MARKETING RESEARCH

Marketing research is the intelligence service of a business enterprise.

American Marketing Association defined marketing research as “the gathering, recording and
analyzing of all data about problems relating to the transfer and sale of goods and services from
producer to consumer.”

Objectives of Marketing Research

1. To know the demographics and psychographics of customers:- Marketing research tries

to reveal the number of persons who buy, why they buy, when they buy, the frequency
of their buying, and the sources of their buying. It also includes the social status and the
regional location of the customers.
2. To find out the impact of promotional efforts.
3. To know customer response to a new product.
4. To probe ‘what went wrong’.

NATURE OF MARKETING RESEARCH

Marketing research is systematic and objective collection of data, its analysis and evaluation,
and decision making in respect of specific aspects of a marketing problem.

Marketing Research and Market Research:- The nature of marketing research cannot be properly
understood without knowing the meaning of market research. Market research is the gathering,
recording and analyzing of market data to identify the present and potential customers and their
motives and buying habits. It is the discovery of the capacity of the market to absorb the products of
a firm. It is a part of the marketing research. It is worthwhile to quote Richard D.Crips to identify
clearly the scope of Marketing research and market research. “Marketing research is the systematic,
objective and exhaustive search for the study of the facts relevant to any problem in the field of
marketing. Market research is restricted to the study of actual and potential buyers, their location,
their actual and potential value of purchases and their motives and habits.”

Market research may be conducted for the following reasons:-

(i) To identify the present and potential customers and their needs.
(ii) To forecast the demand of a product.
(iii) To determine customers preferences with regard to packaging, design, size, price and
other features of a product.
(iv) To locate the demand for products with regard to time and place, such as festival demand.
(v) To explore new markets for existing products.

SCOPE OF MARKETING RESEARCH

Marketing research covers different aspects of marketing of goods, services and ideas. There
are many areas of marketing management where marketing research has special branches.

Product Research:- Product research is associated with the conversion of customer needs into
tangible product offer. This includes development and testing of new products, improving the
existing products, and a tab on the changing customer preferences, habits, tastes, etc. Packaging
design, branding, and labeling decisions are also included here. Customer Research:- This research
type includes investigation into the customer buying behavior – the economic, social, cultural,
personal and psychological influences. Sales Research:- Sales research involves decisions
concerning selection of store location, channels, territories, sales force motivation and compensation,
etc. The purpose is to reach the target customer more effectively, efficiently and timely. .
Promotion Research:- Promotion research encompasses all efforts by the marketers to communicate
the company’s offer. This includes advertising, publicity, public relations, sales promotion, etc.

SIGNIFICANCE OF MARKETING RESEARCH

Marketing is one of the most important areas of any business enterprise. Making of right type
of decision in this area determines the success of the enterprise. Correct and sound marketing
decision can be made only if right type of information is available to the management. The required
information can be made available by conducting marketing research. The significance of marketing
research has increased because of severe competition in the market, frequent technological changes,
and the emergence of buyer’s market. Marketing research is of great value to management.

Advantage of Marketing Research

A business enterprise can derive the following benefits by conducting marketing research.

(i) Forecasting. Marketing research facilities forecasting of demand for the products of the
firm. This will help in adjusting the production schedules accordingly.
(ii) Assessing Product Acceptance. Marketing research helps in knowing the probability of
acceptance of the products in its present form. Such type of research may lead to alternations
in design, colour and other features of the product to make it more acceptable by the
consumers.
(iii) Rightful Promotion. Marketing research reduces wasteful expenditure on production
and advertisement. It tells in advance the products and services which are required by the
customers.
(iv) Understanding New Markets. Marketing research helps in discovering new markets and
in understanding the behavior of various types of customers.
(v) Suitability of Channels. Marketing research can be used to study the effectiveness of
existing channels of distribution, advertising, sales promotion activities and other marketing
activities.
(vi) Overall Business Direction. Marketing research provides invaluable information which
not only affects the working of the Marketing Department, but has an important impact on the
functioning of other departments of the enterprise, particularly production and purchase
departments.
(vii) Assessment of Middlemen. Marketing research helps in knowing the reaction of the
middlemen in regard to the company’s marketing policies. This may lead to the discovery of
the new lines of production which can be taken up along with the existing products.

