The terms ‘Market Research’ and ‘Marketing Research’ are often loosely used to have the same meaning. But there is a distinction between the two.
Marketing research is concerned with the entire sphere of distribution while Market Research only deals with the problem of the market in the narrow sense of the term. The essential task of Marketing Research is that of finding a “quantitative expression” for mass phenomena.
Marketing Research is the inclusive term which embraces all research activities concerned with the management of marketing work. It includes various subsidiary types of research.
Marketing Research may be defined as the planned and systematic gathering and collection of data and the analysis of information relating to all aspects of marketing and the final consumption of goods or services. The marketing research is concerned with the factors that are directly involved in the marketing of goods and services.
Thus, they include the study of effectiveness of the marketing-mix, advertising strategies, competition and consumer behaviour. It not only helps in formulating strategies suitable for market intervention but also guides in perspective planning by analysing information for future projections.
Learn about: 1. Meaning and Definitions of Marketing Research 2. Scope of Marketing Research 3. Objectives 4. Characteristics 5. Purpose 6. Importance 7. Scope 8. Methods 9. Role 10. Ethics 11. Limitations 12. Sources of Data Collection 13. Monitoring, Evaluation and Research.
Marketing Research: Meaning, Definitions, Objectives, Characteristics, Purpose, Monitoring and Evaluation
- Meaning and Definitions of Marketing Research
- Scope of Marketing Research
- Objectives of Marketing Research
- Characteristics of Marketing Research
- Purpose of Marketing Research
- Importance of Marketing Research
- Methods of Marketing Research
- Role of Marketing Research
- Ethics in Marketing Research
- Limitations of Marketing Research
- Sources of Data Collection in Marketing Research
- Monitoring, Evaluation and Research
Marketing Research – Meaning and Definitions: By the American Marketing Association, Green, Tull and Philip Kotler
The tool for listening to customers is marketing research. Before firms can offer new or improved products, they must understand what customers need, how they think, and what their questions are. Much of the marketing research process therefore aims to get close to the customer and to permit the organization to understand the customer’s perspective and needs.
Marketing research also assists managers in decision making. Marketers are often faced with a lack of information and therefore with uncertainty; information can lead to better decisions under these conditions. Uncertainty is normally greater in those markets that are changing and greatest in those that are changing rapidly. Many markets have experienced major shifts in recent years because of global competition.
Even industries thought to be stable or mature enough to be unaffected by change, such as car production or shipbuilding, have experienced dramatic changes in market structure and customer expectations.
Marketing research is also useful for analyzing organizational performance. Leading-edge firms constantly strive to improve their service delivery, their customer responsiveness, and their product assortments. To do so, they need information on their activities and performance. Marketing research therefore requires a constant flow of information, which typically covers markets, customers and consumers, competitive activities, the impact of environmental factors such as governments or sociocultural changes, and the organizations own marketing activities.
Marketing research means the search of marketing functions of a company and analyse them in the betterment of the company.
The American Marketing Association (AMA) defines it as, “Marketing research is the function which links the consumer, customer, and public to the marketer through information used to identify and define marketing opportunities and problems, generate, refine, and evaluate marketing actions; monitor marketing performance, and improve understanding of market as a process.”
Green and Tull define ‘Marketing Research’ as, “Marketing research is the search for and analysis of information relevant to the identification and solution of any problem in the field of marketing.”
Philip Kotler defines, “Marketing research is the systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organisation.” Palmer defines, “Marketing research is about researching the whole of a company’s marketing process.”
Marketing Research – Scope: Product Research, Price Research, Promotion Research, Distribution Research, Policy Research and a Few Others
Marketing research is a comprehensive term with a very wide scope. Marketing research is used to find solutions for any problem of marketing. Different marketing managers with different objectives, feel the need for marketing research.
Marketing research can be quantitative or qualitative. Quantitative research generalises for the population on the basis of a sample study whereas qualitative research is diagnostic in nature.
The scope of marketing research is wide and has application in all areas of the marketing mix such as:
(a) Product Research:
Product research consists of undertaking studies on new and potential product or improvement of present products or testing of the existing products. In product research the consumer’s reactions to the products are analysed under product marketing research. The scope of this research varies from a new product to an existing product. Necessary changes must be made in the product line according to the changes in the market, which are revealed by the product marketing research.
(b) Price Research:
Pricing and establishing of price policies are the most important aspects in price research. It includes several forms of price analysis, marginal analysis and cost analysis.
(c) Promotion Research:
This research relates to personal selling advertising and publicity, sales promotion and public relations. In personal selling research, the research focuses on the sales organisation, sales effectiveness and sales compensation. In advertising, there is a media research and pre-testing and post- testing of the advertisements. For instance, which advertising media like television, radio, newspapers etc. would be more suitable for companies.
(d) Distribution Research:
This research undertakes activities such activities which helps to remove the gap between consumers and producers through retailers and wholesalers. The other components of distribution channel research are studies of dealer costs and profits, store audits, dealer relations and the industry pattern of distribution. The location research is also required to determine the most optimum location of distribution of products, this may range from local to national and international markets.
(e) Policy Research:
This research helps in deciding the marketing policy and inventory policy. It provides important data and information to predict future market conditions. The economic, social and political atmosphere is reviewed so that appropriate policies are adopted by the management.
(f) Competition Research:
In this research a study is being made to study the competitors’ activities and also to study the company’s competitive position in the market. The company undertakes intensive study of competitors, marketing practices and policies and also assesses its own strength and weaknesses.
(g) Consumer Research:
All marketing decisions are ultimately geared towards consumers. Here the detailed studies of consumers and their behavioural pattern are undertaken. Who is the target audience? What do the customer’s expect? What are their buying habits? Why do they behave like this? All these and related questions about consumers are answered by consumer research.
In conclusion, it can be said that marketing research is undertaken to guide managers in their analysis, planning implementation and control of programmes to satisfy customers and organisational goals. The need for market research is felt by marketing managers for different objectives, which ultimately decides the scope of marketing research. The scope of marketing research management covers all the market measurement studies, the competitive situation and the marketing mix studies.
