Sample
3. a. Confidence
4. False
Probability Sampling 5. Probability sampling
6. True
7. b. Simple random sampling
8. Systematic sampling
Non-Probability Sampling 9. Non-probability sampling
10. False
11. c. Quota sampling

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Topic Q. No. Answer

Parameters and Statistics 12. Parameters
13. False
Sample Reliability 14. True

1. Sampling refers to the process of selecting a small part, which
would then be known as a sample from the bigger or larger part,
known as population. Refer to Section 4.2 Concept of Sampling.
2. Census refers to the process of collecting data from each and
every individual or an entity from which the data is required to
be collected. Sampling, on the other hand, refers to the process
of collecting data from some of the elements or entities or units.
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Refer to Section 4.2 Concept of Sampling.
3. Simple random sampling, systematic sampling, stratified
sampling and cluster sampling are different types of probability
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sampling. Refer to Section 4.3 Probability Sampling.
4. Judgmental sampling is the sampling wherein the expert
judgment is used to include or exclude a particular entity in the
sample. Refer to Section 4.4 Non-Probability Sampling.
5. The measurable characteristics of a population are termed
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parameters, such as mean or standard deviation related to

the respective population. On the other hand, the measurable
characteristics of a sample are termed statistics, such as mean or
a standard deviation related to the sample. Refer to Section 4.5
Parameters and Statistics.
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6. Sample reliability refers to the ability of the sample to produce

consistent results when the process is repeated for a long period
of time. Refer to Section 4.6 Sample Reliability.

4.10
REFERENCE
SUGGESTED READINGS
Wiley.
son-Wesley.

n o t e s
E-REFERENCES
Explorable.com (2015). Non-probability sampling. Retrieved 28
October 2015, from https://explorable.com/non-probability-sam-
pling.
Socialresearchmethods.net (2015). Nonprobability sampling. Re-
trieved 28 October 2015, from http://www.socialresearchmethods.
net/kb/sampnon.php.
Socialresearchmethods.net (2015). Probability sampling. Re-
trieved 28 October 2015, from http://www.socialresearchmethods.
net/kb/sampprob.php.
Stat.yale.edu (2015). Sampling. Retrieved 28 October 2015, from
http://www.stat.yale.edu/Courses/1997-98/101/sample.htm.
Statpac.com (2015). Survey sampling methods. Retrieved 28 Octo-
S
ber 2015, from https://www.statpac.com/surveys/sampling.htm.
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C hapter
5
attitude MEASUREMENT TECHNIQUES
CONTENTS
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5.1 Introduction
5.2 Concept and Measurement of Attitude
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5.2.1 Components of Attitude
Activity
5.3 Attitude Rating Scales
5.3.1 Nominal Scale
5.3.2 Ordinal Scale
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5.3.3 Interval Scale

5.3.4 Ratio Scale
Activity
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5.4 Comparative Scaling Techniques

5.4.1 Paired Comparison
5.4.2 Rank Order Scaling
5.4.3 Constant Sum Scaling
5.4.4 Q-Sorting
Activity
5.5 Non-Comparative Scaling Techniques
5.5.1 Graphic Rating Scale
5.5.2 Itemised Rating Scale
5.6 Developing a Multi-Item Scale
Activity
5.7 Interpreting an Attitude Scale
Activity

CONTENTS
5.8 Selecting an Attitude Scale

Activity
5.9 Accuracy in Attitude Measurement
Activity
5.10 Summary
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attitude MEASUREMENT TECHNIQUES 91
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GILLETTE—CUSTOMER ATTITUDE MEASUREMENT
(Source: news.gillette.com)
When people hear the name Gillette, the first thing that strikes
their mind is razors. The brand is known for its safety razors and
also includes shaving and personal care products. Gillette was
merged with Procter & Gamble in 2005. Initially, the assets of
Gillette were assimilated into Procter & Gamble as Global Gil-
lette, but in 2007, Global Gillette was dissolved and assimilated
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into Procter & Gamble Beauty and Procter & Gamble Household
Care. This brand is famous for its products Gillette Mach-3 Turbo,
Oral-B and Duracell. It provides a high-quality service by satisfy-
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ing the consumers’ requirements.
According to Gillette’s analysis of the consumer market, the mar-

ket till the 1990s was dominated by other disposable razors. How-
ever, the conscious efforts of Gillette to understand the changing
market conditions and customer requirements encouraged it to
conduct a market research. This further helped it in understand-
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ing the customer’s attitude towards its products. Gillette used

graphic rating scale to obtain customers’ response on a continu-
ous scale. In addition, it used itemised rating scale, where items
are shown in the form of ordered statements like I regularly use
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this product; I often use this product; I never use this product.
The survey conducted by Gillette marketers reported that custom-

ers were looking for some cartridge razor, serving multipurpose
activities. The marketers decided to focus on delivering high tech
cartridge and disposable razors by providing three attributes—
closeness, comfort and safety. Accordingly, the brand came up
with sensor razors with autonomously moving twin blades. It was
reported by most of the Gillette’s customers that this provided a
better and smoother finishing as compared to other disposable
razors in the market.
The only concern of the customers was the higher price range of
the sensor razor. Some of Gillette’s consumers were of the opin-
ion that the finishing touch and the look of the sensor razor were
successful in reflecting their lifestyle and personality. Further,
the consumers also pointed out that a superior shave would be
enough to validate its premium price range.

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The marketers were not yet done with analysing the customer’s
attitude. They studied the selected market of university students
and IT professionals and came out with providing five free blade
sets with the disposable sensor razor. Consumers of that segment
(IT and universities) were influenced by market value, price and
group feedback regarding the product. It was a result of successful
attitude measurement techniques that people who were using oth-
er brands so far were also interested in switching to Gillette now.
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learning objectives

>> Explain the concept and measurement of attitude
>> Describe attitude rating scales
>> Explain comparative scaling techniques
>> Discuss non-comparative scaling techniques
>> Describe multi-item scales
>> Explain the interpretation of attitude scales
>> Describe the selection of attitude scales
>> Explain the accuracy in attitude measurement
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5.1 INTRODUCTION
The previous chapter discussed about the concept of sampling meth-
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ods. This chapter will discuss the methods that measure the attitude
of individuals.
Research is a data-driven activity, and data can be quantitative as well

as qualitative. Collecting quantitative data is easier as it involves only
numbers. On the other hand, the qualitative data is difficult to collect
and consequently, it is challenging to measure and subject to statisti-
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cal treatment process.
It is easier to measure physical entities with the help of a standard

yardstick, as they are quantifiable in nature. For example, height can
be assessed in centimetres and feet; area can be quantified in square
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metres, kilometres or hectares; and weight can be calculated in kilo-

grams. In addition to physical objects, the researcher needs to measure
abstract concepts, such as happiness, sadness, attitude and leadership
qualities that cannot be quantified because they are qualitative in na-
ture. Therefore, scaling is used to measure such abstract concepts. In
formal terms, scaling is the branch of measurement that designs the
instruments, known as scales, to measure qualitative concepts.
A researcher may use different types of scales, such as rating scale,

ranking scale, arbitrary scale or differential scale, depending on the
type of research problem. If the research problem is to assess wheth-
er the product is performing good, bad, average or outstanding, the
researcher requires a rating scale. However, if the research problem
is to identify the brand of soap that attracts the highest number of
customers, then the researcher would ask the customers to rank the
top brands in their order of preference on a ranking scale. If the re-
searcher opts for ranking scale to assess the performance of employ-

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ees or rating scale to know the preference of customers, then fruitful

and useful results would not be obtained. Therefore, it is essential for
the researcher to select the most appropriate scale to measure the ab-
stract concepts for ensuring productive and accurate conclusions of
the research studies.
In this chapter, you will learn the concept and measurement of atti-
tude as well as, various attitude rating scales. Further, comparative
scaling techniques and non-comparative scaling techniques have been
discussed. In addition, the chapter explains developing a multi-item
scale, interpreting an attitude scale and selecting an attitude scale. To-
wards the end, accuracy in attitude measurement has been discussed.
CONCEPT AND MEASUREMENT OF

5.2
ATTITUDE
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We know that marketing research is based on consumer behaviour re-
search. It involves the determination of attitude and motivational fac-
tors for the success (or failure) of the product launched in the market.
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Have you ever thought how is an attitude of a consumer measured
for marketing research purposes? To answer this question, first we
should know what an attitude is. This can be defined as an expression
of favour or disfavour towards a person, place, thing or event (the at-
titude object).
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Attitude can be defined as the tendency of an individual to react pos-

itively or negatively in a specific set of circumstances. Many psychol-
ogists have emphasised the importance of attitude in every aspect of
life.
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An attitude can be defined as a positive or negative evaluation of people,

objects, events, activities, ideas, or just about anything in your environ-
ment (Zimbardo, 1999).
Attitude is the readiness of the psyche to act or react in a certain way

(Jung, 1921).
An unfavourable attitude of a customer towards the product may af-

fect the company in the long run. Thus, a company should ensure that
customers are positive towards its product. Thus, the study of atti-
tudes gains importance.
Attitudes cannot be measured directly as their existence is inferred

from the results. Attitude research deals with the concept of under-
standing the premonitions and biasedness of the respondents to-
wards the product. Attitude research deals with the questions, such as
Whether the respondent has a positive outlook or a negative outlook
towards new product and how can his attitude be changed?

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Let us consider an example. Suppose, a marketer wants to know how

much his product is likely to sell. For this, he can conduct a research
on the buying behaviour of the customers. The results of research on
customer behaviour can further help the marketer understand prefer-
ences and needs of the customer.
Attitude measurement is achieved by means of attitude rating scales.

These are the scales that are used to measure the attitude of the re-
spondents. For example, rating the candidates in a sports competition
based on the performance. Other example can be answering to the
question such as How many hours of TV do you watch? Possible an-
swers may range between 0–2 hours, 3–5 hours, 6–8 hours, more than
8 hours.
note
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Measurement is a process of assigning standard values to quantify
physical entities. In the context of research, measurement is a pro-
cess of ascertaining the dimensions of an object. This can be in the
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form of a physical entity or an abstract idea. It is easier to measure
physical entities with the help of a standard yardstick, as they are
quantifiable in nature. For example, height can be assessed in cen-
timetres and feet; area in square metres, kilometres or hectares;
and weight can be calculated in kilograms.
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5.2.1 COMPONENTS OF ATTITUDE
The attitude of an individual is made up of various components, such

as ideas and beliefs. These components help in understanding the be-
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haviour of an individual towards people, activities and events. The

components of attitude are explained as:
Cognitive component: It is an evaluative component based on
past experiences and memories of an individual. This component
plays an important role when we tend to have perceptions of cer-
tain products. For example, a person having a bad experience with
a medicinal product will not buy it in the future.
Affective component: It refers to a component that is responsible
for the emotional set-up of an individual. This component express-
es an individual’s likes or dislikes. For example, an individual may
like the flavour of a particular ice-cream, so it is expected that he/
she will buy the ice-cream of that flavour.
Behavioural component: It refers to a component that changes
the way a person behaves in a situation. For example, it is expected
that a person who has a positive approach towards a product will
buy it.

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1. ________________ can be defined as the tendency of an

individual to react positively or negatively in a specific set of
circumstances.
2. Attitudes cannot be measured directly as their existence is
inferred from the results. (True/False)
3. Attitude measurement is achieved by means of
___________________.
4. Which of the following is an evaluative attitude component
based on past experiences and memories of an individual?
a. Cognitive component
b. Affective component
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c. Behavioural component
d. Continuous component
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5. _________________ is a component that changes the way a
person behaves in a situation.
Activity
Visit any organisation and meet its marketing manager. Discuss

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how that organisation observes the behaviour of its customers.
5.3 ATTITUDE RATING SCALES

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Marketers are interested in the measurement of attitudes as they be-

lieve that there is a strong relationship between what individual thinks
(attitude) and what he/she does (behaviour). There are various meth-
ods available for measuring attitudes. Before learning the measure-
ment techniques, let us first study the types of measurement scales.
The types of attitude measurement scales are shown in Figure 5.1:

Attitude Measurement
Nominal Scale
Ordinal Scale
Scales
Interval Scale
Ratio Scale
Figure 5.1: Types of Measurement Scales

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5.3.1 NOMINAL SCALE
Nominal scale is a simple rating scale and considered to be the low-

est level of measurement and least powerful scale. It is the measure-
ment scale in which numbers are assigned to things, beings or events
to classify or identify them. The main purpose of this type of scale is
identification of an entity. Example of this type of rating scale is the
number printed on the shirts of cricket or football players, books in a
library, etc. Each of the players is identified on the basis of the num-
ber on the shirt. It is clear that the numbers given to players, books
or computers are just a method to label them. These numbers cannot
be used to perform mathematical operations. If 11 players of a cricket
team are assigned a figure from 1 to 11, finding average of 1 to 11 does
not signify any meaning. In this case, the counting of members is the
only possible operation. However, it is helpful when there is a need to
classify data.
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Figure 5.2 depicts several examples of nominal rating scale:
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What is your gender?
[ ] Male
[ ] Female
Another example is - a survey of retail stores done on two dimensions - way of
maintaining stocks and daily turnover.
How do you stock items at present?
[ ] By product category
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[ ] At a centralised store
[ ] Department wise
[ ] Single warehouse
Daily turnover of consumer is?
[ ] Between 100 & 200
[ ] Between 200 & 300
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[ ] Above 300
A two-way classification can be made as follows
Daily/Stock Product Department Centralised Single
Turnover Category Wise Store Warehouse
Method
100 – 200
200 – 300
Above 300
Mode is frequently used for response category.
Figure 5.2: Example of Nominal Rating Scale

(Source: http://www.managementstudyguide.com/attitude-scales.htm)
5.3.2 ORDINAL SCALE
Ordinal scale is another attitude measuring scale wherein the num-

bers denote the ordering of the entities. In other words, the numbers
are non-indicative in nature unlike the nominal scale. This scale only
implies greater than or less than but does not answer how much great-
er or lesser. Only equalities can be set up with respect to the ordinal
scale and other arithmetic operations cannot be performed.

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The example of ordinal scale is shown in Table 5.1:
Table 5.1: Ordinal Scale

Objectives of an Organisation Rank
Increase in sales 2
Increase in revenue 1
Increase in customers 3
Decrease in cost 4
Table 5.1 shows that different ranks have been given to the organisa-
tion’s objectives. It is clear that the organisation’s preference for sales
increment is more than the increase in customers. However, it cannot
be said that the organisation’s preference for an increase in sales is
two times higher than its preference for decrease in cost.
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Thus, with ordinal scale, other arithmetic operations, such as differ-
ence and addition, do not make sense. This scale is an improvement
over nominal scale as it is an ordered scale.
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Figure 5.3 depicts examples of the application of ordinal scale:
Example 1: Rank the following attributes (1 - 5), on their importance in a microwave oven.
1. Company Name
2. Functions
3. Price
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4. Comfort
5. Design
The most important attribute is ranked 1 by the respondents and the least important is
ranked 5. Instead of numbers, letters or symbols too can be used to rate in a ordinal scale.
Such scale makes no attempt to measure the degree of favourability of different rankings.
Example 2: If there are 4 different types of fertilizers and if they are ordered on the basis
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of quality as Grade A, Grade B, Grade C. Grade D is again an Ordinal Scale.

Example 3: If there are 5 different brands of Talcom Powder and if a respondent ranks
them based on say, “Freshness” into Rank 1 having maximum Freshness Rank 2 the
second maximum Freshness, and so on, an Ordinal Scale results.
Median and mode are meaningful for ordinal scale.
Figure 5.3: Depiction of Ordinal Scale

5.3.3 INTERVAL SCALE
Interval scale is the scale wherein various ratings are placed at equal in-
tervals. This is in sharp contrast to the nominal or ordinal scale wherein
the ratings can be in any form. The numbers that are used to rank the
objects also represent equal increments of attributes. For example, sup-
pose a person represents his/her level of happiness along a scale rated
from 1 to 10. With this scale, the following conclusions can be made:
Number 8 represents a higher level of happiness than number 7.
Difference in the level of happiness between 8 and 7 is same as
difference in the level of happiness between 6 and 5.

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However, it cannot be stated that number 4 represents double happi-

ness level as compared to number 2.
Figure 5.4 depicts various examples of application of interval scale:
Illustration 1 - How do you rate your present refrigerator for the following qualities.
Less Well
Company Name 1 2 3 4 5
Known Known
Functions Few 1 2 3 4 5 Many
Price Low 1 2 3 4 5 High
Design Poor 1 2 3 4 5 Good
Overall Very Dis- Very
1 2 3 4 5
Satisfaction Satisfied Satisfied
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Figure 5.4: Depiction of Application of Interval Scale
From Figure 5.4, it is inferred that ratings are placed at equal inter-
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vals, i.e., from 1 to 2 to 3 and so on. Further, we cannot conclude that
any position is stronger than the previous position. In this type of scal-
ing, the researcher can obtain the mean score and further the devia-
tions can be obtained so that future course of actions can be planned
and implemented.
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5.3.4 RATIO SCALE
Ratio scales are the most powerful scales of measurement. These

scales are useful when comparison is involved. They have a natural
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zero point. For example, on a centimetre scale, zero implies the ab-
sence of length or height. In the ratio scale, it is possible to perform
multiplication and division operations. For example, it can be stated
that the weight of Ram is twice that of Shyam.
The main advantage of a ratio scale is that all statistical operations,

which cannot be performed by other scales, can be performed by this
scale.
6. With ordinal scale, other arithmetic operations, such as

difference and addition, do not make sense. (True/False)
7. _______________ is the scale wherein various ratings are
placed at equal intervals.
8. Ratio scales do not have a natural zero point. (True/False)

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Activity
Mention the scale of the following:

a. Number of incorrect letters in the page of a book
b. Number of traffic violations in different parts of a city
c. Numbering the basketball players in a team
5.4 COMPARATIVE SCALING TECHNIQUES

Comparative scaling techniques are deployed when the respondents
need to compare two or more objects. In this case, it is assumed that
the respondent will make use of the standard frame of reference and
respond accordingly. For example, a respondent may be given three or
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more samples of washing powder for use by labelling them separately,
such as 1, 2 and 3. The respondent has used the samples, he/she is
asked to compare them and list them in an order of decreasing pref-
erence. The respondent may order them as 2, 3 and 1, which means
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that sample 2 was best, 3 was next best and 1 was least preferred.
Therefore, the comparative scales help in relative measurement of the
objects or their characteristics. Alternatively, it can be said that com-
parative rating scales give a relative interpretation of the data.
Another example of comparative scaling technique is: How do you

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rate Yippee Noodles in comparison to Maggie Noodles?
Comparative scaling techniques are shown in Figure 5.5:

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Paired Comparison
Comparative Scaling
Techniques
Rank Order Scaling
Constant Sum Scaling
Q-Sorting
Figure 5.5: Comparative Scaling Techniques
5.4.1 PAIRED COMPARISON

Paired comparison is an approach of ranking scale that provides a way
to make comparisons among objects. For example, if a respondent has
to compare an established brand of jeans and a new brand, then there
is only one possible comparison. He/she can prefer either the new
brand or the established one. However, if there are three products,
such as A, B, and C, then there can be three comparisons. The first

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comparison would be between A and B, the second comparison would

be between B and C and the third comparison would be between A
and C. However, in practical life, there are many more products to be
compared and judged. For example, for almost every product, there
are numerous brands. In that case, the task of respondents becomes
difficult enough.
According to the method of paired comparison, if there are n number
of objects, the respondents need to make (n (n-1))/2 comparisons. For
example, if there are 8 products, then the respondents need to make
28 (8 (8-1))/2 comparisons. If the comparisons become quite numerous,
then there is a risk because respondents may show their reluctance to
take part in the research study. In such a case, comparisons can be
reduced to an extent by selecting a sample of available products. The
other way to reduce the number of comparisons is to apply the law of
transitivity. This law says that if A is preferred to B and B is preferred
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to C, then A would automatically be preferred to C.
An example of paired comparison scaling technique is the choice of
selection of one subject out of the six subjects for class XII board ex-
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amination. The paired comparison test is useful when the number of
options is small.
For example, some respondents were asked about which character-
istics they will like to see in a noodle product, say N. The rating scale
used was as shown in Table 5.2:
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Table 5.2: Paired Comparison Example

Paired Comparison Example
Parameter Choice 1 Choice 2
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Cooking time Less than 3 minutes Less than 2 minutes

Stickiness Sticky Non-sticky
Sourness Yes No
Flavour Masala Tomato
5.4.2 RANK ORDER SCALING
In the rank order scaling method, the respondents are presented with
several options and are asked to rank the items in a particular order
as per their choice. The result so obtained is ordinal in nature. The
order may be based on preference, importance, liking, etc. For exam-
ple, a respondent is asked to rank the preference of having fast food in
a particular restaurant. Rank order scaling is comparative in nature.
It forces the respondents to discriminate among the stimulus objects.
This type of scaling takes less time for the respondent. If there are n
stimulus objects, then (n-1) scaling techniques will be made. No two
objects can receive the same rank.

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An example of rank order scaling for this is shown in Table 5.3:
Table 5.3: Rank Order Scaling Example

Rank Order Scaling Example
Food Item Rank the items on a scale of 1 to 5 with 1 being of
least preference and 5 of highest preference
Burger 4
Dosa 1
Chowmein 2
Fried rice 5
Chilly paneer 3
In the above example, it can be concluded that the respondent would

most probably order fried rice and is least likely to order dosa.
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This rank comparison method is used when the number of items is
less and the result is to be generated in a short time.
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Rank method is much easier and faster as compared to paired compar-
ison method. If there are 20 items, then according to paired compar-
ison method, total number of comparisons would be (20* 19)/2= 190.
It is not at all feasible to make 190 comparisons. However, according
to rank methods, 20 items can be numbered from 1 to 20 with much
ease according to respondent’s preference. It is important to note that
rank method represents only ordinal scale and posseses all limitations
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of ordinal scale. In addition, if the number of items is large, then the

respondents may feel reluctant to rank their choices.
5.4.3 CONSTANT SUM SCALING

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Constant sum scaling method is another technique that is similar to

rank order scaling method. In this method, the respondents are given
a constant number of points, usually 100 points. The respondents are
asked to divide these points among two or more attributes according
to their relative importance for the respondent. The respondent must
evaluate the worth of each attribute against all the other attributes.
The number of points that are assigned to different attributes help in
ranking all the attributes. An example of constant sum scaling method
is shown in Table 5. 4:
Allocate a total of 50 points to these five places in order of preference

for a vacation tour:
Table 5.4: Constant Sum Scale Example

Constant Sum Scale Example
Place Points
Thailand 15
Singapore 10

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Constant Sum Scale Example

Place Points
Japan 20
China 3
Taiwan 2
Total points 50
In this example, it can be seen that the respondent gives maximum

preference to visiting Japan and gives least preference to visiting Tai-
wan.
5.4.4 Q-SORTING
Q-sorting is a typical method of scaling under which the respondents

are given different cards listing certain objects, such as slogans, prod-
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uct features, etc. Each card contains only one object or characteristic.
The respondents are then asked to make piles or clusters of similar
objects according to the specified categories.
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For example, assume that a respondent is presented with 50 cards
containing different questions and after that he is asked to group his
answers in the following categories—strongly agree, fairly agree, do
not agree and strongly disagree. He then places his responses in the
four piles or clusters, namely, strongly agree, fairly agree, do not agree
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and strongly disagree. The result is again an ordinal type of data. The
data distribution of these types of measurement generally follows a
normal distribution.
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9. ___________________ technique is deployed when the

respondents need to compare two or more objects.
10. Which of the following is not a method of comparative scaling
technique?
a. Paired comparison
b. Rank order scaling
c. Constant sum scaling
d. Likert scale
Activity
Make a group of friends and prepare a list of the differences

between constant sum scaling and rank order scaling using
some real-life examples.

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NON-COMPARATIVE SCALING
5.5
TECHNIQUES
Non-comparative scaling techniques involve scaling of each object
independently of the other. For example, on the basis of the factors,
such as price, punctuality, food, etc., consumers may be asked to rate
a particular airline.
In non-comparative scaling techniques, the respondents respond in

their own manner. Non-comparative scaling techniques are divided
into two parts shown in Figure 5.6:
Graphic Rating
Likert Scale
Scale
S
Non-Comparative
Scaling Techniques Semantic
Itemised Rating
Differential
Scale
Scale
IM
Stapel Scale
Figure 5.6: Non-Comparative Scaling Techniques

M
The non-comparative scaling techniques are discussed as follows:
5.5.1 GRAPHIC RATING SCALE

N
In graphic rating scale, the respondent is required to indicate the

response on a continuous scale. Graphic rating scale is also called
continuous scale. The scale is labelled at two ends with two opposite
words. Figure 5.7 is an example of a graphic rating scale.
How do you like this new product?
Outstanding Excellent Very Good Good Neutral Dislike
Figure 5.7: Depiction of Graphic Rating Scale
5.5.2 ITEMISED RATING SCALE
Itemised rating scale is a scale in which items are shown in the form
of ordered statements. Respondents are given a scale with numbers/
brief description of each category. For example:
I use this product regularly

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I often use this product

I never use this product
This example shows a series of statements in the decreasing order of

frequency. The respondents are asked to select one of the choices ac-
cording to their preferences or opinions. The types of itemised rating
scales are discussed as follows:
LIKERT SCALE
Likert scale is most frequently used in studying social attitudes. In

this scale, usually there are five degrees of a statement. The respon-
dent is required to indicate the degree of agreement or disagreement
to the particular question. The responses are summed up and they are
then used to depict the nature or opinion of the respondent.
S
Example of Likert Scale:
Statement: Do you think that product A is better than product B?

IM
Strongly Agree (1) Agree (2) Neutral (3) Disagree (4) Strongly Disagree (5)
In this example, there are five degrees of responses for the given state-
ment. The right extreme of the scale shows the strongest approval
to the statement, whereas the left extreme indicates the strongest
M
disapproval to the statement. Middle points are between these two

extremes. Each point on the scale has a numerical value. The preced-
ing example constitutes only one statement. In Likert scaling meth-
od, each statement is assigned a numerical value. Thus, total score
is calculated for each respondent. For example, suppose there are 10
N
statements. In this case, the total of Strongly Agree responses can be

1 × 10 = 10. The total of Strongly Disagree responses can be 5 × 10 =
50 and the total of Neutral response can be 10 × 3 = 30. The score of
any particular respondent would be between 10 and 50. If the score of
a respondent is more than 30, it would show unfavourable opinion to
the statement. However, if the score is less than 30, then it shows the
feeling of agreement towards the statement.
SEMANTIC DIFFERENTIAL SCALE
In a semantic differential scale, the respondents are asked to indicate

their feeling on a scale that contains words rather than numbers. This
scale was developed by Charles E. Osgood, G. J. Suchi and P. H. Tan-
nenbaum. It measures the connotative meaning of objects, events and
concepts. Semantic differential scale consists of bipolar adjectives,
such as good–bad and valuable–worthless. The respondent is asked
to select his/her position between these two adjectives. These words
contain bipolar words at the end of the scale.

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Semantic differential scale analysing candidates for a managerial po-

sition is shown in Table 5.5:
Table 5.5 Semantic Differential Scale

Successful Unsuccessful
Progressive Regressive
Active Passive
Fast Slow
Strong Weak
Severe Lenient
True False
3 2 1 0 –1 –2 –3
In Table 5.5, two adjectives are shown on two extremes. In between
S
these two extremes, scores (3, 2, 1, 0, –1, –2 and –3) are mentioned to
rate candidates according to the level of traits possessed by them.
STAPEL SCALE
IM
This scale was developed by John Stapel. In this type of scale, which is
vertical in format, the respondent is asked to rank the attribute of an
item. Positive rating describes the object accurately, whereas negative
rating describes the object as inaccurate by a respondent.
An example of staple scale is given as follows:
M
Rank the quality of burger:

+5
+4
+3
+2
N
+1
High Quality
–1
–2
–3
–4
–5
11. In graphic rating scale, the respondent is required to indicate

the response on a continuous scale. (True/False)
12. What is the other name of the graphic rating scale?
Activity
Conduct a research on various other areas of scales that are widely

used in the marketing research process. Prepare a report on your
findings.

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5.6 DEVELOPING A MULTI-ITEM SCALE

Multi-item scales are the most widely used scaling system, which is
commonly deployed during surveys. The main purpose of using mul-
tiple item scales is the determination of a particular aspect of the per-
sonality or the attribute under study of the respondent by posing a
series of questions that are directly or indirectly related to the aspect
under study. Multi-item scales are based on psychometric theory.
The usage of multi-item scaling has the following assumptions:

The set of multi-items represents the attribute under study more
accurately than a single item. This is because the respondent is able
to understand the items well when placed in relation to one another.
When items are combined together, the respondent is more or less
S
sure of the correct response as compared to a single item.
By using multi-item scaling technique, the reliability of the re-
sponse increases tremendously.
IM
Inthis technique, the researcher is able to distinguish the respon-
dents accurately as the particular aspect under study comes out
more clearly.
Let us take an example of a multi-item scaling:

M
The four questions given as follows seek to determine the extent of

influence of the respondent’s decision for variables under study:
“I often look for consultation from other people who will assist me
in making the best choice from the several choices that are avail-
N
able for the product.”

“Ioften observe as to what other buyers are purchasing and I en-
sure that I am buying the right product.”
“Ihave never used the product before therefore; I always consult
my friends while buying a new product.”
“I frequently consult my friends, relatives and others about a prod-
uct before I buy the same instead of taking the risk of purchasing
the wrong product.”
The main disadvantage of this type of approach is the fact that it be-
comes extremely difficult to identify as to what is required to be mea-
sured and the manner in which the questions are formulated, as they
can mislead from the object under study.
Thus, in the process of developing a multi-item scale, the following

points should be taken into consideration:
The objective that is to be achieved by using multi-item scaling
process, i.e., what the researcher is trying to achieve through this
process.

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The number of questions to be included in the multi-item scale.

This is the most important aspect that needs to be taken into con-
sideration due to the fact that the respondent may tend to lose fo-
cus and interest and thus will not answer the questions earnestly.
The language in the question must be simple and easy to under-
stand. If the language is complex or complicated, then the respon-
dent will fail to understand the question and will give the response
incorrectly.
The order of the questions is the most important aspect of the
multi-item scaling process. This is due to the fact that it will mis-
lead the respondent as well as the researcher in trying to under-
stand the motive of the questions as well as the objective of the
research.
Finally, the process of the answering the questions should be ex-
S
plained in detail to ensure that the respondent provides the cor-
rect answer. For example, the question “I often take public trans-
port while going to office” may have several answers due to the
IM
generic word often. The respondent may mark ‘yes’ even if he/
she travels once a week by public transport and on the other days
works from home. Thus, in this case, the word ‘often’ is replaced
by always, in practical scenario. In other words, the respondents
must be explained as to what is to be answered in situations
like this.
M
13. The main purpose of using multiple item scales is the

determination of a particular aspect of the personality. (True/
N
False)
Activity
Conduct a research on various other areas where multi-item scales

are used widely. Prepare a report on your findings.
5.7 INTERPRETING AN ATTITUDE SCALE

In the previous sections, we discussed the various types of attitude
scales that are widely deployed in the marketing research process
for the purpose of data collection. However, despite the availability of
several types of scales, one question that is always in the mind of the
researcher is the question of interpreting the attitude scale. In oth-
er words, whatever may be the scale used for measuring attitudes,
the measurements that are provided by the participants in the survey
process must be interpreted so that some conclusion can be derived
from them.

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In general, the following points are deployed for the purpose of inter-
pretation of the measures on the attitudinal scale:
Objective of data collection and measurement process: This is the
most important aspect that is taken into consideration while devel-
oping and interpreting the attitudinal scale. Until the objective is
clear and specific, the whole purpose of the research objective as
well as the data collection and measurement process is futile. For
example, if the research objective is to determine the factors that
are responsible for customers buying increasingly more number of
chocolates in winters, then the scale must be so constructed that it
measures this aspect. In case the researcher deploys the nominal
scale for this parameter, the whole purpose gets defeated as the
research objective as well as the scaling system is out of sync. In
other words, the interpretation findings will be of no use.
S
The type of the scale that has been deployed for the attributes
under study: If the scale deployed is a nominal scale wherein the
numbers are just for indicative purposes, then the interpretation is
done on the basis of the number of times a particular value occurs,
IM
i.e., frequency. Thus, in nominal scales, the common measure is
the mode of the construct. Similarly, in the case of ordinal scales,
where the responses denote the ranking of the questions, the scales
are represented on the basis of the number of times the variable
has been rated on each of the rating parameters. For example, the
quality of food being good has been rated 4 times, better has been
M
rated 18 times and best has been rated 8 times.

The practical considerations of the data collection process: In
this case, even though the data has been collected in an efficient
manner, but the interpretation of the data is not feasible due to
N
practical considerations. For example, the marketer has collected

data from surveys and other means by including attitudinal scales.
However, when the findings are required to be interpreted, the rel-
evant software or the tools to process the data are unavailable due
to practical considerations, such as extremely low budget for the
purchase of software or the management is forcing the researcher
to process the data manually. In situations like these, the research-
er will interpret the findings of various scales as per convenience
and involving less hassles.
14. The measurements provided by the participants in the survey

process must be interpreted. (True/False)
Activity
Conduct a research on various other ways of interpreting the atti-

tude scale. Prepare a report on your findings.

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5.8 SELECTING AN ATTITUDE SCALE

The previous sections have dealt with various aspects of attitudinal
scales. Often, the process of selecting an attitude scale is the most im-
portant issue that the researcher is required to undertake. This is due
to the fact that a wrong scale will not fulfil the desired objectives. On
the other hand, the usage of a right scale may also fail to provide cor-
rect findings, if the responses on the scale are not as per the objectives
of the research or the data collection process.
In general, the selection of an attitudinal scale depends on the follow-

ing points:
Research objective: This is the most important factor that needs
to be taken into consideration while selecting the scale. The se-
lected attitudinal scale must fulfil the research objective. The two
S
general types of research objectives are:
To measure the participant’s characteristics who contribute in
the study
IM
To use the participants as evaluators of the objects presented
to them
Objective of the data collection process: This is another import-
ant aspect, deployed in the selection of an attitude scale. However,
the objective of data collection process must support the research
M
objectives. If the data collection objective is different from the re-

search objective, then the findings and interpretation will not suf-
fice each other and the whole research work would go in vain. For
example, if the research objective is to determine the cause of the
failure of a particular product and the data collection objective is
N
to collect responses from only a limited number of participants,

then both objectives do not fulfil each other. In this scenario, the
most obvious choice of data collection would be the nominal or the
ordinal scale that can collect data quickly.
Application of the treatment process to the data: This is another
important point that needs to be kept in mind while determining
the attitudinal scale. This aspect relates to the availability of com-
puter software, statistical tools and the like. If the researcher does
not possess adequate facilities for data treatment, then the scales
are selected on the basis of these factors as well as on the basis of
the volume of data.
Practical considerations of the survey process: This is another
important aspect that is deployed in the selection of attitudinal
scales. The practical conditions and issues that arise during the
survey or data collection process must be taken care of. For exam-
ple, if large number of respondents are illiterate and the research-
er uses the graphic rating scale in the data collection process, then
there might be a possibility that most of the respondents do not
understand the representation and functioning of that scale.

