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Marketing Research

RESEARCH

R Recognition of information needs


E Effective decision making
S Systematic and objective
E Exude or disseminate information
A Analysis of information
R Recommendation for action
C Collection of information
H Helpful to managers
Marketing Research
 Marketing research is the systematic
gathering, recording and analyzing of data
about problems relating to the marketing
of goods and services.

 Market research will give you the data you


need to identify and reach your target
market at a price customers are willing to
pay.
 The American Marketing Association defines
marketing research 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 improve
understanding of marketing as a process.

 Market research and Marketing research are often


confused. 'Market' research is simply research into a
specific market. It is a very narrow concept.
'Marketing' research is much broader. It not only
includes 'market' research, but also areas such as
research into new products, or modes of distribution
such as via the Internet.
 Marketing research is a form of business research and is
generally divided into two categories: consumer
market research and business-to-business (B2B)
market research.

 There are four key factors that make B2B market


research special and different to consumer
markets:

 The decision making unit is far more complex in B2B


markets than in consumer markets.
 B2B products and their applications are more complex
than consumer products.
 B2B marketers address a much smaller number of
customers who are very much larger in their
consumption of products than is the case in consumer
markets.
 Personal relationships are of critical importance in
B2B markets.
 Marketing research focuses and organizes
marketing information. It permits
entrepreneurs to:
 Spot current and upcoming problems in the current
market
 Reduce business risks
 Identify sales opportunities
 Develop plans of action
The Role of Marketing Research
Customer Groups
• Consumers
• Employees
• Shareholders
• Suppliers
Uncontrollable
Controllable Environmental
Marketing Factors
Variables
Marketing • Economy
• Product
Research • Technology
• Pricing
• Laws &
• Promotion Regulations
• Distribution • Social & Cultural
Assessing Marketing Factors
Providing
Information Information Decision • Political Factors
Needs Making

Marketing Managers
• Market Segmentation
• Target Market Selection
• Marketing Programs
• Performance & Control
Need For Marketing Research

• Why do businesses need accurate and up-to-date information?

– To undertake marketing effectively


– Changes in technology
– Changes in consumer tastes
– Market demand
– Changes in the product ranges of competitors
– Changes in economic conditions
– Distribution channels
Purpose Of Marketing Research

• Gain a more detailed understanding of


consumers’ needs:
– e.g., views on products’ prices, packaging,
recent advertising campaigns

• Reduce the risk of product/business failure:


– there is no guarantee that any new idea will
be a commercial success
– Can help to achieve commercial success
• Forecast future trends:
– it can also be used to anticipate future
customer needs
Purpose for Market Research
(contd..)

 Successful marketing requires timely and


relevant market information.

 An inexpensive research program, based on


questionnaires given to current or prospective
customers, can uncover dissatisfaction or
possible new products or services.
 Marketing research is not a perfect science. It
deals with people and their constantly changing
feelings and behaviors, which are influenced by
countless subjective factors.

 To conduct marketing research, you must gather


facts and opinions in an orderly, objective way to
find out what people want to buy, not just what
you want to sell them.
 Market research will identify trends that
affect sales and profitability.
 Population shifts
 Legal developments
 The local economic situation should be monitored to
quickly identify problems and opportunities

 Keeping up with competitors' market


strategies also is important.
 Every small business owner
must ask the following
questions to devise effective
marketing strategies:
 Who are my customers and potential
customers?
 What kind of people are they?
 Where do they live?
 Can and will they buy?
 Am I offering the kinds of goods or services they
want at the best place, at the best time and in the
right amounts?

 Are my prices consistent with what buyers view as


the product's value?

 Are my promotional programs working?

 What do customers think of my business?

 How does my business compare with my


competitors?
Why do market research?

 People will not buy products or services they do not


want.

 Learning what customers want and how to present it


drives the need for marketing research.

 Small business has an edge over larger businesses in


this regard.
 Small business owners have a sense of their customers' needs
from years of experience, but this informal information may
not be timely or relevant to the current market.
How to do market research
 Analyze returned items.

 Ask former customers why they've switched.

 Look at competitors’ prices.