Marketing Research – Top 10 Objectives: Planning, Helps in Reducing the Cost, Consumer Behaviour, Innovative Techniques in Production and a Few Others
The following are the main objectives of marketing research:
(a) Planning – Marketing research is very useful in the formulation and evaluation of planning and its components, it helps the management of small and large scale firms to know their customers understand their needs by effectively taking planning and forecasting as a tool in their research activities.
(b) Helps in reducing the cost – Marketing research helps in minimising the costs in selling, advertising, promotion and distribution. The cost of distribution is reduced tremendously because research brings market closer to the consumers. The production cost per unit also decreases because of the different production patterns adopted.
(c) Consumer behaviour – Marketing research helps in studying the behavioural patterns of the consumers. The producer while producing the products keeps in his mind the needs and the tastes of the customers.
(d) Innovative techniques in production – Marketing research helps in finding out new techniques of production and the producer is in a better position to find out and compare his production results with the products of other companies. Research also helps in the discovery of supplementary lines of products. E.g. Bajaj Company has produced a wide variety of products both in automobiles and electricals in India.
(e) Problem Solving – The main objectives of marketing research are to solve the problems relating to the product, price, promotion, competition, advertisement and distribution of goods and services. The market researcher tries to bring alternative solutions to different problems. For instance, if he comes to know that a particular product is going out of fashion then he immediately discontinues that product line or diversifies that product lie.
(f) Reduces Risks – As the markets have expanded geographically there are various risks, hence the main objective of the market researcher would be to reduce such risks.
(g) Survivals of the firm – Marketing research are used for the survival of the firm. It helps in assessing the strengths and weaknesses of the firm and also analyse the firm’s share of the markets and finally provides necessary information to the top management for proper decisions.
(h) Growth of the firm – It helps in the growth of the firm. Growth is possible if initiatives are taken to expand markets by introducing new varieties of products.
(i) Introduction of new product – Before introducing a new product in the market, the market researcher would find out the appropriate timing for introducing that product and also tries to find out suitable avenue and place and also the different methods to reach such markets.
(j) Market orientation – The objective of marketing research is to enable the firms to produce the goods and services acceptable to the customers. It sees that the goods and services must reach the market easily, quickly, cheaply and profitably. The right course of action to approach and sustain the market is possible with suitable marketing research.
Marketing Research – 7 Main Characteristics: Comprehensive Scope, It is Both a Science and an Art, Continuous Process, Applied Research and a Few Others
Characteristic # 1. Comprehensive Scope:
Marketing research has a very wide scope. It covers all the fields of marketing— product, pricing, packaging, sales, advertising, consumer behaviour, etc. It is used to study any particular issue in detail and take appropriate decisions like formulation of marketing policies, decision to introduce a new product, selecting target audience, advertising strategies, selecting channels of distribution, etc. are taken on basis of marketing research.
Characteristic # 2. It is both a Science and an Art:
Marketing research is a science because it involves the application of proven theories and principles to collect and analyse data. It is objective, scientific and systematic in nature. It is an art because it involves the interpretation of the information in light of the marketing scenario to take important marketing decisions. The proper interpretation and application of results to practical situations requires creativity on part of the manager, and therefore it is an art.
Characteristic # 3. Continuous Process:
Marketing research is a continuous process. Situations keep on changing in the dynamic business environment, and newer issues in marketing crop up regularly. The process of marketing research can never be put on a hold; the environment needs to be continuously monitored and analysed, so that any changes that may impact the marketing strategies can be detected at the onset.
Characteristic # 4. Applied Research:
Applied research is a scientific enquiry that seeks to solve some practical problems. It is conducted for a specific purpose. Marketing research is applied research because it is used for solving marketing problems. It has practical applicability in real-world marketing scenario.
Characteristic # 5. Decision-Making Tool:
The marketing manager has to take a variety of important decisions in his routine professional life. He requires a lot of current and accurate information to facilitate decision-making. Marketing research provides him the needed facts, figures and information for evaluating his options.
Characteristic # 6. Beneficial to Both Customers and Company:
Marketing research benefits the company as it helps it to stay ahead of the competition, boost its goodwill, increase sales and profits, reduce risks, etc. It also benefits the customer as their preferences are studies, their needs are understood and newer products that fulfill the wants of the customers are developed and offered to them. Market research helps the company to successfully make profits by ensuring customer satisfaction.
Characteristic # 7. Marketing Information System (MIS) and Marketing Research:
Marketing research is a component of MIS. MIS refers to a set of procedures and methods for regular and planned collection, analysis and presentation of information in making marketing decisions. Marketing research is one of the three components of MIS, the other two being internal marketing information and marketing intelligence system.
Marketing Research – Purpose
Marketing Research is an Essential Management Tool:
Marketing research consists of a plan that charts how relevant data is to be collected and analysed so that the results are useful and relevant for making marketing decisions. Once the research and the related analysis are complete, the results are communicated to the management. This provides management with in-depth information regarding crucial factors that have an impact on the target market and existing marketing mix. Marketing research allows management to make the changes necessary for better results through adopting a proactive approach.
Uses of marketing research in management are enumerated below:
(a) To supply valuable data to the top management to formulate long-term marketing objectives and to set clearly defined strategies necessary to accomplish them.
(b) To design and develop marketing policies and strategies relating to product pricing, packaging, product line extension etc.
(c) To design and develop internal system to monitor, measure and evaluate performance of the marketing department.
(d) To supply data on competition, market trends, consumer behaviour etc., so as to make the marketing activity more effective.
(e) To assist in selecting suitable channel of distribution and finalise the rates of commission payable to agents and middlemen.
(f) To assist in making sales forecast more accurately and scientifically. This will enable the top management to find out present and potential demand correctly.
(g) To take decisions on allocation of resources among various products and activities.
(h) Research will help in identifying areas for expansion and test the market’s readiness for a new product/service.
