MARKETING RESEARCH

LESSON 3
 Definition

Marketing Research – the function that links the

consumer, customer, and public to the marketer
through information. (American Marketing
Association)

-very systematic, scientific, objective,

organized and has a wide scope. Includes product
research. Consumer research, etc. It’s a
continuous process and a company can’t
survive and succeed without it.
 Marketing Research

Information pertains to the marketing opportunities

and problems. To find out the needs and
expectations of the consumers.

Helps the company to:

a) make its production and marketing policies

b) Introduce new products in the market
c) Identify new markets
d) Collect full information about the competitors.
 Significant Features

1) Wide and comprehensive scope – marketing

research covers a wide scope since it includes more
researches like production research and so on. It
covers all of marketing opportunities and
problems.
2) Systematic and scientific – conducted step-by-
step and uses scientific methods.
3) Science and art – marketing research as a
science collects knowledge (data) while as an art
uses the data for solving marketing problems.
 Significant Features

4) Collects and analyzes data – marketing

research collects reliable data objectively and then
analyses it systematically and critically.
5) Continuous and dynamic process – the
company faces marketing problems throughout the
year. Marketing research is conducted continuously
and goes on changing, not static.
6) Tool for decision-making – provides correct
and up-to-date data to the marketing manager
which helps him take quick and correct decisions.
 Significant Features

7. Benefits company and consumers – brings

success to the company and brings the company
closer to the consumers by giving them
convenience and satisfaction.
8. Similar to military intelligence – commercial
intelligence-gathering activity. Marketing
intelligence first makes a systematic study and only
then takes a business action.
9. Applied research – used for solving marketing
problems both in the present and future.
 Significant Features

10. Connected with MIS – marketing research is a

component of Marketing Information System (MIS)
and are interrelated. Both are used to solve marketing
problems and take marketing decisions.
11. Reduces gap between producers and
consumer – informs producers about the needs and
wants of the consumers and in turn bring good profit.
12. Uses different methods – marketing research
uses 3 scientific methods for collecting data: survey
method, experiment method, and observation
method.
 Significant Features

13. Has few limitations – a) not exact science; b)

doesn’t give accurate results; c) provides
suggestions not solutions; and d) is a costly and
time-consuming process.
14. Accurate data collection and critical
analysis – data must be accurate, reliable, and
relevant. Later, it’s systematically and critically
examined before making any decisions.
 Importance of Marketing To Business Enterprise

 Business faces problems and some are

very serious therefore, in marketing,
managers use marketing research as an
important tool to solve marketing
problems.
Marketing Research helps company and decision makers as follows:

1. Provides valuable data – Demand, Supply,

Consumer behavior, Competition. (Decision
Making)
2. Studies consumer behavior- Age, Income, Likes ,
Dislikes (Production and Marketing Policies)
3.Selects Promotional Techniques:
 A. Helps the company to select suitable sales promotion techniques.
 B. Helps to select marketing techniques.
 C. Helps select proper media for advertising
 D. Helps to solve problems
 E. Helps prepare the budget for advertising and sales promotion
Marketing Research helps company and decision makers as follows:

4. Supplies Marketing Information – Data about

market situation.
*This market-related demand is used to find out:
 A. The present and future demand and supply position.
 B. The level of Competition and steps taken to control it.
 C. Market opportunities.
 D. The cause of fall in sales level.
5. Evaluate Marketing Performance – Finds out the
effect of price, package, brand, name, etc. on sales.
 A. Finds out consumers’ reaction about company’s product.
 B. Evaluate inventory and pricing policy.
 C. Evaluate the effectiveness of advertising, sales promotion, etc.
Marketing Research helps company and decision makers as follows:

6. Miscellaneous Needs and importance:

 A. Improves the efficiency of the marketing department.
This creates good will and good reputation.
 B. It helps the marketing manager to take the rational and
effective decisions.
 C. It helps to choose suitable staff of doing research.
 D. It is used to make growth and expansions programs.
 E. It benefits all like the company, distributors, advertising
agency, consumer, government and the entire society.
 Steps in Marketing Research

Stage 1: Formulating the Marketing Research

Problems. Research starts with a problem that needs
to be understand, the cause diagnosed, and solutions
development.
 * Management Problems focus on action
 * Research Problems focus on providing the information
needed in order to solve management problems.

- Once the problem is given an approach from the

research angle, finding a solution is easier.
 Steps in Marketing Research

Stage 2 : Statement of Research Objectives

- Objectives may be stated in qualitative or quantitative terms
and expressed as research questions, statement or hypothesis.

Examples:
 Statement: “To find out the extent to which sales promotion schemes
affected the sales volume.”
 Hypothesis: “To test the proposition that sales are positively affected
by sales promotion schemes undertaken this summer.”

*Hypothesis can be reputed or supported by empirical

findings.
 Steps in Marketing Research

Stage 3: Research Design

- Is a plan or framework for conducting the study
and collecting data.

