lec1_introduction to market research

8/9/2019 Lec1_Introduction to Market Research

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FUNDAMENTALS OFMARKETING RESEARCH

I. INTRODUCTION TO MARKETING

RESEARCH

II. MARKETING RESEARCH

PROCESS AN OVERVIEW


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INTRODUCTION TOMARKETING RESEARCH


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Definition and purpose

Marketing research is the systematic design, collection,

analysis and reporting of data and findings relevant to a specific

marketing situation facing the company. [Philip Kotler]

Market research is an organized effort to gather information

about markets or customers. It is an important component of

business strategy

Basic purpose - Marketing research reduces uncertainty or error

in decision making. The information collected by conducting

marketing research is used for problem solving and decision

making in various areas of marketing


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Marketing research

Can help the marketing manager to -

Identify and define marketing problems and opportunities

accurately;

Understand markets and customers and offer reliable prediction

about them;

Develop marketing strategies and actions to provide acompetitive edge; and refine and evaluate them;

Facilitate efficient expenditure of funds;

Monitor marketing performance; and

Improve the understanding of marketing as a process.


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Marketing research

Is important because of

Rapid changing marketing environment

Need for up-to-date information for strategically important

areas

Importance of research as an integral part of better

operation


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Role of marketing research inmarketing plan

Marketing strategy

Marketing plan

Information formarketing decision

Segmentation

Target Market selection Positioning

4 Ps of marketing

Product

Price

Promotion

Place

Level 1

STRATEGIC

Level 2

TACTICAL


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When marketing research may not benecessary

Marketing research is almost always problem-oriented.Whetherto conduct marketing research depends on the managers

experience and wisdom; nature of decision; degree ofuncertainty; and the value and importance of the research.

Marketing research may not be necessary if

Information is available/outcomes known

Insufficient time for marketing research

Non-availability of resources

Cost Vs Value of the Research

Outcomes known


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When to do Market research?

Marketing research can be done when

There is an information gap which can be filled by doingresearch

The cost of filling the gap through marketing research is lessthan the cost of taking a wrong decision without doing research

The time taken for the research does not delay decision makingbeyond reasonable limits. A delay can have many undesirableeffects like competitors becoming aware of strategies or tacticsbeing contemplated etc


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Main divisions of marketing research

Market and Sales Research

Product Research

Pricing Research

Distribution (Place) Research

Promotion Research

Customer satisfaction research Advertising research Copy testing and media

research

Concept research


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Types of Marketing research

Marketing research

Research basedon purpose

Research basedon source of data

Research basedon data collection method

Basic research

Applied research

Primary research

Secondary research

Qualitative research

Quantitative research


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Marketing Intelligence vs. MarketResearch

Marketing intelligence

Ongoing process

Usually done in-house

Not meant for immediate

action

General purpose

Focus on competition and

environment

Marketing research

Project based on information

gap

Mostly outsourced

Action oriented

Very specific answers to the

questions

Focus on consumers,

influencers etc


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Application areas of MarketingResearch

Strategical areas

Demand forecasting

Sales forecasting

Segmentation studies

Identification of target

markets

Positioning studies

Tactical areas

Product testing

Pricing research

Advertising research

Distribution and logistic

related research

Promotional research


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MARKETING RESEARCHPROCESS AN OVERVIEW


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MARKETING RESEARCH PROCESS

Every research project is differentresearch project is different and unique. However,research procedures and activities are common and

constitute the marketing research process

This process -

is an well-organized sequence of SEVEN stepsinvolved in the systematic collection and analysis of

marketing data

provides a description of how a marketinginvestigation is designed and implemented and helpsto guide the execution of a research project.


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Steps involved in market researchprocess

Define the research

problem / objective

Determine the research

design

Identify data types

and sources

Design the

questionnaire

Determine the sample

plan and size

Field work,

Analysis & Interpretation

Final report &

presentation

Marketing

Action


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Step 1 Define the research problem

The very first, and the most important step in research -

A problem well-defined is half solved

Nature of the problem determines the type of study toconduct

Symptoms, for example, declining sales, profit, marketshare, or customer loyalty

A research problem must be accurately and preciselydefined, else the task of designing a good research will bedifficult


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Step 1 contd.

The basic question to address Will I be able to take betterdecision if I include this research objective in the study?

Problems may become apparent from:

deviation from the business plan, company records and reports,

customer complaints and grievances, conversations with

company employees, and observation of inappropriate behavior

or conditions in the firm;

the success of the firms competitors, and published materials

reporting issues such as, changes in market or environmental

trends, new government regulations, anticipated changes in the

economy, etc.)


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Step 1 contd.

The decision problem which is faced by managementmust be translated into a market research problem in theform of questions that define the information which isrequired to make the decision. Thus, the decision problemis translated into a research problem.

For example, the decision problem may be whether tolaunch a new product. The corresponding researchproblem might be to assess whether the market wouldaccept the new product.

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Step 2 Determine the research

design

Research design involves the development of research

plan for carrying out the study. It gives a framework forcollecting and analyzing the data.

