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Application of Marketing Research
Application of Marketing Research
Research can be categorized either on the basis of technique (surveys, experiments, observation studies,
etc) or on the basis of purpose. We will look at the techniques in the subsequent chapters. Now let us
focus on the 3 methods of doing Marketing Research based on purpose:
1. Exploratory
As the name implies, exploratory research is the initial exploration done to get an idea and
insights into the problem. Research is a relatively expensive process; exploratory research
ensures that this process is not initiated without a thorough understanding of the problem. This
study is qualitative (understanding the concept) rather than quantitative (providing precise
measurement). Also, this type of research does not give conclusive evidence and subsequent
research needs to be done.
A widely used method for executing exploratory research for this purpose is Concept Testing.
Here, target consumers are introduced to an idea and asked how they feel about it, whether they
are likely to use it, etc. It tests the likeability or acceptability of the new product before investing in
its research and development.
2. Descriptive
This type of research is used when there is some comprehension of the problem, objectives are
defined and the research questions are clearly formulated. Contrary to exploratory research, the
proof descriptive research provides is used for formulating action plans. It helps answer the
questions ‘when’, ‘who’, ‘what’, ‘how’ and ‘where’, but not ‘why’.
3. Experimental
Experimental studies demonstrate cause and effect relationships. They try to decipher the
outcome marketing actions might have. For example, it is used when the purpose is to determine
the impact of increase in price on usage.
This research is used in succession to exploratory and descriptive research and hence sufficient
knowledge is gained on the topic by then. Experimental research is also popularly known as
causal research.
The extent of uncertainty also affects what type of method should be chosen. The more well defined the
situation is, the more the research agency will move from exploratory to descriptive to experimental
research.
The following cases will further help understand the significance of each type of research:
1. Competitive Advantage.
The notion that achieving superior performance requires a business to gain and hold an
advantage competitors is central to contemporary strategic thinking.
The assessing competitive advantage can be done in number of ways. The methods can be
broadly classified as market-based and process-based assessment.
2. Brand Equity.
Brand equity is defined as a set of assets and liabilities linked to a brand that add to or subtract from the
value of a product or service to a company and/ or its customers.
The assets or liabilities that underlie brand equity must be linked to the name and/or symbol of the
brand.
The assets and liabilities on which brand equity is based will differ from context to context. However,
they can be usefully grouped into five categories:
a) Brand loyalty
b) Name awareness
c) Perceived quality
3. Customer satisfaction.
The measurement of customer satisfaction and its link to product/ service attributes is the vehicle for
developing a market-driven quality approach.
This approach requires a sequential research design that uses the results from each research phase to
build and enhance the value of subsequent efforts.
During this process, it is imperative to study customers who were lost, to determine why they left. This
issue must be addressed early in the system design.
The steps involved in customer satisfaction is
a) Define goals and how information will be used
TQM is a process of managing complex changes in the organization with the aim of improving quality.
The power of measurements is clearly visible in applications of quality function deployment (QFD), a
japanese import used to make product design better reflect customer requirements.
In QFD, a multifunctional team measures and analyzes in great detail both customers attitudes and
product attributes. Marketing research plays a crucial role at this stage of the process.
Then the team creates a visual mtrix in order to find ways to modify product attributes (engineering
characteristics) so as to improve the product on the customer-based measures of product performance.
Along the way, the team must develop a series of measures of several different types.
1. Database marketing
A database is a customer list to which has been added information about the characteristics
and the transactions of these customers. Business use it to cultivate customers – as they
seek new customers.
Need
A database provides the means for research to support decisions. It enables profiling of
customers by searching for prospects who are similar to existing customers. It provides the
means for implementation of profitable programs of repeat business and cross-selling. It
assist in marketing planning and forecasting. Further a database can:
• Help create the offers most likely to elicit responses from customers
• Help achieve a unique selling proposition (USP), targeted to appeal to your customers.
Types of database
1. Active customers
2. Inactive customers
3. Inquiries
a) Customers are easier to retain than acquire. The first reason is that it takes five times
the energy and budget to get new customer as it does to keep an existing one. Also, a
disproportionately small number of your customers generate a very large proportion of your
income.
b) Determine their “Lifetime Value”. Building a lasting relationship becomes the obvious way
to a prosperous and profitable future.
2. Relationship marketing
A wide variety of information used to support marketing decisions can be obtained from
market research. A selection of such uses are summarised below:
• Analysis of the market potential for existing products (e.g. market size, growth,
changing sales trends)
• Forecasting future demand for existing products
• Assessing the potential for new products
• Study of market trends
• Analysis of competitor behaviour and performance
• Analysis of market shares
• Effectiveness of advertising
• Effectiveness of sales force (personal selling)
• Extent and effectiveness of sales promotional activities
• Competitor promotional strategies