Marketing Research – Importance to an Economy
The importance of marketing research to an economy are discussed below:
1. Creates Employment Opportunities:
Marketing research concludes in increased production, widespread distribution and expansion of promotional activity in the economy. It helps to create greater employment opportunities for the society in the form of personnel required for production and businessmen for distribution process.
The market researcher finds suitable channels of distribution. Those coming in the channel of distribution may get a reasonable margin for their services. Hence, the producers and distributors are benefited.
3. Ensures Reduction Recession:
Recession happens when the production exceeds the capacity of the market. The disequilibrium between production and the market can be avoided with the use of the findings of marketing research.
4. Enhances National Income:
With the increase of production, distribution and marketing activities, the national income increases. The diversified economic activities act as an impetus to the growth of national income.
Suitable production functions are adopted to meet the market demand. Without marketing research, production will be undertaken without knowing its ultimate result. It may exceed the market demand or may lag behind. It may not meet the consumers’ needs, interest and willingness to purchase.
6. Helps in Avoiding Crisis:
The scarcity of production causes a crisis in the economy and it is unable to meet the market demand. If the findings of market research are used, the disequilibrium between the market and production can be corrected.
Marketing Research – 6 Major Limitations: Not an Exact Science, Time Constraints, Wrong Findings and Conclusion, Not a Proper Tool of Forecasting and a Few Others
1. Not an Exact Science:
Marketing research is not an exact science because it deals with human behaviour. And unlike the physical sciences it does not examine the various controllable and uncontrollable variables. However, sincere attempts are made to assess the scientifically and accurately, but there is always a possibility to arrive at wrong conclusions on account of improper use of techniques of analysis and interpretations.
2. Time Constraints:
Marketing research takes a long time in carrying out any research process. The collection of data, their analysis, and interpretations in fact take a very long time. Hence by the time the decision is implemented, the research report may prove to be outdated which may result in arriving at wrong conclusions.
3. Wrong Findings and Conclusion:
The problems of marketing are complex and hence they are required to be studied in depth by the researchers. However due to insufficient time and techniques, the findings and conclusions are not proper and hence may lead to further problems.
4. Not a Proper Tool of Forecasting:
Marketing research cannot be used as a cent percent tool of forecasting because there are a number of complex marketing factors which act and interact and ultimately react to give a complex state of marketing. Hence latest techniques are necessary to be studied and used for arriving at logical solutions to such complex problems.
5. Inefficient and Less Trained Research Staff:
Many companies feel that marketing research is not an important activity and hence they hire inexperienced research people who have not acquired formal training in research activities and hence the results are not proper. In fact market research is a function of great expertise as it involves human psychology and social character and therefore it is essential to have well trained and highly motivated staff to perform research activities.
6. High Cost of Operation:
Marketing research is considered a luxury for the management as it involves high cost of operation. This is the reason why many companies do not adopt marketing research. Such companies believe in management expertise rather than conducting costly researches.
To sum up it can be said that marketing research cannot provide solutions to every business problem. It only offers accurate information, which can be used to arrive at a suitable decision to reduce problems. Research is not problem oriented, it involves too many techniques. The market research also suffers from samples or statistical errors and hence if these are eliminated, the results obtained from market research may prove a very useful tool of management decision. Marketing research has definite advantages if properly conducted and used in proper perspective.
Marketing Research – 4 Main Methods: Existing Internal Data, Surveys, Focus Groups or Group Discussions and Experiments
Marketing research uses a wide range of techniques to collect data on customers and products.
Some of the main methods are:
i. Existing internal data – such as sales records, call reports from sales representatives and especially quotations for work that have been not been taking up by customers. Customer loyalty schemes such as Tesco’s Clubcard routinely gather vast amounts of information on specific consumers. This information can give very detailed data on individuals and groups of customers.
ii. Surveys can take many forms. Perhaps the simplest is a questionnaire returned by a purchaser when she or he registers a guarantee. Many organisations also use questionnaire surveys. Archetypally, questionnaire surveys are administered by market researchers who approach customers, whose characteristics appear to meet their quotas, as they visit shopping malls or go about their daily life.
Alternatively, questionnaire surveys may be administered in a slightly more rigorous way to a random sample of people in their own homes.
Unfortunately, random samples are more expensive than quota samples. Questionnaires may also be distributed via the post but this method may result in a very poor response rate. The telephone and the Internet may also be used to administer questionnaires. However, the sample responding to this type of survey may not be representative of the whole market.
Questionnaire surveys need to be constructed with care to ensure that the questions are “neutral”. Sometimes a series of questionnaires are administered to the same group of people. Often these are called consumer panels. Consumer panels have the advantage that they can track changes in customer preferences over time. Unfortunately, the repeated questioning of the same people can sensitise them to issues so that they gradually become unrepresentative.
Some unscrupulous organisations use questionnaires as a way of introducing themselves to people, getting them to divulge information and then attempting to sell them a product directly. This is called “SUGGING” (selling under the guise). Charities sometimes use surveys as a ruse to raise funds. This is called “FRUGGING” (fund raising under the guise). Both practices are unethical and should not be used.
iii. Focus groups or group discussions are frequently used in market research – especially when customers’ underlying attitudes to new or changing situations are relevant. Focus groups consist of, say, eight people representing different types of consumers plus a leader who ensures they cover the required topics. Sometimes, focus groups attempt to assess “emotions” and “deep attitudes” towards a product or service.
Some of the techniques are exotic and perhaps silly. Group members, for example, might be asked to nominate a type of tree that they associate with a certain public figure. In other situations, a focus group will be asked to taste a new drink and compare it to existing beverages. Focus groups can also be used to evaluate the clarity and impact of different ways of packaging a product.
iv. Experiments are used infrequently. Usually they are employed to study the impact of advertisements and packaging. For example, the technique of pupilometry may be used to monitor a consumer’s eye movements and determine the parts of an advert that a consumer selects for attention. Sometimes experiments are used to observe buyer behaviour. For example, a supermarket may stock shelves in a different ways and videotape the behaviour of customers. The videotape will then be analysed to establish which shelf lay-out generates most purchases.