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15. The objective of data collection process must support the

research objectives. (True/False)
16. The ___________ treatment process determines the choice of
attitudinal scale.
Activity
As a researcher, you want to measure the attitude of the first year

students of a particular collage towards their university, on various
parameters, such as awareness, feelings, association, etc. Which
points would you consider before selecting an attitude scale for
your research purpose? Give reasons.
S
ACCURACY IN ATTITUDE
5.9
MEASUREMENT
IM
The attitude measurement must be accurate to derive some useful in-
formation after going through the statistical treatment process. In oth-
er words, an accurate attitude measurement generates an error-free
result. In addition, it is both valid and reliable. The aspects that con-
tribute to an accurate measure include validity, reliability, sensitivity
M
and generalisability.
An attitude measure tends to be valid, if it measures the defined entity

in the way it was supposed to. A measurement is valid if the observed
score is same as the true score or projected score. In other words, a
N
valid score is one that reflects the true score. Usually, one considers
that if a measure is valid, then it is reliable as well. However, it is not
always true as reliability is not a sufficient condition for validity. Reli-
ability is judged by the extent to measure stability of results over time.
In other words, reliability is measured by the consistency of the items
in an attitude scale. If a researcher gets consistent results in repeat
measurements with same respondents and instruments, at two differ-
ent points of time, it could be called reliable measurement.
Sensitivity is another good attitude measure that is achieved by in-

creasing the number of scale categories. Sensitivity denotes the abil-
ity to distinguish among the significant differences in attitude. Apart
from sensitivity, the ability to generalise the result obtained from the
research data is also one important factor to judge the accuracy of
the attitude measure. The generalisability of a multiple item scale can
be determined if it can be applied in a wide variety of data collection
modes. However, unlike reliability and validity, generalisability is not
absolute and is measured in terms of degree.

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In order to ensure accuracy in attitude measurement, a researcher

should try to address certain issues that may severely impact the re-
search process. These issues are as follows:
The measurement of attitude is a complex and complicated pro-
cess. This is due to the fact that attitudes are difficult to define
and once they have been defined, they are all the more difficult to
measure. For example, in order to measure the satisfaction rate
of the customers for a particular product, the primary task is to
define the word satisfaction. However, once it has been defined,
the next task is to measure satisfaction in the way it was defined,
which is a more difficult task. If you say that a customer is very
much satisfied with a product, the response in itself is difficult to
measure as there is no clear distinction between ‘very much sat-
isfied’ and ‘satisfied’. Hence, when dealing with attitudinal scales,
attempt should be made to ensure that the response is as near to
S
accurate response as possible.
The measurement of attitude is highly dependent on the mind-set
of the customer at the time of entering the response. In other words,
IM
the mind-set of the respondent plays a great role in responding to
the questions and the data collection process. For example, if the
respondent does not feel like answering the questions, he/she may
not provide the correct answer.
The measurement of the attitudinal process also depends on the
environment in which the responses have been taken. In other
M
words, if the response of the customers is taken at the respondent’s

home wherein the respondent is at ease, he/she may provide more
accurate answers to the questions in comparison to the situation
when he/she is sitting in the office and is in a hurry to attend an
N
urgent meeting.
17. A measurement is ____________ if the observed score is same

as the true score or projected score.
18. Which of the following is judged by the extent to measure the
stability of results over time?
a. Validity
b. Reliability
c. Sensitivity
d. Generalisability

19. Generalisability is measured as a matter of degree.
(True/False)

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Activity
As a researcher, how would you measure the accuracy of a multi-

ple item scale, developed to measure customer’s attitude towards
unethical advertising practices? Prepare a report based on your
analysis.
5.10 SUMMARY
Attitude measurement is achieved by means of attitude rating
scales. These are the scales that are used to measure the attitude
of the respondents.
The types of attitude measurement scales are nominal scale, ordi-
nal scale, interval scale and ratio scale.
S
Comparative scaling technique is deployed when the respondents
need to compare two or more objects. In this case, it is assumed
that the respondent will make use of the standard frame of refer-
IM
ence and respond accordingly.
In non-comparative scaling techniques, the respondents respond
in their own manner. The non-comparative scaling techniques are
divided into graphic rating scale and itemised rating scale.
Multi-item scales are the most widely used scaling system that is
commonly deployed during surveys. The main purpose of using
M
these scales is the determination of a particular aspect of the per-

sonality.
Whatever may be the scale used for measuring attitudes, the mea-
surements that are provided by the participants in the survey pro-
N
cess must be interpreted so that conclusion can be derived from

them.
The selection of an attitudinal scale depends on certain points,
which include:
Research objective
Objective of the data collection process
Application of the treatment process to the data
Practical considerations of the survey process
An accurate attitude measurement generates error-free result. In
addition, it is both valid and reliable.
The aspects that contribute to an accurate measure include valid-
ity, reliability, sensitivity and generalisability.

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key words
Attitude research: It is a research that is undertaken to assess

the characteristics, such as behaviour, mindset, buying prefer-
ences, etc., of the respondents.
Measurement: It implies determining the characteristic of any
physical object.
Sampling: It is the process of selecting a part of the whole with
an objective to collect data for the research purpose.
Scaling: It is a measurement technique that is deployed in the
attitudinal research process to gather the response of partici-
pants to the research process.
S
1. What is the concept of measurement of attitude? Discuss.
2. Explain attitude rating scales.
IM
3. What are comparative scaling techniques? Discuss.
4. What are non-comparative scaling techniques? Explain.
5. Explain the components of attitude.
6. Describe the concept of multi-item scales.
M
7. Explain how an attitude scale is interpreted.

8. Explain the points that should be considered while selecting an
attitudinal scale.
9. Which aspects contribute to an accurate attitude measure?
N
Topic Q. No. Answer

Concept and Measurement of 1. Attitude
Attitude
2. True
3. Attitude rating scales
4. a. Cognitive component
5. Behavioural component
Attitude Rating Scales 6. True
7. Interval scale
8. False
Comparative Scaling Techniques 9. Comparative scaling
10. d. Likert scale

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Topic Q. No. Answer

Non-Comparative Scaling Tech- 11. True
niques
12. Continuous scale
Developing a Multi-Item Scale 13. True
Interpreting an Attitude Scale 14. True
Selecting an Attitude Scale 15. True
16. Data
Accuracy in Attitude Measurement 17. Valid
18. b. Reliability
19. True
S
1. Attitude can be defined as the tendency of an individual to react
positively or negatively in a specific set of circumstances. Refer
to Section 5.2 Concept and Measurement of Attitude.
IM
2. Attitude rating scales are nominal scale, ordinal scale, interval
scale and ratio scale. Refer to Section 5.3 Attitude Rating Scales.
3. Comparative scaling techniques are deployed when the
respondents need to compare two or more objects. Refer to
Section 5.4 Comparative Scaling Techniques.
M
4. The non-comparative scaling technique involves the scaling

of each object independently of other objects. Refer to Section
5.5 Non-Comparative Scaling Techniques.
5. Attitude components help in understanding the behaviour of an
N
individual towards people, activities and events. Refer to Section

5.2 Concept and Measurement of Attitude.
6. Multi-item scales are the most widely used scaling system that
is commonly deployed during surveys. Refer to Section 5.6
Developing a Multi-Item Scale.
7. Whatever may be the scale used, the measurements that are
provided by the participants in the survey process must be
interpreted so that conclusion can be derived from them. Refer
to Section 5.7 Interpreting an Attitude Scale.
8. The research objective, objective of data collection process,
application of the treatment process to the data and practical
considerations of the survey process should be considered while
selecting an attitudinal scale. Refer to Section 5.8 Selecting an
Attitude Scale.
9. The aspects that contribute to an accurate measure include
validity, reliability, sensitivity and generalisability. Refer to
Section 5.9 Accuracy in Attitude Measurement.

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5.13
REFERENCE
SUGGESTED READINGS
Wiley.
son-Wesley.
E-REFERENCES
S
Managementstudyguide.com (2015). Attitude scales—Rating
scales to measure data. Retrieved 29 October 2015, from http://
www.managementstudyguide.com/attitude-scales.htm.
IM
Manufacturer (2010). Attitude measurement—Types of atti-
tude rating scales | exporters-sources.com. Retrieved 29 Octo-
ber 2015, from http://exporters-sources.com/attitude-measure-
ment-types-of-attitude-rating-scales/.
Marketingresearch.org (2015). Stapel scale | Marketing Research
Association. Retrieved 29 October 2015, from http://www.market-
M
ingresearch.org/issues-policies/glossary/stapel-scale.
McLeod S. (2015). Attitude measurement | Simply psychology.
Simplypsychology.org. Retrieved 29 October 2015, from http://
www.simplypsychology.org/attitude-measurement.html.
N
Slideshare.net (2015). Attitude measurement and scaling tech-

niques. Retrieved 29 October 2015, from http://www.slideshare.
net/charurastogi/attitude-measurement-and-scaling-techniques.
SurveyGizmo (2015). Likert scale—What is it? When to Use it?
How to analyze it? Retrieved 29 October 2015, from https://www.
surveygizmo.com/survey-blog/likert-scale-what-is-it-how-to-ana-
lyze-it-and-when-to-use-it/.

C hapter
6
QUESTIONAIRE DESIGN
CONTENTS
S
6.1 Introduction
6.2 Concept of a Questionnaire
IM
6.2.1 Objectives of a Questionnaire
Activity
6.3 Designing Question Content
6.3.1 Linking with the Required Information
6.3.2 Types of Questions
M
6.3.3 Question Wording

6.3.4 Order of Questions and Questionnaire Layout
Activity
N
6.4 Managing Inability and Unwillingness of Respondent to Answer

Activity
6.5 Summary

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SONY`S QUESTIONNAIRE FOR PLAYSTATION 4 UPDATION
(Source: www.pcadvisor.co.uk)
3.0 update of Sony’s PlayStation 4 was released in September 2015.

Since then, Sony is eager to receive feedback from users regard-
ing what all features should be included in their new console. Sony
S
has sent an invite-only questionnaire to select PlayStation players
asking them to check the boxes adjacent to the features that they
thought should be part of the next update of PlayStation 4. The fol-
lowing is a snapshot of the questionnaire.
IM
M
N
(Source: techtimes.com)
The list of features suggested by Sony includes folders, the option

to appear in offline mode, the option to change the PSN name, etc.
The questionnaire does not ask the respondents to rate the features
in the order of importance, but to select the options that they want
to be included in the console.
(Source: Data derived from Tech Times, ‘Sony Is Asking Players What New Features They
Want On The PS4 Next’. N.p., 2015. Web. 27 Oct. 2015.)

QUESTIONAIRE DESIGN 119
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learning objectives

>> Discuss the concept of a questionnaire
>> Explain how to design the content of a questionnaire
>> Discuss how to manage the inability and unwillingness of
respondent to answer
6.1 introduction
In the previous chapter, you studied about attitude and motivation-
al research. Now in this chapter, let us move forward and study how
questionnaires are designed in marketing research.
S
The marketing research process or, in fact, any research process is
conducted by means of data collection. Indeed, it is the data which
drives the marketing research process. Marketing research begins
IM
with the process of understanding the design of the data i.e. what type
of data will be included in the research process. For example, a mar-
keting researcher needs to decide whether primary data or second-
ary data should be preferred for the research and what should be the
contents of the data. In addition, he needs to decide whether to use
quantitative or qualitative data. Once this is decided, the researcher
moves to the next phase of determining the selection process or data
M
collection. In other words, the researcher moves to the process of sam-

ple design and its characteristics. The next stage involves deploying
the right data collection technique or data collection.
This data collection process may be in the form of observational meth-

N
ods, searching through secondary data sources such as government

publications from various authorised agencies and the like. A com-
mon method deployed for collecting data is the questionnaire. In fact,
this is the most widely used technique in many of the applications,
apart from research activities. A questionnaire, as the name suggests,
includes a number of questions that are asked to the respondents,
for the purpose of collecting the desired data. Thus, the design of the
questionnaire is in itself a task which takes into account several fac-
tors.
In this chapter, you will be introduced to the concept of questionnaire

and the process of designing the content of the questionnaire. Towards
the end, you will study how to manage the inability and unwillingness
of respondents to answer a questionnaire.
6.2 CONCEPT OF A QUESTIONNAIRE

In marketing research, it is the questionnaire which ensures that the
research objectives are met. Therefore, the design of the question-
naire must be such that it meets the intended purpose.

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Before we proceed further, let us discuss the definition of a question-

naire.
In simple words, a questionnaire is a document containing a set of

questions which are designed to obtain data or information so as
achieve the intended objective. In other words, the main purpose of a
questionnaire is to collect the data which will be further processed, so
as to obtain meaningful information.
Thus, the above definition provides the following features of a ques-

tionnaire:
A questionnaire comprises a set of questions.
A questionnaire has an objective.
The responses to the questionnaire can be processed to derive
S
meaningful information.
A questionnaire is designed in a way that it ensures data collection as

well as the purpose of deriving the information after processing the
IM
data.
Further, the questionnaire technique is the most cost-effective mech-

anism for the data collection process. However, it is not free from lim-
itations. For example, the language of the questionnaire may be diffi-
cult to understand or the respondent to the questionnaire is unable
to understand the question, even though the language of the question
M
may be simple. In some other cases, where the data required to be col-
lected is based on personal opinions and suggestions, there is always
an element of subjectivity. This subjectivity introduces some errors
and bugs which are difficult to understand during the data processing
N
stage.
6.2.1 OBJECTIVES OF A QUESTIONNAIRE
Having understood the basic definition of a questionnaire, let us now

proceed further to the process of dealing with a questionnaire.
The term ‘objectives of the questionnaire’ is construed to mean the

end result that the person floating the questionnaire aims to achieve.
In other words, what purpose does the questionnaire serve?
The following points illustrate the objectives of a questionnaire:

To collect data pertaining to the intended purpose from the re-
spondents.
To help the respondent to stay focused on answering the ques-
tions in the questionnaire. Questions should be designed in such
a manner that the respondent is seamlessly led to the process of
achieving the objective of the researcher by staying focused while
responding to the questions mentioned in the questionnaire.

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To assist the data analyst in determining the inconsistencies in the

response given by the respondent. This is another objective of the
questionnaire wherein the inconsistencies in answering the ques-
tions are identified and segregated.
To assist the respondent for extracting the data or information in
a simple and articulate manner (pertaining to the language used
in the questions).
To assist the data analyst in determining the mindset of the re-
spondent based on the background information or details of the
latter. This is another objective wherein based on the mindset of
the respondent, the responses are evaluated for variations and ab-
normalities.
To assist the data analyst in understanding the issues related to
language barriers and the communication gaps in the mindset of
S
the respondent. This is another objective wherein the communi-
cation gap in oral, written and verbal communication exhorts the
respondent to provide incorrect answers to the questions.
IM
1. In market research, the questionnaire ensures that the

research objectives are met. (True/False)
2. A questionnaire assists the data analyst in determining the
M
inconsistencies in the response given by the respondent.

(True/False)
3. ____________technique in the most cost- effective mechanism
for the data collection process.
N
Activity
Form a group with your friends and discuss the objectives of a ques-
tionnaire.
6.3 DESIGNING QUESTION CONTENT

The previous section discussed the objectives of a questionnaire. De-
signing a questionnaire is not a simple task; it is complex and compli-
cated in which several factors need to be considered. A questionnaire
needs to be designed in a systematic and structured manner.
The following points must be taken into consideration while drafting
a questionnaire.
1. Converting the research objectives into the required

information or data: This is the most important step in the

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process of designing a questionnaire. This step involves the

conversion of research objectives into information collection
objectives. In other words, the researcher/data analyst needs to
determine what information or data is required to be collected
for the purpose of fulfilling the research objectives.
2. Determining the method of administering the questionnaire:
This is the next step after the information requirements pertaining
to research objectives have been determined. This step involves
the process of how the data or information will be collected that
is through e-mail, fax, self-administered questionnaire, etc.
3. Designing the contents of the questionnaire: This step involves
the process of determining the contents which need to be covered
in the questionnaire. This is an essential step, since it leads to the
formulation of the questions after the contents are finalised.
S
4. Motivating the respondent to answer the questions: This step
covers the aspects which deal with the process of motivating the
respondents to answer the questions given in the questionnaire.
IM
5. Determining the types of the questions that will constitute
the questionnaire: This step is concerned with the process of
determining the type of questions in the questionnaire. In other
words, this step involves deciding whether the questions will be
open ended, closed ended, multiple choice ones and the like.
6. Determining the criteria for designing the questionnaire: This
M
stage is concerned with the process of wording the questions

that is it deals with the simplicity of the language, ease of
understanding, etc.
7. Determining the structure of the questionnaire: This stage is
N
used to provide logical flow or structure to the questions which

have been formulated. In other words, this stage provides a
framework or logical structure to the questions.
8. Determining the style of presentation of the questionnaire:
This is the stage which deals with the look and feel of the
questions such as quality of paper, font size and type, spacing
between the lines, etc.
9. Conducting pilot testing of the questionnaire: This is the stage
which involves presenting the questionnaire to a small group
of people so that the inconsistencies or errors, if any, can be
identified and removed before the questionnaire is distributed
among the actual respondents.
10. Administering the questionnaire: This is the process of floating
the actual questionnaire to the participants in the research
process.

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6.3.1 LINKING WITH THE REQUIRED INFORMATION
Now that you have got a preliminary insight about designing a ques-
tionnaire, now let us proceed further and discuss how the content of a
questionnaire is linked with the required information of the research.
While designing the questionnaire, certain core points need to be tak-

en into consideration, in the absence of which the basic objectives of
the preparation of the questionnaire remains unfulfilled.
The following points need to be considered while preparing the ques-

tionnaire:
The questionnaire must be linked to the basic objective of collect-
ing the data.
Adequate measures must be taken to ensure that each and every
S
question is linked to the information which is required to be col-
lected during the data collection process. In other words, controls
must be deployed to ensure that the quality of the questions in the
questionnaire must be directly or indirectly linked to the main ob-
IM
jective. Some of the various controls that can be deployed to link
the information to the basic objectives are:
Limiting the number of questions
Using language which is easy to understand and which can
provide the information that is being sought
M
Ensuring that the responses to questions are controlled by

means of multiple choice questions or logical questions and the
like. These controls ensure that each question is linked to the
N
main information which is being sought from the research.
Thus, by adopting the above-mentioned approach, the information to

be obtained is linked to the questions in the questionnaire.
6.3.2 TYPES OF QUESTIONS
In the previous section, we have discussed the means, mechanisms

and controls which can be deployed to ensure that there is a linkage
between the research objective and the questions constituting the
questionnaire. However, the types of the questions also play a cru-
cial role in linking the information to be obtained with the research
objectives. In this section, we will discuss the type of questions in the
questionnaire.
In general, questions in marketing research are of the following types:

Open-ended questions: These are the types of questions which
are asked to know the mindset of the respondent. These questions

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provide complete freedom to the respondent to express his views

in the manner which he feels. One example of open- ended ques-
tions can be: “What are your views on the prospect of e-commerce
in India?” Here, the respondent is not provided with a set of op-
tions; rather, his subjective opinions on an issue are sought. These
types of questions have the advantage of determining new ideas,
providing new insights which are not covered in the questionnaire,
etc. However, one disadvantage of open-ended questions is that
the handwriting of the respondent may not be legible.
Dichotomous questions: These types of questions are designed
in a manner that the respondent gets the opportunity to choose or
select only one alternative. For example, in the question, ‘do you
pay your electricity bill on time’ the answer can be ‘Yes’ or ‘No’.
Hence, the respondent is forced to choose either ‘yes’ or ‘no’ as the
case may be. These types of questions have an ease of use for data
S
processing purposes, but they have a disadvantage in the sense
that these questions may have a third answer which is not covered
by the two options. For example, the respondent may have paid his
IM
electricity bill partially. In these cases, the answer can neither be
‘yes’ nor ‘no’.
Multiple Choice Questions (MCQs): These questions are accom-
panied with a set of answers among which the respondents need
to choose the most appropriate option. In MCQs, the respondents
may be asked to select more than one options. The main advantage
M
of these types of questions is the fact they assist the data analyst in
understanding the nature and mindset of the respondent. In addi-
tion, these types of questions can be used for ranking the options.
Filter or contingency questions: These are questions which are
N
asked to further investigate on an issue based on a main question.

In short, these questions can also be called probing questions. For
example, in the question, ‘have you ever smoked a cigar’? (Yes/
No), if the respondent answers ‘Yes’, then the he can be asked to
answer a set of other questions, such as the frequency of smoking
or the brand of cigar, etc. These questions are categorised as filter
or contingency questions.
Likert questions: These are questions which enable the respon-
dent to mark the degree of agreement or disagreement to a par-
ticular question. For example, democratic form of government is
always good for the business environment (Answer in a scale of 1
to 5 in which 1, 2, 3, 4, and 5 denotes ‘strongly disagree’, ‘disagree’,
‘neutral’, ‘agree’ and ‘strongly agree’, respectively.)
Bipolar questions: These are the questions which have two ex-
treme answers written at the ends of the answer. For example,
‘What is your opinion about the customer service department of
XYZ Inc.? (Ans: Efficient, Inefficient).

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6.3.3 QUESTION WORDING
The term ‘question wording’ implies the language, the words and oth-
er constituents that make up a question. In other words, the manner
in which the questions are phrased do play a crucial role in the ex-
traction of the desired information.
The following points need utmost attention when preparing the ques-
tionnaire.
The wordings of the questions must be such that they express the
intentions of the researcher clearly. In other words, the questions
must outrightly specify the objective to be achieved from the ques-
tionnaire.
The language of the questions must not be ambiguous. In other
words, the language should be simple and easy to understand.
S
The wordings in the question must be such that all the respon-
dents can understand the questions in the same manner and that
they are able to interpret the same meaning as the researcher
IM
wants to convey.
The words that are expressed in the form of questions must be
such that they are not biased. In other words, the words expressed
in the questions should not sway the respondents towards giving
biased answers.
M
The wordings in the questions should not contain any offensive

term/language. In other words, the questions must make the re-
spondents comfortable and be politically correct. For example, the
questions must not hurt the religious sentiments or personal be-
liefs of people.
N
In the case of open- ended questions, the wording should be framed

in such a manner that they force the respondent to stay focused on
the main objective of the researcher.
The wordings in the questions must not be insensitive to the feel-
ings and emotions of the respondents.
6.3.4 ORDER OF QUESTIONS AND QUESTIONNAIRE

LAYOUT
The previous sections covered the various facets of the questionnaire.

However, other considerations such as the order of questions and the
layout of questionnaire also play an important role. The following are
the points which must be taken into consideration while preparing the
layout of the questionnaire.
The questions must follow a logical sequence. In other words, the
flow of questions must be systematic and should lead the research-
er in achieving the research objective.

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The questionnaire should begin with the factual questions. This

is the most important point to be kept in mind, as these questions
enable the respondent to feel at home.
To encourage the respondent to answer the questionnaire, inter-
esting questions must be asked first so as to ensure that the re-
spondent’s attention and interest are maintained.
In order to avoid the establishment of a specific mind set or bias,
generic questions must be asked first followed by specific ques-
tions.
While drafting the layout, give priority to the most important items
of the questionnaire, as the respondents generally do not read the
full questionnaire, and even if they read, they do not earnestly
respond to all the questions. By adopting this approach, the re-
searcher is able to capture the most valuable and significant infor-
S
mation.
Open-ended questions should be given priority. Doing so would en-

courage the respondent to express his opinions freely. Furthermore,
IM
with this approach, the respondent’s interest is maintained. This en-
sures that the respondent answers all the questions in the question-
naire.
Exhibit
M
Sample Questionnaires
Following are the two sample questionnaires used in different mar-

ket research surveys:
N
New Product Questionnaire Template
[Mention the name of the organization along with a small introduction]
This question are seeks your opinion on the ____________ [mention the pur-
pose of the product] so that we can bring to your products and service that
can fulfill your needs and expectations. We appreciate your cooperation in
this regard.
Yours sincerely ____________ [Here you can mention the name of the organi-
zation administering the questionnaire]
Details of the respondent:
Name of the respondent _____________ [First name followed by last name]
Occupation: ____________ [E.g. professor, student, computer professional, etc]
Phone number: ______________ [Include the STD code before the number]
E-mail address _______________ [E.g. email@gmail.com]

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Questions: [sample question are given below.]
1. Please rate the ‘price’ of a production your decision making on a scale of 1

to 5 where 1 is the least and 5 is the highest rating.
a) ________________
b) ________________
c) ________________
d) ________________ [You can list the options here]
2. Have you used any of our b and c are products before?
a) Yes
b) No
S
3. What are your current choices of hair oil products? _________ [This is an
open-ended question which is to be answered by the respondent]
IM
4. What problems do you face with the current hair oil? ______________
More at sampletemplates.org
Feedback Questionnaire Template

M
Name of the customer: ________________
Sex: ________________ Age: ________________
Occupation: _________________
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Name of the company: _________
Type of the product: _____________
Date of participation: ____________
Date of Purchase _____/_____/_____ [basic details are provided by the customer]
Q1. How did you find our product?
• Very good
• Good
• Satisfactory
• Somewhat satisfactory
Q2. According to you, the information mentioned on the product is sufficient to guide
the customer
• Yes
• No
• Can’t say

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Q3. Do you think our products justify the value of your invested money?
• Yes
• No
Q4. Would you like to suggest our products to your friends?
• Yes
• No
• Not sure
Q5. Rate your overall satisfaction with us?
• Excellent
• Very good
• Amazing
S
• Fair
Q6. Please suggest us some effective changes to improve the performance of
our product? ______________
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(Source: sampletemplates.org)

M
4. Mention State some of the modes of administering a

questionnaire.
5. In open- ended questions, the respondents are provided with
a number of options to answer. (True/False)
N
6. _________ questions which enable the respondent to mark

the degree of agreement or disagreement with a particular
question.
7. The questionnaire should begin with the ________ questions.
8. Preference to the open- ended questions should be given first.
(True/False)
Activity
Conduct a research on at least two studies conducted undertak-

en by different business organisations in which the questionnaire
method was followed. Study the questionnaires and make observa-
tions regarding the question types, the questionnaire layout, and
the wordings of the questions. Make a note of your findings.

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MANAGING INABILITY AND

6.4 UNWILLINGNESS OF RESPONDENT TO
ANSWER
The above sections covered the aspects related to the questionnaire.
However, there is another aspect which is not directly related to the
design and construction of the questionnaire, but has great signifi-
cance. This issue is related to the management of the respondents in
terms of their unwillingness and inability to answer the questions in
the questionnaire. Respondents may not always answer to the ques-
tions mentioned asked in the questionnaire. In such cases, it becomes
difficult to fulfill the research objectives because of lack of adequate
data. Therefore, a researchers needs to effectively manage the inabili-
ty and unwillingness of respondents to participate in a survey.
S
The following are the key points which must be taken into consid-
eration to manage the unwillingness and inability of respondents to
answer:
IM
The respondents must be briefed about the purpose of the ques-
tionnaire and what role the respondent has in this questionnaire.
This is the most important aspect, as the purpose must be clearly
and specifically conveyed to the respondent. Once the purpose is
conveyed, the next task is the communication of the stake that the
respondent has in this questionnaire. This is because; unless and
M
until the stakes are highlighted or conveyed, the respondent will

not answer the questions in a sincere and earnest way.
The respondent must be conveyed the fact that the information
provided by him will not be revealed or used in any manner. In
N
other words, he should feel free to answer the questions without

any fear or apprehensions.
The layout and quality of the paper on which the questionnaire is
prepared must be good. This is essential, as most of the respon-
dents may get discouraged by the look, feel and presentation if the
questionnaire if it is not presented well. This results in the respon-
dents providing incorrect answers to questions or answering them
in a casual manner.
The opening of the questionnaire must be designed in a manner
such that it generates interest and that this interest is sustained till
all the questions are answered in an earnest manner.
The respondents can be provided with some monetary or non-mon-
etary benefits, such as free passes, discount coupons, product sam-
ples, etc. to compensate for the time and effort they put in respond-
ing to the questionnaire. Such benefits create positive motivation
for respondents and make them more interested in participating
in the survey and responding to the questionnaire.

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9. Unwillingness to respond by the respondents may result in

lack of adequate ______ which in turn makes it difficult to
fulfill the objectives of the research.
10. Mentioning the objectives of the research may motivate
respondents to participate in a survey. (True/False)
11. Monetary benefits have no positive effect on the willingness of
respondents in participating in a survey. (True/False)
Activity
With the help of the Internet, conduct a research on the various
S
points which must be taken into consideration to ensure that the
respondent feels free to answer the questionnaire. Prepare a report
on your findings.
IM
6.5 SUMMARY
In the introductory section, we have covered the concept of ques-
tionnaire. Further, we mentioned that there can be no research or
investigative activity without the use of a questionnaire technique.
M
Thus, in marketing research, it is the questionnaire which ensures

that the research objectives are met. Therefore, the design of the
questionnaire must be such that it must meet the intended pur-
pose.
N
In simple words, the word questionnaire is a document containing

a set of questions which are designed to determine data or infor-
mation so as achieve the intended objective. In other words, the
main purpose of the questionnaire is to collect the data which will
be further processed so as to deduct meaningful information from
the collected data.
By the term ‘objectives of the questionnaire’, it is construed to
mean that what is the end result that the person floating the ques-
tionnaire aims to achieve. In other words, what purpose does the
questionnaire serves?
While designing the content of a questionnaire, the following need
to be kept in mind:
1. Converting the research objectives into required information
or data
2. Determining the appropriate method of administering the
questionnaire
3. Designing the contents of the questionnaire

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4. Motivating respondents to answer the questions

5. Determining the types of questions that will be included in the
questionnaire
6. Determining the criteria for designing the questionnaire
7. Determining the structure of the questionnaire
8. Determining the presentation style of the questionnaire
9. Conducting a pilot testing of the questionnaire
In general, questions in the marketing research are of the follow-
ing types:
1. Open-ended questions
2. Dichotomous questions
S
3. Multiple Choice Questions (MCQs)
4. Filter or contingency questions
5. Likert questions
IM
6. Bipolar questions
The manner and wordings in which the questions are phrased do
play are a crucial role in the extraction of the required information.
The questions in a questionnaire must follow a logical sequence.
M
Respondents may not always answer to the questions mentioned

in the questionnaire. In such cases, it becomes difficult to fulfill the
research objectives because of lack of adequate data. Therefore, a
researchers needs to effectively manage the inability and unwill-
ingness of respondents to participate in a survey.
N
key words
Closed-ended questions: The type of questions in a question-

naire which force the respondent to choose one alternative
among the several alternatives.
Open-ended questions: The type of questions in a question-
naire which force the respondent to express his opinion freely.
PSN name: Acronym of for PlayStation Networks, a gaming
entertainment service provided by Sony Computer Entertain-
ment.
Questionnaire: A document containing a set of questions de-
signed to achieve a specific objective of collecting data from dif-
ferent sources.
Respondent: The entity who answers the questionnaire.

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1. What is meant by a questionnaire? Support your answer with
examples.
2. What are the objectives of a questionnaire? Explain with
examples.
3. What are points to be kept in mind while designing the content
of a questionnaire? Support your answer with examples.
4. What points are to be considered while linking the content with
the required information? Explain with examples.
5. What are the various means and measures adopted to manage
the unwillingness and inability of the respondent in answering a
questionnaire? Explain with examples.
S
IM

Concept of a Questionnaire 1. True
2. True
M
3. Questionnaire
Designing Question Content 4. E-mail, fax, and self-administered
questionnaire.
5. False
N
6. Likert
7. Factual
8. True
Managing Inability and 9. Data
Unwillingness of Respondent
to Answer
10. True
11. False

1. A questionnaire is a document containing a set of specific
questions which is designed to collect data from the respondent.
Refer to Section 6.2 Concept of a Questionnaire.
2. A questionnaire is designed to achieve specific objectives. One
of the main objectives is to collect relevant data. Refer to Section
6.2 Concept of a Questionnaire.

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3. The contents of the questionnaire are designed by considering

certain points such as linking the contents with the objective of
the research. Refer to Section 6.3 Designing Question Content.
4. The design of the questionnaire must be such that it must be
linked with the objective of data collection for ensuring that
the research objectives are met. Refer to Section 6.3 Designing
Question Content.
5. During the administering of the questionnaire, the inability and
unwillingness of the respondent must be managed to ensure
that he or she answers all the questions in the questionnaire.
Refer to Section 6.4 Managing Inability and Unwillingness of
Respondent to Answer.

6.8
S
REFERENCE
SUGGESTED READINGS
IM
Beri G.C. (2005). Marketing research, Tata McGraw Hill Publish-
ing Company Limited
Brace, I. (2008). Questionnaire design. London: Kogan Page.
E-REFERENCES
M
Roberts John. H, Kayande Ujwal. From Academic Research to

Marketing Practice: Exploring the Marketing Science Value Chain.
Retrieved on 2nd September, 2015 from http://www.sciencedirect.
com/science/article/pii/S0167811613000852
N
Lotich, P. (2015). Customer Satisfaction Questionnaire Template

— The Thriving Small Business. The Thriving Small Business.
Retrieved on 28 October, 2015, from http://thethrivingsmallbusi-
ness.com/customer-satisfaction-survey-template/
Pew Research Center,. (2015). Questionnaire Design. Retrieved on
28 October, 2015, from http://www.pewresearch.org/methodolo-
gy/u-s-survey-research/questionnaire-design/
Wireuk.org,. (2015). Ten Steps Towards Designing a Question-
naire. Retrieved on 28 October, 2015, from http://www.wireuk.org/
ten-steps-towards-designing-a-questionnaire.html.

N
M
IM
S
C hapter
7
DATA ANALYSIS TECHNIQUES
CONTENTS
S
7.1 Introduction
7.2 Statistical Analysis with Frequency Distribution
IM
7.2.1 Measures of Location
7.2.2 Measures of Variability
7.2.3 Measures of Shape
Activity
7.3 Introduction to Hypothesis Testing
M

Activity
7.4 Cross-Tabulation
N
Activity
7.5 Data Analysis Techniques
7.5.1 Parametric Tests (Test of Significance for Large Samples, Chi-Square
Test, T-test and ANOVA)
7.5.2 Non-parametric Tests
Activity
7.6 Advanced Techniques
7.6.1 Correlation and Regression
7.6.2 Factor Analysis
7.6.3 Cluster and Discriminate Analysis
7.6.4 Conjoint Analysis
7.6.5 Multi-dimensional Scaling (MDS)
Activity

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CONTENTS
7.7 Summary
S
IM
M
N

DATA ANALYSIS TECHNIQUES 137
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DATA ANALYSIS AT ABACUS MARKET ANALYTICS
The Abacus Market Analytics is a unit of IMRB International, an

organisation that undertakes research and consultancy services
across the world. Abacus Market Analytics deals with various fac-
ets of data related to the process of market research.
In general, it offers a wide range of research oriented services

which include the following:
Data mining
Advanced data analysis
Data interpretation and reporting
Advanced statistical data services
S
In order to carry out data analysis, data analytics at Abacus Mar-
ket Analytics implements a wide range of software and processing
IM
tools. In particular, the tools which are commonly implemented
are Statistical Package for the Social Sciences (SPSS) for man-
aging large amount of data. This tool is useful for advanced data
analysis, such as factor analysis, conjoint analysis, etc.
Abacus Market Analytics has a well-structured and process-driv-

en approach for managing the data. This approach includes the
M
process for designing and implementing data collection frame-

work. Once the data has been collected, the next phase involves
the process of data cleaning, data verification and data validation
process. Thereafter, the next phase commences with the process
N
of analysing the data in the form of subjecting to statistical tests

based on the research objectives.
Once these tests are completed, the process ends with the prepa-
ration of the report which covers the findings of the data analysis
process.

