UNIT -7

Application of Marketing Research-

Areas of Marketing Research
Market Segmentation:
Market Segmentation is a customer oriented philosophy need and want clusters in the market and
develop marketing mix and program to satisfy those needs and wants. It is the basic tool for the
implementation of the marketing concept.
Market segmentation is the process of partitioning markets into groups of potential customers
with similar needs and characteristics who are likely to exhibit similar purchase behavior.
Market segmentation is the foundation on which all other marketing actions can be based. It
requires a major commitment by management to customer oriented planning research,
implementation and control.
The all over objective of using a market segmentation strategy is to improve your company’s
competitive position and better serve the needs of your customers. Some specific objectives may
include increased sales, improved market share, and enhanced image.
There are 4 major benefit of market segmentation analysis and strategy.
• Designing responsive products to meet the needs of the market place.
• Developing effective and cost efficient promotional tactics and campaigns.
• Gauging the company’s market position.
• Fine-tuning current marketing strategy.
Research process for segmentation:
Segmentation studies are among the most difficult ones to undertake regardless of which segmentation model is
used. There are difficulties in terms of the sample design, the reliability of the data collected, data collection method
and data analysis as well as in the interpretation of the result.
1. Problem of defining the unit of analysis: Segmentation studies seek not only to segment a sample on the basis of
differences, but also to protect the findings to the appropriate universe. The unit of analysis problem is also a
problem in the study of purchase behavior relating to industrial goods where multiple purchase influences abound.
2.Problem of sample selection methods: There is usually a sampling problem because often quota samples are used
although their clear limitation. Most segmentation studies also ignores the non-response problem although there is
every likelihood that there are significant differences between respondents and non-respondents.
3.Defining the measuring variables: Segmentation study has the problem of defining in an operational sense, the
dependent and independent variable. In product attribute studies that is the question of how to define or describe
product characteristics in a way that will mean the same to all respondents.
4.Data reliability or segment stability: Stability depends on the changes in the market place as well as in the
consumer perception of the relevant products. Person’s perception is actually hard to obtain that makes data
unreliable and the market stability is just and imagination. Because of these problem, it is difficult to the validity of
segmentation study.
Finally segmentation studies involve complex techniques where many hybrid segmentation is applied. One can not
know in advance which basis for segmentation will lead to the identification a meaning full segments, segmentation
studies should be flexible, allowing diverse analysis aimed at the identification of relevant segments. This needs
create special demand for researcher with knowledge of a large no. of analytical procedure, good conceptual
understanding of alternative segmentation model, and a high level of research activity.
 Product Research
Product Research is the most important research in marketing. Product research gives back valuable inputs
to the decision maker in all stage of the new product development process. Product research activity is
concentrated into areas, such as developing product specification, concept development and testing,
product testing and test marketing research.
The main type of product development are as follows:-
1. New concepts – Completely new products that have arisen as a result of innovation and which can
sometimes create new markets.
2. Additions to existing product lines – New products that supplement established product lines. For
example, a supplier of industrial gases may introduce a new, smaller cylinder to include in an existing
product line, aimed at servicing customers who require smaller amount of gas.
3. Modification of existing products – Existing product that are modified in order to better meet customer
needs, such as improved performance.
Product is the center of all marketing policies and decisions. The marketing planning begins with the
product and also ends upon the product. So product decisions are the most important decision.
The different factors of marketing (such as pricing, policies, channels of distribution, advertising system,
sales promotion etc.) are affected to a large extent by the firm’s product policies. Product planning is the
starting point of all marketing decision. Until and unless sound product policies are developed and the
qualities, attributes, size and level of product are improved, a firm can not get success in marketing efforts.
 Product Levels
In planning the marketing offering, the marketer needs to address 5 product levels. Each level adds more
customer value and the 5 constitute a customer value hierarchy.
1. Core Benefit – This service or benefit the customer is really buying, A hotel guest is buying “rest and sleep
and relaxing”. The purchaser of beauty aids is buying “beautiness”.That is why product means a psychological
product. It is noted what a product should give rather than what is it.
2. Basic Product – At the second level, the marketer has to turn the core benefit into a basic product. Thus a
hotel room includes a bed, bathroom, towels desk, dresser and closet.
3. Expected Product – At the third level, the marketers prepare an expected product, a set of attributes and
conditions buyers normally expect when they purchase this product. Hotel guest expect the clear bed, fresh
towels, working lamps and relative degree of quite. Because most hotels can meet this minimum expectations,
the traveler normally will settle for which ever hotel is most convenient or least expensive.