Marketing Research – Role
The task of marketing research is to provide management with relevant, accurate, reliable, valid, 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 judgment.
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.
The role of marketing research in managerial decision making is explained further using the framework of the “DECIDE” model:
D – Define the marketing problem.
E – Enumerate the controllable and uncontrollable decision factors.
C – Collect relevant information.
I – Identify the best alternative.
D – Develop and implement a marketing plan.
E – Evaluate the decision and the decision process.
The DECIDE model conceptualizes managerial decision making as a series of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints.
Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected.
The next step is to select the best alternative based on chosen criteria or measures of success. Then a detailed plan to implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are evaluated.
Marketing Research – Ethics
Through marketing research, companies learn more about consumers’ needs, resulting in more satisfying products and services. However, the misuse of marketing research can also harm or annoy consumers. Two major public policy and ethics issues in marketing research are intrusions on consumer privacy and the misuse of research findings.
Many consumers feel positively about marketing research and believe that it serves a useful purpose. Some actually enjoy being interviewed and giving their opinions. However, others strongly resent or even mistrust marketing research. A few consumers fear that researchers might use sophisticated techniques to probe our deepest feelings, and then use this knowledge to manipulate our buying.
Others may have been taken in by previous “research surveys” that actually turned out to be attempt to sell them something. Still other consumers confuse legitimate marketing research studies with telemarketing or database development efforts and say “no” before the interviewer can even begin.
Most, however, simply resent the intrusion. They dislike mail or telephone surveys that are too long or too personal, or that interrupt them at inconvenient times. Increasing consumer resentment has become a major problem for the research industry.
This resentment has led to lower survey response rates in recent years—one study found that 38 percent of Americans now refuse to be interviewed in an average survey, up dramatically from a decade ago. Another study found that 59 percent of consumers had refused to give information to a company because they thought it was not really needed or too personal, up from 42 percent just five years earlier.
The research industry is considering several options for responding to this problem. One is to expand its “Your Opinion Counts” program to educate consumers about the benefits of marketing research and to distinguish it from telephone selling and database building. Another option is to provide a toll-free number that people can call to verify that a survey is legitimate.
The industry also has considered adopting broad standards, perhaps based on Europe’s International Code of Marketing and Social Research Practice. This code outlines researchers’ responsibilities to respondents and to the general public.
For example, it says that researchers should make their names and addresses available to participants, and it bans companies from representing activities such as – database compilation or sales and promotional pitches as research. Research studies can be powerful persuasion tools — companies often use study results as claims in their advertising and promotion.
Today, however, many research studies appear to be little more than vehicles for pitching the sponsor’s products. In fact, in some cases, the research surveys appear to have been designed just to produce the intended effect. Few advertisers openly rig their research designs or blandly mispresent the findings — most abuses tend to be subtle “stretches”.
In others cases, so-called independent research studies actually are paid for by companies with an interest in the outcome. Small changes in study assumptions or in how results are interpreted can subtly affect the direction of the results.
Recognising that surveys can be abused, several associations — including the American Marketing Association, the Council of American Survey Research Organisations, and the Marketing Research Association — have developed codes of research ethics and standards of conduct.
Marketing Research – 2 Major Sources of Data Collection: Internal and External Sources
Marketing research involves the collection and analysis of data or information bearing on the different aspects of the marketing effort of a firm. Methods of marketing research are, therefore, essentially methods of data collection.
Information as to the market and the effectiveness of the marketing instruments of that firm can be collected broadly from two types of sources:
1. Internal sources, and
2. External sources.
1. Internal Sources:
It is commonly assumed that marketing research consists entirely of data collection from the external sources particularly from the field. However, this is a mistaken view for often a problem can be solved without recourse to the much more expensive method of field research by analysing the data already available within the firm.
Good use can be made for marketing research purposes of the accounting information and the salesmen’s reports, etc., which accumulate in the firm in the normal course of business transaction. For example, sales turnover statistics can be analysed by lines, areas, salesmen, etc.
Similarly statistics of sales turnover, expenditure, advertising expenditure, transport costs, etc., can be analysed to get useful information for securing an understanding of the marketing problems of the firm.
2. External Sources:
Generally internal sources of information provide clues to problems which need a more thorough investigation. At this stage, the need for the use of external sources of information arises. The external sources of data for marketing research fall into two broad sub-categories – (a) primary data, and (b) secondary data.
Since the primary data have to be collected from the field through expensive investigation, the firm tries to extract the required information first from the secondary sources of data on markets and their trends and problems.
The secondary sources include all those agencies which gather and disseminate information of use to firms from the marketing point of view. The data from these sources is generally in a printed form.
The principal sources of secondary data for marketing research are:
i. Trade Press.
ii. Published Surveys.
iii. Trade Associations.
iv. Government and International Publications.
i. Trade Press:
This includes trade journals, economic and financial periodicals and the papers and reports published by some business houses and banking companies, etc. In India, the Economic Times, Commerce, Capital, Tatas Quarterly, etc., are some useful publications giving data on the state of the market in general and commenting on the trends in specific trades.
ii. Published Surveys:
Another useful source of data for marketing research is the reports of the surveys of markets for specific lines of products or specific regions made by business houses or independent research organisations (like the NCAER or the IIPO, etc.). These reports can be consulted in libraries or procured direct from the source for the firm’s own library.
iii. Trade Associations:
Trade Associations representing specific trade interests and the Chambers of Commerce both in the States and at the Centre conduct industrial and market research and collect and disseminate a considerable amount of information and statistical data pertaining to different trades, industries and markets. A researcher can benefit a great deal by tapping this source of information.
iv. Government and International Publications:
The Government is releasing a virtual stream of useful economic data which can be analysed and used for chalking out an effective marketing strategy for the firm. The periodic reports, journals and bulletins issued by the Planning Commission and Ministries of Agriculture, Commerce, Industry and Labour contain a wealth of information of use to the researcher. International publications issued by the U.N. agencies and the I.M.F. and the World Bank, etc., can prove useful particularly in research in international marketing.
