In this article we will discuss about:- 1. Introduction to Marketing Research 2. Characteristics of Marketing Research 3. Role 4. Uses 5. Steps 6. Advantages 7. Disadvantages.
Contents:
- Introduction to Marketing Research
- Characteristics of Marketing Research
- Role of Marketing Research
- Uses of Marketing Research
- Steps in Marketing Research Process
- Advantages of Marketing Research
- Disadvantages of Marketing Research
1. Introduction to Marketing Research:
The atmosphere for marketing has become extremely active. Without sufficient groundwork, it is difficult for organizations to carry on in such an atmosphere. Marketing research is one of the most successful tools that help organizations excel in the marketplace. Obtaining necessary information about customers’ tastes and preferences is the key to business success.
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Marketing research provides information about consumers and their reactions to various products, prices, distribution, and promotion strategies. Marketers who collect accurate and relevant information quickly and design their strategies quicker than their competitors are more likely to be successful.
Marketing research helps in successful planning and implementation of trade decisions by providing correct, relevant, and timely information. The process of marketing research involves a series of steps that systematically examine a problem or an opportunity facing the association.
This inspection starts with trouble or opportunity recognition and definition, development of objectives for the research, development of hypothesis, planning the research design, selecting a research method, analyzing the research designs, selecting a sampling procedure, Market Information collection, evaluating and analyzing the Market Information and finally preparing and presenting the research report.
The research procedure provides a scientific stage, contrary to the traditional intuitive approach of decision making by managers which used to put large amounts of resources of the organization at risk.
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Organizations in areas such as IT, pharmaceuticals, telecom, manufacturing, transportation, advertising, banking, law, education and even governments utilize marketing research to find solutions to different kinds of decision making problems.
Marketing research is used in new product development, in segmenting markets, in identifying the needs of the customers, in sales forecasting and estimating the market possible of products and services, in analyzing the contentment levels of customers and so on.
Meaning of Marketing Research:
Marketing research refers to the systematic identifying, gathering, recording and analyzing of data about problems relating to the marketing of goods and services.
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Definitions of Marketing Research:
According to Richard D. Crisp, “Marketing research is the systematic, objective and exhaustive search for and study of the facts relevant to any problem in the field of marketing”.
According to Philip Kotler, “Marketing research is systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in the marketing of goods and services”.
According to American Marketing Association, “Marketing Research is the function that links the consumer, customer and public to the marketer through information. This 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.”
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2. Characteristics of Marketing Research
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The various characteristics of marketing research are as follows:
1. Systematic and Continuous Activity/Process:
MR is a continuous process. This is natural as new marketing problems are bound to come from time-to-time in the course of marketing of goods and services. One type of research is not adequate to resolve all marketing problems. Similarly, new research projects will have to be undertaken to solve new marketing problems and challenges.
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2. Wide and Comprehensive in Scope:
Marketing research is wide in scope as it deals with all aspects of marketing of goods and services. Introduction of new products, identification of potential markets, selection of appropriate selling techniques, study of market competition and consumer preferences, introduction of suitable advertising strategy and sales promotion measures, are some areas covered by MR.
3. Emphasizes on Accurate Data Collection and Critical Analysis:
In marketing research, suitable data should be collected objectively and accurately. The data collected must be reliable. It should be analyzed in a systematic manner. This will provide comprehensive picture of the situation and possible solutions.
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4. Offers Benefits to the Company and Consumers:
Marketing research is useful to the sponsoring company. It raises the turnover and profit of the company. It also raises the competitive capacity and creates goodwill in the market. It enables a company to introduce consumer-oriented marketing policies. Consumers also get agreeable goods and more satisfaction due to marketing research activities.
5. Commercial Equivalent of Military Intelligence:
MR is a type of commercial intelligence activity. It facilitates planned activities in the field of marketing. It is similar to military intelligence where systematic study of the situation is made before taking any military action. Marketing research acts as the intelligence tool of management.
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6. Tool for Managerial Decisions:
MR acts as a tool in the hands of management for identifying and analyzing marketing problems and finding out solutions to them. It is an aid to decision making. It suggests possible solutions for the consideration and selection by managers. Marketing research is an aid to judgment and never a substitute for it.