4. Augmented product – In this level, the marketers prepare an augmented product that exceeds customer
expectations. In other words, consumer does not demand those services but it is provided, customer value is
enhanced. In hotel room, TV telephone, air conditioners facility, free morning lunch facility, bus and air ticket
getting facilities, village tour and sight seeing contribute to customer.
5. Potential product – Potential product encompasses all the possible augmentation and transformation the
product or offering might undergo in the future . Here is where companies search for new ways to satisfy
customer and distinguished their offer. For instance, in an era when customers are demanding ever-faster
internet and operate internet on laptop here and there.
 Advertising Research
Advertising Research is a specialized form of marketing research, conducted to improve the
efficiency of advertising. The efficiency of advertising is evaluated in three phase – First-at
the time of the finalization of the layout design, then during the advertisement campaign
and finally after the campaign is over. The first phase is known as pretest, the second phase
on tracking study, and the third phase advertisement post test or after test.
There are two types of research, customized and syndicated. Customized research is
conducted for a specific client to address that client’s needs. Only that client has access to
the results of the research. Syndicated research is a single research study conducted by a
research company with its results available, for sale to multiple company.
Premarket research can be conducted to optimized advertisements means for any medium
,radio, TV, Print (magazine, news paper, or direct mail), 0utdoor bill board (highway, bus,
train) or internet. Different methods would be applied together the necessary data
appropriately. Post testing is conducted after the advertising, either a single advertisement
or an entire multimedia campaign has been run in market. The focus is on what the
advertising has done for the brand, for example increasing brand awareness trial,
frequency of purchasing and so forth.
Benefits of advertising research –
Assess– An advertisement’s ability to create awareness, generate leads and
increase conversion.
Measure – How effective different ads are at drawing attention, build brand
image, elicit emotion, communicate a message etc.
Pin point – Weak element within ad and how to improve its performance.
Identify – Elements that can be part of an integrated ad campaign using different
media.
Provide – A frame work for the creative design team, allowing them to create
effective ads.
Allow – To explore different creative concepts before production.
Indicate – Which creative element and content appeal to different target
segments.
Sales and Distribution Research
Sales research involves the identification and measurement all those
variables that individually or in combination affect the sales. It includes
market potential analysis, sales analysis, distribution analysis and sales
forecasting.
Market potential analysis: It is performed to evaluate the potentials for
each geographical market segment. Such analysis helps the decision
maker to determine the amount of sales effort needed for each market
segment. The potential analysis is performed in relation to a product item
or line for a specific market area for a specific time period . The potential
may either be expressed in absolute term or percentage of the market
share.
Uses of potential analysis:
• Allocation of sales resources.
• Setting sales quota.
• Defining sales territory. (town, district, zone)
Sales Analysis: Sales analysis is an analysis of the actual sales results. Sales
analysis is based on the analysis of sales invoices. The invoice contains valuable
information on customers name, location, products sold, sales quantity, price
including discounts and total sales value. The objective of such analysis is to find
the area of strength and weakness of sales territories, to identify the products
giving profit and loss and to identify customer and customer groups who order in
large quantity.

Distribution Analysis: It is performed to evaluate the efficiency of the distribution

channels and the cost of distribution. The objective of such analysis is to increase
the profit by cutting down the marketing costs. Distribution analysis uses various
combination of the sales analysis to calculate cost associated with distribution of
various products in different territories, to different customer groups and in
different order sizes. Contribution accounting technique is used to find the
profitability of market segments, products and channel units.
Sales Forecasting: Sales forecasting is a necessary part of the marketing decision. Most of the
marketing decisions depend on the forecast of sales. Any significant error in sales forecasts has far
reaching consequences for the company. Market researcher rely on a no. of forecast techniques to
provide a reliable sales forecast. The method of sales forecasting can be grouped into subjective and
objective methods.
a. Subjective or judgmental methods:
Jury of executive opinion—Under this method, the key executive of the company make individual
forecast of the sales based past experienced. These forecasts are more than guesses are based on
factual data available to the executives.
Sales force estimates—Under this each sales person is asked to make his own forecast of sales for the
territory level.
b. Objective Method
a)Trend Analysis--It is based on the statistical technique of extrapolation of the past sales trends.
b) Regression analysis—It is more objective than trend analysis since this method can consider more
than one variable to make the sales forecast.
c) Survey—The survey can be conducted at the household level or at the retail sales level. It is more
expensive than any other method. However, the forecast generated through a survey are more accurate
than other methods.
Attitude and psychographic Research
Attitude—Attitude is the preparation or readiness to response. Further it is not behavior but a pre-
condition for it. Social psychologists are generally of the view that attitude involves some
evaluation components for or against an item.