Limitations of Secondary Data:
The secondary data collected from the above-noted sources may suffer from the following limitations which must be borne in mind by the users:
i. The bases for the data collected by different agencies may not be comparable.
ii. The data may be based on incomplete returns.
iii. The bias of the collecting agency (trade or governmental) may be reflected in the data.
iv. The data collected by different agencies may overlap.
v. The data is generally collected for purposes different from marketing research.
vi. The definitions of terms may not be uniform in all kinds of such data.
The primary sources of data for marketing research are those agencies and persons from whom the company collects the desired information directly for its own specific purposes, and through its own staff. Generally, survey techniques have to be used to gather information from the primary sources.
The primary sources of market information are:
If a firm employs salesmen to conduct and promote the sale of its products, the salesmen can be asked to give their assessment of the consumers’ or dealers’ reaction to the various features of the firm’s marketing effort, e.g., price, design, packaging, size, etc. They can also provide useful feedback regarding the working of the marketing machinery of the firm and the problems arising in this connection.
The use of salesmen for collecting data for marketing research has the advantage of utilising the first-hand knowledge of the market conditions and distribution system without additional expense and motivating them to still greater effort by giving them a sense of importance. However, salesmen are not trained for marketing research and their reports may not be unbiased, accurate and pointed.
Another source of primary data for marketing research is the dealers in products of the firm. The retail distributors may be contacted to find out from them the percentage of the sales of the manufacturer’s product to the total sales of that kind of products made by them over a certain period.
The dealers can also give some useful feedback about the consumers’ reaction to the firm’s products and marketing policies as compared to the products of rival firms. However, the sources may not always yield reliable information either because the retailers do not have a well-organised system of record-keeping or because they do not feel sufficiently interested in the firm.
The ultimate test of the quality of a product and its marketability lies in the consumers’ opinions and attitudes. Representative samples of consumers—actual or present and prospective or potential—may, therefore, be selected so that a thorough investigation can be made of their buying habits and behaviour in general and their opinion on the quality, price, packaging, availability, etc., of the firm’s product can be ascertained. This will naturally necessitate some kind of field survey. Such research is also called ‘consumer research’.
The primary data collected by the firm from the above sources is of greater and more direct utility for the firm because it is collected by the firm’s own staff for the specific purpose of forming objective judgments about the firm’s marketing effort.
Marketing Research – Monitoring, Evaluation and Research
Monitoring and evaluation in marketing is a new discipline which may broadly be classified as a component of development planning. It is considerably an important instrument to assess the physical and financial progress of product marketing in developing markets where the product is relatively new and yet to make the customers familiar of its usage.
Though ‘monitoring’ is an old concept, the ‘evaluation’ approach began with the new experiments in production and technology extension in the areas of modern consumer products and services. The monitoring and evaluation studies help to understand the status of the product in the market and the prospects of cultivating better ways and means of distribution, pricing, promotional and product-mix strategies for a company on the basis of the consumer feedback. The monitoring and evaluation analysis helps in determining the trend of consumer behaviour, volume of sales and related variables.
Behaviourally, monitoring and evaluation may be defined as learning dynamics in planning and management of marketing development projects, being complex and much of it is still undergoing the process of ‘trial and error’. A global concern for business development has led to standards generating a close competition and administering customer oriented strategies for accrediting the product as well as the company with the welfare business theory.
In attempting to establish such theories, one of the important factors to be considered is evolving an efficient marketing-mix system which is a complex and important parameter that determines the growth in business. Thus, monitoring and evaluation studies have a vital role to play in an integrated manner, reconciling the business administrative tasks in a competitive environment.
Another major impetus to the growing interest in monitoring and evaluation is based on the development concerns in marketing management. It is a tool to probe the failure and success factors that are responsible for the strategies that have turned down the achievements. The flows in decision-making can be understood from the marketing evaluation reports, which would help to draw lessons for the future to build up the appropriate alternative strategies.
Marketing management is an interdisciplinary concept which needs integration, as often several distinct components are administered by separate agencies. Monitoring and evaluation can play a crucial role in the coordination of their implementation, and lessons drawn from monitoring and evaluation can help in identifying the gaps in the existing approach and aid the designing of alternative projects.
Monitoring and Evaluation of Structural Components:
Monitoring and evaluation are the analytical methods applied to the relevant data and information to get the feedback reports of the existing implementation pattern of the project or scheme. In a particular context, with marketing management, it is essential to have a monitoring and evaluation unit at the distribution points pertaining to monitor the demand and supply status, customer orientation and other behaviour issues.
The specific tasks of the monitoring and evaluation unit can be defined as below:
i. To monitor the flow of goods and services to terminals from the producing centres through the established backward and forward linkages.
ii. To evolve accuracy in data and information flow to analyse the feedback.
iii. To evaluate the marketing project and study the impact thereof on the target group to build up alternative approaches for better implementation and outcome.
Ideally, in a company, a monitoring and evaluation structure with reference to marketing management should be at the marketing regions in charge of a monitoring and evaluation manager, vested with the task of periodical monitoring of demand, supply, pricing, quality, retailing and other related matters, assisted by a statistical assistant. However, this structure is subject to the turnover and marketing research potential of the company.
This unit, by and large, is concerned with the data pertaining to the physical and financial targets and achievements. However, the feedback on marketing is also to be considered at the same time. Thus, a monitoring and evaluation unit in a potential company would be a very helpful effort to develop the marketing plans for indigenous products of the region, through an effective monitoring and evaluation research.
The monitoring and evaluation in such agencies can be relatively small depending on the area of operation and location in the administrative hierarchy. In fact, the monitoring and evaluation unit should form an integral part of the marketing research set-up and should also serve as the Marketing Planning Secretariat of the companies individually or in a cluster.