 Formal marketing research simply makes this


familiar process orderly. It provides a framework
to organize market information.
Types of Marketing Research

 Ad Tracking – periodic or continuous in-market research to


monitor a brand’s performance using measures such as brand
awareness, brand preference, and product usage. (Young, 2005)
 Advertising Research – used to predict copy testing or track the
efficacy of advertisements for any medium, measured by the ad’s
ability to get attention (measured with AttentionTracking),
communicate the message, build the brand’s image, and motivate
the consumer to purchase the product or service. (Young, 2005)
 Brand equity research - how favorably do consumers view the
brand?
 Brand association research - what do consumers associate with
the brand?
 Brand attribute research - what are the key traits that describe
the brand promise?
 Brand name testing - what do consumers feel about the names of
the products?
 Commercial eye tracking research - examine advertisements,
package designs, websites, etc. by analyzing visual behavior of
the consumer
 Concept testing - to test the acceptance of a concept by target
consumers
 Coolhunting - to make observations and predictions in changes of
new or existing cultural trends in areas such as fashion, music,
films, television, youth culture and lifestyle
 Buyer decision making process research - to determine what
motivates people to buy and what decision-making process they
use; over the last decade, Neuromarketing emerged from the
convergence of neuroscience and marketing, aiming to
understand consumer decision making process
 Copy testing – predicts in-market performance of an ad before it
airs by analyzing audience levels of attention, brand
linkage, motivation, entertainment, and communication, as well as
breaking down the ad’s flow of attention and flow of emotion.
(Young, p 213)
 Customer satisfaction research - quantitative or qualitative studies
that yields an understanding of a customer's satisfaction with a
transaction
 Demand estimation - to determine the approximate level of
demand for the product
 Distribution channel audits - to assess distributors’ and retailers’
attitudes toward a product, brand, or company
 Internet strategic intelligence - searching for customer opinions in
the Internet: chats, forums, web pages, blogs... where people
express freely about their experiences with products, becoming
strong opinion formers.
 Marketing effectiveness and analytics - Building models and
measuring results to determine the effectiveness of individual
marketing activities.
 Mystery consumer or mystery shopping - An employee or
representative of the market research firm anonymously contacts
a salesperson and indicates he or she is shopping for a product.
The shopper then records the entire experience. This method is
often used for quality control or for researching competitors'
products.
 Positioning research - how does the target market see
the brand relative to competitors? - what does the brand stand
for?
 Price elasticity testing - to determine how sensitive customers are
to price changes
 Sales forecasting - to determine the expected level of sales given
the level of demand. With respect to other factors like Advertising
expenditure, sales promotion etc.
 Segmentation research - to determine
the demographic, psychographic, and behavioural characteristics
of potential buyers
 Online panel - a group of individual who accepted to respond to
marketing research online
 Store audit - to measure the sales of a product or product line at a
statistically selected store sample in order to determine market
share, or to determine whether a retail store provides adequate
service
 Test marketing - a small-scale product launch
used to determine the likely acceptance of the
product when it is introduced into a wider market
 Viral Marketing Research - refers to marketing
research designed to estimate the probability that
specific communications will be transmitted
throughout an individual's Social Network.
Estimates of Social Networking Potential (SNP)
are combined with estimates of selling
effectiveness to estimate ROI on specific
combinations of messages and media.
A Classification of Marketing Research
Marketing Research

Problem Problem-Solving
Identification Research Research

Market Potential Research Segmentation Research


Market Share Research Product Research
Market Characteristics Pricing Research
Research
Sales Analysis Research Promotion Research
Forecasting Research Distribution Research
Business Trends Research
Problem-Solving Research

SEGMENTATION RESEARCH
 Determine the basis of segmentation
 Establish market potential and
responsiveness for various
segments PRODUCT RESEARCH

 Select target markets  Test concept

 Create lifestyle profiles:  Determine optimal product design


demography, media, and  Package tests
product image characteristics
 Product modification
 Brand positioning and repositioning
 Test marketing
 Control store tests
Problem-Solving Research
PROMOTIONAL RESEARCH

0.00% APR  Optimal promotional budget


 Sales promotion relationship
 Optimal promotional mix
 Copy decisions
 Media decisions
 Creative advertising testing
 Evaluation of advertising effectiveness
PRICING RESEARCH
 Pricing policies
 Importance of price in brand selection
 Product line pricing
 Price elasticity of demand
 Initiating and responding to price
$ALE
changes
Problem-Solving Research
DISTRIBUTION RESEARCH

Determine…
 Types of distribution
 Attitudes of channel members
 Intensity of wholesale & retail coverage
 Channel margins
 Location of retail and wholesale outlets
Market research - the process
 Market research can be simple or
complex.
 You might conduct simple market
research.
 Example: Questionnaire in your customer bills
to gather demographic information about your
customers
 You might conduct complex research.
 Example: Hiring a professional market
research firm to conduct primary research to
aid in developing a marketing strategy to
launch a new product
Step 1: Define Marketing Problems
and Opportunities
Opportunity  You are trying to launch a new
product or service.

Problem  Awareness of your company and


its products or services is low.