MR is applied knowledge. It is concerned with specific marketing problem and suggests alternative solutions and possible outcome of each alternative.
8. Reduces the Gap between the Producers and Consumers:
MR is an essential supplement of competitive marketing. It is useful for understanding the needs and expectations of consumers. It reduces the gap between producers and consumers and adjusts the marketing activities to suit the needs of consumers.
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9. Marketing Research Has Limitations:
Marketing research is not an exact science. It only suggests possible solutions to marketing manager for consideration and selection.
MR can be conducted by using different methods. Data can be collected through survey or by other methods. The researcher has to decide the method which is suitable for the conduct of research project. This selection is important as the quality of research work depends on the method used for the research purpose.
3. Role of Marketing Research
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The assignment of marketing research (MR) is to present management with relevant, accurate, reliable, suitable and current information. Competitive marketing environment and the ever increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure decision.
Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control.
These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition and social and cultural changes. Another factor in this mix is the complexity of consumers.
Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers’ response to marketing programs cannot be predicted reliably or accurately.
Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers.
Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research.
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4. Uses of Marketing Research
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Marketing research is the gathering, recording, and analyzing of Market Information that relates to a specific problem in marketing products or services. While this definition implies a systematic approach to marketing, marketing research is often performed as a reaction to a problem that occurs. Marketing research efforts, therefore, often are undertaken for specific projects that have set beginning and ending points.
The uses of Marketing Research are as follows:
1. Market and Economic Analysis:
Market analysis involves analyzing market segment factors to determine the market potential of a given product or service. The marketing researcher gathers Market Information and analyzes the factors that affect possible sales in a given market segment.
The economic analysis is also used by marketing research departments to determine:
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(1) How actively a company should market in a given market segment?
(2) How much money it should invest in marketing to that segment?
(3) How much it may have to produce to fulfill the needs of the market segment?
Economic analysis often involves economic forecasting, which analyzes and attempts to forecast developing market trends and demands.
2. Marketing Research for New Product:
Marketing research departments conduct product research for a variety of reasons, including:
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(i) Measuring potential acceptance of new products.
(ii) Finding improvements or additions for existing products.
(iii) Making changes or improvements in product packaging.
(iv) Determining acceptability of a product over a competitor’s product.
When a new product is being developed, marketing research departments will often use product concept testing to see how customers might react to the new product. Typically, before a business invests in the development of a prototype for a new or improved product, it will have its marketing researchers verbally describe or visually depict the prospective product to a group of potential customers in the target market.
Once a product has been accepted during the concept testing stage, the business may move on to develop a prototype of the product. The marketing research department may then conduct product use tests, in which potential customers are they industrial users or consumers are given the new or modified product to try.
Consumers may be given a new type of hot breakfast cereal to try at home so that the marketing researcher can test the product use among families; industries may be given a new type of telephone system to test in their offices so that the marketing researcher can receive management’s evaluation of the system and see how the new product works in a field test site.
After product concept and product use tests are completed, businesses may decide to use market tests before they go full throttle into the marketplace with their products. These market tests allow the business top see how the product is accepted in various market segments before it is rolled out to the mass market and before the business invests in a full-blown release of the product.
While test marketing is viable for producers of products that do not involve millions of dollars in production costs for production facilities, it may be cost prohibitive for businesses producing large, expensive goods. Soap detergent is easily test marketed for a relatively inexpensive price tag; the cost of test marketing jet airplanes, on the other hand, is not cheap.
3. Customer Satisfaction Research:
Customer satisfaction research is that area of marketing research which focuses on customer’s perceptions with their shopping or purchase experience.
Many firms are interested in understanding what their customers thought about their shopping or purchase experience, because finding new customers is generally more costly and difficult than servicing existing or repeat customers.
Many people are familiar with “Business to Customer” (B2C) or retail level research, but there are also many “Business to Business” (B2B) or wholesale level projects commissioned as well.