A small and compact team is preferable in most of the cases, as compared to large units whose supervision would become a problem in the long run. The monitoring and evaluation head should preferably be a senior-level manager in the management hierarchy. The task of designing monitoring and evaluation system for a marketing project should start in the embryonic stage itself.
Infrastructural and Behavioural Dimensions in Marketing Research:
Marketing is a combination of physical and behavioural components both from the producers, and buyers’ point of view. Thus, the concept of accessibility, approachability, affordability and adaptability seems to be of a greater importance in product marketing. The association of these components may be termed as – 4As, which are required for efficient marketing system, along with the consideration of the 4Ps.
Accessibility to the market from the producers’ angle and to the product from the consumers’ point of view gains a significant importance. The infrastructure viz., storage, transportation, etc., available with the producer for product placement is a main factor determining accessibility. The strategy for product marketing in competitive conditions may be defined as approachability. This component is more crucial as it paves the path to enter the markets amidst different existing products.
The approach to market for the product introduction is largely based on the available communication infrastructure which helps in disseminating the First Product Information (FPI) more convincingly; to the potential buyers. The FPI would be helpful in building up attitudes of consumers for the new products. Thus, better the communication system, higher would be the preference for the product introduced.
The feedback on the consumers buying attitude towards the new product is an important tool for developing the base to induct the change in the existing system of production and marketing. The adaptability to such changes need to be conceived immediately in the competitive system where the product has limited time to present an effective introduction. However, it is essential for a product to assess the long run market trend by analysing the merits and demerits with a view to settle the product.
It is observed that no product market is effective for a long run, unless the modifications in marketing approaches are properly carried out. There is a need to develop a self-appraisal mechanism within the product-marketing system to acquaint oneself with the existing strength, weakness, opportunities and threats (SWOT). Such an analysis has to be done with reference to the prevailing market conditions for the product.
The companies may restructure the production and marketing design for their products on the basis of the antiquated weaknesses and threats to explore better opportunities and achieve more strength in the product market.
The substantial strength of the product in the market may develop more dynamism in product placement, if challenged by the threats of the competing products. The strong products and strong anti-market forces always develop new business perspectives in a challenging environment like ‘durbey’. On the contrary the weak product-market base, despite better opportunities may be unable to make headway in the market and gradually starts receding. The whole SWOT mechanism in product market planning may be termed as ‘SWOT-Circuit’ which generates dynamism with positive and negative forces.
The product marketing has a tertiary environment comprising political, economic, social and technological factors. An integrated impact of these factors (PEST) affects the marketing of products indirectly. These factors with a vested interest, provide the scope for capitalistic environment by interrupting the inlets of products to potential markets and in turn opens an opportunity for the products to capture these markets through PEST PUSH approaches.
PEST affect is common for the new product entries that put the customers into indecisiveness often. The power structure of capitalistic industries operates with a strong resistance in the competitive market which even dilutes the State intervention to a large extent. Thus, it is essential to PEST also in conducting marketing research. It would help to protect the concerned system within the framework of PEST to avoid marketing interruption at the stage of premature and mature of the product cycle.
Research Design and Marketing Information System:
The effectiveness of marketing research largely depends on the formulation of an appropriate research design considering adequate sample size, variables and proper tools for data collection suitable to the problem given. A researcher has to collect substantial background material to conceptualise well the research study before heading towards formulation of a research design of the problem concerned. The nature of problems varying in consumer marketing research and studies related with the research of industrial products marketing and the style of research design too.
There are many design conflicts encountered by the researcher in evolving a suitable research design.
i. The sample size (Quantitative).
ii. Respondents (Classified).
iii. Information to be sought (Issue specific).
iv. Time frame (Schedule for completion, class-intervals of time to be observed).
v. Tools for information collection (Interview, Mail, Telephone’ etc.).
It is essential for a marketing researcher to determine the sample Size in terms of the number of respondents, regions, products, firms, etc., to be studied and the type of respondents to be covered under study. The classification of respondents reforming to their income levels, locality, gender, etc., need to be decided prior to deciding what questions to be asked from them.
A synchronised list of issues has to be drafted embodying the questionnaire to be administered to retrieve the information from the sample respondents. However, in conducting any research, time management has considerable importance and so in marketing research, the time schedule for information to be decided.
In this context, the cutting-edge of time, class-intervals, and time-series issues need to be decided by the researcher. On completing the designing process, the tool(s) for the data collection has to be selected. They are interviewing, mailing questionnaires, telephone conversations, etc. An integration of all these components makes a perfect research design.
The sampling process should begin with identifying the universe of the study in reference to the population to be interviewed and the spatial distribution of the respondents. This step sets the demographic and geographical boundaries of the sample design. A researcher cannot develop the sample design until the universe of the study is defined.
The size of the sample should be determined carefully and there remains risk and error while administering the questionnaire. Hence, a researcher has to find the answer for two questions in deciding an appropriate sample size. They are – (i) how large should the sample be and (ii) how the respondents should be selected. Statistically, a minimum number of 30 respondents of homogeneous group is found to be significant whereas, the size for the heterogeneous group need to be decided on the qualitative considerations of the sample viz., purchasing power, volume of products in demand, behavioural dimensions, etc., in context of a consumer product.
However, there are two kinds of anticipated errors in the sampling process which often occur:
i. Administrative errors in carrying out the survey design. These include communication errors, flaws in interviewing schedule, irrelevance of framed questions, etc.
ii. Sampling errors due to the misrepresented samples, faulty selection of universe of the study and the like.
Hence, sampling needs to be done scientifically taking all error possibilities into considerations.
There are many techniques for sampling used in marketing research. However, the correctness of the technique is subject to the nature of the problem identified for the study and objectives set for the same.