Problem  The market is familiar with your


company, but still is not doing
business with you.
Problem  Your company has a poor image
and reputation.
Problem  Your goods and services are not
reaching the buying public in a
timely manner.
Step 2: Set Objectives, Budget
and Timetables
Objectives

 Explore the nature of a problem so you may


further define it.

 Determine how many people will buy your product


packaged in a certain way and offered at a certain
price.

 Test possible cause- and effect- relationships.


 For example, if you lower your price by 10 percent, what
increased sales volume should you expect?
 What impact will this strategy have on your profit?
Budget
 Your market research budget is a portion of your
overall marketing budget.

 Allocate a small percentage of gross sales for the


most recent year to use on market research.
 It’s usually about 2 percent for an existing business.

 Planning to launch a new product or business?


 You may want to increase your budget to as much as 10
percent of your expected gross sales.

 Other methods include analyzing and estimating the


competition's budget and calculating your cost of
marketing per sale.
What percentage
of gross sales
from an existing
A. 2%
business should B. 4%
be used for C. 8%
market research? D. 10%

Click to see the answer.


Timetables

 Prepare a detailed timeline to complete all


steps of the market research process.

 Establish target dates that will allow the best


accessibility to your market.
 For example, a holiday greeting card business may want
to conduct research before or around the holiday season
buying period, when its customers are most likely to be
thinking about their purchases.
Step 3: Select Research Types,
Methods and Techniques
 Two types of research are available:
 Primary research is original information gathered
for a specific purpose.
 Secondary research is information that already
exists somewhere.
Secondary Research

 Secondary research is faster and less


expensive than primary research.
 Gathering secondary research may be as
simple as making a trip to your local
library or business information center or
browsing the Internet.
 It utilizes information already published.
 Surveys, books, magazines, etc.
Secondary Research Cont.
 Localized figures provide better information
as local conditions might buck national
trends.
 Newspapers and other local media are helpful.
 Many sources of secondary research material
are available. It can be found in:
 Libraries
 GALES' Directory is available at any public library.
 Colleges
 Trade and general business publications and
newspapers
 Trade associations and government agencies are
rich sources of information.
Example of Secondary Research
 An article may show how much working
mothers spent on convenience foods last
year.
 If you were thinking about selling a
convenience food, this information would
show you what kind of market there is for
convenience foods.
 It doesn’t show you how much they are willing
to spend on your particular product.
Primary Research
 Primary research can be as simple as
asking customers or suppliers how they
feel about a business, or as complex as
surveys conducted by professional
marketing research firms.
 Examples of primary research are:
 Direct-mail questionnaires
 On-line or telephone surveys
 Experiments
 Panel studies
 Test marketing
 Behavior observation
Primary Research
 Primary research is divided into reactive and
nonreactive research.

 Nonreactive
 Observes how real people behave in real market situations
without influencing that behavior

 Reactive research
 Includes surveys, interviews and questionnaires
 This research is best left to marketing professionals, as
they usually can get more objective and sophisticated
results.
Primary Research Cont.
 Those who can't afford high-priced marketing
research services should consider asking
nearby college or university business schools
for help.
Step 4: Design Research Instruments

 The most common research instrument is the


questionnaire. Keep these tips in mind when
designing your market research questionnaire.
 Keep it simple. Include instructions for answering all
questions

 Begin the survey with general questions and move


toward more specific questions.

 Design a questionnaire that is graphically pleasing and


easy to read.
 Before printing the survey, ask a few people to
complete the survey and give feedback.

 Mix the form of the questions for different


sections of the questionnaire
 Scales
 Rankings
 Open-ended questions
 Closed-ended questions

 The form or way a question is asked may


influence the answer given. Questions are in two
forms: closed-end questions and open-end
questions.
Closed-ended questions

 Types of closed-ended questions include:


 Multiple choice questions
 “Yes” or “No” questions

 Scales refer to questions that ask respondents to


rank their answers or measure their answer at a
particular point on a scale.
 For example, a respondent may have the choice to rank
his/her feelings toward a particular statement. The scale
may range from "Strongly Disagree" "Disagree" and
"Indifferent" to "Agree" and "Strongly Agree."
Open-ended questions

 Respondents answer questions in their own


words.

 Types of open-ended questions include:


 Word association questions ask respondents to state the
first word that comes to mind when a particular word is
mentioned.
 Fill-in-the blank
 For example, a question might read:
“When I eat toast and jelly, I use
_____brand of jelly and it usually
costs about ________ per jar.
Step 5: Collect Data
 To obtain clear, unbiased and
reliable results, collect the data
under the direction of experienced
researchers.

 Before beginning data collection,


You must to train, educate and
supervise your research staff.
 Untrained staff conducting primary
research will lead to interviewer bias.
Step 5 Cont.