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learning objectives

>> Explain statistical analysis with frequency distribution
>> Describe hypothesis testing
>> Discuss cross-tabulation
>> Explain data analysis techniques
>> Explain the various advanced techniques
7.1 introduction
In the previous chapter, you studied the concept of a questionnaire,
designing question content and managing inability and unwillingness
S
of respondents to answer. This chapter will focus on various data anal-
ysis techniques.
IM
Organisations can have efficient and effective data collection system.
However, these are of no use unless the data is subjected to statis-
tical and mathematical analysis. Data analysis is the process of sys-
tematically applying statistical and/or logical techniques to describe
and depict, condense and recap and evaluate data. Some of the useful
data analysis techniques are parametric tests, non-parametric tests,
M
correlation and regression, factor analysis, cluster and discriminate

analysis, conjoint analysis, multi-dimensional scaling, etc.
Organisations need to ensure to implement efficient data analysis

techniques as improper statistical analysis tends to distort scientific
N
findings, mislead data analytics and negatively influence the public

perception of marketing research. Proper analysis of data will reveal
the actual output and enable data analysts in organisations to com-
pare it with the expected output and accordingly take the appropriate
action. Organisations also need to ensure that data analysis is con-
ducted in an unbiased manner, follow acceptable norms, be clear and
presentable, etc.
This chapter covers the statistical analysis with frequency distribu-

tion, the concept of hypothesis testing and cross-tabulation. It also fo-
cuses on various data analysis techniques, such as parametric tests
and non-parametric tests. Towards the end the chapter explores the
different advanced data analysis techniques, such as correlation, re-
gression, factor analysis, cluster and discriminate analysis, conjoint
analysis and multi-dimensional scaling.

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Statistical Analysis with

7.2
Frequency Distribution
The analysis of the collected data is one of the main activities of the
marketing research process. However, there are various means and
mechanism for analysing the data. One of the means and mechanisms
for data analysis is the wide usage of statistical tools and techniques.
Frequency distribution is one such statistical analysis technique.
Frequency distribution can be defined as an organised tabulation or
graphical representation of the number of individuals in each cate-
gory on the scale of measurement. It enables data analysts to review
the entire data conveniently. It indicates whether the observations are
high or low and also if they are concentrated in one area or distributed
across the entire scale. Therefore, frequency distribution depicts the
S
manner in which individual observations are distributed on the mea-
surement scale.
Frequency distribution is widely applied in business operations. For

IM
example, the sales manager may be interested to know the number
of products sold by his competitors or he may want to determine the
three most popular brands of toothpaste in the market. Frequency dis-
tribution helps in providing solutions to such questions.
The most commonly used display modes of frequency distributions
are shown in Figure 7.1:
M
Displaying
Frequency
Distributions
N
Frequency
Frequency
Distribution
Tables
Graphs
Frequency Box and

Histogram
Polygon Whisker Plot
Figure 7.1: Display Modes of Frequency Distribution
Let us now study these display modes in detail.

Frequency tables: A frequency distribution table depicts the var-
ious measurement categories and the number of observations in
each category. Data analysts need to know about the range (min-
imum and maximum values) before constructing a frequency ta-
ble. The range is segmented into arbitrary intervals called ‘class

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interval.’ If there are several class intervals, then there will be no

reduction in the bulkiness of data. On the other hand, if there are
very few class intervals, then the shape of the distribution itself
cannot be estimated. Usually, 6 to 14 intervals are sufficient.
The width of the class can be estimated by dividing the range of obser-
vations by the number of classes. The following are some guidelines
which data analysts in organisations generally follow while estimating
class widths:
Equal class widths must be mostly used while unequal class
widths should be used only when large gaps exist in data.
The class intervals must be mutually exclusive and non-over-
lapping.
Open-ended classes at the lower and upper side, for example,
S
<10 and >100 must be avoided.
Frequency distribution graphs: These are diagrammatic repre-
sentation of the information in the frequency table. The different
IM
types of frequency distribution graphs are as follows:
Histogram: It is a graphical illustration of the variable of inter-
est in the x axis and the number of observations (frequency) in
the y axis. Percentages can be applied if the objective is to com-
pare two histograms comprising different number of subjects.
A histogram is used to determine the frequency when data are
M
measured on an interval or a ratio scale.

Frequency polygon: It is constructed by connecting all mid-
points of the top of the bars in a histogram by a straight line
without displaying the bars. A frequency polygon helps in com-
N
paring two frequency distributions easily. When the total fre-

quency is large and the class intervals are narrow, the frequency
polygon becomes a smooth curve known as the frequency curve.
Box and whisker plot: This plot was first illustrated by Tukey,
an American mathematician, in 1977. It is used to depict the
distribution of data.
A simple box and whisker plot is shown in Figure 7.2:
Box
Whisker Whisker
Min Max
Lower Upper
Median
Quartile Quartile
Q2
Q1 Q3
Figure 7.2: Box and Whisker Plot

(Source: faculty.nps.edu)

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From the Figure 7.2 above, it is observed that a vertical or horizontal

rectangle (box) is present, the ends of which correspond to the upper
and lower quartiles, that is, 75th and 25th percentile, respectively. Hence,
the middle 50 per cent of observations are represented by the box. The
length of the box estimates the variability of the data. The line inside
the box highlights the median (sometimes marked as a plus sign). The
position of the median reflects whether the data are skewed or not.
If the median is nearer the upper quartile, then they are negatively
skewed and if it is near the lower quartile, then positively skewed. The
lines outside the box on either side are called whiskers, which are 1.5
times the length of the box, that is, the Inter-Quartile Range (IQR).
Figure 7.3 depicts the Inter-Quartile Range (IQR):
Box and Whisker Plot
S
M
o x *
IM
Q1 Q3
IQR
1.5*IQR 1.5*IQR
3*IQR 3*IQR
Figure 7.3: The Inter-Quartile Range (IQR)

M
(Source: www.texample.net)
The end of whiskers is known as the inner fence and any value outside
it is an outlier. If the distribution is symmetrical, then the whiskers are
of same length. If the data are sparse on one side, the corresponding
N
side whisker will be short. The outer fence (generally not marked) is
at a distance of three times the IQR on either side of the box. The
reason of having the inner and outer lines at 1.5 and 3 times the IQR,
respectively, is mainly due to the fact that 95 per cent of observations
fall within 1.5 times the IQR, and it is 99 per cent for 3 times the IQR.
Some of the key characteristics of frequency distribution are as fol-
lows:
Measures of central tendency and location, that is, mean, median

and mode
Measures of dispersion, that is, range, variance and standard de-
viation
The extent of symmetry/asymmetry, that is, skewness
The flatness or peakedness, that is, kurtosis
7.2.1 Measures of Location
The measures of location is a common data analysis technique, which

is applied in day to day operations. In essence this technique is one

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of the measures of central tendency. In other words, central tendency

is widely used to determine the apparent inclination of the data to
the central part of the distribution. This is essential due to the fact
that once the data analyst has a central position of the central number
then controlling the distribution becomes easier. The three measures
of central tendency are depicted in Figure 7.4:
Measures of
Central
Tendency
Mean Median Mode
S
Figure 7.4: Measures of Central Tendency
Let us now study these three measures in detail.

IM
Mean: It is the most commonly used measure of location that is
widely applied in various day to day operations. The mean takes
into account all the values in the frequency and then provides the
ratio of the sum of all the values with the total number of items.
The result thus obtained represents the entire distribution.
M
Median: It is also another measure of central tendency or location.

The median is the middle number in a group of numbers. It is not
so frequently used as other measures like mean and mode, howev-
er, it can be the best ‘average’ to use when a set of data is present
N
that contains outliers.
An outlier is a statistical observation which is numerically distant

from the rest of the data. It can skew the mean of the data, however,
by using the median, statisticians and data analysts can estimate an
exact figure of the true average (or middle value) of the data.
The median is widely used in several operational areas, such as load

balancing during a cruise or river rafting or choosing the advertising
campaign based on the target distribution of a particular area.
Mode: It depicts the value which has the highest frequency.
The mode of a discrete probability distribution is the value x at
which its probability mass function considers its maximum value.
In other words, it is the value that is most likely to be sampled.
7.2.2 Measures of Variability
Measures of variability is defined as a mathematical determination

of the extent to which the performance of the group as a whole devi-

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ates from the mean or median. The most frequently used measure of
variability is the standard deviation. The measures of variability are
depicted in Figure 7.5:
Measures of
Variability
Standard Mean
Range Deviation
Deviation
Figure 7.5: Measures of Variability
S
Let us now study these measures in detail.
Range: It measures the deviation as the difference between the
IM
largest value and the smallest value in the distribution.
Standard deviation: It is a measure of the dispersion of a set of
data from its mean. The greater the distribution of data, the higher
the deviation. Standard deviation is determined as a square root
of variance.
M
Mean deviation: This is the absolute deviation from the mean.
The choice of determining the variation depends on the applicability

of the objective. In other words, different measures of variation are
applied for specific purposes.
N
7.2.3 Measures of Shape
An essential aspect of the description of a variable is its shape, which

determines the frequency of values from various ranges of the variable.
Statisticians and data analysts want to estimate how well the distribu-
tion can be approximated by the normal distribution. The measures
of shape determine the symmetry and flatness of the distribution of a
data sample.
A given distribution may be slightly skewed in the positive direction

or negative direction or it may be slightly above or below the peak of
the standard distribution.
If the distribution is above the normal distribution then it is called

leptokurtic; if it is below the normal distribution it is called platykurtic
while if it is equal to the normal distribution, it is called mesokurtic.
Figure 7.6 below depicts the variation in shape as compared to the
normal distribution:

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(+) Leptokurtic
General
Forms
(0) Mesokurtic of Kurtosis
(Normal)
(-) Platykurtic
Figure 7.6: Depiction of Variation in Shape as Compared to Normal

Distribution
S
IM
1. A frequency distribution table depicts the various
measurement categories and the number of observations in
each category. (True/False)
2. __________ are diagrammatic representation of the information
in the frequency table.
M
3. Name the plot that was first illustrated by Tukey, an American

mathematician, in 1977.
4. Which of the following measures of central tendency depicts
the value which has the highest frequency?
N
a. Mean
b. Median
c. Mode
5. Which of the following measures of variability measures the
deviation as the difference between the largest value and the
smallest value in the distribution?
a. Range
b. Standard deviation
c. Mean deviation
6. The __________ determine the symmetry and flatness of the
distribution of a data sample.
Activity
Select an Indian apparel firm and determine ways in which fre-

quency distribution is carried out as part of the firm’s data analysis.

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Introduction to Hypothesis
7.3
Testing
The concept of hypothesis testing is widely used in organisations by
data analysts. A statistical hypothesis is defined as an assumption about
a population parameter, which may or may not be true. Hypothesis test-
ing is defined as formal procedures used by statisticians to accept or re-
ject statistical hypothesis. The most effective ways to estimate whether
a statistical hypothesis is true would be to examine the total population.
However, due to its impractical nature, data analysts generally examine
a random sample from the population. If the sample data are not in
line with the statistical hypothesis, the hypothesis is rejected. There are
mainly two types of statistical hypothesis, which are as follows:
Null hypothesis: It is defined as the hypothesis that sample obser-
S
vations occur purely by chance. It is constructed with the possible
aim of rejection.
Alternate hypothesis: It is defined as the hypothesis that sample
IM
observations are influenced by some non-random reason. It is con-
structed with the aim of accepting the same when the null hypoth-
esis is not true.
Statisticians and data analysts generally follow a formal process to es-

timate whether to reject a null hypothesis, based on sample data. This
M
process is called hypothesis testing. It comprises four steps, which are

depicted in Figure 7.7:
N
Stating the
Hypotheses
Formulating an
Analysis Plan
Analysing
Sample Data
Interpreting
Results
Figure 7.7: Hypothesis Testing Process to Determine whether to Re-

ject a Null Hypothesis
Let us now study these steps in detail.

1. Stating the hypotheses: This step involves stating the null and
alternative hypotheses. The hypotheses are stated in a manner

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in which they are mutually exclusive, that is, if one is true, the
other must be false.
2. Formulating an analysis plan: This plan includes the way in
which sample data is used to determine the null hypothesis. The
evaluation often emphasises a single test statistic.
3. Analysing sample data: The values of the test statistic, for
example, mean score, proportion, t-score, z-score, etc. are
estimated as detailed in the analysis plan.
4. Interpreting results: The decision rule is implemented as
detailed in the analysis plan. If the value of the test statistic is
unlikely, based on the null hypothesis, then the null hypothesis
is rejected.
Statisticians and data analysts need to be aware of two types of errors
S
that can occur from hypothesis testing. These errors are:
Type I error: It occurs when the statistician or data analyst re-
jects a null hypothesis when it is true. The probability of commit-
IM
ting a Type I error is known as ‘significance level’, which is also
called ‘alpha’, and is often denoted by α.
Type II error: It occurs when the statistician or data analyst fails
to reject a null hypothesis that is false. The probability of commit-
ting a Type II error is known as ‘beta’, and is often denoted by β.
The probability of not committing a Type II error is known as ‘power of
M
the test’.
Hypothesis testing is widely used in business operations. For exam-

ple, a business organisation may conduct a survey to launch a new
product. Based on the survey findings, they launch the new product.
N
Here, the hypothesis is that as per the survey this is a productive op-
portunity for conducting business in a particular area. However, re-
sults reveal that the sales are not generated as expected and hence the
hypothesis, that is, the finding of survey is false.
7. __________ is defined as formal procedures used by statisticians

to accept or reject statistical hypothesis.
8. The probability of committing a Type I error is known as ‘beta’.
(True/False)
Activity
Prepare a report on the hypothesis testing of an Indian start-up

enterprise.

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7.4 Cross Tabulation

Cross tabulation or Crosstab is used by statisticians and data analysts
to jointly display the distribution of two or more variables by tabulat-
ing their results against one another in 2-dimensional grids. It applies
a process of forming contingency tables from the multivariate fre-
quency distribution of variables, displayed in matrix format. Crosstab
is widely used in survey results to determine interrelationships and
interactions between variables.
Crosstab construction and analysis is generally conducted via differ-

ent statistical packages. Stata is one such statistical package common-
ly used to build crosstabs. Statistical Package for the Social Sciences
(SPSS) is also used for crosstab analysis. Although SPSS offers the
flexibility of selecting whichever variable you want on which axis, it
S
allows only seven categories in the ‘column’ variable without the issue
of wrapping over. However, no limit is present on the number of cate-
gories for the dependent variable. In addition, though SPSS enables
IM
you to calculate and display percentages for row, column and total,
doing so will result in a cluttered output which then becomes difficult
to interpret.
Table 7.1 illustrates an example of crosstab analysis, which can be a 2

× 2 contingency table, where one variable is Age Group and the other
M
is Preference for Denims or Cotton Trousers:
Table 7.1: An Example of Crosstab Analysis

Preference Age Total
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Below 30 yrs Above 30 yrs

Denims 14 8 22
Cotton trousers 6 12 18
Total 20 20 40
From Table 7.1 above, it is observed that while 14 respondents below

the age of 30 prefer denims, only 8 respondents above 30 years of age
prefer denims as compared to cotton trousers. This information can
be easily used by an organisation manufacturing both products to tar-
get the right age group for the appropriate product.
Therefore, if you are a marketer aiming to enhance your brand’s visi-

bility through better promotions directed at the factors affecting sales
in your target segment, crosstab analysis will provide you deep in-
sights on customer profile and their buying behaviour. This enhanced
knowledge of your target market’s needs would help you design an
effective and more targeted branding and promotion strategy to attain
the end objective of higher sales.

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Crosstabs are commonly used in quantitative market research and

surveys and help identify trends. In addition, they help identify the
type of response of a specific category of respondents. This often helps
us in analysing the impact an action will have on a category of our tar-
get segment. Therefore, an FMCG organisation may be able to analyse
the effect of price change on its urban vis-á-vis its rural consumers, or
a survey can be used to measure the effectiveness of a specific adver-
tising campaign on its male vis-á-vis its female user groups.
Crosstabs have various benefits over other statistical tools, which are
as follows:
They are easy to compute and understand.
They provide comparative data on two or more variables across
multiple features at one glance.
S
In certain circumstances, they may also help solving the problem
of missing data.
They can also be used with various data, for example, ordinal,
IM
nominal, ratio or interval data.
Today, most organisations use Data Warehousing intensively where

the use of software applications like relational database management
systems can aid the cross tabulation of any two data with one another
to compare them and note their correlation. Recently, a few modern
systems have even started including a dynamic crosstab functionality
M
that allows you to manage constantly changing values of a variable.

N
9. Crosstab is widely used in survey results to determine

interrelationships and interactions between variables. (True/
False)
10. Crosstabs are commonly used in __________ and surveys and
help identify trends.
Activity
Using the Internet, find out and list the limitations of crosstabs.
7.5 Data Analysis Techniques

Once the quantitative and qualitative data have been gathered, it is
analysed to derive useful information that forms the results of the re-
search project. The previous section dealt with a conceptual view of
the data analysis and its application in the marketing research pro-
cess. We also saw through an example that the findings of the research

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project is not treated as the final data rather some means and mecha-
nisms are applied on the available data to assess the market situation
realistically and then take appropriate measures. Thus, the first step
in marketing research decisions involves treatment of data. The basic
steps involved in data (collected through a systematic process) analy-
sis are as follows:
Data cleaning: This is the most important step which is used to
clean data. In other words, this step is used to separate the cor-
rect data from the incorrect data and improper responses to the
questions (used in research) from proper responses. For example,
unfilled answers, that is answers which are not recorded properly
and ambiguous responses to the questions are discarded. In es-
sence, this step ensures that the data which has been collected is
free from all possible defects either in the response of the ques-
tions by the respondents or by the data collector.
S
Data verification and data validation: This step deals with the
process of verifying and validating the data. If the data is not ver-
ified and validated, the findings and the results of the research
IM
would be affected and would not be true results.
Data transformation: This step involves coding the responses,
specifically the responses which are in qualitative forms. It is im-
portant to code the qualitative data so that it can be subjected to
mathematical and statistical treatment. This mathematical treat-
ment converts the qualitative data into such a form wherein they
M
are able to provide some relevant information such as frequency

distribution of responses, median, mode etc.
Basic data treatment: It involves using certain mathematical or
statistical techniques or measures so as to assess the initial trends
N
and patterns of the data distribution.
Some of the basic data analysis techniques are as follows:

Descriptive statistics: Data analysis techniques such as mean,
median, mode, range, standard deviation, skewness and kurtosis
are the techniques used in descriptive analysis. Such measures are
applied on the quantitative data and the result of such data reveals
a general pattern of response.
Inferential statistics: The data analysis techniques which are
used to make predictions or estimates or inferences based on the
available data to generalise the results of the sample to the target
population are called inferential statistical analysis techniques and
such analysis is called inferential analysis. Some of the examples
of inferential statistics include sampling, hypothesis testing, esti-
mations done using normal distribution, chi square distribution
and true population based on sample information etc.
In addition to the above data analysis tests, the tests for assessing the
normality and the tests for outliers are also applied. It is done to en-

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sure that the data so collected is normalised data. In other words, the
data is not skewed which means that the data is unbiased and is free
from any error. This involves use of tests for skewness and kurtosis.
7.5.1 Parametric Tests (Test of Significance for

Large Samples, Chi-Square Test, T-test and
ANOVA)
While carrying out marketing research, we deal with sample and pop-
ulation. The entire research methodology is concerned with the de-
termination of the aspects or features of the population under study.
It means that the researcher tries to determine the characteristics of
the population based on the characteristics of sample. When all the
required information about the population (in the form of parameters)
is available with the researcher, then the statistical tests are called
S
parametric tests. On the other hand, in non-parametric tests the re-
searcher does not have any information regarding the population and
the associated parameters but the test needs to be carried out to test
the validity of the hypothesis. In parametric tests, specific assump-
IM
tions are made about the population while in non-parametric tests no
assumptions are made regarding the population. In parametric tests,
the null hypothesis is made based on the parameters of population
distribution while in non-parametric tests the null hypothesis is not
based on parameters. Parametric tests are usually divided into two
types of tests viz. the small sample test and the large sample tests.
M
Some commonly used parametric tests are as follows:

t-test: This is the most frequently used data analysis test in market
research process. This test is used to determine population param-
eters such as mean of the population and check whether it sig-
N
nificantly differs from the hypothesised value or not. Example of

application of t-test include say determination of the waiting time
of all the cars which are due for service in a car servicing centre
based on the sample waiting time of some cars. Other example of
t-test includes determining whether or not a person from Mumbai
spends more on monthly food items as compared to a person from
New Delhi.
Analysis of variance (ANOVA) test: This test is used to test the
difference between two means. ANOVA test is of two types viz. one
way ANOVA and two way ANOVA. Examples of ANOVA test in-
clude determination of the effect of fertilizers on different types
of wheat or any other food item. In such an example, one needs to
determine the difference among the yield of the crop(s) and differ-
ence in the different varieties of wheat.
Tests for large samples: When dealing with t-tests, it is assumed
that the size of sample is less than 30. However, when the sample
size exceeds 30, data analysis is carried out by using parametric

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tests for large sample. Such tests include z tests. The prime re-
quirement for conducting z-test is that the sample distribution
must be normal distribution.
Some commonly used non-parametric tests include Chi-square tests,

Mann-Whitney test and Kruskal-Wallis test.
Let us now study these non-parametric tests.
7.5.2 Non-parametric Tests
In the previous section, we discussed parametric tests wherein we use

parameters related to population and the sample to derive useful in-
sights related to the population and the sample. The data which has
been collected may or may not follow any particular type of distribu-
tion. In case, it follows a particular distribution, we may apply para-
S
metric tests and if the data is not normally distributed, we may apply
non-parametric tests.
Some non-parametric tests are described as follows:
IM
Chi-square test: Chi-square test is applied when one nominal
variable with two or more values is available, sample size is large
and when it is required to check whether or not the number of
observations in each category correspond to a theoretical value
(expected value as per the hypothesis) or not. Under this test, the
variances of population and sample are studied. It is based on the
M
chi-square distribution. The chi-square value for the test variable

is calculated based on present data and it is compared with the
chi-square value at the level of significance. It is used to check the
chi-square value in the chi-square distribution table. It is used to
compare the variance of sample with the variance of population.
N
Mann-Whitney test: This non-parametric test which is used to

compare the sample means of two variables from the same pop-
ulation. This is also used to test whether two sample means are
equal or not. It is generally used when the data is ordinal (ranked
data). The test widely uses some of the assumptions such as the
two samples from the population are random and independent of
each other. Such a test is based on an assumption that ‘x’ num-
ber of X random variables and ‘y’ number of Y random variables
are arranged in a pattern of increasing magnitude. This pattern
provides information about the relationship between their parent
populations.
Kruskal-Wallis test: This is another non parametric test which is
widely used when there is one nominal variable and one ranked
(ordinal) variable. It is used to test whether mean ranks are the
same in all the samples or not. One way ANOVA test is the para-
metric equivalent of this test.

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Exhibit
Chi-Square Test Example
A researcher has the data for the preferences of men and women
regarding the joint and nuclear families as follows:
Joint Family Nuclear Family Total

Men 96 35 131
Women 170 360 530
Total 266 395 661
Data for Preferences of Men and Women for Joint and Nuclear
Families
S
The researcher wants to find out whether the opinion of men and
women regarding the type of family is same or not. Use 5% as a
level of significance.
IM
The null hypothesis and alternate hypothesis are as follows:
H0: The opinions of men and women regarding the type of fam-
ily are same
H1: The opinions of men and women regarding the type of fam-
ily are different
M
The test statistic used for this data is chi-square test. The equation
used for calculation is as follows:
k
χ2 = ∑ (Oi − Ei )2 / Ei
N
i=1
Where, Oi = Observed frequency
Ei = Expected frequency
Expected frequency can be calculated with the help of following

equation:
Ei = Row total*Column total/ Grand total
In the current scenario, the expected frequency can be calculated

by the following method:
E1i =131*266/661 = 52.72
E2i=131*395/661= 78.28

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E3i=530*266/661 = 213.28
E4i=530*395/661= 316.72
After calculating the expected frequency and the square of differ-

ences between the observed and expected frequency is calculated
as follows:
No. of Observations Observed Expected Oi-Ei (Oi-Ei)2 (Oi-Ei)2/Ei

Frequency (Oi) Frequency (Ei)
Men
Joint Family 96 52.72 43.28 1873.158 35.53032
Nuclear Family 35 78.28 -43.28 1873.158 23.92895
Women
Joint Family 170 213.28 -43.28 1873.158 8.782626
S
Nuclear Family 360 316.72 43.28 1873.158 5.914241
Total 74.15614
Calculation of Chi-Square Test

IM
Calculated value of chi-square = 74.16
Assume that the Degree of Freedom = 1
Then, chi-square value at 5% level of significance with one-tailed

test and 1 Degree of Freedom is 3.841. You can check the chi-square
M
value for significance with the help of one-tailed test. The graphical
representation of the preceding solution is shown below:
N
Acceptance Region
Rejection Region
+3.841 74.16
Rejecting the Chi-Square Value
It can be observed that the value of chi lies in the rejection region;
therefore, we reject H0 and accept H1. This implies that there is a
vast difference between the opinions of men and women regarding
the type of family.

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11. Mention one test that you would use to analyse a small sample.
12. One way ANOVA test is the parametric equivalent of _________.
13. When the sample data is normally distributed, parametric/
non-parametric tests are used. (Pick the correct option.)
Activity
Prepare a report on the non-parametric tests for data analysis other

than those covered in the text.
7.6 Advanced Techniques
S
In the previous section, we discussed the parametric and non-para-
metric tests of data analysis. The techniques covered in the previous
section, used the parameters to arrive at the inferences related to the
IM
population or a sample. However, the methods discussed above were
unable to identify whether or not any correlation exists among the
different variables.
Let us now study some advanced techniques of data analysis known

as multivariate techniques. These are further divided into depen-
M
dency and interdependency techniques. In dependence techniques

there is one variable that is designated as dependent variable and the
rest of variable are independent. On other hand, in interdependency
techniques, there are no dependent and independent variables and
all the variables are treated equally. Dependency techniques include:
N
multiple regression, discriminant analysis, MANOVA (Multivariate

analysis of variance), conjoint analysis etc. whereas interdependency
techniques include: factor analysis, cluster analysis, Multidimensional
Scaling (MDS) etc.
7.6.1 Correlation and Regression
Data is collected during the data collection phase either through ques-
tionnaire or through any other means and this data is analysed so that
some useful information can be found. The analysis of the data is also
aimed at determining the relationship among the variables. One such
technique of determining the relationship is correlation and regres-
sion.
The correlation depicts the degree and the type of the relationship be-
tween the variables. The value of correlation lies between −1 and +1.
Correlation value of 0 indicates that there is no relationship among
the variables. However, a value more than 0 and less than +1 indicates
a positive relation between the variables and a correlation value less
than 0 but more than -1 indicates an existence of negative relationship

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among the variables. The negative relationship indicates that as one

of the variables increases, there is a corresponding reverse change
in the other variable. For example, if the price of the popular item or
product increases, then its sales may decrease.
Regression technique is used to study the relationship between two

variables where one is independent variable and other is dependent
variable. It is also used to predict the future value of the dependent
variable. The regression values are obtained from the regression
equation which follows the concept of line of best fit as follows:
Y = a + bX
Where, Y = Estimated value of Y for a given value of X
b = Amount of change in Y produced by a unit change in X
a and b = Constants
S
The equations to calculate a and b are as follows:
a = Y- bX
IM
b= ∑xiyi / ∑xi2
∑xi2 = ∑Xi2– nX2
∑xiyi=∑XiYi- nXY
Exhibit
M
Regression Example
Let us learn to calculate simple regression with the help of an exam-

ple. Suppose, a researcher wants to study the relationship between
N
the employees satisfaction (sales division) and sales of an organi-

sation. The researcher takes feedback from the employees in the
form of questionnaire and asks them to rate their satisfaction level
on a 10-point scale where 10 is the highest level of satisfaction and
1 is the lowest level of satisfaction. The researcher has taken the
sales data (average of monthly sales for an year) for every individu-
al employee of the sales division. The collected data is arranged as
shown:
Number of Ob- Employee Sat- Sales(in Xi2 XiYi

servations isfaction(Xi) Lacs),Yi
1 2 2 4 4
2 4 3 16 12
3 5 6 25 30
4 7 8 49 56
5 8 6 64 48
6 10 9 100 90
7 9 10 81 90

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8 3 2 9 6
9 1 3 1 3
10 2 4 4 8
11 4 5 16 20
12 6 8 36 48
13 8 9 64 72
14 10 11 100 110
15 4 5 16 20
16 7 12 49 84
17 9 15 81 135
18 5 6 25 30
19 8 16 64 128
S
20 9 20 81 180
21 10 20 100 200
22 7 6 49 42
IM
23 6 5 36 30
24 8 14 64 112
25 9 19 81 171
Total 161 224 1215 1729
Data to Calculate Simple Regression

M
Let us now calculate the mean for employee satisfaction (X) and
sales (Y) is as follows:
Mean for X= ∑Xi/n
N
Mean for Y= ∑Yi/n

X= 6.44
Y= 8.96
Following equation is used to calculate the value of b:
∑xi2= ∑Xi2– nX2 and
∑xiyi= ∑XiYi- nXY
Calculating the value of b for the preceding data is as follows:
∑xi2 =∑Xi2 – nX2
∑xi2= 1215 - 25*6.44*6.44
∑xi2= 178.16
∑xiyi= ∑XiYi- nXY
∑xiyi=1729 - 25*6.44*8.96
∑xiyi =286.44

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b= ∑xiyi / ∑xi2
b = 286.44/ 178.16
b= 1.61
a = Y- bX
a = 8.96 – 1.61*6.44
a = -1.39
Y = a + bX
Y = -1.39 + 1.61X
This is the regression equation in which the researcher can take
any value of X to find the estimated value of Y. For example, if the
value of X is 9, then the value of Y would be calculated as follows:
S
Y = -1.39 + 1.61X
Y = -1.39 + 1.61(9)
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Y = 13.1
With the help of preceding example, it can be concluded that if an
employee is satisfied, then his output would increase.
7.6.2 Factor analysis
M
The factor analysis method is used to reduce a large number of vari-

ables into a relatively small number of variables so that the correla-
tions among them can be determined.
N
Let us understand the concept of factor analysis with the help of an

example: Assume that an organisation needs to analyse two factors
viz. employee and product. Factor 1: employee who possesses knowl-
edge, appearance and availability. Factor 2: Product which possesses
style (design of product), colour, size and colour.
It can be observed that a single factor represents a lot of individual

pieces of data. For example, the individual data comprising style, co-
lour choices, size and colour density has been clubbed together under
Factor 2, which is product. Thus, when we refer to the factor product
it implies all these properties or characteristics.
7.6.3 Cluster and Discriminant Analysis
This technique is used in the process of market segmentation. Through

this technique, the researcher tries to determine market composition
by forming discrete groups called clusters. Under this technique, sim-
ilar variables or objects or people are grouped into different clusters.
Companies use this technique to group the people into clusters based
on psychological, demographic, lifestyle or other characteristics.

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When the researcher uses clusters, the number of classes may be un-
known and there is no prior knowledge of the characteristics of the
population. This type of technique is used to understand or explore
the data.
On other hand, the discriminant analysis begins when two or more

sets of characteristics or clusters are already available with the re-
searcher. This is the only difference between the cluster and discrim-
inant analysis.
An example of clustering and discriminant analysis is the survey for

understanding the reading habits of the residents of a particular area
or a locality in a particular city. In this case, the researcher will try to
form clusters and from these clusters the researcher will try to formu-
late groups having similar characteristics.
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7.6.4 Conjoint Analysis
Conjoint analysis is a data analysis technique that is used in market-

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ing research and product development. Conjoint analysis is used to
determine the parameters which majorly influence the decisions of
the respondents.
For example, conjoint analysis is used to determine the factors such as

durability, value for money, quality of the product, usefulness or utility
of the product etc. The customer will take these aspects into consid-
M
eration and then evaluate whether or not to buy a product. Conjoint

analysis is also known as trade-off analysis.
The conjoint analysis has several advantages such as:

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Measurement of the various preference of the user at the individ-

ual level
Providing insight realistically to the researcher to understand the
customer
Used to uncover features of a product that are valued by a custom-
er but are normally not available
Some disadvantages of conjoint analysis are as follows:

Process of carrying out conjoint matrix is complex
When the number of options are large, then the respondents may
get confused and resort to more simplified responses
7.6.5 Multi-dimensional scaling (MDS)
This is another technique which is widely deployed in the data analy-

sis techniques. In this method, a perceptual map is created on which
the special description of a respondent’s perception about a product,

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service or object is mapped. This type of analysis helps in revealing

certain results that are otherwise difficult to measure such as product
quality or the desirability of the product. Certain variables cannot be
measured very specifically so these are perceived and mapped cogni-
tively. The map would present the perception of the respondents.
Various uses of MDS are as follows:

The MDS technique can be used to determine the image of the
organisation among the customers. Additionally, this data can also
be compared to organisation’s perception of self.
This technique can be deployed to determine the market segmen-
tation as the researcher will be able to understand the various pa-
rameters required for market segmentation.
This technique is used to identify the gaps wherein new products
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can be introduced in the market.
This technique helps in analysing the impact of pricing among
various customers.
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14. MDS is an example of interdependency technique of data

analysis. (True/False)
15. What data analysis technique you would use if you have to
M
carry out research related to product development?