Limitations of Marketing Research

Marketing research may suffer from the following limitations:

(i) Huge Expenditure. Marketing research involves huge expenditure of money, efforts and
time on the collection and analysis of data. Small firms cannot afford marketing research.
(ii) Bias in Collecting Data. The effectiveness of marketing research depends largely on the
types of data or information collected. The subjectivity of the investigators may have adverse
effect on the effectiveness of the marketing research.
 (iii) Unpredictable Human Behaviors. Marketing research is mainly a study of the
behaviour of human beings. The individuals may not always give adequate and accurate data.
Thus, the results of the marketing research are not cent percent accurate.
(iv) Requires Intelligent Handling. Marketing research is not an end in itself. It is a means to
decision –making. It requires competent and experienced executives or managers to use the
results of marketing research.
(v) Supplementary, Not Substitute. Marketing research is not a substitute for executive
judgment. It only provides relevant information with the help of which executives can take
decisions regarding product, pricing, promotion, place, packaging, etc.
(vi) Requires Competent Researcher. Marketing research may lead the executive to wrong
results because of carelessness of the research staff. If the investigators are not competent to
collect right type of data and analyze it accurately, there will be no utility of marketing
research.
(vii) No time Gap Allowed Between Research and its Implementation. There is generally
a time lag between marketing research and the implementation of its findings. During this
period, business conditions might change making the market research a futile exercise.

THE MARKETING RESEARCH PROCESS

Marketing research is carried out in a systematic and scientific manner to make it more effective
and useful for marketing management. There are 5 sequential steps that apply to any research
1. Define the Problem.

The starting point calls for the Marketing Manager and marketing researcher to define the
problem carefully and agree on the research objectives. The problem should be defined and written
down with full clarity. A problem well defined is half solved.

2. Developing the Research Plan

The second stage calls for developing the most efficient plan for gathering the needed
information. The Marketing Manager needs to know the cost of research plan before approving it.
Designing research plan calls for decisions on the data sources, research approaches, research
instruments, sampling plans and contact methods.

Data sources
In order to conduct marketing research, the marketing research department may collect
information from various sources which may be either primary or secondary. The primary source of
data refers to the first hand original data collected by the investigators through observation,
experimentation, and field survey. The information may be collected directly from the customers,
dealers and salesmen. The secondary data include facts and figures which are already collected by
other individuals and institutions. The sources of secondary data include publications of Government,
private institutions like Trade Associations and Chambers of Commerce, international institutions like
the International Monetary Found and the World Bank, and data collected by other research agencies,
etc.
Researchers usually start their investigation by examining secondary data to see whether their
problem can be partly or wholly solved without collecting costly primary data.
Primary data can mainly be collected as follows

• Preparation and Use of questionnaire

Questionnaire is the soul of survey. Therefore, it is necessary that sufficient care is taken to
draft the questionnaire. The questionnaire should be so framed that it suits the purpose of survey and
 evokes the highest possible response. Following considerations should be taken into account while
preparing a questionnaire and putting it into use.

(i) Questionnaire should be accompanied by a covering letter stating the purposes of enquiry
and requesting the respondent to complete it and send it back to the investigator. It should
also give assurance that the information supplied by the respondent will be kept as strictly
confidential.
(ii) The number of questions in the questionnaire should be minimum possible. Particularly,
questionnaire used for telephone survey should be very brief.
(iii) The question should be short and simple. As far as possible, the answers to the
questions should be capable of being expressed in standard format, i.e. ‘Yes’, ‘No’ and ‘No
comment’, etc.
(iv) There should be a logical arrangement of questions
(v) The questions should be expressed in unambiguous words.
(vi) Mathematical calculations like ratios and percentages should not be asked from the
respondents.
(vii) As far as possible, personal questions should be avoided
(viii) The layout of the questionnaire should be attractive in printing and design and the
paper used.
(ix) Questionnaire should be pre-tested by checking response of a select respondents. This
pilot study is necessary to remove the draw-backs of the questionnaire in the initial stages.
The re-drafted questionnaire can be effectively used for undertaking a large scale survey to
collect data for marketing research.

Surveys with the help of a questionnaire can be conducted in the following way: (1) Personal
Interview; (2) through mail and (3) through the telephone.

Personal Interview:- It involves face to face communication between the investigator and the
respondent. The investigator is given a list of questions (known as questionnaire or schedule) to be
put to the respondents concerned. However, the investigator is given some freedom to put the
questions in different styles to suit the needs of a particular situation. Thus, it is a flexible form of
data collection. This interview can also be held without a questionnaire. Personal interview helps in
asking complex and probing questions to secure more information. The investigator can also observe
certain factors related to income, occupation, standard of living, etc.of the respondent. Personal
interview helps in contacting only those respondents from whom the required information can be
obtained. It helps in getting detailed and accurate information. Literacy of the respondent is no
problem. But this method is expensive, particularly when a large number of respondents are covered.
More time is required to collect data. The interviewers must be competent, trained and experienced.
They must be honest and free from any biases. Otherwise, data collected will not be accurate, valid
and reliable.
Mail Survey:- Data may be collected by sending printed questionnaire to the respondents with a
request to supply the written replies. It is presumed that while writing the answers sufficient thought
will be given and therefore, it is more reliable than the oral answers provided to an interviewer. The
answers can be collected in a standard form which facilitate tabulation, computation and analysis.
Questionnaire through mail can be sent to a large number of respondents scattered throughout the
country. Thus, it is a cheaper method of collecting data. The bias on the part of the interviewers is
also avoided. .