Types of customer satisfaction research:
(i) Descriptive or Documentary Research:
Many customer satisfaction studies are intentionally or unintentionally only “descriptive” in nature because they simply provide a snapshot in time of customer attitudes. If the study instrument is administered to groups of customers periodically, then a descriptive picture of customer satisfaction through time can be developed.
(ii) Inferential or Models-Based Research:
Beyond documentary types of work are studies that attempt for providing an understanding of why customers have the perceptions they do and what may be done to change those perceptions.
While models-based studies also provide snapshots of customer attitudes, the results of these studies are more powerful because they present the firm with recommendations on how to improve customer satisfaction.
Frequently, these studies also provide firms with a prioritization of the various recommended actions. Inferential studies can also be conducted as tracking studies. When this is done, the firm can gain insight into how the drivers of customer satisfaction are changing in addition to documenting the levels and areas of customer satisfaction.
Viral Marketing Research is a subset of marketing research that measures and compares the relative Return on Investment (ROI) of advertising and communication strategies designed to exploit social networks.
Algorithms are used to derive respondent-level coefficients of Social Networking Potential (SNP). These coefficients are integrated with respondent level Market Information measuring the selling effectiveness of specific communications and the Viral Marketing Potential of those communications within specific media e.g., Internet video, texting, print ads, television.
Results identify strategies that are likely to drive sales among the target audience and be distributed throughout relevant social networks.
Examples:
An electronics manufacture is about to launch a new video console and wants to maximize new product potential. In advance of the launch, Viral Marketing Research is used to compare the relative ROI of several strategies of among high SNP respondents within the target audience.
Results help the manufacturer maximize sales by identifying what needs to be communicated and through which media e.g., print ads, Internet videos, texting and television.
A pharmaceutical company has developed a new drug for an existing drug category and needs to build brand recognition. Viral Marketing Research could be conducted among physicians or patients to identify which communication strategies are most likely to be spread by word of mouth, and which are likely to induce physicians/patients to prescribe/request the new drug.
The search engine Viral Sauce uses viral marketing research and statistical methods in order to rank the results of search queries by the perceived viral potential of content using a measure which they call v Rank, rather than by content’s current popularity.
5. Steps in Marketing Research Process:
The various steps in marketing research process are as follows:
Step-1 – Identifying and Defining a Marketing Problem:
The first step in the marketing research procedure is to identify the marketing problem which needs to be solved quickly. The problem may be related to product, price, market competition, sales promotion and so on.
The research process will start only when the marketing problem is identified and defined clearly. The researcher has to identify and define the marketing problem in a clear manner.
Step-2 – Conducting a Preliminary Exploration (Survey):
The marketing team may suggest many marketing problems which they face. However, it is not possible to take up all such problems for research purpose. The researcher has to study such problems and select one major problem which is suitable for detailed investigation. For this, preliminary investigation is necessary.
A sales manager may suggest a problem of declining sales. The researcher has to find out the possible reasons and which one is the most important and also suitable for detailed study. Marketing problems are not researchable and hence such preliminary exploration is necessary and useful.
Step-3 – Determining Research Objectives:
The researcher has to formulate hypothesis to fit the problem under investigation. It is a tentative explanation of a problem under study.
For Example – The sales are declining. According to the researcher, this may be due to poor quality and high price or due to limited interest taken by middlemen or that the product has become outdated. If the first reason is accepted, the same will be investigated in full. If the first cause is rejected, he will move to the second for detailed study through data collection.
Step-4 – Determining the Data Required and their Sources:
In this stage, the researcher has to decide the type of data required for his study purpose. The hypothesis guides the data collection process. The researcher can use primary and/or secondary data for his research project.
The sources of primary and secondary data are different. Similarly, for the collection of primary data, any one method such as mail survey or telephone survey or personal interview or observation or experimentation method can be used. The researcher has to decide the method which is convenient for data collection and collect the required data accordingly.
Step-5 – Creating Research Design:
Research design is the plan for the conduct of actual research investigation. Such design provides guideline for the researcher to keep a track on his actions and to know that he is moving in the right direction on data collection.
The research design contains answers to the following questions:
(a) What is the nature and purpose of study?
(b) What type of data is required?
(c) How to collect required data?