16. A ____________ co-relation exists between the product quality
and the sales of the product.
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Activity
Write a short note on the MANOVA test.
7.7 SUMMARY
A frequency distribution table depicts the various measurement
categories and the number of observations in each category.
Measures of variability is defined as a mathematical determination
of the extent to which the performance of the group as a whole
deviates from the mean or median. The most frequently used mea-
sure of variability is the standard deviation.
The measures of shape determine the symmetry and flatness of
the distribution of a data sample.
Hypothesis testing is defined as formal procedures used by statis-
ticians to accept or reject statistical hypothesis.

n o t e s
Crosstabs are commonly used in quantitative market research and

surveys and help identify trends.
When all the required information about the population (in the
form of parameters) is available with the researcher, then the
statistical tests are called parametric tests. On the other hand, in
non-parametric tests the researcher does not have any informa-
tion regarding the population and the associated parameters but
the test needs to be carried out to test the validity of the hypothe-
sis.
In dependence techniques there is one variable that is designated
as dependent variable and the rest of variable are independent.
On the other hand, in interdependency techniques, there are no
dependent and independent variables and all the variables are
treated equally.
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key words
ANOVA: It is method of analysis for determining the level of

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variations among two or more samples. The ANOVA can be one
way ANOVA or a two way ANOVA. In the two way ANOVA two
variables are used to assess the significant difference among
them.
Cluster analysis: It is a technique where clusters are formed
comprising heterogeneous variables. The main purpose of clus-
M
ter analysis is to identify the similarities among the variables

and thus form groups which have those similarities.
Conjoint analysis: It is a multivariate analysis technique which
is used by the researchers to determine the impact of the in-
N
dividual variable which have on the cumulative variable. For

example, while evaluating the price of a product, the customer
takes into account various parameters, such as quality, useful-
ness and so on to assess whether the quoted price is worth or
not.
Factor analysis: It is a process wherein the variables are
grouped under a factor which depicts the common pattern. In
other words, factor analysis is the process of reducing the num-
ber of variables having similar degree of correlation and which
can be clubbed under a factor.
Sampling: It is the process to select a part from an entire part
with the objective of collecting data for research purpose.
Scaling: It is the measurement technique that is applied in atti-
tudinal research process to gather the response of participants
to the research process.

n o t e s

1. Explain the commonly used display modes of frequency
distribution.
2. Describe the measures of location.
3. Discuss the measures of variability.
4. Elaborate on hypothesis testing.
5. Describe cross-tabulation in detail.
6. Write a brief note on t-test.
7. What is chi-square test? Explain in detail.
8. Explain conjoint analysis in detail.
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Topic Q. No. Answer
Statistical Analysis with Fre- 1. True
quency Distribution
2. Frequency distribution
graphs
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3. Box and whisker plot

4. c. Mode
5. a. Range
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6. Measures of shape
Introduction to Hypothesis 7. Hypothesis testing
Testing
8. False
Cross-Tabulation 9. True
10. Quantitative market research
Data Analysis Techniques 11. t-test
12. Kruskal-Wallis test
13. Parametric
Advanced Techniques 14. True
15. Conjoint analysis
16. Positive

1. The most commonly used frequency modes of distribution are
frequency tables and frequency distribution graphs. Refer to
Section 7.2 Statistical Analysis with Frequency Distribution.

n o t e s
2. The measures of location are mean, median and mode. Refer to

Section 7.2 Statistical Analysis with Frequency Distribution.
3. The measures of variability are range, standard deviation and
mean deviation. Refer to Section 7.2 Statistical Analysis with
Frequency Distribution.
4. Hypothesis testing is defined as formal procedures used by
statisticians to accept or reject statistical hypothesis. Refer to
Section 7.3 Introduction to Hypothesis Testing.
5. Crosstabs are commonly used in quantitative market research
and surveys and help identify trends. Refer to Section 7.4 Cross-
Tabulation.
6. T-test is the most frequently used data analysis test in market
research process. This test is used to determine population
S
parameters such as mean of the population and check whether it
significantly differs from the hypothesised value or not. Refer to
Section 7.5 Data Analysis Techniques.
IM
7. Chi-square test is applied when one nominal variable with two
or more values is available, sample size is large and when it is
required to check whether or not the number of observations in
each category correspond to a theoretical value (expected value
as per the hypothesis) or not. Refer to Section 7.5 Data Analysis
Techniques.
M
8. Conjoint analysis is a data analysis technique that is used in

marketing research and product development. Conjoint analysis
is used to determine the parameters which majorly influence
the decisions of the respondents. Refer to Section 7.6 Advanced
Techniques.
N

7.10
REFERENCE
SUGGESTED READINGS
Excel Books
E-REFERENCES
Manikandan, S. (2011). Frequency distribution. Journal of
Pharmacology and Pharmacotherapeutics, 2(1), 54. http://dx.doi.
org/10.4103/0976-500x.77120

n o t e s
Ori.hhs.gov. (2015). Data analysis. Retrieved 29 October 2015, from

https://ori.hhs.gov/education/products/n_illinois_u/datamanage-
ment/datopic.html
Stattrek.com. (2015). Hypothesis tests. Retrieved 29 October 2015,
from http://stattrek.com/hypothesis-test/hypothesis-testing.aspx
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C hapter
8
NEW PRODCUT DEVELOPMENT AND
TEST MARKETING
CONTENTS
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8.1 Introduction
8.2 New Product Development Process
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Activity
8.3 Techniques for Product Testing
Activity
8.4 Test Marketing
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8.4.1 Types of Test Marketing

8.4.2 Guidelines for Designing Market Tests
Activity
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8.5 Summary

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INTEGRATION OF MARKET RESERCH WITH

NEW PRODUCT DEVELOPMENT
In the recent past, the fast moving consumer goods (FMCG) seg-

ment turned out as the fourth largest sector in the Indian economy.
According to estimation, the market size of FMCG in India is ex-
pected to grow from US$ 30 billion in 2011 to US$ 74 billion in 2018.
FMCG goods are popularly known as consumer packaged goods
(CPG). These goods such as soaps, detergents, shampoos, tooth-
paste, shaving products, shoe polish, packaged foodstuff, house-
hold accessories and certain electronic goods are used frequently.
The enhanced awareness and changing lifestyles of individuals

act as key drivers for the FMCG sector. In addition, frequent con-
sumption and associated high return make these ventures more
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lucrative than the other. Every organisation needs a constant
stream of new ideas to grow in the market. The rate of innovation
ensures the success story of the organisation in the market facing
IM
cut-throat competition. Therefore, CPG companies are needed to
turn to market research so that they can better understand, incor-
porate and meet consumer needs.
These companies perform market research by adopting early stage

concept testing. It helps companies to innovate quickly with min-
imal investments. Early-stage concept testing helps CPG brands
M
in making smart decisions by building their focus. It enhances

the success rate of the expected product. These companies also
perform market research for package testing. It is important to
note that packaging is seen as one of the most influencing factors
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in today’s competitive world and plays a major role when a con-

sumer makes his/her purchasing decisions. Packaging decisions
can impact several aspects such as serving size, materials used
or unique elements added. Market research provides significant
help to companies in understanding what appeals more to their
customers while making purchasing decisions.
Market research is also performed by these companies for mak-

ing improvement in the existing products. Variations are needed
in the market to survive. Already established brands also need to
update their products with the on-going change in the demand for
customers. Making small changes and improvements to existing
CPG products is always seen as a significant part of the product
development process. It is estimated that 90% of product-related
market research is focused on making improvement in the exist-
ing products.
These companies can explore new markets for existing products.

It is not always required for a company to create new products.

NEW PRODCUT DEVELOPMENT AND TEST MARKETING 167
n o t e s
The creation of a new market is also seen as a profitable attribute.

Market research can help CPG companies find new markets.
CPG companies can identify opportunities by making an applica-

tion of market research. There are a number of resources that are
used by companies for gathering ideas for new products. Ideas for
new products can come from several sources such as employees,
industry and customers. Market research helps in the systematic
evaluation of product development efforts to compete in the market.
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learning objectives

>> Explain the concept of new product development process
>> Discuss various techniques of product testing
>> Describe the concept of test marketing
8.1 Introduction
In the previous chapter, you have studied about data analysis tech-
niques. Let us move further with the concept of new product develop-
ment and test marketing.
New product development is one of the most crucial parts of an organ-
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isation’s product policy. The satisfactory performance of the existing
product mix is not enough for any progressive organisation. An or-
ganisation always develops new products to get the maximum share
IM
of the market. In the age of advanced technology, the preferences of
customers change frequently, which, in turn, changes the demand for
different products available in the market. Thus, organisations have
to be vigilant in the changing environment where customers always
prefer better products and services. The response of organisations to-
wards such changes has paved the way for new product development.
M
A new product is one that opens a new market, replaces an existing

product or widens the market for the existing product. New product
development helps an organisation to grow and earn profit by replac-
ing old products with new technologically advanced products. Thus, it
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is important for an organisation to take care of successful launching of

new products to sustain itself in the market. A product can fail in the
market due to a lack of proper planning and market research. There
are many techniques and tools of marketing research that contributes
significantly towards product development. From idea generation to
the distribution of the product, there are several research tools that
make the task of the organisation easy by considering the time and
monetary constraints.
This chapter covers the concept of new product development process

in detail. In addition, various techniques for product testing are dis-
cussed. Lastly, the concept of test marketing is explained along with
various market tests.
NEW PRODUCT DEVELOPMENT

8.2
PROCESS
New product development is a systematic process of managing all
processes involved in getting a new product in the market. In other
words, it can be defined as an act of designing, forming and marketing

n o t e s
a new product or service. Organisations need to develop new products

in order to stay ahead of competition in the today’s dynamic business
environment. A number of factors need to be considered by an organ-
isation before actually developing a new product and introducing it
in the market. These factors include changes in technology, industry
standards, customer preferences, etc.
Introducing a new product is important for the success of any or-

ganisation. However, it is not a simple process for any organisation
to bring a new product in the market. This is because new product
development requires anticipating market trends in the long run, im-
plementing new designs and processes and making capital commit-
ment. A marketer needs to follow a set of procedures before bringing
a product into the market. A product can fail in the market due to lack
of proper planning and market research. For the successful launch of
a product, an organisation needs to follow a number of steps, which
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are listed in Figure 8.1:
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Step 1 • Idea Generation
Step 2 • Idea Screening
Step 3 • Concept Development
Step 4 • Business Analysis

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Step 5 • Product Development
Step 6 • Test Marketing

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Step 7 • Commercialisation
Figure 8.1: New Product Development Process
These steps are discussed as follows:

Idea generation: This is the most important stage in the new prod-
uct development process as this stage involves collecting ideas
from various sources. These sources include individuals, groups
or communities that are willing to provide their ideas. Ideas are
generated using various techniques. Some of them are explained
as follows:
Brainstorming: This technique is practiced in a group of 10 to
12 people. These people are asked to generate a pool of ideas
based on four general rules. These rules are avoiding criticism;
focusing on the quantity; being as creative as possible and
combining ideas to arrive at a comprehensive solution.

n o t e s
Focus group: In focus groups, there are 8 to 12 members who are

provided with a topic for discussion related to their field. They
are informed about the motive for conducting discussion and
various aspects that would be covered during the discussion.
Surveys: A marketer tries to seek information from prospects
about their needs and desires. This helps the marketer in iden-
tifying market trends and opportunities to develop a new prod-
uct. In this method, the marketer generally prepares a ques-
tionnaire regarding some common needs and preferences of
prospects. Surveys can be conducted either by approaching
prospects in person or reaching out to them through emails,
Web chats, videoconferencing, etc. Based on the responses re-
ceived in surveys, the attributes of the product are decided.
Idea screening: This is the next step in the product development
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process wherein the generated ideas are analysed and filtered. The
selection of the idea depends on various factors, such as return on
investment (ROI) to be generated if a particular idea is selected,
the feasibility of the idea, the availability of raw materials, etc.
IM
Concept development: It involves technically developing an
idea on the paper. In this step, an organisation takes the decision
whether the idea should be developed into the final product or not.
Concept development is concerned with the usage, segment, pri-
mary benefits and profitability of a product before it gets launched
in the market.
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Business analysis: This step is concerned with analysing the via-

bility of the product to be developed. In particular, this stage takes
into account various aspects such as profitability, marketing mix
and positioning of the product. This step also involves analysing
N
whether there is a demand for the product or not in the market.

Product development: This step is related to generating a proto-
type or sample product. This sample product is tested in the market
in order to determine its demand and get feedback from customers.
If the test is successful, the product is introduced in the market.
Test marketing: In this step, organisations roll out the sample
product in the market to determine the possible success of the
product and effectiveness of a marketing campaign before com-
mercialising the product. This step also provides an organisation
insight into product performance, level of customer satisfaction,
distribution requirements, etc. A detailed explanation of the con-
cept of test marketing is given in the later sections of the chapter.
Commercialisation: This is the final step that involves launching
the product in the market at a large scale. In this step, the organi-
sation decides how, when, where and to whom the product should
be distributed. The ‘how’ part deals with the decisions related to
introductory market strategies. The ‘when’ aspect is related to the
exact timing of commercialisation of the new product in the mar-

n o t e s
ket. The ‘where’ aspect deals with strategies related to geograph-

ical areas; the organisation must decide where it wants to launch
its new product. The ‘to whom’ aspect deals with the target market
prospects. The organisation must be clear about whom it wants to
sell its product to.
1. New product development is a systematic process of managing

all processes involved in getting a new product in the market.
(True/False)
2. ________ is the most important stage in the new product
development process as this stage involves collecting ideas
from various sources.
3. Test marketing involves technically developing an idea on the
S
paper. (True/False)
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Activity
With the help of the Internet, collect data on the product develop-
ment efforts of the following organisations:
Nestle
P&G
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8.3 TECHNIQUES FOR PRODUCT TESTING

Product testing can be defined as a process of evaluating the perfor-
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mance of the product introduced in the market. It is also known as

consumer testing or comparative testing. Product testing can be per-
formed using various techniques. Some of these techniques are shown
in Figure 8.2:
Monadic Research Design
Sequential Monadic Research Design
Paired-comparison Test
Repeated Pairs Test
Triangle Test
Figure 8.2 Types of Techniques for Product Testing

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Let us discuss these techniques in detail.

Monadic research design: One of the best methods for product
testing or product optimisation is monadic testing. Under this
method, product testing takes place by providing one product to
a respondent at a time to retrieve the associated benefits. Giving
one product at a time to a respondent helps in gaining his/her full
attention and obtaining the most accurate and actionable diagnos-
tic information regarding the product. Unlike paired-comparison
tests, interaction between products is eliminated. For instance,
if products having strong flavour/fragrance such as perfume and
chocolates are tested simultaneously, the accurate result would be
difficult to retrieve.
Sequential monadic research design: It is the revised version of
monadic research design that ensures reduction in the cost. In the
sequential monadic research design, two products are evaluated
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one by one. A respondent evaluates two products in a sequence.
This method brings the same advantages as pure monadic testing
along with reduced cost incurred on testing two products separate-
IM
ly. However, lower test scores are obtained under sequential mo-
nadic design as compared to a pure monadic test. It is important
to note that the comparison of the results obtained from sequential
monadic tests cannot be compared with results retrieved from mo-
nadic tests. Like paired-comparison testing, there are chances of
‘interaction effect’ to be visible in the sequential monadic designs.
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For instance, if one of the two products is exceptionally good, the

other product would certainly score the least scores and vice versa.
Paired-comparison test: In this method, a consumer is asked to
use two products so that he/she can let the marketer know which
one is better. This technique is considered to be a sensitive testing
N
technique because of its feature of measuring very small differenc-

es between the two products. In addition, the paired-comparison
test can be conducted at lesser cost than other methods because
products are checked in a sample size. It is important to note that
this method is heavily influenced by the ‘interaction effect’. This
leads to the impact on the scores of the test product of any varia-
tions pertaining to the control product.
Repeated pairs test: This test is the revised version of the
paired-comparison test. Under this method, the respondent of the
paired-comparison test is given another test of repeated pairs test.
In the second test, the labels of the products are removed so that
the elimination of discrimination (if any) can take place and the
honest outcome can be retrieved towards the product/concept. It
is important to note that if a respondent chooses different products
in two different tests, then his/her response would not be consid-
ered in the final outcome. For instance a respondent chooses prod-
uct having label ‘A’ in the paired-comparison test but in another
test that is repeated pairs test, he/she chooses product ‘B’ that was
not having any label. In this case, the response of this respondent

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would be tagged as discriminatory and would not be counted for

the final evaluation.
Triangle test: This test is carried out to determine variation in
different products. Under this method, three products are given to
every respondent and they are asked to taste all the three products
and choose the product that is different from the other two. The
triangle test helps in identifying the respondents who can consis-
tently discriminate and choose the product that is different from
the other two. These discriminators are included in small expert
panels or sensory panels that assist in research and development.
These panels evaluate the product formula if a particular ingredi-
ent or processing is changed by spotting a detectable difference
in the final product. This test contributes significantly in quality
control by ensuring the uniformity in products manufactured at
different locations.
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4. In the ________, two products are evaluated one by one.

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a. sequential monadic research design
b. Monadic research design
c. Paired-comparison test
d. Repeated pairs test
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5. Repeated pairs test is carried out to determine variation in

different products. (True/False)
6. Under ________, product testing takes place by providing one
product to a respondent at a time to retrieve the associated
N
benefits.
Activity
With the help of different sources, gather information on product

testing efforts of any top 10 FMCG companies. Also, find informa-
tion on product testing techniques used by them.
8.4 TEST MARKETING

After a product is developed and tested, the next stage is test market-
ing, which is a process of determining whether the product would be
accepted in the market or not. As discussed earlier, a sample product
is introduced in the market to determine its possible success and ef-
fectiveness of a marketing campaign before producing the product at
a large scale. In this way, test marketing helps in reducing the risk of
product failure when it hits the market. Test marketing is done in a
controlled and limited manner. If the results of the test are favour-
able, the organisation goes ahead with strategic decisions otherwise

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another course of action is taken. The following are the features of test
marketing:
Management control tool: Test marketing is a management con-
trol tool, which is used to assess the response of the product when
it is introduced in the market. This saves the cost and the efforts in
case the product fails to make an impact in the market.
Predictive research tool: Test marketing acts as a predictive re-
search tool as it helps in anticipating the future demand for the
product. In other words, it is through test marketing that manag-
ers are able to determine the likely impact of the product among
the masses.
It is important to consider the appropriate location, time and channel

for performing test marketing of the product in order to obtain satis-
factory results.
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8.4.1 TYPES OF TEST MARKETING
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Test marketing can be different in different organisations depending
on the type and features of a product, time of the test, associated cost,
etc. The following are some types of test marketing commonly per-
formed by organisations:
Standard test marketing: Under this, a small number of represen-
tative cities are chosen by an organisation where test marketing
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would be performed. After the selection of the cities, marketing

campaigns are run and consumer and distributor surveys are per-
formed in these cities to measure the performance of the product.
Controlled test marketing: In this technique, test marketing is
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carried out in a controlled environment wherein shopkeepers are

asked to store a product in exchange of a certain amount of fee. Af-
ter that, the customer buying behaviour is observed. This shows the
product’s success with respect to competitors’ products.
Simulated test marketing: A shopping environment is created to
test a new product. It helps in observing customers’ buying be-
haviour, measuring the effectiveness of advertising messages and
evaluating the efficiency of promotional activities of the organisa-
tion as compared to that of market competitors.
Sales wave research test marketing: In this method, first an or-
ganisation offers its product free of cost so that the prospective buy-
er can use that product. After that, the organisation offers its prod-
uct at reduced prices and analyse if its product is purchased against
the competitors’ product or not. In this way, this process helps the
organisation to determine the response based on the competitors’
product and note down how many people are buying the product.
Alpha test marketing: This is the type of test marketing which
is carried out within the organisation’s premises with the help of

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test engineers, employees and their families. A group of employees

or staff members known as test group is selected on the basis of
some criterion and then they are asked to provide responses to the
product. The main aim is to gauge the degree of the success of the
product. Though this is a crude method, the results are not conclu-
sive evidence of the success of the product due to the fact that the
audiences are internal.
Beta test marketing: This is another technique which is deployed
in the test marketing of the product. Unlike alpha test marketing, re-
spondents of the beta marketing include external individuals. This
process produces more unbiased response and enables the organi-
sation to evaluate the correct response of the participants. The main
objective of this test is to incorporate consumer perspectives into
the product before releasing it in the market to make it a success.
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8.4.2 GUIDELINES FOR DESIGNING MARKET TESTS
For ensuring a high success rate, a market test should be designed by

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keeping in mind the following guidelines:
A test market must be selected in a way that it represents the
whole market. If this is not taken into consideration, the whole
test marketing process would be futile and will not produce the
desired results.
A test market must be such that it is functional for a sufficient
M
amount of time preferably for at least a year. This is one of the most
important aspects as the organisations will be able to understand
the market at different periods of time in a year.
A test market must be controlled in an effective and efficient man-
N
ner. If the variables under study are not controlled, the results ob-
tained from the process will not be commensurate with the objec-
tive of the test market.
A test must be designed in such a manner that one variable can be
studied at a time. Testing several variables may provide obscure
solutions.
7. After a product is developed and tested, the next stage is test

marketing, which is a process of determining whether the
product would be accepted in the market or not. (True/False)
8. Under ________, a group of employees or staff members
known as test group is selected on the basis of some criterion
and then they are asked to provide responses to the product.
9. Unlike beta test marketing, respondents of the alpha marketing
include external individuals. (True/False)

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Activity
With the help of the Internet, find out real-life examples of any three
Indian companies that have recently used alpha testing.
8.5 SUMMARY
New product development is a systematic process of managing all
processes involved in getting a new product in the market.
The new product development process includes several stages
namely idea generation, idea screening, concept development,
business analysis, product development, test marketing and com-
mercialisation.
Under the monadic research design method, product testing takes
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place by providing one product to a respondent at a time to re-
trieve the associated benefits.
Sequential monadic research design is the revised version of mo-
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nadic research design that ensures reduction in the cost.
In the paired-comparison test, a consumer is asked to use two
products so that he/she can let the marketer know which one is
better.
The repeated pairs test is the revised version of the paired-com-
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parison test.
Triangle test is carried out to determine variation in different
products.
After a product is developed and tested, the next stage is test mar-
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keting, which is a process of determining whether the product

would be accepted in the market or not.
Test marketing is a management control tool, which is used to as-
sess the response of the product when it is introduced in the mar-
ket.
Test marketing acts as a predictive research tool as it helps in an-
ticipating the future demand for the product.
Under standard test marketing, a small number of representative
cities are chosen by an organisation where test marketing would
be performed.
In controlled test marketing, test marketing is carried out in a
controlled environment wherein shopkeepers are asked to store a
product in exchange of a certain amount of fee.
Alpha test marketing is the type of test marketing which is carried
out within the organisation’s premises with the help of test engi-
neers, employees and their families.

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Unlike alpha test marketing, respondents of the beta marketing

include external individuals.
key words
Focus group: It refers to a group of people gathered for participat-

ing in a discussion about a product before it is launched. This dis-
cussion helps in collecting feedback for products to be launched.
Marketing mix: It refers to a set of actions taken by an organi-
sation for promoting its brand or product in the market.
Product optimisation: It refers to a practice of modifying
a product so that it can turn out to be more efficient, cost effec-
tive, desirable or innovative so that the product can provide a
competitive advantage to the organisation.
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Prospect: It refers to a potential buyer or customer.
Return on Investment (ROI): It refers to the expected return
earned on the investment. It is expressed as a percentage and is
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used for making financial decisions.

1. Explain the process of new product development.
2. Differentiate between the monadic research design and
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sequential monadic research design.

3. Write a short note on triangle test.
4. Define test marketing.
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5. Discuss guidelines for designing market tests.
Topic Q. No. Answer

New Product Development Process 1. True
2. Idea generation
3. False
Techniques For Product Testing 4. a. sequential monadic
research design
5. False
6. Monadic research design
Test Marketing 7. True
8. Alpha test marketing
9. False

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1 The new product development process includes several stages,
namely idea generation, idea screening, concept development,
business analysis, product development, test marketing
and commercialisation. Refer to Section 8.2 New Product
Development Process.
2. Under the monadic research design method, product testing
takes place by providing one product to a respondent at a time
to retrieve the associated benefits. On the other hand, in the
sequential monadic research design, two products are evaluated
one by one. Refer to Section 8.3 Techniques for Product Testing.
3. This test is carried out to determine variation in different
products. Refer to Section 8.3 Techniques for Product Testing.
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4. After a product is developed and tested, the next stage is test
marketing, which is a process of determining whether the
product would be accepted in the market or not. Refer to Section
8.4 Test Marketing.
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5. A test market must be selected in a way that it represents the
whole market. If this is not taken into consideration, the whole
test marketing process would be futile and will not produce the
desired results. Refer to Section 8.4 Test Marketing.

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8.8
REFERENCE
SUGGESTED READINGS
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Beri, G.C., (2005), Marketing Research, Tata McGraw Hill Publish-

ing Company Limited.
Aaker, D., Kumar, V., & Day, G. (1998). Marketing research. New
York: Wiley.
Burns, A., & Bush, R. (2000). Marketing research. Upper Saddle
River, N.J.: Prentice Hall.
E-REFERENCES
Skarra,. (2006). Product Development. CFW. http://dx.doi.
org/10.1094/cfw-51-0277
Valentin, E. (1994). Commentary: Marketing Research Pitfalls
in Product Development. Journal Of Product & Brand Manage-
ment, 3(4), 66-69. http://dx.doi.org/10.1108/10610429410073147

n o t e s
Ernst,H., Hoyer, W., & Rübsaamen, C. (2010). Sales, Marketing,

and Research-and-Development Cooperation Across New Prod-
uct Development Stages: Implications for Success. Journal Of
Marketing, 74(5), 80-92. http://dx.doi.org/10.1509/jmkg.74.5.80
Nash, B. (2013). Product Development. Journal Of Marketing, 1(3),
254. http://dx.doi.org/10.2307/1245653
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C hapter
9
ADVERTISING RESEARCH
CONTENTS
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9.1 Introduction
9.2 Concept of Advertising Research
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9.2.1 Copy Testing and Recalling Ads
9.2.2 Comprehension, Opening and Punch/Base Line Research
9.2.3 Designing Sample Ad Campaigns
9.2.4 Stages in Advertising Research
9.2.5 Research on Advertising Planning, Advertising Objectives and Media
Experiments
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9.2.6 Advertising Research for Monitoring and Control

9.2.7 Day After Recall (DAR) Test and Tracking Studies
9.2.8 Consumer Panels
9.2.9 Campaign Tracking Research
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Activity
9.3 Types of Advertising Research
9.3.1 Print
9.3.2 Outdoor
9.3.3 TV/Cinema
9.3.4 Mobile Outdoor Media
Activity
9.4 Determining the Effectiveness of the Advertising Medium for Different
Products and Industries
Activity
9.5 Using NRS and IRS in Advertising Decisions
Activity

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CONTENTS
9.6 Summary
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ADVERTISING RESEARCH 183
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ADVERTISEMENT CAMPAIGN FOR A SOCIAL CAUSE
A leading ngo located in the ncr region was entrusted the job
of educating consumers about their rights on the products pur-
chased by them. The NGO had been receiving such complaints
of products in the fmcg sector. The complaints were mainly re-
lated to the products found on the shelves despite passing their
expiration dates. They were brazenly being sold without any con-
cern for public safety and legal obligations. Also, in some cases,
consumers were asked to pay more than the printed mrp of the
product. And in some cases, the cost of the products was deliber-
ately erased so that consumers could be overcharged. Consumer
forums complained several times to the concerned governmental
authorities but to no avail. In fact, one of the shopkeepers even
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threatened consumers with dire consequences if they registered
a complaint.
The NGO decided to intervene on behalf of the consumers. It

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embarked on an advertising campaign that included distribution
of leaflets in the newspapers, demonstrations and road shows to
highlight the irregularities and illegal practices followed by the
shopkeepers. Moreover, the NGO floated advertisements in local
TV channels and the radio. The advertising campaign had the
desired effect and the shopkeepers decided to withdraw the old
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products and began to self their products at the MRP.
Thus, it can be seen that advertisement campaigns can be an ef-

fective tool in bringing awareness and change in society.
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n o t e s
learning objectives

>> Describe the concept of advertising research
>> Explain the various types advertising research
>> Discuss the effectiveness of the advertising medium for dif-
ferent products and industries
>> Explain the use of NRS and IRS in advertising decisions
9.1 introduction
In the previous chapter, you studied the process of new product devel-
opment and test marketing of products. In this chapter, we will study
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some other important concepts of marketing research that come un-
der the field of advertising research.
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Businesses today are running in a highly unstable and unpredict-
able environment characterised by high competition and challenges
such as political or economic meltdowns or instability, recession etc.
Businesses also need to face challenges posed by technological ad-
vancements and develop various strategies and tactics to meet such
challenges. A critical aspect that impacts the success of a business is
advertising, which is an activity that comes under marketing. The field
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of advertising has gained a lot of importance owing to its capability of

impacting the sales and profits of a company. It is therefore important
that different aspects of advertising are fully supported by proper re-
search work, also called advertising research.
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Market research that is specifically focussed on advertising is known

as advertising research, and it helps companies in determining the pa-
rameters that can be used to sell their products and thereby increase
their market share. Advertising research provides information about
the effectiveness of the advertising medium, impact of advertisements
in changing the behaviour of consumers, etc.
This chapter discusses various aspects of advertising research such as

copy testing, designing sample advertising campaigns and pre-testing
and post-testing of ads. It also explains various types of advertising re-
search, effectiveness of the advertising medium for different products
and industries and the use of National Readership Survey (NRS) and
Indian Readership Survey (IRS) data in advertising decisions.
9.2 concept of advertising research

Advertisements are one of the most important components of any
business because they can affect how people think and behave. Ad-
vertisements can also rouse emotions. Generally, however, in the

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context of business, an advertisement helps in informing the people

about a product or its utility. The role and importance of advertising
have grown considerably and businesses are spending large amounts
of money in advertisement research. Advertising research is done to
gain insight into various aspects of advertising. Such insight can be
used to increase the market share of a business or influence the public
in general.
In common parlance, advertisement research is the process of con-

ducting research into advertising practices so that the results of the
research can be used to increase the effectiveness of the advertise-
ments. In other words, advertisement research is used to provide in-
sights into different aspects of an advertisement that are integral for
conveying the intended message to the audience or for generating the
desired impact on the masses and compelling them to buy the adver-
tised product. Advertising research is a specialised form of marketing
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research.
The purpose of advertisement research is to determine the various pa-

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rameters that impact the audience’s decision regarding the purchase
of a product or service. These parameters can be emotional, societal,
financial, psychological, etc., which influence the buying decision of
people in general.
9.2.1 Copy testing AND recalling ads

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The term ‘copy testing’ is frequently used in advertising research. The

word ‘copy’ basically refers to all the elements of an advertising mes-
sage, whether printed or broadcast, including the headings, message,
pictures, captions, etc. Copy testing refers to the process of analysing
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the entire content of an advertisement (copy) to determine its effec-

tiveness and impact on the people. Copy testing determines the effec-
tiveness an advertisement on several parameters, such as the time for
which it is run on different media after its release, its frequency, etc.
Copy tests are conducted before the advertisement is released so that
any potential problem areas (such as content that may offend a certain
section of society) can be identified and corrected. Another problem
may be an advertisement targeting a wrong section of society which,
if not corrected, would defeat the purpose of the ad.
Copy testing is conducted in two stages. In the first stage, the adver-
tisement undergoes a pre-release evaluation (pre-tests) to judge its
potential effectiveness and in the second stage, tests are conducted af-
ter the advertisement has been released to determine its effectiveness
in terms of certain pre-defined parameters.
Some of the methods of copy testing used before an ad is released

(pre-tests/before tests) are as follows:
Consumer jury research: This method is commonly used to give
a rating to an advertisement by a target group that consists of pro-

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spective customers of the product being advertised. In this meth-

od, the views of all the prospective customers are collected on
various aspects of the advertisement to determine its impact and
effectiveness. For example, an advertisement about the launch of
a fast food outlet may be shown to young people to know how they
feel about it.
Rating scales: This method is used to assess an advertisement
against certain standards that may be set by those who have cre-
ated the advertisement or by certain government bodies. Rating
scales use certain standards (such as visual appeal) to measure
the effectiveness of a copy. Each standard is assigned a numerical
weight. A numerical score of an advertisement is the total of the
individual scores for all the standards.
Portfolio tests or recall ads: In this method, a number of dummy
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advertisements are put together with the actual advertisement in
the form of a portfolio. Participants are asked to go through the
portfolio and recall and the advertisements. This exercise is help-
ful in ascertaining the strength or impact of the advertisement on
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the basis of their recall value.
Psychological tests: Psychological tests are conducted on partic-
ipants to measure and obtain certain parameters of an advertise-
ment by using specialised equipment. This method is used to de-
termine the strength of the various psychological factors such as
fear, insecurity, happiness, etc. that impact the respondents.
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Simulated sales tests: In this method, participants are exposed

to different advertisements using direct mail or through point-of-
purchase displays. Groups of sample stores are selected and dif-
ferent copies of advertisements (different advertisements are used
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in different stores) are placed in the stores. The level of sales after
the placement of the advertisements are measured and compared
to the sales when no advertisements were used in the stores. The
advertisement(s) that helped to get the highest sales are consid-
ered the most effective. This is one of the simulation techniques
that are deployed to determine the relative strength of different
advertisements on the sales of a product.
Some of the parameters on which copy testing is done after the re-
lease of an advertisement (post-tests/after-tests) are as follows:
Recognition test: This test is used to determine the degree of rec-
ognition of an advertisement by a participant. Participants are
shown a copy of a magazine or newspaper that they have read and
which contains an advertisement. The different measures of rec-
ognition (such as seen/noted/read) are taken. Here, seen refers to
the percentage of readers who are aware of the advertisement but
have not gone through it; noted refers to the percentage of readers
who have read a part of the advertisement and read refers to the
percentage of readers who have read a major part or the whole

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advertisement. This test helps to determine whether the advertise-

ment has been able to imprint itself on the minds of the people or
prospective buyers and therefore justifies the cost incurred on the
advertisement.
Recall tests: This is another method that is used to determine the
degree to which a participant recalls an advertisement. Here, the
participants are given hints about the advertisement such as me-
dium used, product class and the sponsors. Recall tests are of two
types, aided recall and unaided recall. In an aided recall test, par-
ticipant may be provided a picture of the advertisement in which
the product and brand name are hidden. On the other hand, in
an unaided recall test, only the name of the product is provided
to the participant. The effectiveness of the ad is determined by
how well the participant is able to recall what the advertisement
is about. The greater the recall of an advertisement, the greater is
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the chance that a person will be motivated to buy the product.
Sales tests: This is another method that is used to determine any
changes in the level of sales after the release of an advertisement.
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Sales tests are of two types. In the first, alternative advertisements
are used. In the second, two groups of participants are used. A
brief description of the two types is given below:
Use alternative advertisements: This test is similar to simu-
lated sales tests, where copies of advertisements are placed in
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certain stores. The idea is to compare the sales before and after
the placement of the advertisements. The advertisement that
earns the highest sales is considered the best one.
Use of two similar groups: In this test, two groups of partic-
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ipants are required. One group is shown a TV advertisement

of a trailer located near a supermarket. The other group is not
shown the advertisement. Then, both groups are given dis-
count coupons. They are allowed to buy a product belonging to
a particular category of any brand of their choice. The test then
finds out the number of people who have tried to measure how
much influence the TV advertisement has on the products pur-
chased by the participants. Also, does the advertisement make
any difference in the way the two groups have purchased their
products?
9.2.2 Comprehension, Opening and Punch/Base line

Research
In order to create an effective advertisement, organisations and mar-

ket researchers focus on certain elements of the advertisement. These
elements are:
Comprehension: Researchers usually study the entire content of
an advertisement and evaluate what can be interpreted from it.