The attitude has the following components.
1. Attitudes are learned—Attitude develop out of the learning process as a result of direct
experiences, information acquired from others and exposure to mass media.
2. Attitudes have consistency—Attitudes are relatively consistent with the behavior it reflects.
However, attitudes are not permanent and subject to change in the long run. Attitudes are often
influenced by situation.
3. Attitudes are either favorable or unfavorable—Attitudes are either positive or negative. Attitude
can never be neutral.
Many of the questions in a marketing research survey are designed to measure attitudes.
Attitudes are the person’s general evaluation of something. Customer attitude is an important
factor for the following reasons:-
• Attitude helps to explain how ready one is to do something.
• Attitude do not change much over time.
• Attitude produce consistency in behavior.
• Attitude can be related to preferences.
Components of attitudes:
• Cognitive component (learn). It is learning aspect of attitude formation.
• Affective component (feel). It refers to our positive or negative feelings with regard to an object. It is the
feeling, sentiments, moods, and emotion about the product.
• Behavioral components (do).It refers to our predisposition toward action in a given situation. For ex. We
buy the product. It is observable behavior.
Methods of collecting Attitude Data:
A. Communication or questionnaire method.
• Self reporting questionnaire – Respondents complete the questionnaire without the help of the
interviewer.
• Verbal reaction – The respondents are expressing their responses after showing product in action(use) or
any incidents given.
• Performance evaluation – The respondents do show their familiarity with the product and reports it
various attributes. Also are to product performance in relation to competing brands.
B. Observation method.
• Overt reaction – Consumers are placed a certain created position under which they behave and
observation is performed.
• Physiological reactions – Consumers are exposed to an ad or products and their physiological responses are
measured through measuring devices.
Psychographic analysis:-
In marketing, psychographic variables are any attributes relating to personality,
values, attitudes, interest or life styles. They are also called IAO variables
for( interest, attitudes, and options ). They can be contrasted with demographic
variables (such as age and gender) and behavioral ( usage rates and loyalty) .
Psychographic is the criteria for segmenting consumers by life style, attitude,
beliefs, values, personality, buying motives and extent of product usage.
Psychographic analysis are used like geographic (place of residence or work) and
demographic ( age income occupation) criteria to describe and identify
customers and prospective customers and to aid in developing promotion
strategies designed to appeal to specific psychographic segments of the market
for a product.
Psychographic data can be gathered first hand through personal interviews, focus
group interviews or questionnaire or purchased from research companies in the
form of list overlays for direct marketers or market profiles for general marketers
Motivation Research-
Motivation Research search the psychological aspect of demand. This techniques can be helpful to
obtain useful information about the important causes of buyer behavior that may be a medium of
success or failure of product in the market.
Techniques of motivation Research are as follows:-
Experience and knowledge of marketing executives-
In this method, the opinions of experienced and knowledgeable marketing executives are collected
when they come into direct contact with the consumers and market. Here they can decide and
describe on the motives behind particular type of consumers response to the demand of the product.
Questionnaire method- It is a traditional statistical method of conducting any survey research, under
this method, a questionnaire is send to the likely respondent who are requested to fill it up and then
send it back to the company.
Projective technique- It is the projective techniques where respondents are give to incomplete and
unclear stimuli(clues) and exposed their responses. The main projective techniques used in the field of
motivation research are as follows:-
Word association test- It is one of the simple test under which the researcher presents the
respondent a no. of predetermined words, on at a time. After each word the respondents are asked to
give the first word that comes to his mind. The time taken for answering is also recorded. The word
supplied by respondents are later analyzed to find out the motivating factor.
Sentence completion test- The respondent is supplied with a number of incomplete
sentences which he is required to complete with in a specified time period. The test is
used to uncover the emotional responses to the product or brand. The respondent will
disclose his emotional values associated with a product or brand which completing the
sentences.
Thematic appreciation test- In this test , a series of pictures of people in some
unstructured, ambiguous situation is shown to the respondents. The respondent is
required to look at the pictures, one at a time , and narrate this story of the pictures. The
story narrated by the respondent is to then analyzed to find the motivating factor.
Story completion test- The respondent is presented with an incomplete story and asked
to complete it. The completed story is analyzed or find the motivating factors.
Cartoon test- A cartoon is drawn with two people in it. The researcher supplies a dialogue
for one of the person while the respondent is asked to write the reply dialogue for the
other person in the cartoon.
Paired picture test- This technique uses two (a pairs) of almost identical pictures. The
picture will be almost same except on a few aspects on which the motivating factor need
explaining by the respondents.