NATURE & SCOPE OF MARKET RESEARCH

RESEARCH
Research always starts with a question or a problem. Its purpose is to find answers to questions through the application of the scientific method. Research can be classified into two broad categories: 1. Basic (or Fundamental) research: aims at expanding the frontiers of knowledge and does not directly involve pragmatic problems, and 2. Applied (or Decisional) research: proceeds to start with a certain problem and specifies alternative solutions and the possible outcomes of each alternative. i. Problem-solving research, and ii. Problem-oriented research

MARKETING RESEARCH
As marketing research does not address itself to basic or fundamental questions it does not qualify as basic research. On the contrary, it tackles problems which seem to have immediate commercial potential. Marketing research should be regarded as Applied research. Marketing research is a systematic and & objective study of problems pertaining to the marketing of goods and services.

Its function is to provide information so that Management can identify and react to marketing opportunities.

GROWTH FACTORS OF MARKET RESEARCH

The first evidence of formal research techniques being employed could be traced as far back as 1824. Large scale production. Producers not having direct contact with the consumers. Shift from a seller's to a buyers market. The increasing use of computers. Changes in the composition of population.

MARKETING RESEARCH FOR INDUSTRIAL GOODS

Derived (indirect) demand Demand concentration
Geographic - industries cluster in small areas. Industrial Purchasing a few firms account for a relatively large proportion of total demand for industrial goods.

Demand volatility subject to sharp variations. Purchasing procedures and organization formal & elaborate. Manufacturer-buyer relationships strong.

CONSUMER MARKETING RESEARCH

Autonomous (direct) demand Demand concentration not prevalent.
Geographic distributed over a wide area. Industrial Purchasing

Demand volatility not subject to sharp variations. Purchasing procedures and organization not formal. Manufacturer-buyer relationships not strong.

APPLICATIONS OF MARKETING RESEARCH

A pharmaceutical company carried out a study on the prescription behavior for a major brand on account of its booming sales. The study brought out interesting and even startling findings on a number of aspects such as the relationship between the sales and the age of the brand, its regular promotion, its core therapeutic emphasis and the role of retailers in servicing prescriptions. Prior to the study, all these aspects had been only a matter of conjecture all the while. On the basis of findings of the study, the company changed its marketing strategy. This enabled it to regain the lost market share of its brand.

APPLICATIONS OF MARKETING RESEARCH contd.

Malayala Manorama, which is Kerala's largest publication group, has recently launched a monthly women's magazine in Hindi, Vanita. While launching this magazine, the management observed that it was convinced through market research that there was a huge vacuum in the Hindi magazine segment. This new magazine Vanita has been positioned as a partner and friend that the modern woman can identify with. The first print run of Vanita was one lakh copies.

APPLICATIONS OF MARKETING RESEARCH contd.

Cadbury India Limited launched Picnic from its international portfolio in February 1998. It is wrapped in vibrant colors of red, blue and yellow in conformity with its international packaging. Earlier, Cadbury India Limited cornmissioned a consumer research study in Mumbai. The results of this study were encouraging and showed that the Indian youth is always interested in experimenting with new food options.

APPLICATIONS OF MARKETING RESEARCH contd.

Procter & Gamble (P&G) launched Menthol, an international variant of Head & Shoulders. This joins the extra-conditioning anti-dandruff shampoo of the same brand. The company conducted a market research study prior to its launch. The findings of the study indicated a distinct need for a menthol-based shampoo. The study showed that in hot and humid conditions as in India, consumers prefer a shampoo which not only removes dandruff but also provides a cool and tingling sensation to the scalp.

LIMITATIONS OF MARKETING RESEARCH

First: Many a time, marketing research tends to be fragmentary in its approach as a result of which it becomes difficult to have an overall perspective in which a marketing problem is to be viewed and studied. Second: Marketing research is criticized on the ground that it becomes too superficial and faulty in industry. While the principles of marketing research are good and based on scientific lines, in industry, marketing research is used very often by those who have had no formal training in the subject. Such persons avoid using detailed investigations and sophisticated techniques which require both time and patience on the part of marketing researchers.

LIMITATIONS OF MARKETING RESEARCH contd.

Third: There is an absence of a meaningful dialogue between the marketing management and the marketing research team. As a result, marketing researchers get divorced from the mainstream of marketing. This denies them any opportunity to test their findings in the practical marketing situation. Marketing researchers tend to think that "research is the be all and end all'" This attitude further reduces the utility of research to the management. Fourth: Marketing research is not an exact science. There are several imponderables which come in the way of getting accurate results. For example, consumer behavior is an area which is rather elusive and the theory does not go very far in disclosing it very precisely. Analytical tools of marketing research are still deficient and cannot give us a precise idea, especially on the behavioral aspects.

LIMITATIONS OF MARKETING RESEARCH contd.

Apart from these limitations of marketing research, one finds that it is sometimes misused. These misapplications, strictly speaking, are not the limitations of the subject as such. A major misuse of marketing research is found when it is used to support or substantiate a particular viewpoint or position. In such a case, objectivity, which is the soul of research, is non-existent. To collect data and to interpret it deliberately to prove or disprove a certain point does not qualify as legitimate research. Another misuse of marketing research is found in deliberately delaying decision-making. In the hands of vested interests, it may be used to avoid taking a certain decision or delaying it until the findings of marketing research are available' Finally, it is used to grab power and authority in an organization. Executives who are over-ambitious may use marketing research to consolidate and strengthen their position in the organization and also to extend their authority over their colleagues.

THREATS TO MARKETING RESEARCH

The success of marketing research depends upon the cooperation of the public. Unprofessional or unethical marketing research practices may seriously jeopardize the publics willingness to cooperate in surveys. It is therefore, necessary to ascertain the reaction of the public towards marketing research. Three major threats to marketing and survey research: 1. Excessive interviewing, 2. Lack of consideration and abuse of respondents, and 3. Use of marketing research as a sales ploy.

MARKETING INFORMATION SYSTEM

A structured, interacting complex of persons, machines and procedures designed to generate an orderly flow of pertinent information, collected from both intra- and extra-firm sources, for use as the basis for decision making in specified areas of marketing management.

MARKETING INFORMATION SYSTEM Types of lnformation

1. Recurrent information is that information which is provided on a periodic basis. For example, information on sales, market share, customer satisfaction and perceptions, advertising expenditure, etc. may be supplied on weekly or monthly basis. Monitoring information is the information obtained from regular scanning of certain sources. For example, official publications, journals, annual reports of companies constitute common sources of monitoring information. Requested information, as the name implies, is the information sought by a marketing manager. Such information could involve a wide range of activities such as cost and price analysis of competitive products, cash flow position of competitive companies, quality testing of competitive products, etc.

2.

3.

MARKETING DECISION SUPPORT SYSTEM

On account of the highly competitive environment especially in Western countries, marketing managers frequently find themselves seeking a wide range of information in order to take the right decision. This means that the marketing manager should not only be concerned with the availability of the requisite information but also with its accuracy and adequacy. A marketing decision support system (MDSS) comprises of collection, storage, analysis and reporting of marketing data. The introduction of computers has facilitated the setting up of MDSS. The main difference between MIS and MDSS is that whereas the former is centralized, the latter is decentralized and allows marketing managers to interact directly with the database. MDSS can be classified into five components: (i) data sources, (ii) data management, (iii) display, (iv) statistical analysis, and (v) modeling. Data sources are a major component of MDSS.