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Comprehension simply refers to the interpretation of an adver-

tisement. Researchers may ask participants how they interpret an
advertisement, whether they can understand the central theme
of the advertisement, etc. How people comprehend an advertise-
ment provides vital clues and insights into the type of content that
should be developed while designing advertisements. It is import-
ant for an advertisement to be interpreted correctly in order to
send the correct message to the people. For example, the Jago Gra-
hak Jago advertisement is designed to make people aware of their
rights and duties as an Indian citizen.
Opening: The starting of an advertisement is very crucial because
it decides whether the consumer is going to continue to listen to
or read the rest of the advertisement or not. Therefore, a lot of re-
search goes in making the opening of an advertisement attractive
and effective so that it succeeds in capturing the interest of the
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intended audience. The interest of the people can be captured by
various means such as background music, themes, sketches, etc.
For example, having a catchy and attractive picture in a print ad-
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vertisement often increases the impact of the advertisement. Pen-
guin Books advertised and promoted their audio books using an
innovative and eye-catching ad campaign. It showed a headphone
that with the photos of great writers like William Shakespeare,
Mark Twain and Oscar Wilde. The picture of the Penguin audio
book with the innovative headphone is shown below:
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(Source: http://www.creativebloq.com/inspiration/print-ads-1233780)
Punch line or base line: A punch line is a short, memorable or

catchy line or phrase that is integral to the meaning of an adver-
tisement. People often remember ads because of their punch lines.
Advertisements with great punch lines are likely to stay in the
mind and may even ultimately persuade customers to buy the ad-
vertised product or service.

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Some examples of ads with great punch lines include Godrej hair
dye with the punch line ‘Kaato, gholo or laga lo’. Another example is
that of the Colgate ad tag line in Hindi: ‘Kya aapke toothpaste mein
namak hai?’
9.2.3 Designing Sample AD Campaigns
An advertising campaign refers to a series of advertisements that are

based on a particular idea or theme. The ad campaign is broadcast
through various media channels. The advertisement may focus on a
particular product or a group of products. Ad campaigns are of great
importance to businesses because they help them in developing the
best strategies for marketing their products and services. Ad cam-
paigns are made to promote products/services by using either the of-
fline mode or the online mode. Before developing an ad campaign, the
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company must evaluate its current position in the market and also de-
cide as to what it wants to achieve through the campaign. The design
of the ad campaign must be such that the unique features and bene-
fits of the product or service offered by the company are highlighted
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clearly.
Let us discuss how an advertising campaign is created. The following

are the generic steps for preparing a sample advertising campaign:
1. Researching: The first step in designing an advertisement is
to conduct market research. It is essential to conduct market
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research for the product that the company wants to advertise in

order to derive critical data such as product demand, company’s
competitors, etc.
2. Knowing the target audience: After doing the market research,
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the company needs to decide the target group or target audience

for the advertisement. It is important to decide the target audience
because different advertisements are meant for different target
audiences. For example, advertisements of baby products are
targeted at young couples, especially expecting mothers or those
with small babies. Most ads of baby care products highlight the
unique bond between the mother and the child.
3. Setting the budget: The company has to set aside a particular
amount of money for developing the ad campaign. The company
must also ensure that it does not overshoot this budget and that
the amount to be spent would be compensated in terms of sales
derived from the advertisement.
4. Deciding a theme/idea: In this step, the theme or central idea
of the advertisement is prepared. In addition, other elements
such as music, voice, message, colour, etc., to be used in the
advertisement are also decided.
5. Selecting the media: This step involves deciding the media
channels for the advertisement and the duration and frequency
of the advertisements in the channels.

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6. Media scheduling: It means deciding when the ad is to be aired

so that it is visible to the target audience at the right time in order
to generate the maximum impact.
7. Executing the campaign: This step involves executing or rolling
out the entire set of advertisements and then obtaining feedback
about their impact on the sales of the concerned company.
9.2.4 Stages in Advertising Research
Advertising research is a specialised field of marketing research. It

endeavours to study and research various aspects related to the cre-
ation of an advertisement. Businesses and advertising agencies use
information gained from advertising research to design and imple-
ment better advertisements, which ultimately lead to greater profits
for the business.
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Research in advertising is a systematic approach that follows certain
well-defined stages or steps. These steps can be listed and explained
as follows:
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1. Briefing about the product or the service: The first step
involves briefing the ad researcher giving him/her an overview
about the product or service to be advertised. This process sets
the advertising campaign into the motion. It usually involves
carrying out the SWOT (Strength, Weakness, Opportunity and
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Threat) analysis of the product or service to identify its unique

features and highlight them in the advertisement. This step is
essential because a wrong briefing can result in costly wastage
in terms of time and money and resources.
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2. Determining the objective of the advertisement: This step in

advertisement research is very important because it is here that
the objectives that the concerned company wants to achieve are
elucidated.
3. Determining the target audience: Before creating an
advertisement, it is necessary to determine its target audience
because advertisements are always made with particular
audiences in mind. In this step, the researcher tries to determine
why a particular target audience would require the product/
service being advertised. Additionally, the possible reasons
for the target audience not buying the product are also taken
into consideration. The preferences of the customer, his/
her likes and dislikes are also determined. Once the target
audience is determined, it is easy to frame the other elements
of the advertisement such as tag line, punch line, etc. Take a
chocolate ad, for example. Although chocolates are generally
associated with children, the focus of the advertisement can be
everyone who likes chocolates. Therefore, the content or focus
of the advertisement must also be in accordance with the target
audience.

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4. Selecting the media: This step involves determining the

media for launching the advertisement. Ads can be given in
print media (newspapers, magazines etc.) as well as electronic
media (television, radio, the Internet, etc.) For example, an
advertisement that has a lot of visual appeal, such as a car or
motorcycle is suitable for TV. The vehicle can be shown being
driven in different locations and conditions to highlight its
robustness. On the other hand, an ad for the launch of a new
book, for example, is better shown in print media.
5. Designing and creating the advertisement: In this step, the
design of the advertisement is prepared and the advertisement
is created. It is important to create an advertisement keeping in
mind its objectives and target audience.
6. Deciding the place and time of release of the advertisement:
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After the advertisement has been created and the media on which
it will be launched has been decided, it is important to decide the
place and the time of launch of advertisements. For example, an
advertisement for Diwali mega sale must be launched at a time
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just before Diwali.
7. Evaluating the advertisement objectives: In the final step, the
response of the advertisement is measured. This will help in
ascertaining whether or not the objectives of the advertisement
were achieved or not. The response is ascertained by the feedback
the advertisement gets and ultimately translates into increased
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sales for the company.
9.2.5 Research on Advertising planning,

Advertising Objectives and Media
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Experiments
Advertising planning refers to the entire process of advertising start-

ing from conceiving the idea of the advertisement right to the point
when the advertisement is removed from the market after it has served
its intended purpose. Advertising objectives refer to the objectives or
goals that a company wants to achieve through the advertisement.
The success of advertising objectives depends on how much research
and planning have gone into making them and how successful they
have been in selling the product.
Media experiment refers to the process by which a company decides

the appropriate media channel for its advertisement. It is an exercise
where a company tries several media channels that are available to it
in the market for launching its advertisements. This enables the com-
pany to identify those channels that produce the maximum impact
on the masses and thus help to generate the maximum sales. Con-
sequently, the company can focus on these channels and withdraw
its advertisement from those channels that have been unsuccessful in
generating the desired levels of sales.

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Market research can provide useful insights into the process of ad-
vertising planning. In general, it can provide insight into how the ob-
jectives of an advertisement are set, and the criteria for setting these
objectives. Market research related to media experiments includes an
analysis of the following aspects:
Media vehicle distribution: A media vehicle refers to the particu-
lar mode of media that is used by a company to run its advertise-
ments. Media vehicle distribution refers to the density of the media
in terms of circulation or popularity among the masses, for exam-
ple, how many people read a particular newspaper or magazine or
how many viewers watch a particular programme on television.
On the basis of the distribution or spread of a media, companies
can select the appropriate media vehicle for their advertisements.
Media vehicle audience or exposure: This refers to the number of
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people exposed to an advertisement through a particular media.
Note that generally, this media is taken to be the newspaper be-
cause more people use the newspaper as a medium of information
than any other media.
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Advertising exposure: This refers to the number of people who
are exposed to a specific advertisement. This number is usually
less than that of the people exposed to a particular media. This is
because a person who reads the newspaper or watches television
may not have come across a particular advertisement.
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Advertising perception: This refers to the number of people who

perceive (see/hear/read) a particular advertisement. This number
of people is usually less than that of advertising exposure.
Advertising communication: This refers to the number of people
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who have understood or grasped the message that was commu-

nicated by the advertisement. This number of people is less than
that of advertising perception.
Sales response: This refers to the number of people who actually
buy the product as a result of the advertisement. This number of
people is less than that of advertising communication.
9.2.6 Advertising Research for Monitoring and

Control
An advertising campaign must be monitored and controlled carefully

because in the absence of proper management, the entire advertis-
ing exercise would be futile. With proper management, various issues
that may creep in during the process of making the advertisement are
identified and rectified before they become major problems. Manage-
ment involves monitoring and control of advertisements. Research is
often conducted on the processes involved in the management and
control of the advertising process in order to remove any flaws in the
process and make it efficient.

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9.2.7 DAY AFTER RECALL (DAR) TEST and Tracking

Studies
Tracking study or ad-tracking is a technique to evaluate the effective-

ness of advertisements. It is a post-testing technique that evaluates
the performance of a particular advertisement, including the level of
advertising awareness and attitude of the brand being advertised. The
Day After Recall (DAR) test is one such test that helps to track the
performance or effectiveness of an ad. The concept of DAR is widely
used in advertising research. In the DAR test, effectiveness is evaluat-
ed on the basis of the number of people who are able to recall an ad-
vertisement after it has been shown on a particular media. The main
purpose of DAR is to determine the impact of the advertisement and
the interest it generates in the masses, and whether that interest has
translated into increased sales of the product advertised.
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The DAR test provides useful information to the researcher about the
advertising process. It helps in ascertaining whether people are influ-
enced by the content of the advertisements. Such knowledge helps
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companies determine appropriate strategies while creating advertise-
ments.
9.2.8 Consumer Panels
In order to design an effective and efficient advertising campaign,

market researchers are increasingly using consumer panels.
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A consumer panel refers to a group of consumers from different strata

of society. Consumer panels are generally recruited by research agen-
cies, and their job is to answer questions related to products. In the
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case of advertising, they are asked questions about advertisements

as well as judge their effectiveness. The main purpose of a consumer
panel is to determine the behaviour of the consumer towards adver-
tisements.
Consumer panels help companies or researchers know the following

about advertisements:
The opinion of consumers about advertisements that are about to
be released
The opinion of consumers about advertisements that have already
been released
Areas of improvement in an advertisement
Likely impact of the advertisement on the people
The potential of future advertisements
By having an insight into the various aspects mentioned above, the

concerned company or researcher is able to decide the appropriate
strategy for floating the advertisement.

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9.2.9 Campaign Tracking Research
The field of advertising research has grown considerably. Numerous

efforts are now focused on tracking advertising campaigns launched
by companies from time to time.
Campaign tracking research refers to an activity in which various as-

pects of advertising research are studied. The various aspects that are
tracked in the campaign tracking research process are as follows:
The medium of the advertisement such as TV, radio, etc., that is
used in the advertisement campaign
Advertising in cinema halls
Advertising in malls and other places frequented by a large num-
ber of people
S
The process of campaign tracking involves defining a set of parame-
ters, and using these parameters to keep track of the advertising cam-
paign. For example, if advertising has been done through television,
then campaign tracking would involve measuring the expected TRP
IM
against the actual TRP ratings. Similarly, if advertising has been done
through print media, then campaign tracking would involve compar-
ing the actual number of copies sold against the number of copies that
were expected to be sold.
M
1. List two pre-tests used in copy testing.

2. A punch line is a short, memorable or catchy line or phrase
that is integral to the meaning of an advertisement. (True/
N
False)
3. Companies make advertisements with the idea of targeting a
certain section of people. What is this section called?
4. Advertising exposure is usually less than the media exposure.
(True/False)
5. ____________ is a post-testing technique that monitors and
evaluates a particular product/service performance.
6. ____________ are generally recruited by research agencies,
and their job is to answer questions related to products.
7. Campaign tracking research refers to an activity in which
various aspects of advertising research are studied. (True/False)
Activity
Using the Internet, find examples of some pre- and post-tests used
in copy testing that have not been covered in the text.

n o t e s
9.3 Types of Advertising Research

In the previous section, we covered the basic concepts of advertising.
Let us now learn about the different types of advertising research.
Research in advertising can be of two types, that is, customised adver-
tising research and syndicated advertising research. The following is
a description of the two:
Customised advertising research: This type of research is done
at the request of a client. Therefore, it is completely based on the
needs and requirements of the particular client. In this case, only
the client would have access to the research reports. Usually, such
research is carried out by specialised advertising research agen-
cies. For example, Adbur Pvt Ltd. handles all advertising activities
for Dabur Pharmaceuticals.
S
Syndicated advertising research: This type of research is done
for generic businesses, i.e., for particular types of firms or industry,
for example, the Fast-Moving Consumer Goods (FMCG) industry.
IM
Such research does not address the needs of a particular client.
Syndicated research reports address only general aspects of ad-
vertising research.
Generally, a mix of the two types of advertising research is used by

advertising research agencies while creating advertisements. Syndi-
cated research reports provide the basic details related to a particu-
M
lar product category while customised reports provide insights into

various aspects of advertising for a particular business. It provides
specific details that can help in improving the advertising methods
being used.
N
9.3.1 Print
Advertising research provides useful information about advertising in

print media. It helps companies by providing information on the fol-
lowing aspects:
Extent of coverage or reach of a particular print media such as
books, magazines, newspaper, hand-outs, etc.
Response of the people in terms of the print quality and the degree
of comprehension of the content in the advertisement.
Positioning of advertisement, i.e., the placement of the advertise-
ment in the magazines, newspapers and other print media. The
positioning of the ad is important because it impacts its noticeabil-
ity. For example, ads placed on the front page of a newspaper are
easily noticed than any ad placed anywhere else in the newspaper.
The size of the ad is important too in this context.

n o t e s
Placement of content in the advertisement, i.e., placing critical

information, such as phone numbers or addresses, at a strategic
position so that they can be located easily.
Degree of recall of the advertisement among the people.
The information on the aspects discussed above can help companies

create effective advertisements for print media.
9.3.2 Outdoor
Outdoor advertising refers to advertising in the form of posters, bill-

boards, hoardings, graffiti, etc., which are placed at strategic points
so that the maximum number of people can see them, such as a busy
street, a market place or highways. Research is also done on outdoor
advertising. The following are some guidelines that need to be fol-
S
lowed in outdoor advertising research:
In outdoor advertising research, the positioning of the advertise-
ment is studied. The ads must be positioned strategically so that
IM
they are visible to the maximum number of people. For example,
placing a two-sided board or hoarding on a highway at such a lo-
cation that the people who pass from either side of the highway are
able to see the board.
Outdoor advertising research can provide insights into the impact
of advertisements in places such as malls and stage shows. It can
M
also provide insights into aspects such as the number of persons

who actually read the advertisement or who can recall the adver-
tisement.
Outdoor advertising research can also provide useful information
N
on the medium employed for the advertisement, such as roadside

kiosks, hoardings, etc. Such research enables businesses to choose
a suitable medium for advertising. For example, research may re-
veal that electronic hoardings are more effective than ordinary
printed hoardings. Based on this information, companies may
decide to adopt electronic hoardings and do away with ordinary
hoardings to advertise their products.
9.3.3 TV/Cinema
Television and media are popular means of entertainment and com-

munication aimed at the masses. Both are used widely by companies
to advertise and promote their products. TV and cinema are seen by
a wide population, which makes them ideal platforms for publicising
different products and services. Advertising research helps companies
by providing information related to TV/cinema as advertising media
in the following manner:
Advertising research provides information regarding the popular-
ity of a particular TV channel or show, using which the concerned

n o t e s
company can strategically schedule its advertisements on a partic-

ular TV channel. This would force the viewers to view the adver-
tisements aired on this channel.
Cinema provides a great platform for airing advertisements. The
characteristics of the cinema hall and its ambience enable the re-
searcher to get an insight into the various types of people visiting
these cinema halls due to which the companies can strategically
target their ads. For example, if a particular cinema hall is located
in a posh and rich locality, then the advertisements in the hall can
be about luxury products, which would be according to the tastes
and preference of the audience.
Incase of TV shows, the viewer has the option to switch the chan-
nel if the advertisement is not appealing. This can provide clues
about the popularity of an advertisement.
S
In the case of cinema, viewers are forced to view advertisements
even if they do not appeal to him/her. In spite of this, the ads would
somehow register in the minds of the viewers and may even lead
IM
to future sales for the company.
Thus, by gaining insights into various aspects of TV and cinema
advertisements, companies can strategically position the adver-
tisements in such media.
9.3.4 Mobile Outdoor Media

M
We have already discussed how outdoor media such billboards, hoard-

ings, etc., are used for advertisements. Apart from this, public trans-
port such busses, taxis, trains, etc., are also as an advertisement me-
dium. Also, a specially designed van or truck can be used to carry a
N
billboard or hoarding. Such type of advertising is called mobile out-

door media. The advantage of mobile outdoor media lies on its mobil-
ity. The vehicle used in this type of advertising goes to different loca-
tions and a large number of people can see the advertisements. The
following is an image of a truck with advertisements on the sides. The
advertisements would be visible to people at various places wherever
the truck would travel.
(Source: http://m3g.us/services/mobile-billboards/)

n o t e s
Advertising research helps businesses by providing information relat-

ed to outdoor mobile media for advertising in the following manner:
As the media is mobile in this case, data on advertising can provide
various insights about the impact of dynamically changing posi-
tion of the media on the sale of the advertised product. This is im-
portant because while designing outdoor advertising campaigns,
dynamically changing locations can be taken into consideration
to derive the maximum benefit as it is viewable by a large number
of people. For example, advertisements for a music concert can be
mounted on a car. While this car travels around the city, a large
number of people will come to know about the event and those
interested would turn up and buy tickets and watch the event.
Mobile outdoor media does not require a fixed or dedicated space
as in the case of other outdoor media. The advertisements can be
S
rapidly scaled up and down so as to ensure maximum visibility
to the masses. For example, gas-filled balloons can be placed at a
great height so that a large number of people are able to see it. In
addition, such balloons can be pulled down easily and can be tak-
IM
en to other locations quite easily.
8. List the two types of advertising research.

M
Activity
Use the Internet to find five famous Indian advertising research

agencies.
N
Determining THE Effectiveness

of the Advertising Medium
9.4
for Different Products and
Industries
Advertising research is a powerful tool that can be used to prepare
strategic plans for creating advertising campaigns. However, a com-
pany must ensure that the advertisement has been created carefully
keeping in mind various aspects such as target audience and medium
of floating the advertisement. It must be noted that there is a wide
variety of mediums available for advertising products and services.
However, not all mediums of advertising may prove to be effective for
a particular product/service. Therefore, it is necessary to determine
the effectiveness of a particular medium of advertising for different
products and services. There are different ways of measuring the ef-
fectiveness of an advertisement. Some of them are explained below:

n o t e s
Recall tests can be used to measure the effectiveness of advertise-

ments. For example, when carrying out advertisement and brand
awareness tests, a researcher may collect the response in terms of
the number of people who can recall the major part of the ad or
those who can recall only a small part of the ad.
The content of the advertisement can be used to measure its effec-
tiveness. In this technique, the effectiveness of the advertisement
is measured by judging whether its content is appropriate or not.
For example, the punch line may be studied to determine whether
it would be able to catch the attention of the people.
The cost of an advertisement can be used to measure its effec-
tiveness. The ad’s effectiveness is measured by taking the cost in-
curred on the ad and the sales generated by it.
S
9. Mention one way of measuring the effectiveness of an

advertisement.
IM
Activity
Find some methods of advertisement that the small scale industry

can use given its limited budget. Write a short note on the same.
M
Using NRS and IRS in Advertising

9.5
Decisions
N
Advertising research also includes estimating the extent of cover-

age of various media or channels of advertising such as newspapers,
magazines, etc. If the extent of coverage of a media channel is large,
then the possibility of the advertisement being seen and accepted by
masses is high. To estimate the coverage of a particular medium of ad-
vertising, companies need to have the relevant data. There are some
organisations that provide this data. Some of the advertising agencies
may prepare the data for a business specifically. However, there are
organisations that provide consolidated data related to the extent of
coverage of particular media. The information provided by them is
freely accessible.
National Readership Survey (NRS) is a joint venture company located

in UK. The partners in the venture are Institute of Practitioners in
Advertising (IPA), Newspaper Publishers Association (NPA) and Pe-
riodical Publishers Association (PPA). NRS provides information re-
lated to advertising research based on print media. The survey covers
more than 250 newspapers and magazines around the world and pro-
vides information about the size of audience it covers. The audience of

n o t e s
print media is classified further by NRS into various categories, such

as social grade or audience demographics such as age, gender, etc. On
other hand, IRS is a study that is conducted by Media Research Us-
ers Council (MRUC) and Readership Studies Council of India (RSCI).
IRS is the largest continuous readership study done in the world. This
study involves an annual sample size of more than 2.56 lakh partici-
pants. Under this survey, important information related to the extent
of coverage of various media in different consumer and product cate-
gories such as cars, personal care products, etc., is provided. This sur-
vey provides information based on more than 100 product categories.
The data that is derived from NRS and IRS is used in advertising re-
search. Advertising research makes use of such information while de-
signing advertising campaigns and taking advertising decisions.
S
10. National Readership Survey (NRS) provides information

related to advertising research based on ________.
IM
Activity
Mention a few more sources apart from NRS and IRS that can be
used to measure the extent of reach of a particular media.
M
9.6 SUMMARY
A critical aspect that impacts the success of a business is advertis-
N
ing, which is an activity that comes under marketing.

In common parlance, advertisement research is the process of
conducting research into advertising practices so that the results
of the research can be used to increase the effectiveness of the
advertisements.
Copy testing refers to the process of analysing the entire content of
an advertisement (copy) to determine its effectiveness and impact
on the people.
Some of the methods of copy testing used before an ad is released
(pre-tests/before tests) include consumer jury research, rating
scales, portfolio tests, etc.
Some of the parameters on which copy testing is done after the
release of an advertisement (post-tests/after-tests) include recog-
nition test, recall tests and sales tests.
In order to make the advertisement effective, the business units
must use effective techniques of comprehension, opening and
punch line.

n o t e s
An advertising campaign refers to a series of advertisements that

are based on a particular idea or theme. The ad campaign is broad-
casted through various media channels.
Before developing an ad campaign, the company must evaluate its
current position in the market and also decide as to what it wants
to achieve through an ad campaign.
Generic steps that are required for preparing a sample advertising
campaign include: researching, knowing the target audience, set-
ting the budget, deciding a theme/idea, selecting the media, media
scheduling and executing the campaign.
Research in advertising is a systematic approach that follows cer-
tain well-defined stages or steps. These steps include briefing
about the product or service, determining the objective of the ad-
vertisement, determining the target audience, selecting the media,
S
designing and creating the advertisement, deciding the place and
time of release of the advertisement and evaluating the advertise-
ment objectives
IM
Advertising planning refers to the entire process of advertising
starting from conceiving the idea of the advertisement right to the
point when the advertisement is removed from the market after it
has served its intended purpose.
Advertising
objectives refer to the objectives or goals that the con-
cerned company wants to achieve through the advertisement.
M
Media experiment refers to the process by which a company de-

cides the appropriate media channel for its advertisement. It is an
exercise where a company tries several media channels that are
available to it in the market for launching its advertisements.
N
Market research can provide useful insights into the process of

advertising planning.
Tracking study or ad-tracking is a technique to evaluate the ef-
fectiveness of advertisements. It is a post-testing technique that
evaluates the performance of a particular advertisement, includ-
ing the level of advertising awareness and attitude of the brand
being advertised. The Day After Recall (DAR) test is one such test
that helps to track the performance or effectiveness of an ad.
A consumer panel refers to a group of consumers from different
strata of society. Consumer panels are generally recruited by re-
search agencies, and their job is to answer questions related to
products. In the case of advertising, they are asked questions about
advertisements as well as judge their effectiveness.
Campaign tracking research refers to an activity in which various
aspects of advertising research are studied.
The two types of advertising research include customised adver-
tising research and syndicated advertising research. Customised

n o t e s
advertising research is done on the request of a client and syndi-

cated advertising research is done for generic businesses.
Four major types of media for advertisement include print, out-
door, TV/cinema and mobile outdoor media.
Not all mediums of advertising may prove to be effective for a par-
ticular product/service. Therefore, it is necessary to determine the
effectiveness of a particular medium of advertising for different
products and services.
The effectiveness of an advertisement can be measured by using
the recall test, measuring the effectiveness of the ad content, etc.
To estimate the coverage of a particular medium of advertising,
companies need to have the relevant data. There are some organ-
isations that provide this data. Some of the advertising agencies
S
may prepare the data for a business specifically.
National Readership Survey (NRS) is a joint venture company
located in UK. It provides information related to advertising re-
IM
search based on print media.
key words
Adcampaign: An ad campaign refers to a series of advertise-

ments that are based on a particular idea or theme.
M
Consumer jury research: This is a method that is commonly

used to give a rating to an advertisement by a target group that
consists of prospective customers of the product being adver-
tised.
N
Mobile outdoor media: It refers to the type of media used for

advertising that is mobile in nature. Advertisements on local
buses, taxis and trains are examples of mobile outdoor media.
Punch line: A punch line is a short, memorable or catchy line
or phrase that is integral to the meaning of an advertisement.
People often remember ads because of their punch lines.
Recalltest: It is a kind of test to determine the effectiveness of
an advertisement based on how well people are able to recall it.

1. Discuss the concepts of advertising research and copy testing.
2. Explain the various types of media used in advertising research.
3. Describe the various means and measures used for measuring
the effectiveness of advertisements.
4. Explain the importance of NRS and IRS in advertising decisions.

n o t e s

Concept of Advertising 1. Rating scales, recall tests
Research
2. True
What is Enterprise Risk 3. Target audience
Management (ERM)
4. True
5. DARs
6. Consumer panel
S
7. True
Types of Advertising 8. Customised advertising research,
Research syndicated advertising research
IM
Determining the Effective- 9. Recall tests
ness of the Advertising Me-
dium for Different Products
and Industries
Using NRS and IRS in 10. Print media
Advertising Decisions
M
HINTS FOR DESCRIPTIVE QUESTIONS

1. In common parlance, advertisement research is the process of
conducting research into advertising practices so that the results
of the research can be used to increase the effectiveness of the
N
advertisements. Copy testing refers to the process of analysing

the entire content of an advertisement (copy) to determine its
effectiveness and impact on the people. Refer to Section 9.2
Concept of Advertising Research.
2. Various types of media used in advertising research include print
media, outdoor media, TV/cinema and mobile outdoor media.
Refer to Section 9.3 Types of Advertising Research.
3. The effectiveness of an advertisement can be measured by using
the recall test, measuring the effectiveness of the ad content,
etc. Refer to Section 9.4 Determining the Effectiveness of the
Advertising Medium for Different Products and Industries.
4. National Readership Survey (NRS) is a joint venture company
located in UK. It provides information related to advertising
research based on print media. Refer to Section 9.5 Using NRS
and IRS in Advertising Decisions.

n o t e s

9.9
REFERENCE
SUGGESTED READINGS
Aaker, D., Batra, R., & Myers, J. (1992). Advertising management.
Englewood Cliffs, N.J.: Prentice Hall.
Beri, G. (2008). Marketing research. New Delhi: Tata McGraw-Hill.
E-REFERENCES
(2015).Retrieved 28 October 2015, from http://www.researchgate.
net/publication/46513458_THE_EFFECTS_OF_OUTDOOR_AD-
VERTISEMENTS_ON_CONSUMERS_A_CASE_STUDY
S
wiseGEEK,. (2015). What Is Copy Testing?. Retrieved 28 October
2015, from http://www.wisegeek.com/what-is-copy-testing.htm
Managementstudyguide.com,. (2015). Advertising Campaigns -
IM
Meaning and its Process. Retrieved 28 October 2015, from http://
www.managementstudyguide.com/advertising-campaigns.htm
M
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C
10
hapter
brand equity and corporate image research
CONTENTS
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10.1 Introduction
10.2 Brand Equity Research
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Activity
10.3 Positioning Research
Activity
10.4 Corporate Image Measurement Research
M

Activity
10.5 Sales Promotion Research
N
Activity
10.6 Summary

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BRAND EQUITY RESEARCH BY ASTRAZENECA

AND READER’S DIGEST
A targeted effort that facilitated the 2001 launch of AstraZeneca’s

Gastroesophageal Reflux Disease (GERD) treatment Nexium (es-
omeprazole) not only enabled building brand equity, but also aided
the necessary application of the new medication. Nexium succeed-
ed Prilosec (omeprazole), the long-time market-leading Proton
Pump Inhibitor (PPI) that achieved US sales of $3.7 billion in 2001.
Market research revealed that patients could benefit from another
treatment alternative. Nexium was launched to the medical com-
munity based on the information comparing it with Prilosec.
Nexium was launched in the US market with support befitting a
S
potential megabrand-extensive direct-to-consumer television and
print campaigns, besides direct communication with self-identi-
fied regular heartburn sufferers who previously requested infor-
IM
mation from AstraZeneca about treatment alternatives. In order to
aid long-term growth and build brand equity, the marketing team
at AstraZeneca planned to establish a documented brand presence
among others who may suffer from GERD and thus, collaborated
with Reader’s Digest to reach 380,000 US households whose resi-
dents meet that criterion.
M
The objective of this collaboration was to provide a specific group

of chronic heartburn sufferers an early introduction to Nexium and
enable them to be aware of a favourable image of the brand. Re-
cipients requested vital information from, ‘Viewpoints on Health’,
an essential data source of Reader’s Digest, about specific informa-
N
tion-diagnosis, treatment, products-about ailments suffered by a

member of their household. The database of Reader’s Digest con-
sisted of subscriber households reporting more than 30 ailments,
with total ailments ranging from 250,000 to more than 1.5 million.
‘Heartburn households’ obtained two 16-page ‘Viewpoints on

Health’ booklets in their July and August 2001 issues of Reader’s
Digest. These booklets included vital information about the impli-
cations of recurring heartburn, treatment alternatives and health
suggestions ranging from diet to meditation. In each booklet, a
four-page advertising section detailed the potentially serious na-
ture of acid reflux disease and focussed on the fact that only a doc-
tor can diagnose it. The section further comprised a free seven-day
trial certificate-needing an accompanying prescription for phar-
macy redemption to enable patients to consult with their doctors
whether Nexium might be the right treatment for them.
In order to measure the effectiveness of the project, a compre-

hensive brand equity research was conducted by Reader’s Digest,

brand equity and corporate image research 207
n o t e s
where it studied the involvement of recipients with the material.

The results of the research reflected that about 90 per cent of re-
cipients recalled the booklets, two-thirds reported that they read
most of the content, and of those, 83 per cent rated the content
good or excellent. A complete two-thirds of the recipients recalled
the product ads and 47 per cent confirmed that the association
with Reader’s Digest added to their credibility.
Reliable consumer information is one of the vital features of phar-

maceutical marketing. Based on the significant consumer feed-
back, a useful booklet helped connect credible content with Nexi-
um as a treatment option for acid reflux disease. The collaboration
of AstraZeneca with Reader’s Digest increased the brand’s reputa-
tion with heartburn sufferers.
(Source: http://www.pharmexec.com/case-study-brand-equity-acid-reflux)
S
IM
M
N

n o t e s
learning objectives

>> Explain the concept of brand equity research
>> Discuss the concept of positioning research
>> Describe the corporate image measurement research
>> Discuss sales promotion research
10.1 Introduction
In the previous chapter, you have studied the concept of advertising
research, the types of advertising research, effectiveness of advertis-
ing medium for different products and industries, etc. This chapter
S
will focus on brand equity and corporate image research.
In today’s highly competitive business world, business organisations

are forced to devise an innovative mechanism to stay competitive.
IM
Apart from this, business organisations need to increase their market
share and produce unique products that will build a positive corpo-
rate image in the minds of customers. In other words, business organ-
isations need to focus on brand equity and corporate image along with
a high market share.
M
Brand equity and corporate image are two closely related concepts in
an organisational setting. Brand equity is all about the value perceived
by consumers after consuming the products of an organisation. On
the other hand, corporate image is the impression of an organisation’s
products, services, personnel and policies in the minds of consumers.
N
If the consumers are satisfied with the organisation’s brand, they tend
to build a positive corporate image of the organisation in their minds,
and vice versa.
In this chapter, you will study the concept of brand equity research po-
sitioning research. Moreover, you will study the concept of corporate
image measurement research. Towards the end of the chapter, you
will study the concept of sales promotion research.
10.2 brand equity research

A brand is a value that a customer attaches to a product or any other
entity of the organisation. Value can be in terms of any aspects (such
as quality, colour, logo, etc.) that the customer perceives. For example,
when a customer listens to the ringtone of Airtel, he/she immediately
associates it to the organisation. Similarly, when the customer visua-
lises the swoosh mark of the Nike; he/she immediately associates it to
the organisation. In other words, a brand is a name given to a product
or service that establishes or distinguishes itself from other products
or services in the market. When a brand generates value, it builds pos-

n o t e s
itive association in the minds of customers. This concept is popularly

known as brand equity.
Brand equity is a term that is widely used in marketing practices.

It represents the customers’ evaluation of an organisation’s brand.
Brand equity encompasses customer loyalty, wide recognition, mar-
ket share enjoyed by a branded product or service, etc. Organisations
need to fulfil certain requisites to strengthen their brand equity. Some
of these requisites are explained as follows:
Brand reinforcement: It is all about creating brand awareness
with an objective of improving the strength and uniqueness of the
brand. This is done through advertisements in TV channels, radio
messages, SMS, emails, Web chats, etc.
Brand revitalisation: This is the aspect wherein the brand is man-
aged in a manner so that it can rebuild positive associations in the
S
minds of customers. For example, Maggi Noodles is being revitalised
by Nestle after its recent bans and legal issues in the Indian market.
Brand consistency: It is all about an organisation providing the
IM
same features and quality of a product to a customer on every
purchase. For example, Maruti, an automobile manufacturer, has
maintained brand consistency over a significant length of time.
From discussion so far, it can be said that it is important for an organ-

isation to measure the value of its brand in order to attract custom-
M
ers. For this, organisations need to perform brand equity research.