(d) What is the technique of data collection?
(e) How much funds will be required?
(f) How much time/period will be required for completion of research project?
Step-6 – Designing the Questionnaire:
As per the objective of research project, information will be required. For collection of data, suitable questionnaire will have to be prepared. All necessary care should be taken in order to prepare ideal questionnaire, so as to collect required information easily, quickly and correctly.
Step-7 – Designing a Sample of Respondents:
For data collection, a representative group will have to be selected out of the total i.e. universe. A sample designed should be adequately representative in character. It must represent the total population under study.
Data are to be collected as per the method selected for data collection. If mail survey method is selected, questionnaires will be sent by post to respondents. If personal interview method is selected, interviewers will be given suitable guidance, information and training for the conduct of personal interview. Data collection should be quick and data collected should be reliable, adequate and complete in all respects.
Step-9 – Organizing/Processing the Data Collected:
The completed questionnaires are not useful directly for tabulation and drawing conclusions. They need to be organized /processed properly for drawing conclusions. For this, scrutiny of data, editing, coding and classification of data are required.
In addition, tabulation of data collected is also essential. Such processing make data integrated in a compact manner.
In addition, the data are made reliable and suitably arranged for analysis and interpretation. Conclusions can be drawn only when the collected data are arranged in an orderly manner for detailed study. In short, processing of data means verification of data collected and the orderly arrangement of data for analysis and interpretation.
The steps in data processing (editing, coding, etc.) are interrelated and need to be completed properly. The processing of data collected is a type of office work which can be attended by the office staff under the guidance of researcher.
Step-10 – Analyzing and Interpreting Data:
Tabulated data can be used for detailed and critical analysis. The purpose is to establish useful and logical relation between the information and problem. Analysis of data should be made in a rational manner. This facilitates interpretation of data in an orderly manner.
Conclusions can be drawn after the analysis and interpretation of data. Such conclusions are useful for suggesting remedial measures. Various statistical techniques are used for the analysis and interpretation of data. This is necessary so that the conclusions drawn will be accurate and remedial measures recommended will be appropriate or result oriented.
Step-11 – Preparing Research Report:
After drawing conclusions, the researcher can make concert suggestions/recommendations for solving the marketing problem in a satisfactory manner. A researcher also prepares a document giving details of research problem, data collected, conclusions drawn and the recommendations made.
Such document is called research report which is the final outcome of lengthy research process. The report will be prepared in a suitable format for the convenience of readers. It acts as a self-explanatory document.
Step-12 – Presenting Research Report:
The researcher will submit the report to the decision-makers in the field of marketing. The decision-makers will study the report minutely and find out the desirability of execution of the recommendations made. The final decision is to be taken by the decision makers (marketing managers and top level management) only.
If the recommendations made are accepted, the decision makers have to take follow-up steps for the execution of the recommendations made. The follow up steps should be controlled effectively so as to have positive results in the cause of time.
6. Advantages of Marketing Research
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The several advantages of marketing research are given below:
1. Indicates Current Market Trends:
Marketing research keeps business unit in touch with the latest market trends and offers guidance for facing market situation with confidence. It facilitates production as per consumer demand and preferences.
2. Pinpoints Deficiencies in Marketing Policies:
MR pinpoints the deficiencies as regards products, pricing, promotion etc. It gives proper guidance regarding different aspects of marketing. They include product development, branding, packaging and advertising.
3. Explains Customer Resistance:
MR is useful for finding out customer resistance to company’s products. Suitable remedial measures are also suggested by the researcher to deal with the situation. This makes the products agreeable to the consumers.
4. Suggests Sales Promotion Techniques:
Marketing research enables a manufacturer to introduce appropriate sales promotion techniques, select most convenient channel of distribution, suitable pricing policy for the products and provision of discounts and concessions to dealers. It facilitates sales promotion.
5. Guidance to Marketing Executives:
Marketing research offers information and guidance to marketing executives while framing marketing policies. Continuous research enables a company to face adverse marketing situation boldly. It acts as an insurance against possible changes in market environment.