 Stick to the objectives and rules associated with


the methods and techniques you have set in
Step 2 and Step 3.

 Be as scientific as possible in gathering your


information.
Step 6: Organize
and Analyze the Data
 Once data has been collected, it needs to be
cleaned.

 Cleaning research data involves editing, coding


and tabulating results.
 Start with a simply designed research instrument or
questionnaire.
 Look for data focusing on immediate market needs.

 Rely on subjective information only as support for


more general findings of objective research.

 Analyze for consistency; compare the results of


different methods of your data collection.

 Look for common opinions that may be counted


together.

 Read between the lines. For example, combine U.S.


Census Bureau statistics on median income levels for
a given location and the number of homeowners vs.
renters in the area.
Step 7: Present and Use Market
Research Findings (Report Writing)

 Once marketing information is


collected and analyzed, present it in
an organized manner to the decision
makers of the business.
 You may want to report your findings in
the market analysis section of your
business plan.
 You may want to familiarize your sales
and marketing departments with the data
or conduct a companywide informational
training seminar using the information.
Assess Available Information

 Assess the information that is immediately


available.

 You may have the information you need to


support your marketing plan without doing
extensive market research.

 Weigh the cost of gathering more information


against its potential usefulness.
Gather Additional Information
 Before considering surveys or
field experiments, look at
currently held information:
 Sales records
 Complaints
 Receipts
 Other records that show where
customers live and work, and
how and what they buy.
Additional Information Cont.
 Credit records are an excellent source of
information. They give information about:
 Customers' jobs
 Income levels
 Marital status

 Employees may be the best source of information


about customer likes and dislikes.
 They hear customers' minor gripes about the store or
service - the ones customers don't think important enough
to take to the owner.
 Employees are aware of the items customers request that
you do not stock.
 They often can supply good customer profiles from their
day-to-day contacts.
MARKETING RESEARCH IN
INDIA
MARKETING RESEARCH IN
INDIA
 Despite increase in marketing research India,
there are some inherent constraints in its use.
Constraints in Using Marketing
Research in India
 Heterogeneity of the country with the vast
geographical area
 Non-availability of relevant secondary data.
 Firms believe that marketing research is too
expensive
 Relationship between the researcher and
management may also act as a constraint
 Firms think that it is not necessary
Outsourcing MR Activity
In this MR is going to have a major opportunity. It
has been estimated that the global MR industry is
likely to sponsor 10 to 15% of its business (abt $ 20
billion) to markets like India.
Some foreign experts too say that Indian
researcher are good as their own.
At the same time as far as research costs
concerned, these are much less in India compared
to several advanced countries. As a result, some
companies have set up their offshore research
activity in India.
Serious Thinking on the Present
State of MR Industry
 How MR industry gradually emerging from
problem-focused to solution-focused one.
 Why MR agencies lack leadership today
 How to ensure that companies raise their
expenditure on MR.
 Discussion about the poor remuneration
for the MR agencies.
DEFICIENCES IN RESEARCH
ACTIVITIES IN INDIA
 Not satisfied with the quality of research
 Poor field work
 No permanent field staff
 Structured questionnaires cannot used
 Needed more basic research
 Multiplicity of languages
 Resort to small samples
 Advertising agencies spend very little on
Marketing Research
 Non traditional sectors are neglected
ISSUES IN MARKETING RESEARCH
 Lack of transparency
 Seen as a separate activity
 Allocation of budget to marketing research
activity
 More confined to the urban market
 Not contextual familiarity with the projects
 No adequate attention to the study of consumer
behavior.
FUTURE OUTLOOK
 Liberalization of economic policies of the
Government
 Increase in competition
 Reduced dependence on agriculture by rural
areas
 Increased share of retail market
 Availability of qualified manpower and low
operational cost
 Urbanization of rural areas
Marketing Research Agencies in India
Additional Resources
 Visit the following Web site for information on how to conduct
market research:
www.sba.gov/smallbusinessplanner/manage/marketandprice/
SERV-MARKETRESEARCH.html
 If you need assistance in conducting primary market
research, contact your local SBDC office,
www.ndsbdc.org/
 Market Research Workbook
www.missouribusiness.net/docs/market_research_workbook.
asp
 Conducting market research factsheet:
http://ohioline.osu.edu/cd-fact/1252.html
 Summary of marketing basics:
www.sba.gov/smallbusinessplanner/manage/mar
ketandprice/SERV_MARKBASICS.html
 Market trends and forcasts:
www.marshall.usc.edu/web/Library.cfm?doc_id=
2023#Trends
 Research and Statistics Office of Economic
Research: www.sba.gov/advo/research/