Organisations conduct brand equity research to measure the value
of their brands. For this, they apply innovative brand equity research
models and quantitative marketing research tools. Brand equity re-
search methods are driven by research goals and can be qualitative or
N
quantitative in nature. Some of the brand equity research goals and

marketing research implications are depicted in Figure 10.1:
Track brand equity strength: compare

Track to prior periods, competitive brands,
Brand and out-of-category leaders.
Equity Explore brand decision options such as
Discover renaming or repositioning the brand.
Research
Goals Assess brand equity power for brand
Extend extensions in existing product line or
new category.
Figure 10.1: Brand Equity Research Goals and Marketing

Research Implications
(Source: http://www.powerdecisions.com/brand-equity-research.cfm#.Vi9tF9IrIb0)
Let us discuss these goals as follows:

Track and compare the components of brand equity, such as brand
awareness, brand loyalty, brand association, etc. with that of com-
petitive brands.

n o t e s
Examine different decision options in place relating to the brand

by determining the depth of brand strength of the existing corpo-
rate or product brands.
Determine brand equity power in terms of product or business
line extensions using a current brand or a brand naming variation
of the current brand.
Let us now study some of the commonly used brand equity research
methods in detail.
Brand base research: This involves extensive interviews with cli-
ent management, field sales, product development and customer
service staff. Interviews with salespeople in the distribution chan-
nel also take place to know their preferences and perceptions.
Brand base research is generally carried out with a primary goal
of qualitative depth interviews among a small sample of product
S
users and those who are loyal to competitor brands.
Brand qualitative research: This involves a small sample round
of depth interviews. In the initial phases of brand equity develop-
IM
ment, this method can be more effective than focus groups. Here,
a non-directive design and style is applied, together with projec-
tive interviewing techniques to determine buyer motivation level
and brand perceptions. Respondents are allowed to express their
opinions regarding their brand experience with client brands and
competitive brands.
M
Brand quantitative research: Here, organisations use customised

and tracking marketing research studies to measure various com-
ponents of brand equity, such as brand awareness, brand loyalty,
brand association, etc.
N
Exhibit
ATTRIBUTES OF BRAND EQUITY
Some of the attributes of brand equity as seen from the consumer’s

perception are shown in the following figure:
Availability
Awareness Preference
Brand
Familiarity Equity Loyalty
Association Image and

Personality
Figure: Various Attributes of Brand Equity

(Source: http://www.mbaskool.com/images/stories/business_concepts/equity.jpg)

n o t e s
Let us now study these attributes in detail.

Awareness: It encompasses how many customers are aware of
the brand and to what extent. For example, Coca-Cola has high
brand equity that almost every individual across the world is
aware of the fact that it is a beverage brand.
Familiarity: This refers to the concept wherein a customer at-
taches the brand to familiar products. For example, a custom-
er may immediately associate the Alto 800 model of car with
Maruti.
Association: This refers to the perception wherein a custom-
er chooses a product to which he/she has been associated for a
long time even though there may be better options available in
the market. For example, in the case of four-wheeler vehicles,
S
the customer may choose Maruti manufactured vehicles if he/
she has been driving cars manufactured by the organisation for
the last 10 years even though better cars are available in the
market. This association may be because of various reasons,
IM
such as easy availability of spare parts, after-sales services or
simply convenience in driving.
Preference: This refers to the perception wherein a customer
may prefer to choose a product to which he/she is somewhat
attached even though better options are available. For example,
a customer will prefer having a Coca-Cola drink even though
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other options, such as Pepsi, may be available.

Loyalty: This refers to the perception wherein a customer may
be loyal to a particular brand of product due to discounts and of-
fers being regularly provided by an organisation. For example,
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a customer may be loyal to a particular retail store, for example,

Big Bazaar, as it offers extra discount for the purchases made.
Image and personality: This refers to the perception wherein a
customer may choose a particular brand as it has a good image
and personality. For example, a customer may choose products
from Amway, a direct marketing company, due to its high qual-
ity and durability and a good brand image. Amway markets its
products to suit the personality of its customers.
1. A __________ is a value that a customer attaches to a product

or any other entity of the organisation.
2. Brand equity encompasses customer loyalty, wide recognition,
market share enjoyed by a branded product or service, etc.
(True/False)

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3. Which of the following is an aspect wherein the brand is

managed in a manner so that it can rebuild positive associations
in the minds of customers?
a. Brand reinforcement
b. Brand revitalisation
c. Brand consistency
4. Brand equity research methods are driven by research goals
and can be __________ or __________ in nature.
5. Brand base research is generally carried out with a primary
goal of qualitative depth interviews among a small sample of
product users and those who are loyal to competitor brands.
(True/False)
S
Activity
Find information on the brand equity research efforts of an Indian

IM
retail organisation.
10.3 positioning research

Positioning is defined as the act of designing an organisation’s prod-
M
uct or service offering and image to occupy a distinctive place in the

target market. Positioning research is an act of assessing or gauging
the position of products in the market as compared to the products
offered by competitors based on certain perceived product parame-
ters. These parameters include quality, durability, cost, design, fea-
N
tures, etc. Positioning research assists business organisations in de-

termining strategies so as to counter competitive advantages of other
business organisations. This in turn helps organisations in effectively
targeting products in the market and safeguarding the market share
among other competitive products. Apart from this, positioning re-
search helps an organisation to answer the following questions:
What are the strengths and weaknesses of the organisation as
compared to that of competitors?
What is the current position of the organisation’s product in the
market?
What is the image of the organisation in the market?
What is the competitive advantage of the organisation?
What is the current size of customer base?
Can the products be targeted to other markets?
Positioning research consists of gathering primary data on customers’

tastes, preferences, requirements, etc. through surveys. The initial

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phase in positioning research involves developing a questionnaire for

data collection. In the questionnaire, participants are asked to give a
score for certain selected organisations, products, brands or services
for specific attributes that may be regarded as essential differentia-
tors.
The following example illustrates the way in which positioning re-

search data may be analysed and presented.
Assume there are four competing banks: Bank A, Bank B, Bank C and
Bank D. A survey was carried out to estimate the position of Bank C in
the market. Data was collected using a questionnaire that was filled by
the banks’ customers. Table 10.1 illustrates the average score on each
attribute of 500 participants and the score is out of 10:
TABLE 10.1: SCORING OF THE SURVEY
S
Bank/ Customer Speed of Reliability Range of Accessibility
Attribute Care Service Services
Score
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Bank A 6 7 5 8 7
Bank B 6 8 7 8 9
Bank C 8 7 8 6 8
Bank D 7 8 9 7 9
(Source: http://myics.org/marketing/positioning-research/)
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Results of Table 10.1 are presented using a spider chart to reflect the
positioning of each bank. Figure 10.2 illustrates the spider chart:
Customer Care
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9
8
7
6
5
4
Accessibility 3 Speed of
Bank-A
2 Service
1 Bank-B
0
Bank-C
Bank-D
Range of Services Reliability
Figure 10.2: Spider Chart

(Source: http://myics.org/marketing/positioning-research/)
Figure 10.2 determines the position of each bank in terms of attributes.

It is observed that Bank C is best in terms of customer care while far-
ing poorly in terms of services. Positioning research is an important
tool for business organisations in determining the performance of po-
sitioning strategies adopted by them and estimating future position-
ing strategies.

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6. __________ is an act of assessing or gauging the position of

products in the market as compared to the products offered by
competitors based on certain perceived product parameters.
7. The initial phase in positioning research involves developing
a __________ for data collection.
Activity
Suppose you are a market researcher. You have been assigned a re-
sponsibility of conducting customer surveys on some popular bev-
erage brands. Prepare a questionnaire for the purpose of surveying.
S
corporate image MEASUREMENT
10.4
research
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Corporate image is the psychological impression of an organisation,
its brand or products in the minds of customers. It forms the basis
for building a brand as customers invariably link the corporate image
with the brand of the product. For example, the corporate image of
Microsoft is invariably linked to branded software products. Corpo-
rate image measurement research is a process of determining the im-
M
pact of internal and external environmental factors that directly or in-

directly affect the image, reputation or brand of an organisation. The
following are some of the factors that market researchers consider in
the research process:
N
Human resource: This is the most important factor that affects

the corporate image. A trained, skilled and well-developed work-
force ensures that the product of an organisation is able to build
the brand image of the organisation. For example, Infosys, a mul-
tinational IT solutions provider, hires only B. Tech graduates who
are skilled and trained in software development processes. Such
qualified workforce is able to build the corporate image of Infosys.
Market leadership: An organisation is said to be a market leader
if it has the highest market share or profitability margin in a par-
ticular market. The market share is usually measured in terms of
the volume of goods sold or value of those goods. Market leaders
have certain benefits like lower product cost due to the economies
of scale, greater publicity due to leadership status, favourable dis-
tribution terms due to increased channel demand, etc. When an
organisation attains the position of a market leader, it strives to
maintain the brand for which it is universally acknowledged. For
example, Microsoft has attained market leadership in software
products over the years, thus, enhancing its corporate image.

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Quality assurance: This is another crucial factor responsible for

enhancing the corporate image. Organisations strive to follow the
best quality assurance practices and procedures, which are fol-
lowed in the company for developing products. Corporate image
gets enhanced if quality assurance practices are effectively imple-
mented and followed.
Advertising and public relations: These factors help in spreading
awareness about an organisation and its products and services to
the general public. The corporate image of an organisation is en-
hanced if it successfully manages to carry out its marketing activi-
ties through advertising and public relations.
8. __________ is the psychological impression of an organisation,
S
its brand or products in the minds of customers.
Activity
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Visit some of your neighbours and friends and discuss with them
about the products offered by Indian retail organisations. Prepare
a report on the corporate image that your neighbours and friends
have in their minds about these organisations.
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10.5 sales promotion research

Sales promotion is a set of activities undertaken by business organisa-
tions to increase the sales of their products or services. In other words,
N
sales promotions are the final outcomes of business organisations,

which determine their position and effect in the market. It is the sales
that brings in the revenue and the consequent profit to a business
organisation. Thus, organisations need to conduct sales promotion
campaigns at frequent intervals so as to increase revenue generation.
Sales promotion is applicable at several levels such as customers,

staff, distributors, retailers, etc. The sales promotion market research
process determines several attributes and hence provides insight into
the management to draw out strategies so as to gain competitive ad-
vantage. Sales promotions can be of several types and some of these
are discussed as follows:
Sales promotions by product: Business organisations try to pro-
mote the sales of specific products or several products in gener-
al. Market research findings can provide various insights into the
management in understanding sales promotions by the product.
In particular, it can provide findings related to sales promotion
by product category, sales promotion by product type, sales pro-
motion by payment methodology, etc. For example, during major
festivals, there are various sales promotions, such as ‘Buy 2 Get 1

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Free’ offers. Also, there can be sales promotion like free parking
facility if product purchases are more than ` 500 and so on.
Sales promotion by category: This is another type wherein busi-
ness organisations try to promote sales by a product category. For
example, an FMCG organisation may provide a bathing soap free
with detergent powder. The market research of sales promotion
can provide insight into the sales promotion campaign and tech-
niques that can be adopted to increase sales.
Sales promotion by market segmentation: This is another type
wherein a business organisation tries to promote sales by the tar-
get audience. For example, retail stores can provide discounts on
kid’s wear on children’s day. Here, the target audience is children.
Sales promotion by territory: Location-based sales promotion is
carried out by various business organisations. For example, organ-
S
isations like Coke or Pepsi conduct sales promotion campaigns by
territory, such as the NCR region or eastern region. The market
research of sales promotion can provide business organisations to
venture into new regions.
IM
Sales promotion by the size of the order: This refers to the type
of sales promotion by the quantity of the order purchased by cus-
tomers. For example, if a customer purchases a particular quantity
of FMCG products, a certain portion of the quantity is offered for
a discount. The market research process provides insight into the
amount of goods ordered by customers and helps in making future
M
strategic plans accordingly.

Sales promotion by market forces: This is the competitive scenar-
io wherein strategies for sales promotion are driven by competi-
tive market forces. Examples include the price war for various cell
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phone service providers in India. Market research is able to assist

the management of organisations in understanding the impact of
these competitive forces.
9. Sales promotion is a set of activities undertaken by business

organisations to increase the sales of their products or services.
(True/False)
Activity
Using the Internet, find out the sales promotion efforts of the fol-
lowing organisations:
a. Big Bazaar b. Flipkart
c. Snapdeal d. Arista
d. Ola Cabs

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10.6 SUMMARY
A brand is a value that a customer attaches to a product or any
other entity of an organisation.
Brand equity encompasses customer loyalty, wide recognition,
market share enjoyed by a branded product or service, etc.
Brand reinforcement, brand revitalisation and brand consistency
are some of the requisites for brand equity.
Brand base research, brand qualitative research and brand quan-
titative research are some of the brand equity research methods.
Positioning research is an act of assessing or gauging the position
of products in the market as compared to the products offered by
competitors based on certain perceived product parameters.
S
Corporate image is the psychological impression of an organisa-
tion, its brand or products in the minds of customers. It forms the
basis for building a brand as customers invariably link the corpo-
IM
rate image with the brand of the product.
Sales promotion is a set of activities undertaken by business or-
ganisations to increase the sales of their products or services.
key words
Brand: It is the value that a consumer attaches to a product or

M
service or to the company’s image so as to seek the assured level

of satisfaction.
Brand awareness: It is the extent to which a brand is identified
by prospective customers and is correctly linked to a particular
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product.
Brand loyalty: It is the level of faith shown by consumers to a
specific brand, indicated by their repeated purchases and irre-
spective of market competitiveness.
Logo: It is the symbol or any small design adopted by organisa-
tions to enable customers to recognise their products.
Positioning: It is a technique adopted by an organisation to
make a positive impression in the minds of consumers regard-
ing the brand.

1. What are the requisites of brand equity?
2. Explain some of the commonly used brand equity research
methods.
3. What do you understand by positioning research?

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4. Describe the concept of corporate image measurement research.

5. Discuss sales promotion research in detail.
Topic Q. No. Answer

Brand Equity Research 1. Brand
2. True
3. b. Brand revitalisation
4. Qualitative, quantitative
5. True
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Positioning Research 6. Positioning research
7. Questionnaire
Corporate Image Measurement 8. Corporate image
IM
Research
Sales Promotion Research 9. True

1. Brand reinforcement, brand revitalisation and brand consistency
are some of the requisites of brand equity. Refer to Section 10.2
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Brand Equity Research.

2. Brand base research, brand qualitative research and brand
quantitative research are some of the brand equity research
methods. Refer to Section 10.2 Brand Equity Research.
N
3. Positioning research is an act of assessing or gauging the position

of products in the market as compared to the products offered
by competitors based on certain perceived product parameters.
Refer to Section 10.3 Positioning Research.
4. Corporate image is the psychological impression of an
organisation, its brand or products in the minds of customers.
It forms the basis for building a brand as customers invariably
link the corporate image with the brand of the product. Refer to
Section 10.4 Corporate Image Measurement Research.
5. Sales promotion is a set of activities undertaken by business
organisations to increase the sales of their products or services.
Refer to Section 10.5 Sales Promotion Research.

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10.9
REFERENCE
SUGGESTED READINGS
Excel Books
E-REFERENCES
Ipo-group.com. (2015). Advantages of the market leadership\. Re-
trieved 28 October 2015, from http://www.ipo-group.com/Insights/
Advantages_of_the_Market_Leade/advantages_of_the_market_
S
leade.html
Inc.com. (2015). Brand equity. Retrieved 28 October 2015, from
http://www.inc.com/encyclopedia/brand-equity.html
IM
Inta.org.(2015). Brand valuation. Retrieved 28 October 2015, from
http://www.inta.org/TrademarkBasics/FactSheets/Pages/Brand-
Valuation.aspx
M
N

N
M
IM
S
C
11
hapter
research report preparation

and presentation
CONTENTS
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11.1 Introduction
11.2 Research Report
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11.2.1 Organising the Research Report
11.2.2 Interpreting the Findings
11.2.3 Format of a Research Report
Activity
11.3 Presenting the Research Report
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11.3.1 Differences between Oral and Written Reports

Activity
11.4 Summary
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SWITCHING OF BRAND loyalty REVEALED BY MARKET

RESEARCH REPORT
Catalina Marketing, a market research firm, conducted a study

on customer loyalty in partnership with Chief Marketing Officer
Council, which is a global network of executives dedicated to shar-
ing of high-level knowledge and thought leadership among senior
corporate marketing leaders across industries all over the world.
The study was done to analyse the dynamics of customer loyalty
globally and also develop new approaches related to customer loy-
alty.
The objective of the study was to analyse the shopping behaviour

of household consumers. The study revealed low customer loyalty
S
in leading Consumer Packaged Goods (CPG) such as food prod-
ucts, beverages, footwear, tobacco, apparel, etc.
Then the purpose of the study was to measure customer loyalty as

IM
a percentage of sales in CPG categories. The study focussed only
on specific products of certain brands. The methodology used in
the study was developed by Information Resources Incorporat-
ed (IRI), which is a market research company that provides retail
market intelligence and analysis on consumer goods.
M
The findings of the study revealed an unusually high level of con-

sumer defection among different branded products. For example,
only 48 per cent of ‘high loyal’ consumers in 2007 remained loyal
to the average CPG brand in 2008. Moreover, one-third of the high
loyal consumers defected from the average brand in 2008. There-
N
fore, the CPG consumer brand loyalty study concluded that a high
number of loyal consumers were switching brands and trying out
new ones.

research report preparation and presentation 223
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learning objectives

>> Describe how a research report is finalised
>> Explain the presentation of a report
11.1 Introduction
In the previous chapter, you have studied about brand equity re-
search, positioning research and brand valuation research. You also
learnt about brand valuation research, corporate image measurement
research and sales promotion research. In this chapter, you will learn
how to prepare and present a research report.
S
While preparing a report, you must not only ensure that it contains
relevant data or information but also that the content is in the correct
order. For the information to be in the correct order, it has to be organ-
ised and presented under different sections that appear in a particular
IM
sequence.
For example, the first page of the report is the title page. Then comes
the summary, which is a short description of the entire report. Other
sections of the report include table of contents, introduction, discus-
sion, conclusions, recommendations and bibliography references.
M
In this chapter, you will study about the steps of preparing a report.
You will also study how to present a report. Once the report is finished,
it needs to be presented to the intended audience using an appropri-
ate medium of communication. There are several things that must be
N
considered while presenting a report, such as mode of presentation or

the type of audience. All these aspects are discussed in detail in the
chapter.
11.2 RESEARCH REPORT

A research report is a document that is prepared by an analyst and
focuses on a particular aspect of any business, industry or sector, a
currency, or even a geographic region or country.
Research reports are prepared by different people or bodies such as

market research firms or in-house research teams of big companies.
The main purpose of preparing a report is to understand a particular
aspect of some process or business or identify issues and provide sug-
gestions for solving them. Preparing research reports costs a company
in terms of money, time and other resources but is worth the effort if
the exercise is well planned and skilfully executed.
Preparing a research report consists of specific steps that must be fol-

lowed to ensure that the report is complete in all respects. These steps
are depicted in Figure 11.1:

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Analyse the Task
Develop a Rough Plan
Draft the Body of the Research Report
Draft the Supplementary Material
Check the Report
Figure 11.1: Steps in the Preparation of a Research Report
S
The following is a description of the steps shown in Figure 11.1:
1. Analyse the task: The first step in the preparation of a research
report is to understand what the report is supposed to study
IM
or analyse. In your research, you may have collected a lot of
data. These data are useless if you do not know what to do with
them. Therefore, you need to be clear about the objectives of
the research so that you can focus on the relevant aspects of
the analysis. Moreover, be careful not to make any errors in the
analysis so that the correct conclusions can be drawn.
M
2. Develop a rough plan: Developing a rough plan allows you to

know the structure of your report. You can make a list of the
different sections of the report, place them in the correct order,
and also decide the content for each section. This will help you to
organise your report and give you clarity of purpose. Moreover, it
N
will guide you from the start to the end by ensuring that you do
not stray from the main objective of the report.
3. Draft the body of the research report: This step involves the
actual writing of the report. As mentioned earlier, a report
consists of several well-defined sections. Though these sections
may vary depending on the type of report, a typical report would
contain the following sections:
Title page
Table of contents
Introduction
Literature review
Methodology
Results
Discussion
Conclusion

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Summary
Recommendations
4. Draft the supplementary material: In this step, the various

sources for the material of the report are listed. These include
books, online material, other reports, etc. The supplementary
material is provided under two sections, which are:
References or bibliography: This contains a list of docu-
ments used by the author to write the report.
Appendices: These are provided to give additional informa-
tion about the report. This information is not essential to ex-
plain the findings, but it supports the analysis and validates
the conclusions of the report.
5. Check the report: Lastly, the report needs to be checked for
S
veracity of facts and figures and other factual information
contained in it.
IM
Exhibit
Prerequisites for Preparing a Research Report
Before preparing a report, an analyst needs to consider certain as-

pects in order to ensure the effectiveness of the report as per the
set objectives. The following are the prerequisites for preparing a
M
research report:
Deciding on the objective of the report: This is the most im-
portant part of the research report. The purpose of the report
must be clear from the onset, and the analyst must ensure that
N
all the objectives of the report are satisfied. The objectives act
as a guide for the analyst by telling him what needs to be done.
Deciding the structure of the research report: The structure
of the report takes into account several factors such as research
objectives, research hypothesis, research methodology, target
audience, etc. The structure may vary depending on the type of
report it is or the sort of analysis required.
Deciding on the information in the research report: A report
must contain relevant information that answers the objectives.
Any analysis that does not contribute to the objectives must not
be included. Also, the information should be concise and to the
point. Providing too much content can be counterproductive.
Finally, ensure that numerical information given in tables or
elsewhere in the body of the report is correct.
Deciding on the recommendations and suggestions to be pro-
vided in the research report: Make sure that recommendations
or suggestions provided in the report are based on the available
data and their analysis.

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11.2.1 ORGANISING THE RESEARCH REPORT
While organising a research report, you should ensure that it contains

relevant data and correct analysis. The data need to be accurate and
reliable. In addition, the structure of the report should be logical and
easy to understand and follow. The content should be relevant to the
points or issues being discussed and avoid unnecessary digressions or
superfluous information. Moreover, the language used should be clear
and concise. The style should be formal and the aim should be to pres-
ent the content in a simple and unambiguous manner. The following
points should be taken into consideration while organising a report:
Make sure that the title of the report is not too long or confus-
ing. The reader should be able to see what the report is about at a
glance. Do not include so much information that the title is diffi-
cult to read, or so little that the reader is unable to get an idea of
S
what the report contains.
Avoid being too detailed in the table of contents. List the major
headings and one level of subheadings. Also, remember to main-
IM
tain consistency in the font type and font size being used in the
table of contents (as well as the rest of the report). All the assump-
tions, constraints and dependencies must be clearly highlighted
in the report so that the reader is able to understand the report
accordingly.
In the summary, care should be taken not to include any infor-
M
mation that is not included in the report itself. Also, the summary
should be written in the end. The report should be completed be-
fore attempting the summary. Also, make sure that the summary is
not too long.
N
Make sure that your findings are not vague or inconclusive. Also,
do not pre-judge anything without careful objective consideration
of all the findings.
Make sure your conclusion is realistic. Do not include personal feel-

ings that have no foundation in the results section. If the findings are
inconclusive, then it should be made clear.
11.2.2 INTERPRETING THE FINDINGS
After the report has been organised, the next step is to interpret the
findings that have emerged from the analysis and interpretation of
the research data. Correct interpretation of findings is critical as any
misinterpretation can lead to wrong conclusions. Therefore, the in-
terpreter should be someone who is able to analyse and interpret the
findings correctly. The following are some points that should be con-
sidered while interpreting the findings of a report:
Ensure that the data presented for interpretation are correct, re-
liable, and free from errors, such as missing values and incorrect

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calculations. The interpreter must ensure the reliability of data

and that these are structured as per the requirements and objec-
tives of the research. Also, the interpreter must ensure that the
data are free from any bias.
Ensure that appropriate statistical techniques are applied during
the testing of the data as application of incorrect statistical tech-
niques on data can lead to errors and wrong interpretation of the
results.
Take into account the errors that arise while collecting data sam-
ples. Ignoring this crucial aspect would render the interpretation
incorrect.
Do not jump to conclusions quickly. The interpreter must first ver-
ify and validate the findings before pronouncing the results of the
interpretation.
S
Ensure that a balanced approach is adopted when reporting the
findings. The interpreter must keep the findings balanced and free
from any bias as important business decisions might need to be
IM
taken on the basis of the interpreter’s recommendations.
11.2.3 FORMAT OF A RESEARCH REPORT
Although there are many ways of writing a report, they all follow a
specific format. In general, the format of a typical research report in-
M
cludes the following:

Title page: The first page of the report contains its title. As is ob-
vious, the title page contains the title of the report. It also includes
the author’s name and company, date of publication of the report,
N
etc. The title should be informative and specific to the research

that has been discussed in the report. Figure 11.2 shows the title
page of a sample report:
Figure 11.2: Title Page of a Sample Report

(Source: http://pressbooks.com/wp-content/uploads/2013/08/Austen-Title.png)

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Table of contents: The structure and placement of the different

sections of the report appear as a table of contents and is indicated
by page numbers. This is to enable readers to easily jump to the
section that they want to read. The table of contents also includes
a list of appendices, tables or figures. Figure 11.3 shows the table
of contents page of a sample report:
S
IM
Figure 11.3: Table of Contents Page of a Sample Report
(Source: http://www.contentstrategy.com/images/toc-foreward/toc-1.gif)
Introduction: The introduction helps a reader to know the discus-

M
sion which is to come. It should be written in a manner that helps

to capture the attention of the reader. It indicates the purpose and
scope of the report and provides background information so that
the reader can read the report intelligently. The following figure
N
shows the introduction page of a sample report.
Figure 11.4: Introduction Page of a Sample Report

(Source: http://image.slidesharecdn.com/introtoenglishlit-140624025515-phpapp01/95/
introduction-to-literature-in-english-3-638.jpg?cb=1403578615)
Literature review: A literature review gives an account of what has

already been published by different authors, scholars and research-
ers on the topics taken up by the researcher in the research report.

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Methodology: This section explains the ways that were employed

in obtaining the data as well as the techniques in interpreting
them and deriving to the conclusion. It should give a completely
accurate description of the equipment and the techniques used for
gathering the data.
Results: The results of the research are described here but are not
interpreted. The interpretation of results takes place in the ‘Con-
clusion section.
Discussion: The discussion provides all the details required to un-
derstand what the report is about. It includes data needed to un-
derstand what is happening, what was discovered in the course of
the research, and what needs to be done next.
Conclusion: The main conclusions reached in the discussion are
provided here. They reflect the opinions of the author.
S
Summary: The summary is a short form of the entire report and
must be written in non-technical terms. Although short, the sum-
mary should be informative and include the salient features of the
IM
report. This summary is generally written in the end after the rest
of the report has been written.
Recommendations: A report generally provides recommenda-
tions that state what must be done in case the discussion and con-
clusions suggest a certain course of action needs to be taken.
M
1. A ________________ is a document that is prepared by an

analyst and focuses on a particular aspect of any business,
N
industry or sector, a currency, or even a geographic region or

country.
2. Research reports are prepared by different people or bodies
such as market research firms or in-house research teams of
big companies. (True/False)
3. The table of contents section of a report should generally be
very detailed. (True/False)
4. The ________helps a reader to know the discussion that is to
come in the report.
5. Correct interpretation of the _________ is critical as any
misinterpretation can lead to wrong conclusions.
Activity
Using the Internet, prepare a market research report of products

and services offered by any FMCG company of your choice.

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11.3 PRESENTING THE RESEARCH REPORT

Once the research report has been prepared and interpreted, it must
be presented to the concerned authority, which may be a client, an
organisation, stakeholders, etc. A research report may be presented
either orally or in written form. When giving an oral presentation, the
presenter needs to consider the following points:
Length: The length of the time of an oral presentation is critical.
If the presentation is short, say around 10 minutes, then the focus
should be on the important findings of the report. If more time is
available for the presentation, say 30 minutes or more, then the
presenter can support his/her findings with supplementary mate-
rial. However, remember that in a short oral report, it is easier to
keep the audience engaged but if the presentation gets too long,
S
the presenter risks losing the attention of the audience.
Audience: The audience plays an important role in the way a re-
search report is presented. For example, if the audience consists
IM
of specialists in the subject of the research report, then technical
terms can be used without needing to define them.
Presentation tool: An oral report can be presented by using soft-
ware such as MS PowerPoint. Such a presentation can be used to
show the report in the form of short points for easy comprehension
while the presenter explains each point orally in detail for the ben-
M
efit of the audience. Also, difficult concepts can be explained with

the help of tables, figures and other graphics. This help makes the
concepts easier to understand for the audience. Also, the present-
er can make intelligent use of colour and other tools to make the
presentation attractive.
N
Tone: The presenter needs to present the report in a formal and

articulate manner. A formal tone helps in conveying a professional
attitude and helps to command the attention of the audience. The
presenter must have a pleasing voice that is audible to everyone.
The tone should be authoritative but friendly at the same time.
Practice: The presenter needs to know the report in detail. He/
she should prepare in advance before giving the presentation. The
presenter must also ensure that the content is easy to understand
and flow of information is logical. Apart from this, the presenter
must be prepared for any questions that the audience may ask
during the course of the presentation.
A written report, on the other hand, is prepared on the basis of a

pre-defined format, which has been discussed in the previous section.
The written report follows a systematic and structured process. The
following are some guidelines while preparing a written report:
Use correct punctuation, grammar and spelling.
Avoid use of colloquial or informal language.

n o t e s
Avoid use of vague, unclear and imprecise words as this would

dilute the focus of the report. This may also lead to ambiguity and
wrong interpretation by the reader.
Number the pages of the report correctly.
Use a well-defined formatting scheme to organise the report. For
example, the font size and style of the headings, subheadings, fig-
ure and table captions, etc., should be consistent for easy readabili-
ty. The same applies to the use of any colour schemes in the report.
11.3.1 DIFFERENCEs BETWEEN ORAL AND WRITTEN

REPORTS
A research report, whether oral or written, must serve its primary

function, that is, to communicate the findings of the research to the
S
intended audience. However, there are some significant differences
between an oral report and a written report that need to be under-
stood. This would help you decide the mode of presentation of your
report. The main differences between an oral report and a written
IM
report are as follows:
An oral report depends on the skill and experience of the present-
er in presenting the report. The presentation must be informative
and engage the attention of the audience at all times. A written re-
port, on the other hand, does not require the undivided attention
of the readers and they can read it at their own pace and conve-
M
nience.
Time is always a critical factor in the case of oral reports. The pre-
senter has to finish the presentation at the time allotted to him/her.
He/she has to pace the presentation in such a way that all import-
N
ant points are covered with ample time to spare for the questions
from the audience. Also, the presenter needs to maintain the in-
terest of the audience. Dwelling on a particular point for too long
may lead to boredom and the audience may lose interest quickly.
Therefore, maintaining the right pace while keeping the interest
of the audience alive is a delicate balancing act that the presenter
has to perform throughout presentation.
Feedback in the case of an oral presentation is generally quick, and
provided at the end of the presentation. In the case of a written re-
port, however, it takes time to get the feedback from the readers
and incorporate any suggested changes required in the report.
6. While presenting a research report orally, the presenter

does not need to consider the length of the presentation.
(True/False)

n o t e s
7. In a _______ presentation, the author should avoid use of

colloquial or informal language.
8. Time is always a critical factor in the case of oral reports.
(True/False)
9. _______ in the case of an oral presentation is generally quick,
and provided at the end of the presentation.
Activity
Prepare a presentation using MS PowerPoint on the launch of Ap-

ple iPhone 6.
11.4 SUMMARY
S
A research report is a document that is prepared by an analyst and
focuses on a particular aspect of any business, industry or sector, a
currency, or even a geographic region or country.
IM
Preparing a research report consists of specific steps that must
be followed to ensure that the report is complete in all respects.
These steps include analysing the task, developing a rough plan,
drafting the body of the report, drafting the supplementary mate-
rial, and checking the report.
M
While organising a research report, you should ensure that it con-

tains relevant data and correct analysis. The data need to be accu-
rate and reliable. In addition, the structure of the report should be
logical and easy to understand and follow.
N
After the report has been organised, the next step is to interpret
the findings that have emerged from the analysis and interpreta-
tion of the research data. Correct interpretation of findings is criti-
cal as any misinterpretation can lead to wrong conclusions.
In general, a typical research report includes the following sec-
tions: Title page, table of contents, introduction, literature review,
methodology, results, discussion, conclusion, summary and rec-
ommendations.
A research report may be presented either orally or in written
form.
key words
Appendices: These are provided to give additional information

about the report. This information is not essential to explain the
findings, but it supports the analysis and validates the conclu-
sions of the report.
Interpretation: It is the process of understanding the numeri-
cal data that have been collected, analysed and presented.

n o t e s
Literature review: It gives an account of what has already been

published by different authors, scholars and researchers on the
topics taken up by the researcher in the research report.
Methodology: It is an accurate description of the equipment
and the techniques used for gathering the data in research.
Research: It is the systematic study and evaluation of facts in
order to draw conclusions from them.

1. What is a research report? Describe the steps taken to prepare a
research report.
S
2. Write a short note on organising a research report.
3. What are the guidelines that need to be followed while interpreting
a report?
IM
4. Discuss the format of the research report.
5. Write a note on the oral and written presentation of a report.

M

Research Report 1. Research report
N
2. True
3. False
4. Introduction
5. Findings
Presenting the Research Report 6. False
7. Written
8. True
9. Feedback

1. A research report is a document that is prepared by an analyst
and focuses on a particular aspect of any business, industry or
sector, a currency, or even a geographic region or country. The
steps for preparing a research report include analysing the task,
developing a rough plan, drafting the body of the report, etc.
Refer to Section 11.2 Research Report.

n o t e s
2. While organising a research report, you should ensure that it

contains relevant data and correct analysis. The data need to
be accurate and reliable. In addition, the structure of the report
should be logical and easy to understand and follow. Refer to
Section 11.2 Research Report.
3. Some guidelines to be followed while interpreting a report
include ensuring the data presented for interpretation are
correct, reliable, and free from errors, such as missing values
and incorrect calculations, ensuring that appropriate statistical
techniques are applied during the testing of the data, etc. Refer
to Section 11.2 Research Report.
4. In general, a typical research report includes the following
sections: Title page, table of contents, introduction, literature
review, methodology, results, discussion, conclusion, summary
S
and recommendations. Refer to Section 11.2 Research Report.
5. A research report may be presented either orally or in written
form. However, whether oral or written, a report must serve
IM
its primary function, that is, to communicate the findings
of the research to the intended audience. Refer to Section
11.3 Presenting the Research Report.

11.7
REFERENCE
M
SUGGESTED READINGS
Beri, G.C. (2005). Marketing research. New Delhi, Tata McGraw
Hill.
N
Kothari, C.R. (2004). Research methodology: Methods and tech-

niques. New Delhi, New Age International.
Kumar, R. (2014). Research methodology: A step by step guide for
beginners. New Delhi, Sage Publishing.
E-REFERENCES
Virginia.edu,. ‘Oral Presentation Tips, Center for Undergraduate
Excellence, U.Va.
Jsu.edu,. ‘Format of Research Reports’.
Library.bcu.ac.uk,. ‘How To Write A Report’. N.p., 2015. Web. 23
Oct. 2015.