The various sampling techniques are detailed below explaining the application process thereof:
i. Simple Random Sampling:
This method is very flexible. It is not restricted to the type of respondents, gender, income levels and other variables. The technique allows the researcher to pick up sample respondents from the universe of study irrespective of class barriers. However, the minimum and maximum sample size needs to be defined.
ii. Multi-Stage Random Sampling:
This technique is an improved term of simple random sampling which prescribes that a researcher has to divide the universe of the study based on the selected variables such as – customers by age, customers by income level, customers by sex, etc., and select the samples randomly within the categories formed. However, the minimum and maximum sample size needs to be kept in view while sampling under the various categories.
iii. Cluster Sample Design:
To make the information collection effective, a researcher can group the respondents termed as cluster. This can be done demographically and geographically or both depending on the intensity of data collection and time schedule thereof.
iv. Stratified Sampling:
In this process, the respondents clusters are made in a hierarchical order and the sample size is determined on a proportionate basis in each stratum. For example, the sample size of customers need to selected in context to the different age groups. In this exercise, the customers have to be classified under the different age-groups, their population to be ascertained and proportionately sampled out, using a parameter, say 5 percent. In this technique, mostly, the sample size is adjusted within the strata.
v. Purposive Sampling:
This technique is administered according to the choice of the researcher of area, population and related variables. However, it is necessary to look into the thrust of research and sample design to be evolved accordingly. In using this method, a researcher should logically set the universe of the study and sample variables in reference to the research problem.
vi. Quota Sampling:
This is a term of representative sampling in which the researcher prescribes the quota of individuals, products, etc., to be studied in the universe of the study, which considerably represents the segments of the universe. In this technique, a common error may occur in allotting the correct quota to get a significant representation of a sample for the study.
A set of questions related to the research problem used for interviewing a sample respondent is defined as a questionnaire. The questionnaire is generally prepared in a structured form with many types of questions.
A questionnaire may include the following sets of questions:
i. Long descriptive questions.
ii. Two questions in one.
iii. Multiple choice questions.
iv. Closed and open-ended questions.
v. Indirect questions.
vi. Direct questions.
vii. Personal questions.
viii. Attitudinal questions.
ix. Observation based questions.
The open-ended questions are difficult to codify for analysis. However, they could generate a substantial input for formulating descriptive cases and observatory analysis. The multiple choice questions have an advantage of easy coding and computerised analysis but at the same time limits the scope of response. The direct questions are posed to respondents to know their view point exclusively, while the indirect questions attempt to measure the logical framing of responses in which it is retrieved in reference to an attempted question. It also helps in cross- examining the responses of the respondents.
Consumer Behaviour, Attitude Measurement and Forecasting:
Product marketing and consumer behaviour have a symbiotic relationship. Consumers may be categorised in terms of social and economic parameters. The social profile of the consumers comprises age, gender, educational level, mobility patterns and family profiles. A set of consumers having a varied income level, propensity of consumption and purchasing power may be classified into the economic parameters.
The inclination of the consumer towards any object and the foregoing reaction thereof may be defined as a behaviour. This, in the case of marketing of goods and services, may be termed as consumer behaviour. Marketeers find such patterns useful for segmenting markets, crafting the marketing strategies in tune with the needs of the consumer groups and tailor their services with reference to the behaviour of the consumers towards specific issues. There are many factors which influence the consumer behaviour.
Conceptually, motivations may be categorised into two kinds namely, biological and environmental. The former kind of motivations are observed for the basic needs of people viz., food, clothing and shelter, while the latter type of motivations are influenced by the peripheral environment of the demography comprising pedagogical and androgogical issues.
The motivations are learned in the process of moving through the social and economic dynamics of the demography. This part of learning makes a marketeer know about his products in the market and draw the inclination of customers towards it. This dynamic relationship of marketing the products to the customers in a given environment sets the perception, which in the long run, turn into an attitude and finally such sustained attitude determines the consumer behaviour. Hence, a motivational factor plays a key role in crafting the consumer behaviour.
Individual characteristics are built in a demographic environment to which a person belongs. An anthropometric character viz., height, width of chest, appearance etc., belongs to a demographic class. The buying behaviour of the people thereof will be developed according to their needs. The costumes and cosmetics are the vulnerable example of such an influencing variable. Besides, gender and occupation specific variables also influence the process of consumer behaviour.
However, above all, the income level determines the consumer behaviour by setting the power of purchasing. The buying behaviour is also culture-bound. The socio-cultural values govern most of the demographic segments as what to eat, how to dress and prescribes a lifestyle. These prescriptions hardly change in conventional societies.
However, while in transformation, consumer behaviour deviates from the set path and forms new dimensions. The social factors are largely led by the reference groups who quote their experience with the product or service, family and influence leaders. In a family, the buying behaviour is set either through the influence of wives or husbands in case of consumer goods and services. The motivational factors in a family are of many kinds.
They are exhibited in a descending order below:
i. Biological Needs – Food
ii. Social Needs – Clothing and shelter
iii. Safety Needs – Social security
iv. Psychological Needs – Appreciation, love
v. Esteem Needs – Recognition, status, influence symbol, development, and trend
vi. Self Esteem – Contentment, set behaviour
These motivational factors largely influence the behavioural patterns of the consumer segments and the marketeers attempt to tap these dimensions in favour of marketing their products.
Concepts of Measurements:
Measurement in reference to marketing research may be defined as the assignment of numbers to objects or phenomenon according to predetermined rules. It is a quantitative technique applied on a set of data suitably prepared for knowing the efficiency of vital variables in marketing research viz., attitude changes, demand elasticity, price elasticities etc. On deciding which variable has to be measured in what scale, we may draw an operational definition to the concept of measurement.
The data set can then be subject to measurement at one of the scales listed below:
i. Nominal scale.
ii. Ordinal scale.
iii. Interval scale.
iv. Ratio scale.
The nominal scale is a conventional technique among the scales listed above. It consists of exhaustive categories which are also exclusive. There is no mathematical expression involved in exercising this method. Application of the nominal scale to marketing measurement is commonly used for the purpose of coding of the responses of field data belonging to a particular category of respondents.
The ordinal scale identifies the values of variable subject to measurement in terms of “greater than” and “less than”, beyond simple identifications as is done in the nominal scale. This scale is often used in marketing research to know the consumer preferences over the brands in terms of price, quality, service etc. which measures the preference in comparative terms of “greater than or less than” the competing element.