Telephone Survey:- Telephone interview is the most convenient and speedy method of getting
information. This method allows limited coverage because it cane be used only to get the information
from those people who have installed telephones.
 • Salesmen:- Salesmen are in important source of marketing data. They are in close touch with
the customers. They can be of great help in knowing data about the buying habits of the
customers, changing tastes of the customers, the preferences of the customers, and the
products of the competitors. The marketing manager should ask the salesmen to prepare and
submit periodical reports to him. He can also lay down the guidelines for the salesmen for
preparing the report.

There are many advantages of obtaining data from the salesmen. The salesmen provide the
first-hand information of the conditions in the market. They provide the information within a short
period. Salesmen can appraise the marketing manager of the opinions and reactions of the consumers.
This has also the effect of motivating the salesmen because they feel that information provided by
them is being used in framing company’s marketing policy. But, sometimes, the reports submitted by
salesmen suffer from biases. The information provided by them may not be accurate because they
feel that giving an accurate information will affect their interest adversely. Care must be taken to
check such practices amongst salesmen.

• Dealers:- The in charge of marketing research can also collect first hand information from the
dealers. Investigators may be sent to contact the dealers or distributors personally to know about
the popularity of the firm’s product, the share of firm in the market, acceptability by the
consumers, and so on. The dealers may also be requested to provide information about the
marketing policies of the competitors. Dealers may not always provide cent percent accurate
information. They may not like to leak out the secrets of their arrangements with other
manufacturers and they may not even taken interest in the products of the firm in question.
Research can help solve such problems.

• Consumers:- Consumers are an invaluable source of primary data. A representative sample of

the consumers may be selected and information obtained regarding the prices, quality, packaging,
etc. of the products of the firm. By having direct contacts with the consumers, the reliability of
the information provided by the salesmen and dealers can also be checked. The firm can also use
opportunity of inviting suggestions from the customers regarding the importance of the specific
characteristics of the product. Some firms follow the practice of regularly knowing the opinion of
ultimate consumers from the panel called ‘consumers panel’. Such a panel is formed to know the
fashion, taste and attitudes of the consumers. The members of the panel are interviewed
personally for obtaining the necessary information.

Observation:- The major method of getting primary data is by observing the behaviour (present
and past) of customer. The present behaviour can be observed by, say, positioning the
investigator at the top of the shop and watching how customer makes choice between different
brands. The past behaviour can be selectively observed only when we have some result of the
past behaviour. For example, instead of asking which brand of washing machine the customer
has, the interviewer can look at the washing machine, its brand, colour, model, etc.

Sources of Secondary Data

o Press
o Publications of Trade Associations
o Government Publications.
o Publications of Reserve Bank of India and Financial Institutions
o Publications of private individuals, companies and research institutes
 o Foreign Government and International Agencies

Sampling Plan

After deciding on the research approach and instruments, the marketing researcher must design a
sampling plan
o Sampling unit-who is to be surveyed
o Sample size-How many people to be surveyed
o Sampling procedure-how should the respondents be chosen

Once the sampling plan has been selected, data may be collected by questionnaire, interview
or any other methods

3. Data Collection
Data collection from market/customer/sample surveys are submitted to experts for analysis

4. Data Analysis
The data analysis process involves the use of appropriate statistical techniques in
order to know the meaning of the collected data

5. Marketing Research Report

The last step in the marketing research process is the presentation of a marketing research
report. The report should be prepared while taking into account the preference of the marketers. The
contents of the report might include the title, table of contents, synopsis, introduction, methodology,
major findings, limitations, conclusions, recommendations, and suggestion. . However, the
marketing research report should be easy to follow, generate interest in reading, have visual graphics,
and use non-technical language.

Once the marketing research process is competed with the submission of the report, the task is
to follow-up the research as presented. The quality of presentation, the contents, and the process
should be reviewed and marginal improvements, if necessary, provided as per the additional
requirements of the marketers. However, the marketing researcher should not expect full
implementation of the research report while it was being prepared. Changed circumstances, delays,
and management perception might require minor adjustments. On the whole, the marketing research
should be able to satisfy the requirements of the marketing management.