C
12
hapter
EMERGING CONCEPTS AND APPLICATIONS IN MR
CONTENTS
S
12.1 Introduction
12.2 Database Marketing
IM
12.2.1 Steps in Database Marketing
Activity
12.3 Business Intelligence, Analytics and Big Data
Activity
M
12.4 E-commerce
Activity
12.5 Social and Mobile Marketing
N

Activity
12.6 Summary

n o t e s
E-COMMERCE OPERATIONS IN ICICI BANK
Market research is evolving at a rapid pace. Frequent innovations

and radical changes in the field of market research have changed
the business scenario across all industries. The market research
performance of organisations enhanced to an extent that they
are able to have a holistic view of customers’ needs. The effect of
these innovations is evident in the banking sector too. This case
study will elaborate on e-commerce operations of ICICI banks.
ICICI is the second largest, private sector bank in India. It has

successfully established a network of 3,377 branches in India and
has successfully expanded its business in other countries. While
progressing in the e-banking trend, ICICI has established over
11,000 ATMs in India (as per ICICI data, 2013). The bank also pro-
S
vides debit and credit card facilities to its customers, with the help
of which its customers enjoy the benefits of plastic money.
IM
Online net banking and mobile banking facilities are also avail-
able with ICICI. The bank launched Internet banking services
with the name of ‘Infinity’ in December 1997. At present, more
than 30 lakh customers have joined the bank through its Internet
banking system. The different e-banking facilities offered by ICI-
CI Bank are categorised as follows:
M
ATM banking: This offers anytime banking through a wide-

spread network of ATMs. ATM banking makes the banking
experience easy and convenient for users. In every ICICI bank
ATM, there is a user-friendly graphic screen that provides
easy-to-follow instructions (in their desired language) to the
N
users for performing their desired banking functions.

Internet or net banking: This provides access to all the bank-
ing operations such as cash transactions, loans and credit
cards. The most commonly performed net banking operations
include checking account balance, transferring funds, down-
loading online account statements, paying bills and conduct-
ing online transactions.
Mobile banking: This allows account-related enquiries, trans-
fer of funds, payment of credit card and utility bills and much
more through mobile phones. The ICICI Bank’s iMobile appli-
cation enables users to perform all these banking operations
free of cost. Users only have to download this application on
their mobile phone to have access to banking services.
Phone banking/IVR banking: This offers banking operations
to be performed by making a toll-free telephone call. This tele-
phone call is answered by the ICICI Bank’s Interactive Voice

EMERGING CONCEPTS AND APPLICATIONS IN MR 237
n o t e s
Response (IVR) banking service. Users may select their de-

sired function from the options given by the IVR.
Television banking: This offers an advanced banking facility
for its Indian customers. This facility enables people to get in-
formation regarding loans, accounts, deposits and a lot more,
while they are watching television.
ICICI takes care of its customers’ convenience while offering

e-banking facilities. The bank provides steps to guide its custom-
ers in net banking transactions. The website states, “just three
easy steps to go online Internet banking”. Apart from conve-
nience, secure banking is one of the major areas of attention for
ICICI Bank. It provides all essential guidelines to its customers to
ensure safe access to their ICICI accounts.
S
IM
M
N

n o t e s
learning objectives

>> Describe the concept of database marketing
>> Explain the concept of business intelligence, analytics and
big data
>> Discuss the concept of e-commerce
>> Explain social and mobile marketing
12.1 introduction
In the previous unit, you studied basic issues related to the marketing
research process. Marketing research has been rapidly gaining im-
S
portance in organisations as it is a systematic process of gathering,
recording and examining data to solve marketing problems. Various
emerging concepts, such as database marketing, business intelligence,
IM
big data, e-commerce and social and media marketing, have largely
contributed to the marketing research activities of organisations.
Database marketing is a practice of promoting a product and develop-

ing personalised communication with customers using the database
of customers or potential customers. Business intelligence is a pro-
cess of implementing various tools and techniques for converting data
M
available in a raw form into meaningful information for the purpose of

business analysis. Big data refers to a large volume of data that can be
available in structured, semi-structured and unstructured forms and
has potential to be converted into meaningful information.
N
The business environment has gone through transformation with the

advancement of an information and communication technology. The
emergence of electronic business practices is the most significant of
these modifications. E-commerce or electronic commerce is a process
of buying and selling products and services through electronic me-
diums, primarily the Internet. These transactions can take place be-
tween business-to-business (B2B), business-to-consumer (B2C) and
consumer-to-consumer (C2C). Social and media marketing is another
result of growing information and communication technologies. It in-
volves promoting and selling products and through social networking
sites such as Facebook, Twitter, etc.
In this chapter, you will study various concepts and applications in

marketing research in detail. These concepts include database mar-
keting, business intelligence, business analytics, big data, e-commerce
and social and mobile marketing.

n o t e s
12.2 Database marketing

Database marketing is a systematic approach to collect, consolidate
and process high quality data from a customer database for market-
ing research purposes. It generates targeted customer lists for direct
marketing communications. Businesses use database marketing for
refining their marketing campaigns. The following are some popular
definitions of database marketing:
According to Blattberg et al., database marketing is the use of customer

database to enhance marketing productivity through more effective ac-
quisition, retention, and development of customers.
As per Shaw and Stone, database marketing is an interactive approach

to marketing, which uses the individually addressable marketing media
and channels (such as mail, telephone and the sales force): to extend help
S
to a company’s target audience; to stimulate their demand; and to stay
close to them by recording and keeping an electronic database memory of
the customer, prospect and all commercial contacts, to help improve all
IM
future contacts and to ensure more realistic of all marketing.
The data collected in database marketing are used for various mar-
keting purposes, such as identifying target customers, selecting tar-
get markets for specific campaigns and providing more specialised
offerings to customers. It is collected through various sources, such
as visiting cards, emails and directories. Database marketing is wide-
M
ly deployed by large-scale organisations having a large supply chain

network. The data stored in a database include customers’ name, age,
income, location, reference, transaction history, needs and preferenc-
es, etc. These data can be collected through surveys, questionnaires,
interviews, e-mails, SMS, telephonic conversation, live Web chats, etc.
N
Database marketing helps an organisation in several ways, which are:

Differentiating between valuable and non-valuable customers
Determining the demand for products and services
Maintaining long-term relationships with customers
Determining the lifetime value and buying behaviour of customers
Collecting customer feedback and using it for future marketing ac-

tivities
Conducting product and market research
Improving the performance of different channels of distribution
However, database marketing has some disadvantages, which are:

Involves huge cost and efforts of an organisation
Requires new applications and skills for analytical decision
making
Provides incorrect information if the data are corrupt

n o t e s
12.2.1 STEPS IN DATABASE MARKETING
Database marketing is a process of promoting a product and com-

municating product-related information to customers with the help
of a customer database. This database helps an organisation to store,
maintain and retrieve data related to routine marketing and selling
efforts as and when required. Moreover, the database contains data
related to customers’ personal, demographic, geographic and psycho-
logical aspects, which help the organisation to target products as per
these aspects. Database marketing helps an organisation to identify
potential customers and determine who can be converted to loyal cus-
tomers. Figure 12.1 shows steps in database marketing:
Data Collection Data Conversion Data Formulation
S
Figure 12.1: Database Marketing Process
These steps are discussed as follows:

IM
1. Data collection: This is the first step that involves gathering data
from various sources such as business cards, emails, customer’s
response to surveys and customer’s complaints. The aim is to
gather as much information from any available source. The
main aim of data collection is to capture accurate data that are
translated further into quality data.
M
2. Data conversion: This step involves transforming the collected

data (in raw form) into meaningful information. In this step,
redundant and unwanted data are eliminated.
3. Strategy formulation: After obtaining the data, strategies are
N
developed for conducting the marketing research process. These

strategies can be decreasing prices, developing schemes for the
product, etc.
1. Which of the following is a systematic approach to collect,

consolidate and process high quality data from a customer
database for marketing research purposes?
a. E-commerce b. Database marketing
c. Data analytics d. Business intelligence
2. Database marketing is widely deployed by large-scale
organisations having a large supply chain network.
(True/ False)
3. ________ involves transforming the collected data (in raw
form) into meaningful information.
4. Data are gathered from various sources such as ________ .

n o t e s
Activity
Using the Internet, find information on how database marketing is

helpful for retail organisations.
Business Intelligence, Analytics

12.3
and Big Data
Advancements in technology have created new relationships between

different business parties. These parties can now have real-time ac-
cess to customer data even from remote locations and expedite sup-
ply chain activities accordingly. This could have been possible due to
emerging marketing research techniques. Some of these techniques
are business intelligence, analytics and big data. Let us discuss them
S
in detail.
BUSINESS INTELLIGENCE
IM
Business intelligence is an application of techniques for processing
raw data into meaningful information. This information helps manag-
ers, corporate executives and other end users to make more informed
business decisions. Business intelligence also helps them to develop
queries against data and create reports to form analytical results. The
M
following are the main advantages of business intelligence:

Accelerates the decision-making process in an organisation
Optimises internal business processes
Increases operational efficiency
N
Gains advantages over competitors

Identifies market trends
The main techniques that are applied under business intelligence are
as follows:
Online Analytical Processing (OLAP)
Mobile business intelligence
Enterprise reporting
Open source business intelligence
Data mining
BUSINESS ANALYTICS
Business analytics is a process of evaluating data using various tech-

niques such as statistical methods, operational methods and optimisa-
tion methods. It can be implemented in any department of the organ-

n o t e s
isation. The benefits of business analytics are as follows:

Improves and speeds up the business decision-making process
Increases the revenues of the organisation
Shares information with the large audience
Develops a universal view of enterprise information
BIG DATA
Big data refers to filtering out meaningful information from a large vol-
ume, velocity, variety, variability and complexity of data. It has proved
as a new marketing landscape for organisations by having access to
customer data available in an abundant amount. Big data enables an
organisation to make informed decisions by strengthening customer
engagement, enhancing operations, avoiding threats and exploiting
S
new market opportunities. There are three Vs of big data, which are:
Volume: It stands for the amount of data that are available. The
availability may be in the form of a database or data warehouse.
IM
Example of voluminous data can be the data pertaining to market-
ing and selling activities of organisations for the last 50 years.
Velocity: It is the speed at which the data are being generated. This
is usually observed in transactions. Examples include the number
of visitors of an organisation’s website.
M
Veracity: It refers to the authenticity of the data. This means to

validate and verify whether the data are accurate.
There are two more dimensions related to the big data, which are:
N
Variability: Data available on various sources are highly inconsis-

tent. For example, buying patterns of customers are generally in-
consistent as some customers always prefer to try something new.
Complexity: As data come from multiple sources, they are avail-
able in a raw form. To use these data, an organisation needs to link,
match, clean and transform data across systems.
5. _________________ is an application of techniques for

processing raw data into meaningful information.
6. Which of the following is a process of evaluating data using
various techniques such as statistical methods, operational
methods and optimisation methods?
a. E-commerce b. Database marketing
c. Business analytics d. Business intelligence

n o t e s
7. ______________ refers to filtering out meaningful information

from a large volume, velocity, variety, variability and
complexity of data.
8. ____________ is the speed at which the data are being generated.
9. Volume stands for the amount of data that are available.
(True/False)
Activity
Find information on the benefits of business intelligence enjoyed by

organisations in real life. Prepare a report based on your findings.
12.4 E-commerce
S
E-commerce is a process of conducting business on the Internet. The
term electronic commerce is made up of two distinct terms, that are
IM
electronic and commerce. Anything electronic is said to be run or uti-
lised through electronic mediums and electronic devices such as com-
puter, the Internet and television. Commerce refers to buying and sell-
ing of products and services between organisations and customers.
Examples of e-commerce organisations include Flipkart, Amazon,
Snapdeal, etc. Figure 12.2 explains the concept of e-commerce:
M
Online
Transactions
In the form of Electronic Media and
N
User computer network Electronic

Activities such as the Internet, Commerce
Buying, Selling
and Marketing intranet and extranet
of Products and
Services
Figure 12.2: Meaning of E-Commerce
The following are the distinguishing features of e-commerce:

Virtual existence: E-commerce facilities are available through
electronic mediums and do not have any physical appearance.
These are saved and made available through networks. For ex-
ample, a virtual shopping mall, a virtual advertising firm and an
online auction. The products available in a virtual shopping mall
cannot be touched. A virtual advertising firm does not function
through a building. An online auction is not conducted at any spe-
cific location or place but through a network.
Availability: This is the feature of all-time availability of services
offered in an electronic form. For example, an online store is open
every time and every day while a store situated in a building may

n o t e s
be closed at night and on holidays. The location barrier is also not

applicable for e-commerce as this facility can be made available
worldwide and can serve a number of people at the same time.
Quicker approach: Commercial activities performed through
an electronic media are less time consuming. This is because in
e-commerce, the user does not need to travel any physical dis-
tance to take part in these activities. The only distance that exists
is the one between the end-user and a network-enabled electronic
device. It takes less time to perform various trade and transaction
activities with e-commerce.
Comfort for buyers: As a buyer can do transaction and shopping
anytime without spending a lot of time, money or effort, it becomes
a comfortable process for the buyer. Business buyers can search
suppliers and perform bidding activities more comfortably as com-
S
pared to doing it at a physical location.
Comfort for suppliers/sellers: Sellers can advertise and promote
their products in the e-market place at a lesser expense due to less
IM
consumption of time, cost and money.
Every e-commerce transaction generates data that can be utilised for

business intelligence and marketing research purposes by organisa-
tions.
M
10. E-commerce facilities are available through electronic

mediums and do not have any physical appearance. (True/
False)
N
11. An e-commerce transaction does not generate any data. (True/

False)
Activity
Compare the operations of a virtual store and a physical store. Pre-

pare a report on the pros and cons of operations perform by these
stores.
12.5 SOCIAL AND MOBILE MARKETING

The Internet is the driving medium for carrying out e-commerce op-
erations. The advent of social sites such as Facebook and Twitter has
become crucial in the process of marketing operations. This is because
any information that is floated on social networking sites travels much
faster than any other medium. It is on account of these benefits that

n o t e s
social and mobile marketing has gained tremendous importance in

the recent times.
Let us first learn about the social media marketing.
Social media marketing is a process of gaining website traffic/custom-

ers through social media sites. This is a platform that is easily accessi-
ble to anybody with just an Internet access. This is the cheapest plat-
form for marketing organisations to implement marketing campaigns.
A wide application and connectivity of people through social media by
using smartphones and other devices has opened a plethora of oppor-
tunities for market researchers to carry out the research process.
Social media marketing allows individuals to interact with one another

and build relationships online. Organisations can contact individuals
directly through these networks. The personal interaction can instil a
S
feeling of loyalty in a relationship between a seller and the customer.
Products can also reach customers by choosing the targeted audience.
Another type of marketing is mobile marketing, which involves mo-

IM
bile business services through Internet-enabled mobile phones. Mo-
bile phones are easy to carry anywhere as compared to computers or
laptops. This makes the user capable of using the Internet for such
services from anywhere through a mobile network. If there is any
need to contact or save a contact, it becomes easy on mobile com-
merce. Mobiles nowadays provide various useful applications that are
M
popularly known as mobile apps.
A market researcher has the following advantages in the case of social

and mobile marketing. Some of the advantages are as follows:
N
Help in conducting immediate surveys which help the researcher

to collect the data and gauge trends
Develops relationships with customers through low-cost person-
alised communication
Helps in personalising offers for customers
Allows marketers to easily answer customers queries
12. ___________________ is a process of gaining website traffic/

customers through social media sites.
13. Mobiles nowadays provide various useful applications that
are popularly known as _______________.

14. Social media is the cheapest platform for marketing
organisations to implement marketing campaigns. (True/False)

n o t e s
Activity
Find examples of some organisations that have experienced in-

creased sales and customer base after adopting social and mobile
marketing. Prepare a report based on your findings.
12.6 SUMMARY
Various emerging concepts, such as database marketing, business
intelligence, big data, e-commerce and social and media market-
ing, have largely contributed to the marketing research activities
of organisations.
Database marketing is a systematic approach to collect, consoli-
date and process high quality data from a customer database for
S
marketing research purposes. It generates targeted customer lists
for direct marketing communications. Data collection, data con-
version and strategy formulation are the three steps in database
IM
marketing process.
Business intelligence is an application of techniques for process-
ing raw data into meaningful information. This information helps
managers, corporate executives and other end users to make more
informed business decisions.
Business analytics is a process of evaluating data using various
M
techniques such as statistical methods, operational methods and

optimisation methods.
Big data refers to filtering out meaningful information from a large
volume, velocity, variety, variability and complexity of data.
N
E-commerce is a process of conducting business on the Internet.

The term electronic commerce is made up of two distinct terms,
that are electronic and commerce. Anything electronic is said to be
run or utilised through electronic mediums and electronic devices
such as computer, the Internet and television.
key words
Analytics: It is a process of analysing the data through statisti-

cal methods.
Business intelligence: It is a technique deployed to generate
useful information from raw data.
E-commerce: It implies conducting business activities through
the Internet.
Internet: It is the medium through which people are connect-
ed with one another through computers or any other devices
which use specific type of software.

n o t e s
Social media: It is the media through which several individuals

create, share and exchange information in communities.

1. Explain database marketing. List some of its benefits.
2. What are the steps in database marketing?
3. Explain business intelligence.
4. What is big data? Explain its 3Vs.
5. What is meant by e-commerce? Explain with examples.
6. What are the advantages of social and mobile marketing?
S
IM

Database Marketing 1. b. Database marketing
2. True
M
3. Data conversion
4. Business cards, emails, custom-

er’s response to surveys and
customer’s complaints
N
Business Intelligence, Analyt- 5. Business intelligence

ics and Big Data
6. c. Business analytics
7. Big data
8. Velocity
9. True
E-commerce 10. True
11. False
Social and Mobile Marketing 12. Social media marketing

13. Mobile apps
14. True

n o t e s

1. Database marketing is a systematic approach to collect,
consolidate and process high quality data from a customer
database for marketing research purposes. Refer to Section
12.2 Database Marketing.
2. Data collection, data conversion and strategy formulation are the
three steps in the database marketing process. Refer to Section
12.2 Database Marketing.
3. Business intelligence is an application of techniques for
processing raw data into meaningful information. Refer to
Section 12.3 Business Intelligence, Analytics and Big Data.
4. Big data refers to filtering out meaningful information from a
large volume, velocity, variety, variability and complexity of
data. Refer to Section 12.3 Business Intelligence, Analytics and
S
Big Data.
5. E-commerce is a process of conducting business on the Internet.
IM
Refer to Section 12.4 E-commerce.
6. Social media marketing is a process of gaining website traffic/
customers through social media sites. Refer to Section
12.5 Social and Mobile Marketing.

M
12.9
REFERENCE
SUGGESTED READINGS
N
Beri, G.C., (2005), Marketing research, Tata McGraw Hill Publish-

ing Company Limited
E-REFERENCES
Roberts, John. H, Kayande, Ujwal, From academic research to
marketing practice: Exploring the marketing science value chain
Retrieved on 2nd September, 2015 from http://www.sciencedirect.
com/science/article/pii/S0167811613000852

C
13
hapter
CASE STUDIES
S
CONTENTS
Case study 1 Managerial Decision-Making Through Market Research

Case study 2 Use of Capi by Land Rover
IM
Case study 3 The Google Mode of Data Collection
Case study 4 Defining Sampling Frame for Convenience Stores
Case study 5 Campbell-Ewald’s Respect Survey
Case study 6 Use of Quick Surveys by e-Consultancy
Case study 7 Marketing Strategy Development Through Data Analysis
M
Case study 8 Product Development Through Market Research in New Balance

Athletic Shoe
Case study 9 Marketing Research at iis Consultancy
Case study 10 Brand Positioning Strategy Development Through Focus Group Study
at PeveLy Dairy Co.
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Case study 11 Significance of Repeat Buyers in Success of New Products

Case study 12 Amazon Web Services to Add Analytics

Case study 1
n o t e s
MANAGERIAL DECISION-MAKING THROUGH

MARKET RESEARCH
This case study discusses an overview of Marketing Research as a

tool for making managerial decisions. It is with respect to Chapter
1 of the book.
S
(Source: forbes.com)
Royal Ahold is a world supermarket leader based in Netherlands.

IM
The supermarket has over 1,750 outlets, including the flagship Al-
bert Heijn supermarkets. Worldwide, Ahold caters to 20 million
customers on weekly basis across 3,400 stores in 17 countries,
namely, US, Europe, South American Countries and some of the
Asian countries. Customer orientation is the top priority of Roy-
al Ahold, which it targets to achieve. It has formulated a slogan
M
that says customer comes first: ‘However big we become, howev-

er international, it is ultimately the customer who determines our
success’.
Of late, Royal Ahold wanted to strengthen the means and mecha-

N
nisms for sustaining its philosophy of ‘customer comes first’. This

was not due to any slackness on the part of the business units or
any other factors such as competitors adopting new strategy to
thwart the leadership position. It was simply because the process-
es were becoming monotonous and that they wanted something
new to serve the customer in a better way by understanding their
needs and requirements more specifically.
Thus, they adopted some of the measures which are enumerated

below:
Applying the recommendations of audit findings from A.C.
Nielsen to obtain global trends, customer behaviour, and the
opportunities for market expansion.
Applying the concept of focus groups which were the major
source of information pertaining to customers and potential
customers. Further, they deployed, various observational ap-
proaches such as customer behaviour in the store, what cus-
tomers think about the store, etc.

Case study 1: MANAGERIAL DECISION-MAKING THROUGH MARKET RESEARCH 251
Case study 1
n o t e s
Sharing the best practices and the know-how among the vari-
ous managers and other researchers
Thus, by implementing the above strategies Royal Ahold was
able to improvise their processes and was thus able to serve
their customer in a more efficient manner.
(Source: Data retrieved from: Ahold.com,. (2015). The Netherlands. Retrieved
29 October 2015, from https://www.ahold.com/Media/The-Netherlands.htm)
questions
1. What strategies could be adopted by Royal Ahold to live

upto the maxim of ‘customer comes first’.
(Hint: Conducting primary market research on the
customers, conducting secondary research to understand
S
consumer behaviours, taking direct interviews with the
customers, asking customers to fill feedback forms.)
2. Among the several means and mechanisms of achieving
IM
customer focus, which one of them in your opinion will
be the most effective. You must support your answer with
relevant examples.
(Hint: Taking direct feedback from the customers as this
will ensure two-way communication.)
M
N

Case study 2
n o t e s
USE OF CAPI BY LAND ROVER
This case study discusses the use of Computer-Assisted Personal In-

terviewing (CAPI) by Land Rover to identify which of its SUV car
brands are more attractive to customers. It is with respect to Chap-
ter 2 of the book.
Land Rover is a part of the Jaguar Land Rover brand, which is

itself a subsidiary of Tata Motors. It is famous for making four-
wheel drive cars.
S
IM
(Source: www.boldride.com)
Land Rover cares about its brand image and wants to be seen as
the premier brand in the SUV car category. To periodically mon-
M
itor its brand image, the company uses a data collection method-
ology known as CAPI (Computer-Assisted Personal Interviewing)
to assess the company’s brand value in each country where Land
Rover is sold. Land Rover’s market share is predominantly in Eu-
rope.
N
The company is currently focusing on enhancing its brand im-

age and conducted a CAPI market research in order to identify
which of its car brands (Range Rover, Discovery, Defender, etc.)
are more attractive to customers looking to switch to an SUV car.
The results of the research conducted by CAPI are as follows:

Buyers looking to switch to the 4x4 SUV category were pre-
dominantly interested in the Discovery and Defender models
of Land Rover.
Buyers looking to switch to a luxury SUV model were interest-
ed in the Range Rover model of Land Rover.
Buyers looking to switch to 4x2 SUV were interested in the
Evoque model of Range Rover.

Case study 2: USE OF CAPI BY LAND ROVER 253
Case study 2
n o t e s
questions
1. How does Land Rover monitor its brand image?

(Hint: By periodically monitoring its brand image by
using a data collection methodology known as CAPI.)
2. What were the results of the market research conducted
by CAPI?
(Hint: Buyers looking to switch to 4x2 SUV were
interested in the Evoque model of Range Rover, those
looking to switch to a luxury SUV model were interested
in the Range Rover model of Land Rover.)
S
IM
M
N

Case study 3
n o t e s
THE GOOGLE MODE of DATA COLLECTION
This case study discusses the online primary data collection tools
offered by Google. It is with respect to Chapter 3 of the book.
(Source: searchengineland.com)
S
Data is the foundation of every type of research. If the collected
data is not relevant, reliable and valid, it may affect the results
of the research negatively, and the entire effort put into the re-
IM
search may go in vain. Therefore, collection of data is one of the
major tasks in any type of research. Organisations, in order to
collect data about the market conditions and target customers,
use several data collection techniques such as surveys, mailers,
in-face talks, online surveys, etc., to understand their customer’s
needs more clearly. However, collecting marketing research data
M
was never an easy task for organisations. Google, the world’s larg-
est search engine, has largely contributed in simplifying the task
of data collection by providing various effective tools and tech-
niques.
N
Headquartered in California, US, Google Inc. is a multinational

technology-based company that specialises in Internet-related
products and services. Goggle provides four data-collection meth-
ods to help organisations in conducting online market research.
These methods are:
Keyword Searches: Google offers its clients a platform to per-

form real-time keyword searches related to their brands. This
could help clients in discovering new terms or phrases to mark,
developing new content pages, creating or adding new features or
services and giving further insight into how a customer wants to
interact with a company.
Customers perform searches about different organisations every

day. Therefore, it is important for organisations to increase the
possible keywords, terms, or phrases so that a large number of
customers can visit their websites. For example, a company sell-
ing dishwashers may study the search results and find that more
searches were made for dishwasher repair services. This may

Case study 3: THE GOOGLE MODE of DATA COLLECTION 255
Case study 3
n o t e s
help the company in understanding the customer’s needs, and in

response, it could highlight dishwasher repair services as an add-
on in keyword searches.
Google offers various tools like ‘Google’s Keyword Research Tool’

to help its clients get a comparative view of the search traffic for
particular terms and market competition.
Google Crowdsourcing (Google+): Apart from being a social

platform, Google+ is largely used by the companies in the data
collection process. Companies can use their follower base on
Google+ as an active focus group by posting some questions and
encouraging consumer feedback. They can optimise Google+
circles (target user groups) by selecting specific users. This may
help in obtaining responses to target questions specific to certain
S
customer segments.
Online Surveys: Traditionally, business owners have been con-

ducting customer surveys through ordinary mail or telephone.
IM
However, online surveys are gaining popularity these days as an
easy and inexpensive way of gathering customer insight. Online
surveys are ideal for obtaining data on demographic conditions,
new and current products, customer requirements, customer sat-
isfaction level, etc. It also helps in getting answers to open-ended
questions and discussing customer’s insight on a particular issue
M
related to the research.
Google allows its clients to conduct free online surveys by simply

creating a new online market research form, which is available
on Google Docs. These forms can be used by companies to poll
N
customers on various aspects related to their business. Google

provides multiple formats such as text, paragraph text, multiple
choice, checkboxes, scale, list or grid answering, to create the re-
search form. After creating the form, the companies can embed it
directly on their blog/website or send the link to target customers
to fill out online. Google records the answers and gives the raw
data to the clients.
Google Consumer Surveys: This is a comparatively new mar-

ket research tool from Google that helps clients in gaining access
to not only their target customers but also to Google’s complete
publisher network. Google Consumer Surveys is an initiative to
take free online surveys a step further. It enables website owners
to create online surveys and share them with Google’s publisher
network. They need to pay a small amount of $10 per response.
While traditional online surveys are suitable for polling custom-
ers, Google Consumer Surveys is more appropriate for obtaining
information on different functional areas, logo/site design issues,
or brand equity evaluation.

Case study 3
n o t e s
(Source: www.google.com)
Let us take an example to understand how Google Consumer Sur-

veys works. Suppose a customer visits a website where he comes
S
across some content that is readable up to one or two paragraphs.
The rest of the content is hazy. A survey appears between the
readable paragraph and the hazy content, which shows a simple
IM
question posed by a market research firm. These surveys contain
one or two questions and they may appear in different formats,
like star rating or multiple choice, etc. As soon as the customer
responds to these questions, the hazy content instantly becomes
clear. Visitors also get a very short message informing about the
survey and ensuring that the responses would be kept anony-
M
mous.
In addition to just providing raw data collected from the Google

Consumer Surveys, Google also provides charts, detailed feed-
back and customer insight on the basis of age, gender, location,
N
interests, etc. to its clients.

(Source: http://smallbiztrends.com/2012/05/conduct-market-research-google.html)
questions
1. Do you think the online market research tools offered by

Google could help organisations in collecting international
market research data?
(Hint: Yes. When it comes to international research
processes, collecting data from primary sources can be
extremely expensive. However, online market research
tools offered by Google provide a cheap and easy method
of gathering customer insight.)
2. Suppose you are the owner of a fast moving consumer
goods organisation and want to redesign the organisation’s
logo. For this you need to conduct a market research.
Which market research tools offered by Google could
help you in your task? Support your answer with reasons.

Case study 3: THE GOOGLE MODE of DATA COLLECTION 257
Case study 3
n o t e s
(Hint: In the given scenario, Google Consumer Surveys

could be used for doing the market research. This tool
provides specific samples of the target population. Clients
only need to type their questions and select the preferred
number of responses. Google does the rest of the survey
and provides aggregated and analysed data to the client
with complete statistically significant insights.)
S
IM
M
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Case study 4
n o t e s
Defining Sampling Frame for Convenience StoreS
This case study discusses the challenges in defining a sample size

for generating industry estimates. It is with respect to Chapter 4 of
the book.
Convenience Store News has been one of the leading publications

in the US for about 40 years. The publication provides insight and
analysis on different aspects of the convenience store business.
It is difficult to define the sampling frame and generate industry

estimates for Convenience Store News due to the frequency with
which existing stores are closing and new ones are coming up.
In this ever-changing environment, getting a sample is always a
challenging task. In addition, it is also difficult to define the sam-
S
pling unit.
Convenience stores continuously look for opportunities to in-

IM
crease their revenues and market share. In this regard, research
reports on convenience stores play an important role because
they provide useful information about the competition, sales and
marketing trends in the field. In addition, Convenience Store
News has also engaged the Quantitative Economics and Statistics
(QUEST) group in carrying out its research, the results of which
are published in the Convenience Store News’ annual industry
M
report.
One of the main goals of the research is to generate industry es-

timates for convenience stores in the US. National Association
N
of Convenience Stores (NACS) defines a convenience store as a

store that is less than 5,000 square feet, has off-street parking, has
least 500 stock keeping units and has a product mix that includes
grocery. The report also seeks to highlight differences between
single stores and multi-stores.
QUEST helps Convenience Store News in designing the survey

instruments and the implementation and management of the sur-
vey. In addition, it helps in the sampling and estimation processes
of the research. Convenience Store News uses data from various
sources, including the respondents who are sent to the conve-
nience stores, government and industry data, in order to develop
an authentic industry report.
There are various challenges related to sampling and estimation

in the research. These challenges can be listed as follows:
Difficulty in defining the sampling population (because the
universe from which the researchers have to derive a sample

Case study 4: Defining Sampling Frame for Convenience StoreS 259
Case study 4
n o t e s
is always changing.) Additionally, certain stores do not adhere

to the NACS’ definition of a convenience store.
Difficulty in defining the sampling unit.
Strictdeadlines and a fixed budget for Convenience Store
News to complete the research.
Sampling Population
The data about the population of convenience stores was provid-

ed by Trade Dimensions (TDLinx), which is a software solution.
This data contained the following information about convenience
stores: name, address, parent company, ultimate parent company,
store size, company size, etc. The entire data consisted of 1,37,906
records. However, this data was inconsistent because it included
S
stores with missing or wrong information. Moreover, there were
certain stores that were considered out-of-scope, such as smoke
shops and closed stores. These out-of-scope stores were eliminat-
IM
ed from the entire population to ascertain a population as follows:
Description # of Stores
Full TDLinx Population 137,906
- Smoke Shops 25
- Closed Stores 264
M
- Duplicate Stores 260

Definitions 240
Final Sampling Population 137,117
Sampling unit
N
A single convenience store was defined as a store that was not

associated with any other store while a multi-store was defined
as a store that was associated with at least one other store. There
were more than 5700 convenience stores that were associated
with more than one store. Initially, a single store was selected
as the sampling unit. In the case of multi-stores, the stores were
identified through their owners or the parent company. There-
fore, the individual owner was chosen as the sampling unit. The
number of stores associated with the owner of a single store was
one and similarly the number of stores associated with the owner
of a multi-store was two or more.
Sampling design
The single and multi-store methodology was applied, resulting in

81,686 single and 55,431 multi-stores associated with 1877 owners.
The researchers designed two strata each for single and multi-
stores. One was the certainty stratum and the other the uncer-
tainty stratum.

Case study 4
n o t e s
The sampling design for single and multi-stores is shown below,

with each design divided into two strata:
Single Stores
Stratum Definition # of Stores in # of Stores
Population in Sample
1 Weekly Volume<$90K 81,636 350
2 Weekly Volume>=$90K 50 50
Total 81,686 400
Multiple Stores
Stratum Definition # of # of
Ultimate in Ultimate
Parents in Parents in
Population Sample
S
3 # of Stores Associated<70K 1778 301
4 # of Stores Associated>=70K 99 99
Total 81,686 400
IM
For single stores, the certainty stratum comprised average week-
ly dollar sales of $90,000 or more while the uncertainty stratum
comprised average weekly dollar sales less than $90,000. The total
sample size was 400. Similarly, for multi-stores, the certainty stra-
tum comprised owners associated with 70 or more stores while
M
the uncertainty stratum comprised owner associated with less

than 70 stores. In this case also, the sample size was 400.
(Source: Adopted from, Convenience Store News,. (2004). Defining the Sampling Frame
for the Convenience Store Industry – A Case Study. Washington DC 20036: Convenience
Store New. Retrieved from https://www.amstat.org/sections/srms/Proceedings/y2005/
N
Files/JSM2005-000899.pdf)
questions
1. Why was it difficult to define the sampling population?

(Hint: It is difficult to define the sampling frame and
generate industry estimates for convenience stores due
to the frequency with which existing stores are closing
and new ones are coming up. The universe from which
researchers have to derive a sample is always changing.)
2. Why was the sample stores data stratified?
(Hint: The data was stratified to enable analysis of the
substrata population. This allowed a separate analysis
for multi-stores associated with more than 70 stores and
a separate analysis for multi-stores associated with less
than 70 stores.)