Research design

Exploratory Descriptive Causal


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Exploratory research

The main objective is to formulate the problems moreprecisely, clarify the concepts, gather explanations, togain insights and to form hypotheses

This can be performed using literature search, surveyingcertain people about their experiences, focus groups and

case studies

An example a manufacturer wants to identify ten mostimportant variables his consumers use to decide onwhether to buy his brand


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Descriptive research 1/2

This is more rigid than exploratory research and seeks todescribe users of product or predict the future demand for

the product

Descriptive research defines questions, people surveyedand methods of analysis prior to begin data collection. Itshould answer the who, what, where, when, why andhow aspects of the research

There are two basic types of descriptive studies

Longitudinal studies

Cross-sectional studies


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Descriptive research 2/2

Longitudinal studies are time series analysis that makerepeated measurements of same individuals.

It helps to monitor the behavior such as brand switching

Cross sectional studies take the sample from the

population to make measurements at specific point oftime.

It helps in long term demand forecasting of a product


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Causal research

Causal research helps to find out the cause and effectrelationship between the variables. It is generally done

through laboratory and field experiments. It helps to studyhow actions taken now will affect a business in future

It explores the effect of one variable on another. Forexample, if a clothing company currently sells blue denim

jeans, causal research can measure the impact of thecompany changing the product design to the colourwhite. This would help to decide whether changing thecolour of jeans to white will be profitable


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Step 3 Identify data types and sources

Types of data are classified into two types

I. Secondary data and II. Primary data

Secondary data sources -

Company literature

Syndicated reports Internet

Newspapers

Magazines

Primary data sources -

Demographics

Lifestyles characteristics Attitudes and opinion

Awareness

Purchase intention

Consumer behavior


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Step 4 Design the questionnaire

A questionnaire is a structured technique for collectingprimary data. It is a series of written or verbal questions towhich a respondent provides answers.

Steps involved in developing a questionnaire

Determine which information is being sought

Select the exact question wording Arrange the questions in an effective sequence

Specify the physical characteristics (no. of questions perpage, paper type)

Test the questionnaire and revise as it needed (pilot

interviews)


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Step 5 Determine the sample plan

Sampling plan is the statement of what will be the samplesize and composition. This is the most critical of alldecisions in marketing research process.

2 precautions to be taken to ensure a good sample

Use a probabilistic sampling technique which is not biased

Divide the population to be sampled into segments based onrelevant parameters such as users/non-users or classesbased on age, income etc.

Ensure that each segment is adequately represented in thefinal sample


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Step 6 Analysis & Interpretation

The raw research data collected needs to be edited,

tabulated and analyzed to find the results and tointerpret them.

the method used may be manual or computer based.

The analysis plan follows from the research objective of the

study.

Association and relationships of variables are identified and

discussed in the light of the specific marketing problem.

Analysis and interpretation is done by using statistical

packages like SAS, SPSS, quantum, etc.


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Step 7 Final report & presentation

The researcher has to submit a written report and often make an

oral presentation to management or the client.

In conducting all the marketing research activities; the

marketing researchers must adhere to ethical standards.

A final research report includes a summary of major findingsand some recommendations.


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Step 7 contd

The format of marketing research report varies with the needsof organization. But usually the report contains following

sections

Executive summary

Table of contents

Introduction

Research objectives Research Methodology

Sample design,

Field work plan and dates,

Analysis plan,

Questionnaire copy as annexure


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Step 7 contd

Analysis

Simple tabulation

Cross tabulation Any special analysis

Findings

Limitations

Conclusions and recommendations for action

Bibliography / List of references Appendices containing copies of questionnaire etc


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RESEARCH PROPOSAL 1/2

A research proposal

a plan showing step by step description of how a

proposed research project will be undertaken.

reflects the researchers understanding of the problemand ability to conduct the research.

If the research is to be conducted through a researchagency, the research proposal acts as an importantselection criterion.

Upon its acceptance, the research proposal becomesthe basis for the contract or agreement between theresearch agency and the client, and serves as a record

of what was agreed on.


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RESEARCH PROPOSAL 2/2

There is no fixed or standard format for a researchproposal as it is dependent on the nature of the specific

research project. However, most research proposalscontain the following items.

Executive summary

Statement (title) of the MarketingResearch Problem

Purpose of the study Details of the ProposedResearch Plan -Research

design, sample design, data collection and analysis

Budget and cost estimation

Time schedule

R

esearch team


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VARIABLES

A variable is any entity that can take on different values(anything that can vary can be considered a variable) e.g. age,price, income, country. Variables are the things that wemeasure, control or manipulate in the research

A variablevariable is a factor that: Causes some other factors to vary, and May assume different numerical values

Represents responses to each question asked in the survey

In statistical analysis, a variable is generally identified by asymbol, such as X or Y. If a researcher is using SPSS, or othercomputer packages, he or she may use the name of the variableitself or its abbreviated form e.g., age marstat (for maritalstatus), occupn (for occupation), etc.


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CLASSIFICATION OF VARIABLES

1.Categorical or Discrete Variables:

have a limited number of values, e.g., gender (male or Female) ,marital status (married, single, widowed/ widower) etc.

2.Continuous variables:

have an infinite number of values, e.g., temperature, sales in $ ornumber, profit in $.

3. Dependent Variables (is what is affected by independent variable)

Variables expected to be predicted or explained.

4. Independent Variables (are what you manipulate)

Variables that are expected to influence, predict or explain another.For example, in the following relationship:

Income (I) = F (Age, Level of education),Income is a dependent variable; Age and Level of education are

independent variables. An independent variable is something thatthe researcher can control.

lec1_introduction to market research

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