The function of a research design is to ensure that

the evidence obtained enables you to effectively
address the research problem logically and as
unambiguously as possible. –(USC Libraries)
Three Types of
Research
 Exploratory research
Exploratory research is used in cases where the
marketer has little or no understanding about the
research problem due to lack of proper information.
Is used to gain/discover insights about the
situation. -it follows an unstructured format and
makes use of qualitative techniques, secondary
research and experts' opinions.
The core goal of exploratory research is to equip
marketers with enough information to facilitate
marketers plan a format research design correctly.
 Descriptive research
Descriptive research describes marketing problems,
situations or markets such as the market potential
for a product or the demographics and attitudes of
consumers.
Is used to explain, monitor and test hypothesis
created by marketers to help them find accurate
answers.
It is rigid, well structured and well planned and
uses quantitative techniques like questionnaires,
structured interviews, data analysis, etc.
 CASUAL RESEARCH
Casual Research is used by marketers to find cause
and effect relationship of variables. It is also
sometimes referred as “If.. Then..” method. In this
type of research, the marketer tries to understand the
effects of manipulation independent variable on other
dependent variable.

Casual Research uses field and laboratory

experimentation techniques to achieve its goals. This
research is used by marketers mainly to predict and
test hypothesis.
Here are cases where casual research can be used:

1. What will happen to sale of my product if I

change the packaging of the product?
2. What will happen to sale of my product if I
change the design of the product?
3. What will happen to sale of my product if I
change of the advertizing?
 STAGE 4: Planning the Sample
Sampling involves procedures that use a small
number of items or parts of the population to make
the conclusion regarding the population.

A marketing research project will rarely examine an

entire population. It’s more practical to use a sample
which is a smaller but accurate representation of the
greater population.
 2 METHODS OF SELECTING SAMPLE
The probability method sampling relies in a
random sampling of everyone within the larger
population. Randomly choosing subjects can increase
the chance that a sample will reflect the population at
large.

Here are some types of probability method of

sampling:
1. Simple random sampling- refers to the method
that has the following properties:
a. The population consists of N objects.
b. The sample consists of n objects.
c. If all possible samples of n objects are equally likely
to occur, the sampling method is called simple
random sampling.

2. Stratified sampling- with stratified sampling, the

population is divided into groups, based on some
characteristics. Then, within each group, a
probability sample is selected.
In stratified sampling, the groups are called strata.
3. Cluster sampling- with cluster sampling, every
member of the population is assigned to one, and only
one, group. Each group is called cluster.
A sample of cluster is chosen, using a probability method.
Only individuals within sampled clusters are surveyed.

Note:
With stratified sampling, the sample includes
elements from each stratum. With cluster sampling, in
contrast, the sample includes elements only from
sampled clusters
4. Multistage sampling- with multistage
sampling, a sample is selected by using
combination of different sampling methods.

5. Systematic random sampling- with

systematic random sampling, the researcher
created a list of every member of the population.
 Non- probability method- is based in part on the judgment
of the researcher, and often employs convenience samples, or by
sampling methods that do not rely on possibility. Here are some
types of non- probability method of sampling:

1. Voluntary sample- is made up of people who

self- select into the survey. Often, these folks have a
strong interest in the main topic of the survey.
2. Convenience sample- is made up of people who
are easy to reach.
The final stage of the sample design involves
determining the appropriate sample sixe. This
important step involves cost and accuracy decisions.
Larger samples generally reduce sampling error and
increase accuracy, but also increase costs.
 Stage 5: Data Collection Techniques
The collection of data relates to the gathering of facts to
be used in solving the problem. Hence, methods of market
research are essentially methods of data collection.
There are two kinds of data:
1. Secondary data are facts and figures that have already
been recorded before the marketing research project.
There are two sources of secondary data which are the
internal sources and external sources.
External data is the data that collected by other people
or organizations from the organization’s external
environment.
2. Primary data are facts that are newly collected for the
marketing research project . Data that are primary can be
collected from the original base through empirical research
by means of various tools.

There are many ways to collect data. Two important

methods to consider are:
a. Interviews required a researcher to ask questions and
receive responses. Common modes of research
communication include interviews conducted face-to-face,
by mail, telephone, e-mail, or internet. This broad category
of research techniques is known as survey research. This
techniques are used in both non-experimental research
and experimental research.
b. Observation- Observing a person’s or company’s
present or past behavior can predict future
purchasing decisions. Data collection techniques for
past behavior can include analyzing company
records and reviewing studies published by external
sources.
 Stage 6: Analysis and Interpretation
In order for data to be useful, the must be analyzed.
Analysis techniques vary and their effectiveness
depends on the types of information collected, and
the type of measurements to be used. Because they
are dependent on the data collection, analysis
techniques should be decided before this step.
 Stage 7: The Marketing Research Report
The marketing research process culminates with the
research report. This report will include all of information,
including an accurate description of the research process,
results, conclusions and recommended courses of action. It
should also provide all the information the decision maker
needs to understand the project.
It should also be written in language that is easy to
understand. It’s important to find a balance between
completeness and conciseness. The researcher doesn’t
want to leave any information out. However, he can’t let
the information get so technical that it overwhelms the
reading audience.