Case study 5
n o t e s
Campbell-Ewald’s Respect survey
This case study discusses the use of attitude measurement scales to

measure and improve customer loyalty and the five respect princi-
ples that impact customer loyalty. It is with reference to Chapter 5
of the book.
Campbell-Ewald is a full-service advertising and marketing com-

munications company. It provides services, such as branding,
CRM programmes and experiential events. In the past, the com-
pany has done recruitment for the American Navy. The compa-
ny was founded in 1911 by Henry Ewald and Frank-Campbell. At
present, its current employee strength is 650 (as of 2015).
Campbell-Ewald recognised that there was a very critical relation
S
between customer satisfaction and customer loyalty. One aspect
that impacts customer satisfaction is the respect that a company
gives to its customers. However, it must be remembered that ‘re-
IM
spect’ towards customers may be expressed by the company in
a number of ways. The company carried out research regarding
respect and its impact on any company as a whole, its sales, im-
age etc. The company’s findings were truly impressive which has
helped the company itself and other companies to improve their
business.
M
As of 2004, the average client relationship of the company is about

20 years whereas the industry standard is only 5.3 years. The com-
pany initially began to understand the reasons behind the relation
of customer satisfaction and customer loyalty with the company’s
N
well-being. However, this initiative grew into a big research proj-

ect. The findings of this study revealed that there were five major
principles related to people that help in maintaining long-term
relationships with the clients. The five principles are as follows:
1. Appreciate me: According to this principle, customers must
be appreciated for their purchases or being associated with
the company.
2. Intentions don’t matter; actions do: Customers value what
the company actually delivers as against what it promises it
will do.
3. Listen, then you’ll know what I said: The company must
listen to what the customer has to say and must take an
action on the same.
4. It’s about me, not about you: The company must give
priority to the needs of customers as against its own needs.
5. Admit it, you goofed: The company must apologise for any
mistake that has been made on its part. In case, a mistake

Case study 5
n o t e s
has not been made on part of the company, the company

must still apologise.
According to David Lockwood, Senior Vice President of Camp-

bell, Customer Relationship Management (CRM) is the key to
success of a company. Thus, Campbell started its analysis of CRM.
Campbell roped in Gartner Group and Accenture as its research
partners and the findings related to CRM revealed that the tradi-
tional CRM solutions which required heavy investment on hard-
ware and software were not working properly; approximately
60% of the CRM initiatives did not meet their intended purpose
and more than 55% of the CRM initiatives were not generating
any ROI. In such a condition, the intended CRM solutions did not
help or actually worsened the problem. This made Campbell look
towards some other possible solutions.
S
They began by a basic understanding that loyalty is dependent
on personal relationships and not on technology. The research-
IM
ers started reading extensively regarding personal and people re-
lationships. They read the works of Dr. Phil (relationship guru),
Steven Covey, and many more. Campbell-Ewald partnered Syn-
ovate (a marketing research firm having considerable experience
in complex multivariate analysis and large scale mail surveys) to
conduct a survey to answer the question whether or not ‘respect’
was considered as an important aspect by customers.
M
Campbell has an extensive list of customers in varied sectors such

as automobile, insurance and retail. The company understood
that the factor of respect is expressed in different forms in differ-
ent sectors. The company once again partnered with Synovate
N
to research about various aspects of respect and how it varies in

different sectors. Under this research, Synovate conducted 12 fo-
cus group discussions (four each in three different sectors namely
insurance, airlines and home furnishings).
The focus group discussions were carried out whose participants

were men and women at two locations: Chicago and Detroit. The
results of the focus group discussions were used to develop atti-
tude measurement questions and attitude statements. This activ-
ity helped in clearly demarcating various parameters of respect
in each sector. Additionally, each of the five principles of respect
could also be translated for each sector. The focus group discus-
sions now led to development of three different surveys. The sur-
vey was conducted with the help of a four-page questionnaire.
Each questionnaire comprised usual purchase questions, demo-
graphic questions and 27–29 attitude statements against which
the respondents had five choices (use of five-point scale) start-
ing at strongly agree and ending with strongly disagree. A sample
containing the attitudinal statements is given below:

Case study 5: Campbell-Ewald’s Respect survey 263
Case study 5
n o t e s
Strongly Agree Neither Disagree Strongly

Agree Agree nor Disagree
Disagree
General Respect Initiatives, across categories
Is interested in listening to what is important
� � � � �
to me as a customer
Place their own interests above those of the
� � � � �
customer
Notifies me in advance of sales and special
� � � � �
promotions
Rewards me for repeat business � � � � �
Honor commitments/promises they’ve made
� � � � �
to me
Specific Respect Initiatives, with category
Accepts return without a hassle (retail) � � � � �
Flights take off and land on schedule (airline
� � � � �
travel)
Handles claims in a timely manner (insurance) � � � � �
The respondents in the survey were the Campbell’s customers.
S
Synovate mailed five thousand surveys in each sector on its own
letterhead (to hide the identity of the actual company). About
5–9% of the customers who received the mails responded (from
each sector) which means that the sample size of the research
IM
was roughly around 200–500 for each sectoral survey. The data
so collected was analysed by Campbell and Synovate to answer
one question viz. does respect matter to a customer? The analysis
of data confirmed respect is a very important factor that impacts
customers in all the three sectors. The customers of Campbell in
all the three sectors were made aware of the results of the find-
M
ings. Keeping in perspective, the results of research, various cus-

tomers (of Campbell) developed initiatives to increase customer
loyalty such as loyalty audits etc. For instance, Continental Air-
lines (a customer of Campbell) demonstrates the principle of Ad-
mit it, you goofed in its Customer Recovery Program.
N
(Source: (2015). Retrieved 30 October 2015, from http://www.ehcca.com/presentations/

privacyfutures1/1_03_1.pdf
Campbell Ewald,. (2015). Campbell Ewald -. Retrieved 30 October 2015,
from http://www.c-e.com/)
questions
1. Why did Campbell disregard the CRM software and

hardware as tools to improve customer relationship?
(Hint: Campbell disregarded CRM software and hardware
as tools to improve customer relationship because loyalty
is dependent on personal relationships and not on
technology.)
2. How were the focus group discussions helpful in the
entire survey process?
(Hint: The results of the focus group discussions were
used to develop attitude measurement questions and
attitude statements.)

Case study 6
n o t e s
USE OF QUICK SURVEYS BY E-CONSULTANCY
This case study discusses the use of questionnaires for conducting

a market research about consumer behaviour in relation to social
gaming. It is with respect to Chapter 6 of the book.
E-consultancy is a digital publishing and training group that pub-

lishes research that helps marketers save time and make better
decisions concerning the digital environment, develop business
cases, discover best suppliers and boost their careers.
S
IM
(Source: econsultancy.com)
M
THE CHALLENGE
E-consultancy wanted to explore emerging areas of digital mar-

keting by using “Smart Packs” which are exhaustive market re-
ports. The first market research report in the Smart Pack series
N
focused upon social gaming. E-consultancy faced the challenge

of not having consumer research reports which had current pro-
prietary data available. Moreover, these consumer reports did not
fully cover the areas that the company wanted to explore.
THE OBJECTIVE
E-consultancy needed a programme of action to grasp the es-

sence of consumer behaviour with relation to social gaming. It
also wanted to develop an actionable report to conduct market
research. Moreover, in order to get enough proprietary data,
thousands of respondents would have to be surveyed. However,
the company had limited time to conduct the market survey. The
social gaming market research report had to be prepared in just
a few weeks. The company’s objective was to reach the maximum
number of people to conduct the complete survey questionnaire
as quickly as possible.

Case study 6: USE OF QUICK SURVEYS BY E-CONSULTANCY 265
Case study 6
n o t e s
THE SOLUTION
E-consultancy hired the services of QuickSurveys which is a

self-service online survey tool which would enable the company
to ask the right questions in a timely and cost effective manner.
QuickSurveys also had the benefit of being associated with the

Toluna Community which is the world’s biggest online research
community. E-consultancy with the help of QuickSurveys was
able to launch a survey questionnaire to 2000 members of the
Toluna Community situated in UK. The results were delivered to
E-consultancy within 24 hours.
THE RESULTS
E-consultancy was able to launch its report on social gaming on
S
time and within its budget constraints. The report contained mar-
ket trends, vital statistics and case study examples of companies
who employ social gaming for the purpose of marketing.
IM
THE CLIENT’S DECISION
E-consultancy’s Research Manager Aliya Zaidi provided feed-

back regarding QuickSurveys. She opined:
Speed to market: “We were able to create our survey within
M
a few minutes and collect the final results, a couple of hours

after the survey was launched. This was extremely quick and
easy!”
Scalability: “Another thing that impressed me about Quick-
N
Surveys is its scalability. If in future I want to run a smaller

respondent sample, say 500 or 1000, I need only to change the
number of respondents. It’s that simple.”
Proprietary data thanks to real flexibility: “I really value the
flexibility of QuickSurveys. I was able to choose the number of
questions, the number of respondents, the markets, the ques-
tion types… Being able to create the questionnaire in exactly
the way I wanted saved me a lot of time and trouble, and re-
sulted in genuinely proprietary data.”
First-rate community of respondents: “These days, you can
get online survey tools at a relatively small cost (although not
usually of the Toluna quality), but the ability to tie it up with a
first-rate consumer community is what makes QuickSurveys
stand out from the crowd. I didn’t have to worry about the
quality of the data and once the survey was launched to the
Toluna community, the result took care of itself.”

Case study 6
n o t e s
Thousands saved in data acquisition: “Cost control came

from two things: choosing the number of questions and choos-
ing the number of respondents. We only paid for what we
used. Ultimately, we created a totally customised survey with-
out paying a hefty price to a large research agency.”
Data analysis made easy: “In most cases, data analysis is even
more important than data itself. We needed to see the whole
picture but also to look at things from different angles. This
was easy with QuickSurveys. The survey results were view-
able by age, gender, income level, education and region: ex-
actly what we needed to analyse the data. It was displayed vi-
sually, and we could also download the original data to create
our own charts.”
S
questions
1. Describe the challenge faced by E-consultancy in

exploring emerging areas of digital marketing.
IM
(Hint: Not having consumer research reports which had
current proprietary data available, consumer reports
did not fully cover the areas that the company wanted to
explore.)
2. Discuss the results achieved by E-consultancy by using
M
QuickSurveys.
(Hint: E-consultancy was able to launch its report on
social gaming on time and within its budget constraints.)
N

Case study 7
n o t e s
MARKETING STRATEGY DEVELOPMENT THROUGH

DATA ANALYSIS
This case study discusses the marketing strategy development pro-

cess of a company through data analysis. It is with respect to Chap-
ter 07 of the book.
SITUATION
ABC Company owns and operates a chain of resorts in different

parts of India. Now, the company wants to expand its business;
therefore, it has opened two new resorts under different brand
names. Till now, the company did not implement any marketing
strategy to promote its brands in the market. However, increased
competition in the hospitality industry made it essential for ABC
S
Company to frame an effective marketing strategy to increase
brand awareness among customers. The company hired a re-
search agency to conduct market research in order to have deep
insight into market segmentation, number of existing competitors
IM
in the market and impact of advertising on two new brands. This
would help the company to formulate a strategic marketing plan.
SOLUTION
The research was conducted in three phases. Let us discuss these

phases in detail.
M
In the first phase, a survey was conducted with the help of a

questionnaire on 1500 customers who have visited the resorts in
the last one year. On the basis of the survey, the research agency
N
classified the customers into two segments. This would help the
company in preparing different types of marketing strategies for
different segments.
In the second phase of the research, the research agency tried to

validate the results of the first phase. It formed focus groups in
three cities of the country and invited several industry experts
to participate in the interview. These groups have confirmed the
results of the first phase.
The third phase of the research was conducted to study whether

the advertising and new brand strategies have resulted into in-
creased brand awareness or not. The research agency conducted
an online survey on 1,200 people about their awareness of two re-
sort brands and their advertising medium, such as mail, websites
and print media. The report of the survey is summarised in the
following table:

Case study 7
n o t e s
Data for Brand Awareness

No. of Obser- Brand Awareness after Brand Awareness before
vations the Implementation of the Implementation of
Marketing Strategies (X) Marketing Strategies(Y)
1 8 6
2 8 7
3 10 10
4 10 9
5 9 8
6 10 7
7 9 5
8 10 8
S
9 9 8
10 10 9
11 8 7
IM
12 9 6
13 8 5
14 9 4
15 10 6
16 10 8
M
17 9 5
18 9 4
19 8 9
20 9 7
N
21 9 8
22 10 10
23 10 8
24 10 7
25 9 6
(In the table, the brand awareness of customers is rated on a

10-point scale, where 10 is the highest rating and 1 is the lowest
rating. Use 5% as the level of significance to test the hypothesis.)
RESULTS
The company needs to change its marketing strategies to increase

brand awareness. It should design different advertisements to tar-
get the different segments of customers. In addition, the company
should provide new and better facilities in its resorts and train its
employees on how to keep the customers contended.

Case study 7: MARKETING STRATEGY DEVELOPMENT THROUGH DATA ANALYSIS 269
Case study 7
n o t e s
questions
1. What are the different methods of data collection used in

the case study?
(Hint: The questionnaire method and focus group
interview method are used in the case study.)
2. Using the survey data, find out the impact of new
marketing strategies on the brand awareness of ABC
Company.
(Hint: The null hypothesis and alternate hypothesis are
as follows:
H0: The brand awareness before and after the
implementation of new marketing strategies is same
S
H1: The brand awareness before and after the
implementation of new marketing strategies is different
IM
Or,
H0: µ = 0
H1: µ ≠ 0
Where,
M
µ= Brand awareness of the company

The following table shows the data to calculate brand
awareness among customers before and after the
marketing strategies:
N
Calculation for Brand Awareness After and Before

Implementing Marketing Strategies
No. of Brand awareness Brand aware- D(X–Y) D2
Obser- after implementa- ness before
vations tion of marketing implementation
strategies(X) of marketing
strategies(Y)
1 8 6 2 4
2 8 7 1 1
3 10 10 0 0
4 10 9 1 1
5 9 8 1 1
6 10 7 3 9
7 9 5 4 16
8 10 8 2 4
9 9 8 1 1
10 10 9 1 1

Case study 7
n o t e s
Calculation for Brand Awareness after and before

Implementing Marketing Strategies
No. of Brand awareness Brand aware- D(X–Y) D2
Obser- after implementa- ness before
vations tion of marketing implementation
strategies(X) of marketing
strategies(Y)
11 8 7 1 1
12 9 6 3 9
13 8 5 3 9
14 9 4 5 25
15 10 6 4 16
16 10 8 2 4
S
17 9 5 4 16
18 9 4 5 25
19 8 9 -1 1
IM
20 9 7 2 4
21 9 8 1 1
22 10 10 0 0
23 10 8 2 4
24 10 7 3 9
25 9 6 3 9
M
Total ∑D=53 ∑D2=

171
Sample mean (D) = ∑D/n

D = 53/25
N
D = 2.12
Standard Deviation of Sample
(SD) = √ {∑D2 – [(∑D)2 /n]}/n–1
SD = √ {171–[(53*53)/25]}/24
SD = 1.56
Since, the sample size is less than 30; therefore, the
researcher would apply the following t test:
t = D/ (SD/√n)
t = 2.12/(1.56/√25)
t = 6.79
The t value at 5% level of significance for two-tailed test
with 24 as degree of freedom is ± 2.064.

Case study 7: MARKETING STRATEGY DEVELOPMENT THROUGH DATA ANALYSIS 271
Case study 7
n o t e s
The graphical representation of the preceding solution is

shown in the following figure:
Acceptance
Region
Rejection
Region
S
-2.064 +2.064 6.79
Graph Showing the Position of Calculated t value in Paired t

test
IM
In the preceding figure, it can be observed that the calculated t
value lies in the rejection region; therefore, H0 is rejected and
H1 is accepted. This implies that there is a significant differ-
ence between brand awareness after and before implementing
new marketing strategies.)
M
N

Case study 8
n o t e s
PRODUCT DEVELOPMENT THROUGH MARKET

RESEARCH IN NEW BALANCE ATHLETIC SHOE
This case study discusses the application of market research in new

product development in an organisation. It is with respect to the
Chapter 8 of the book.
S
(Source: roadbikereview.com and wewear.org)
According to a report published by Mintel International, the US

athletic shoe market showed a slow growth in 2006–2008. During
IM
this period, the sales volume was good but the prices of footwear
were reducing. The report projected 2% of annual growth ($15.5
billion) before inflation. Several factors were responsible for the
slow growth of the US athletic shoe market. One such factor was a
complex relationship between manufacturers and retailers, which
reduces brand loyalty and increases bargaining power of retail-
M
ers. In addition to slow growth, the US athletic shoe market was

facing stiff competition from walking shoe (formal shoes) manu-
facturing companies because the distinction between the walking
shoe market and athletic shoe market was fading gradually. The
N
entire US shoe market was divided into two segments—one seg-

ment was catering to the dedicated athletes having high income
and another segment was catering to the needs of the masses. The
report of Mintel International revealed that the consumers are
willing to pay higher prices for good quality shoes.
New Balance Athletic Shoe, an athletic shoe manufacturing com-

pany based in Boston, Massachusetts, tried to appeal those con-
sumers who were ready to pay a high amount for good quality
shoes as per the report presented by Mintel. The company was es-
tablished in the mid-1990s and soon became the third largest sell-
er of athletic shoes in the US. It adopted Nike’s strategy of selling
the largest possible number of shoes in different styles through
specialty athletic and sporting goods stores. However, there was
one difference that New Balance created an upscale brand image
that aimed to attract a greater number of customers in the age
group of 35 to 64. With the passage of time, New Balance realised
that it needs to constantly adopt new processes, procedures and
strategies and develop new products to improve its growth rate

Case study 8: PRODUCT DEVELOPMENT THROUGH MARKET
RESEARCH IN NEW BALANCE ATHLETIC SHOE 273
Case study 8
n o t e s
and profitability. Due to a highly competitive market and chang-

ing trends, New Balance has to conduct a research to increase its
market share. Therefore, it hired a research agency to conduct
the research.
PRIMARY DATA COLLECTION
The research agency used the quantitative research method to

generate ideas for improving the products of New Balance in
comparison to Nike and Reebok and increasing the customer
base. New Balance also wanted to know its present position in
customers’ mind. To collect primary data, the research agency
used various tools, such as focus group discussions, interviews
and questionnaires.
S
SECONDARY DATA COLLECTION
The research agency has also planned to conduct a secondary re-

search to know the position of the present athletic market and
IM
New Balance in the market. To collect the secondary data, the re-
search agency used data from company records of New Balance,
the Internet, and print media.
RESULTS
The research agency found out that New Balance is an established

M
brand in the market but it was not catering to all age groups pres-
ent in the market. Therefore, the company has to expand its mar-
ket by developing new products that could cater to people of all
age groups and segments.
N
questions
1. What type of research design should be used in this case

and why?
(Hint: The research agency needs to find out the position
of New Balance in the market and the ways to tackle
competition. This requires an elaborated research study
and descriptive research design.)
2. Based on the case, discuss why market research is crucial
for product development.
(Hint: Market research helps in being aware of market
trends and understanding the unfulfilled needs
of customers, which are essential for new product
development.)

Case study 9
n o t e s
MARKETING RESEARCH AT IIS CONSULTANCY
This case study discusses the importance of advertising research in

the marketing research process of an organisation. It is with respect
to Chapter 9 of the book.
S
IM
(Source: www.gandrllc.com)
G&R is a research and consulting agency based in Pennington, NJ,

USA. The company helps its clients in various sectors in building
M
brands by performing extensive research based on specific client

objectives. For one of its advertising research projects undertaken
for a client into consumer packaged goods, G&R was involved in
the development and pre-testing of a new ad campaign. Initially,
N
G&R chose an in-context copy testing design to gain more predic-

tive measures of in-market performance.
G&R printed the copies of ads for the client in a leading woman’s
lifestyle magazine. Next, the members of the brand’s target au-
dience who had the habit of reading magazines daily were asked
to participate in the study. These respondents were given copies
of the magazine and asked to read the magazine in their normal
reading style. The following day, the respondents were called and
asked about the ads they remembered. Next, the respondents
were asked to visit a particular website in where they were shown
the ads of the client again. The respondents were also asked
evaluative questions on the basis of the re-exposure of the ad.
Next, G&R compared the results with respect to the agreed-upon
benchmarks and norms.
Finally, the ad of the client passed all performance cross-checks

after demonstrating a strong likelihood of being successful in the

Case study 9: MARKETING RESEARCH AT IIS CONSULTANCY 275
Case study 9
n o t e s
market. Eventually, the brand became a leader in its category us-

ing the core elements of the campaign.
(Source: Adopted from: G&R: Advertising Research & Consulting,. (2015). Case Study:
In-Context copy Testing for CPG client. Retrieved 29 October 2015, from http://www.
gandrllc.com/solutions/case-studies/in-context-copy-testing-cpg/)
questions
1. On the basis of the case, discuss the importance of

advertising research in brand development.
(Hint: Advertising research helps in gauging the
effectiveness of an ad campaign and ensuring that the
right message is being propagated to the target audience.)
2. In the study, why do you think the respondents were
asked to read magazines at the normal reading speed?
S
(Hint: For reducing potential biasness.)
IM
M
N

Case study 10
n o t e s
BRAND POSITIONING STRATEGY DEVELOPMENT

THROUGH FOCUS GROUP STUDY AT PEVELY DAIRY CO.
This case study explores the brand equity strategy development in

an organisation. It is with respect to Chapter 10 of the book.
S
(Source: quirks.com)
Pevely Dairy Company was established in 1887 in St. Louis, Mis-

IM
souri, United States. The company dealt in dairy products, such
as cottage, cheese, yogurt, ice milk, ice cream, calcium-fortified
milk, yogurt, etc. The company served customers in Illinois, Ken-
tucky, Arkansas and Tennessee.
In the 1980s, the company wanted to do an image makeover as it

planned to become a marketing-oriented company. Therefore, it
M
was interested in knowing how to make its brand more appeal-

ing for the customers. According to Jay Ritzen, Director of Brand
Marketing and General Sales Manager at Pevely, Our brand image
had become stagnant. We also needed to update our packaging and
N
make it more consistent. When you looked at our products on the

grocery shelf, it was a real mishmash. Our logo had been pulled and
stretched. The products needed a face-lift. In addition, the compa-
ny had to respond to the increased competition in the market,
while expanding into new geographic areas and increasing the
customer base.
Pevely approached Overlock Howe Consulting Group, Inc., a

brand and corporate image development firm based in St. Louis,
for conducting studies and suggesting on brand position strate-
gies. It’s more than a design change, it’s a brand evolution because
packaging on a product is constantly changing, says a researcher
from Howe. While the visual image is part of the brand evolutionary
process, it also takes into consideration a product’s positioning and
brand name. Until these elements are united, marketers may not
fully realize a product’s prospects for success. He also added that
Brands are absolutely the most valuable assets a company owns. A
brand identifies and positions a product, setting it apart from sim-
ilar offerings in crowded markets. Brand positioning is the foun-

Case study 10: BRAND POSITIONING STRATEGY DEVELOPMENT
THROUGH FOCUS GROUP STUDY AT PEVERY DAIRY CO. 277
Case study 10
n o t e s
dation for all product promotions, advertising and other marketing

strategies. But many companies implement ad campaigns before
thoroughly understanding their brand’s positioning attributes and
this is one of the major reasons why 80% of all new products fail.
FOCUS GROUPS STUDY
For the Pevely study, Howe formed three focus groups —Pevely
product users, nonusers, and non-residents in the St. Louis area.
The focus groups were presented different prototypes of Pevely
products with different visual images. These prototypes includ-
ed ‘contemporary’, ‘healthful’, ‘old-fashioned’, ‘taste-appeal’, and
‘premium quality’. According to the researcher from Howe, Con-
sumers were not told that these were ‘brand positioning,’ or why
the package images looked different. Rather, consumer reactions to
S
what they actually saw in the prototypes were evaluated. We used
these reactions to interpret which images would be most promising
for the new brand positioning. We learned that ‘taste appeal’ and
IM
‘healthful’ were the most important messages the Pevely brand could
offer consumers. To successfully communicate these messages, we
developed a positioning statement: ‘The Good Taste of Good Health’.
This positioning statement was supported by a modern and un-
cluttered packaging image. The text on the packages and the
brand name was also changed to support the image make-over
exercise. These steps helped Pevely extend its brand image, pen-
M
etrate its existing products and develop and launch new products.
According to Ritzen, the two key learning from the focus group
study was not going to opt for radical change and not mixing un-
N
related colour combinations. Radical changes to the logo would

have caused a loss of persona for the consumers, says Ritzen. That’s
because consumers have a fixed image in their mind of what the
logo should look like. We found we shouldn’t stray too much from the
traditional or get too wild or bizarre. The focused group consum-
ers voted for conservative colour combinations, such as white, red
and blue on packaging.
RESULTS
After the revamped products were introduced in the market in

the mid-1987, customers instantly liked the products resulting in
increasing revenue for the company. In addition, the company
gained significant market share among the young consumers be-
cause of the contemporary look of the products.
(Source: Adopted from: Quirks Marketing Research Media,. (2015). Focus groups guide
Pevely’s brand positioning. Retrieved 31 October 2015, from http://www.quirks.com/arti-
cles/a1988/19881203.aspx?searchID=622320781&sort=5&pg=1)

Case study 10
n o t e s
questions
1. On the basis of the case, discuss the importance of focus

groups study in brand positioning.
(Hint: It helps in gauging the tastes and preferences of
consumers and making the necessary changes in the
deliverables, brand attributes, etc.)
2. What mistakes can a firm commit in case it skips customer
study before changing brand attributes?
(Hint: The firm may opt for radical changes which may
not get positive response from consumers.)
S
IM
M
N

Case study 11
n o t e s
SIGNIFICANCE OF REPEAT BUYERS IN SUCCESS OF

NEW PRODUCTS
This case study discusses how the success of a new product is depen-
dent on repeat buyers. It is with respect to Chapter 11 of the book.
Catalina Marketing, a market research firm, conducted a market

research on how the success of a new product depends on a small
concentration of shoppers. In the research report, it highlighted
the need for searching and engaging the right shoppers in order
to make the launch of new products in the Consumer Packaged
Goods (CPG) industry successful.
S
IM
(Source: newonline.org)
Augmenting efficiency and increasing revenue from new prod-

ucts are extremely important for the CPG industry. Due to the
challenges prevalent in the current CPG business environment,
producers are more selective and careful about bringing new
products in the market. As a result, new product launches have
M
fallen for two straight years—by 4.2 per cent in 2013 and 4.6 per
cent in 2014, according to Information Resources Inc. (IRI), a mar-
ket research company that provides retail, shopper and consumer
market intelligence to clients in the CPG industry.
N
The objective of this research was to help producers and retailers

in the planning stage of a product launch. Catalina investigated
the shopping behaviours of around 45 million consumers for 50
best-selling new food and beverage goods, determined according
to the parameters set by IRI.
The research revealed that a small concentration of consumers

(less than one per cent) was contributing to the major volume for
new products. The importance of repeat buyers was also discov-
ered. A significant percentage of shoppers who use a new product
in the first 26 weeks on its launch fail to purchase the product
again in the next 26 weeks. Due to these shopper dynamics, it is
crucial that brand marketers can quickly identify repeat buyers.
This research highlighted that employing customers established

on purchase history would significantly increase trial and repeat
of new product purchases. Moreover, intelligence about purchas-
ing patterns of the shoppers could help brand managers improve
efficiency in marketing and sales. For example, poor synchronisa-

Case study 11
n o t e s
tion exists in the timing of advertising and promotions and avail-

ability of new products in stores.
The key findings highlighted in the research report are as follows:

Only 0.7 per cent of buyers contributed to 80 per cent of reve-
nue for products in the CPG industry in the first year of sales.
On an average, only 11 per cent of first-time buyers of CPG
products who purchased the product in the first 26 weeks of
the product’s launch remain engaged with it after a period of
52 weeks.
Lack of repeat purchasing results in the loss of millions for
newly launched product brands. If every shopper bought a
new product at the rate of every repeat buyer, the average new
S
product would have had sales worth US$ 30.5 million in just
the first 26 weeks of the launch of the product tracked in 11000
stores by Catalina.
IM
It takes on an average of a minimum 28 weeks for newly
launched products to reach 75 per cent of their distribution,
according to the Catalina research.
questions
1. What was revealed by the research conducted by Catalina?

M
(Hint: A small concentration of consumers (less than one

per cent) was contributing to the major volume for new
products; the research also revealed the importance of
repeat buyers in the success of a new product.)
N
2. Discuss the key finding highlighted in the research report.

(Hint: Only 0.7 per cent of buyers contributed to 80 per
cent of volume for products in the CPG industry in the
first year of sales.)

Case study 12
n o t e s
Amazon Web Services to Add Analytics
This case study discusses how organisations use Web data analytics
services to make better use of collected data. It is with respect to
Chapter 12 of the book.
Amazon.com Inc.’s cloud-computing division, Amazon Web Ser-

vices (AWS), has decided to enter a hotly contested territory by
providing a new service that would help businesses analyse their
data.
There are many companies that store proprietary data on

Amazon Web Services, which includes Netflix Inc., Airbnb
Inc., Nike Inc. and Pfizer Inc. This places Amazon in a strong
position to offer add-on services. According to Boris Evelson, an
S
analyst at Forrester Research Inc., This will be the new 800-pound
gorilla in the [business intelligence] market, a market expected to be
worth $143 billion in 2016, according to analyst Pringle & Co.
IM
Code named Space Needle, the new analytics service could help
Amazon lock-in Amazon Web Services customers more tightly by
allowing them to store more of their data on the platform. It would
also broaden the number of the target users of AWS, particularly
information-technology workers and business managers.
M
This service would include a faster method for transferring or

copying data to AWS. Amazon would provide a storage device
that customers could send back after filling it with data, in case
sending the data would have taken a prohibitive amount of time
to move over the Internet. For this service, a monthly subscription
N
would be charged by the company.
There are already several business intelligence software applica-

tions that are enhancing the concept of Big Data and Space Needle
is only one of them. It would be competing with business intelli-
gence software launched from IT giants, including SAP, IBM, Mi-
crosoft and Tibco Software Inc. There are many newer players
also in the market such as Tableau Software Inc. and Microstrate-
gy Inc., and startups such as Birst Inc. and Domo, which develop-
ing good business-intelligence programs.
According to Mr. Evelson of Forrester, Amazon’s prospects are

bolstered by the immaturity of the data analytics market. Spread-
sheets are used for half of all business reporting, and only 40% of
the available data typically is tapped for decision making. Despite
fierce competition, many enterprises are disappointed by current
offerings.

Case study 12
n o t e s
Nowadays, computers play a large role while organisations deal

with various operations. The huge quantum of business is con-
ducted online and the cost of data storage has fallen. The huge
amount of data helps in making informed business decisions and
promotes efficiency. There are several business intelligence soft-
ware applications that help organisations make efficient use of
this data.
For example, suppose a financial executive wants to find out the

relationship between customer meetings and respective sales in
various cities. In this case, business intelligence software would
help the financial executive in drawing the relationships in graph-
ic form by using databases of sales transactions and logs of cus-
tomer meetings. In addition, the software may also help the finan-
cial executive view different scenarios by making adjustments in
S
the sales figures or the number of meetings held in various cities,
thus making it easy for him/her to ensure adequate allocation of
resources to generate the maximum revenue.
IM
However, such software requires accessing the relevant data,
which is difficult to tap as it is in inconsistent formats. Another
challenge is the integration of different databases with data held
in long-term storage.
However, Amazon’s Space Needle can be only handle the data

M
fed; however, the main challenge would be to connect data that is

not stored in Amazon Web System.
(Source: McMillan, E. (2015). Amazon Web Services to Add Analytics. WSJ. Retrieved
29 October 2015, from http://www.wsj.com/articles/amazon-web-services-to-add-analyt-
ics-1443989402)
N
questions
1. What are the benefits of business intelligence software?

(Hint: Business intelligence software helps organisations
by enabling them to graphically view relationships
among various business activities. This in turn helps
proper management of resources, thus improving overall
efficiency.)
2. Explain the challenges faced by Amazon in the new
analytics service, Space Needle.
(Hint: Challenge in integrating different databases with
data held in long-term storage.)

Marketing Research
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IM
M
N

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Marketing Research

TOC Reviewer Content Reviewer

Chief Academic Officer

Author: Sanjive Saxena

NMIMS Global Access - School for Continuing Education

CHAPTER NO. CHAPTER NAME PAGE NO.

Marketing Research – A Tool for Making Managerial

7 Data Analysis Techniques 135

8 New Product Development and Test Marketing 165

9 Advertising Research 181

10 Brand Equity and Corporate Image Research 205

11 Research Report Preparation and Presentation 221

12 Emerging Concepts and Applications in Mr 235

13 Case Studies 249

NMIMS Global Access - School for Continuing Education

Attitude Measurement Techniques: Concept and Measurement of Attitude, Components of Atti-

Questionnaire Design: Definition and Objectives of a Questionnaire, Designing Question Content,

NMIMS Global Access - School for Continuing Education

NMIMS Global Access - School for Continuing Education

Self Assessment Questions

NMIMS Global Access - School for Continuing Education

MARKETING RESEARCH BY APPLE, INC.

the below 20 years target group was expected to get attracted to

Apple had decided to conduct market surveys through e-mail

NMIMS Global Access - School for Continuing Education

Marketing research helped Apple to formulate an effective brand-

NMIMS Global Access - School for Continuing Education

After studying this chapter, you will be able to:

Marketing research is a process of collecting and analysing informa-

isations to determine the strengths and weaknesses of their existing

Organisations either conduct marketing research themselves or hire

external agencies to undertake the research activity for them. The

In this chapter, you will study the concept of marketing intelligence.

NMIMS Global Access - School for Continuing Education

Marketing intelligence can be derived from various sources, such as

can be useful for the organisation.

 Build a marketing information centre internally where marketing

Marketing research is the important component of effective market-

self assessment Questions

1. __________ is a process of collecting information on day-to-

Suppose you have joined as a market researcher in an organisation.

NMIMS Global Access - School for Continuing Education

It is of utmost importance for organisations to understand what cus-

 Usage of the product

Marketing research is always confused with market research. How-

Organisations conduct marketing research to know the demands of

NMIMS Global Access - School for Continuing Education

to understand the growth of e-books, which can minimise the de-

After providing insight into changes in technology, consumer tastes,

search can help organisations in:

recent advertising campaigns, etc.

1.3.1 TYPES OF MARKETING RESEARCH

Organisations conduct marketing research by analysing both primary

NMIMS Global Access - School for Continuing Education

Figure 1.1: Types of Marketing Research

that can be addressed in quantitative research. Focus groups and

start-up or small business.

The results of quantitative marketing research are usually depicted in

NMIMS Global Access - School for Continuing Education

In the quantitative marketing research method, the main source of

The above-mentioned quantitative and qualitative measures of mar-

As discussed earlier, marketing research is a process of collecting,

The following are the various industries where marketing research

Build a marketing information centre internally where marketing

Usage of the product

Hindustan Unilever Limited

Incorrect or non-reporting of exact findings from the marketing

Any potential cultural conflicts can hamper the profitability of the

Advertising campaign: It is a set of activities that are aimed to