6. Selection and Training of Sales Force:
Marketing research is useful for the selection and training of staff in the sales Organization. It suggests the incentives which should be offered for motivation of employees concerned with marketing.
7. Facilitates Business Expansion:
Marketing research enables a business unit to grow and expand its activities. It creates goodwill in the market and also enables a business unit to earn high profits through consumer oriented marketing policies and programmes.
8. Facilitates Appraisal of Marketing Policies:
Research activities enable marketing executives to have an appraisal of the present marketing policies in the fight of research findings. Suitable adjustments in the policies are also possible as per the suggestions made.
9. Suggest Marketing Opportunities:
Marketing research suggests new marketing opportunities and the manner in which they can be exploited fully. It identifies existing and emerging market opportunities.
10. Facilitates Inventory Study:
Marketing research is useful for the evaluation of company’s inventory policies and also for the introduction of more efficient ways of managing inventories including finished goods and raw materials.
11. Provides Marketing Information:
MR provides information on various aspects of marketing. It suggests relative strengths and weaknesses of the company. On the basis of such information, marketing executives find it easy to frame policies for the future period. MR provides information, guidance and alternative solutions to marketing problems.
12. Suggests Distribution Channels:
Marketing research can be used to study the effectiveness of existing channels of distribution and the need of making suitable changes in the distribution system.
13. Creates Progressive Outlook:
Marketing research generates a progressive and dynamic outlook throughout the business Organization. It promotes systematic thinking and a sense of professionalization within the company. It also creates enthusiasm among executives concerned with marketing. This brings success and stability to the whole business unit.
14. Social Significance:
Marketing research is of paramount importance from the social angle. It acts as a means by which the ultimate consumer literally becomes king of the market place.
7. Disadvantages of Marketing Research
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The major disadvantages of marketing research are as follows:
1. Offers Suggestions and not Decisions:
Marketing research is not a substitute for decision making process. Ready-made decisions on marketing problems are not provided by the researcher. Marketing research does not solve any marketing problems directly. It only aids management in decision making and problem solving process.
2. Fails to Predict Accurately:
In marketing research, efforts are made to predict the possible future situation. For this, certain research studies are undertaken. However, the predictions arrived at may not be perfect. Future is always uncertain and exact prediction about the future is just not possible through marketing research.
3. Cannot Study All Marketing Problems:
Marketing research cannot study all marketing problems particularly where it is difficult to collect relevant data. Similarly, research study is not possible where value judgments are involved. Thus, all marketing problems are not researchable and all research problems are not answerable. MR is not a ‘panacea’.
4. Resistance to Research by Marketing Executives:
Researchers study marketing problems and offer guidance to marketing executives in their decision-making process. However, some executives are reluctant to use the solutions suggested by the researchers.
They feel that such use will act as a threat to their personal status. Marketing executives also feel that researchers give solutions which are academic in character and lack practical utility.
5. Time-Consuming Activity:
MR is a time-consuming activity. The research work takes longer period for completion and the findings when available may prove to be outdated. Even data collected very soon become old due to fast changing market environment.
6. Costly/Expensive Activity:
MR activity is costly as research work requires the services of experts. Advanced training in economics, computer technology, sociology, etc. is also necessary on the part of research staff. Even giving responsibility of research work to an advertising agency or to a management consultant is costly.
7. Dearth of Qualified Staff:
For scientific MR, professional marketing researchers with proper qualifications, experience and maturity are required. Research work is likely to be incomplete /unreliable in the absence of such expert staff.
8. Complexity of the Subject:
MR fails to give complete and correct guidance to the management on marketing issues. This is because MR is not an exact science. It is concerned with the study of human behaviour which is always difficult to predict. As a result, the conclusions drawn and recommendations made are not cent per cent correct.
9. Uncertainty of Conclusions:
Consumer is the focal point in marketing research. However, consumer’s buying motives are difficult to judge precisely and accurately. This brings some sort of uncertainty in the conclusions drawn from the MR.
10. Limitations of Data Used:
MR process solely depends on the data collected and used for analyzing the marketing problem, for drawing conclusions and making recommendations. However, the whole process will come in danger if data collected are inadequate and unreliable.