This measurement is done on ranking or scores of different variables. Such measurement in marketing research would help in ranking the preference or attitude for different products whose relationship is to be judged further for evolving marketing strategies.
The interval scale is a more refined technique as compared to the ordinal scale which not only determines the scope of “greater than or less than”, but also quantifies the variables. This scale of measurement is also commonly used in marketing research. However, this unit of measurement is arbitrary and the interval scale has no zero point relating to the presence of none of the present characters.
The use of the interval scale of data allows the use of a wide range of statistical methods for the analysis of collected information. The techniques discussed in the measurement of this scale are also applicable to the ratio scale as well. It is applied for measuring the data sets which include age, income price, market share etc., as independent variables.
In marketing research, an individual attitude is a pervasive component. Attitude is measured in two perspective manners in marketing research. They are – (i) attitude towards an object and (ii) effectiveness of potential strategies for improving the marketing system as an impact of measurement of attitude change or otherwise. Attitude is the mental state of a buyer which predisposes to respond in a manner he feels comfortable in a given or simulated situation.
This state of mind in marketing research may be considered as both a strength and direction. Attitudes are commonly recognised with their three distinguished components.
The cognitive component of an attitude is related to our knowledge and belief which governs the acceptance of the object. An affective component is associated with the customers’ positive or negative feelings about the object and the behavioural component reflect customers’ predisposition towards any action on the object in a given situation. These are very important links between the marketing and a customer which in the long run determine the marketing-mix planning and organisational structure of the company concerned.
In marketing research, many kinds of attitude rating scales are used. The important scales are graphic, itemized, rank order, paired comparison and the like. In the graphic rating scale, the respondent puts an imaginary mark at some point along a continuum that includes all the possible range of ratings. However, such a presentation of the customer opens up infinite permutations and combinations, theoretically.
It can be observed from the illustration that “A” customer’s attitude toward the price of a product depicts high price at “x” point on the scale, while the “B” customer’s attitude shows that he rates the quality of the product very low depicted at “y” point on the rating scale. However, a primary conclusion that may be drawn is that a particular product is of an inferior quality but is sold at a relatively higher price.
The rating must be taken from a significant number of respondents to arrive at a significant conclusion. In constructing a graphic scale, the marketing analyst should be careful not to stretch the ends of the continuum to extremes as the scale will lose its focus and results drawn may turn biased. It is an exercise very close to the ranking approach but provides an advantage of plotting the scores making the analysis more visible than turning it mathematical.
Another similar approach is followed in the rating attitudes of customers in “itemized rating”, which permits a respondent to choose scores from a prescribed number of categories instead of placing a random mark on the scale as is done in the graphic rating process. It can be exercised easily if the researcher follows a multiple choice questionnaire for collecting information from the customers. However the pre-requisites for operating this scale.
This system of attitude rating provides an opportunity for a wide range of responses on the positive and negative side of the question. However, a researcher should arrive at a clear conclusion on the following problems while formulating the scale.
i. Whether the scale be balanced?
ii. Number of categories the scale should have?
iii. How to manage responses on the scale?
The rank-order rating scale for attitude can be understood by the name of the techniques itself as it allows the respondent to rank his preferences or opinions on the object in order to make his attitude evident for the same. For example, a customer may be requested to rank his preferences for a particular product for the reasons best in the ascending order as he perceives. This may be in terms of the price, quality, quantity, availability, promotional policy, durability, service etc. The responses of a number of samples may be pooled and analysed by using frequency presentation or graphic techniques.
A respondent makes a number of comparisons in attitude rating through the paired-comparison rating scale. It has to be applied with two comparable products allowing the respondent to select the best one and the data to be presented in an appropriate form.
In this approach, a number of pairs need to be calculated using the formula as under:
N = [n (n – 1)] /2
N = number of pairs to be presented to respondent.
n = total number of objects/products.
The formula can be illustrated with an indicative exercise that if 5 objects to be evaluated for attitude rating, N = [5 (5-1)]/2, which results that in all 10 pairs to be presented to the respondent for placing his choice. The options emerged thereof may be cross-tabulated to present the attitude of the customer/object. The only weakness in this attitude rating exercise foreseen is the increasing number of comparisons due to frequent new entries of products of a similar nature in the market.
In the constant-sum rating scale, the respondents are allowed to allocate numbers for the different objects within the given numeric frame. It may also be defined as an approach to give weightage to the different products as per the preference. In marketing research, it is useful to use a round numeric value of 100 which can also be represented as percent.
In this approach, if a respondent assigns 60 points to Swiss Airlines and 20 points to Malaysian Airline we can assume that the preference of the respondent is three times higher for Swiss Airlines as compared to the Malaysian Airlines.
In the growing age of technological innovations in consumer products, it has become an essential part of the marketing to constitute market segments also considering the results of product experimentation. An experimentalist has to identify the object to be experimented and its universe in terms of demography and spatial distribution of the control group.
The control group broadly may be defined as the potential users of the product/object spread over the hinterland. An exclusive group for experimentation needs to be evolved for subjecting the use of the product to them. This group may be termed as an experimentation group. The formation of a group is dependent on a variety of variables relevant to the nature and utility of the product.
This may be age, sex, lifestyle, fashion orientation, societal image, purchasing power, mobility, occupation, expressionism, exhibitionism, income level, user potentiality etc., for the latest style of garments, jewellery, cosmetics, shoes and the like. The experimentation process can be at one point of time, continuous or a time-series with class intervals.
The observations of such experiments are generally made to ascertain the consumer behaviour and building-up attitude towards the consumption of particular products. An example may be cited of fertilizers and pesticides which are continuously experimented with different control groups/experimental groups for different crops and the attitude is rated in the process of conducting an overall marketing research. Experimentation needs to be carried out carefully in reference to the selection of area, control group, experimental group and the previous results if any. However, the user value of the object or product set the prime variables for making the decisions in this regard.