Introduction, Nature & Scope

of Marketing Research
 Reference Books
• Marketing Research an Applied
Orientation
– Naresh Malhotra & S. Dash
• Business Research Methods
– Cooper & Schindler
• Marketing Research – Text & Cases
– Boyd, Westfall & Stasch

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Objectives
• Understand Marketing Research (MR)
• Understand relevance of MR for
marketing decisions
• Develop appreciation of MR & its
applications
• Know the procedure of conducting
• Develop familiarity with each step of
procedure

3
What is Business Research?
• A systematic Inquiry whose
objective is to provide information
to solve managerial problems.

4
Why Study Research?
• Research provides you with the
knowledge and skills needed for
the fast-paced decision-making
environment

5
Different Styles of Research
• Applied Research
– Emphasis on solving practical (specific) problems
– It could be exploring opportunities also
• Rectifying an inventory system that is resulting into lost
sales
• Opportunity to increase stockholder wealth by acquiring
another firm
• Pure Research/Basic Research
– Emphasis on problem solving but of a general nature
(not specific)
• Effect of coupon as against rebate to stimulate demand

6
What is Good Research?
• Following the standards of the scientific
method
– Purpose clearly defined
– Research process detailed
– Research design thoroughly planned
– Limitations frankly revealed
– High ethical standards applied

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What is Good Research? (cont.)

• Following the standards of the

scientific method (cont.)
– Adequate analysis for
decision-maker’s needs
– Findings presented unambiguously
– Conclusions justified
– Researcher’s experience reflected

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The Manager-Researcher
Relationship
• Manager’s obligations
– Specify problems
– Provide adequate background information
– Access to company information gatekeepers
• Researcher’s obligations
– Develop a creative research design
– Provide answers to important business
questions

9
Manager-Researcher Conflicts

• Management’s limited exposure to

research
• Manager sees researcher as threat to
personal status
• Researcher has to consider corporate
culture and political situations
• Researcher’s isolation from managers

10
When Research Should be Avoided

• When information cannot be applied to

a critical managerial decision
• When managerial decision involves little
risk
• When management has insufficient
resources to conduct a study
• When the cost of the study outweighs
the level of risk of the decision
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Need for MR
• A manager takes decisions
• His responsibility is to reduce risk of failure in
decision making
• Risk arises due to lack of relevant information
• A manager always seeks information to
improve quality of decision making
• Information can be collected through MR
• Hence, MR is an important tool for managerial
decision making

12
MR & Marketing Decisions
• For Production, Finance, Personnel
– Most of the required info are available within the
organization; Hence easy to collect & analyze
– Formal procedures are used to improve quality :
Stats Methods for QC, PERT & CPM, Queuing Theory,
Optimization Techniques etc
• For Marketing – information mostly exist
outside the organization
– In consumer behaviour, perception, minds
– In competitive moves
– In new government rules & regulations
– In social & political changes

13
MR & Marketing Decisions
• Other problems for collecting
information required for marketing
decisions are
– Being external – collection is cumbersome &
expensive
– Variables are often qualitative & dynamic –
making measurements difficult & inaccurate
– Variables are complex & interact with each
other

14
Important Arguments in
Research
• Deduction is a form of inference
that purports to be conclusive
• Induction draws conclusions from
one or more particular facts
• For suitable examples consult book
pages 32 - 34

15
The Building Blocks of Theory
• Concepts
• Constructs
• Definitions
• Variables
• Propositions and Hypotheses
• Theories
• Models
16
Understanding Concepts
• A concept is a bundle of meanings
or characteristics associated with
certain events, objects, conditions,
situations, and behaviors
• Concepts have been developed
over time through shared usage

17
Understanding Concepts
• The success of research hinges on:
– how clearly we conceptualize
– how well others understand the
concepts we use
• For customer loyalty use questions that
tap faithfully the Attitude of participants
• Attitudes are abstract, try to measure
them using carefully selected concepts

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What is a Construct?

• A construct is an image or idea

specifically invented for a given
research and/or theory-building
purpose.
• Constructs are required for more
abstract concepts – “Personality”,
“Satisfied Customer”

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Types of Variables
• Independent
• Dependent
• Moderating
• Extraneous
• Intervening

20
Types of Variables
• Independent & Dependent
– Leadership style & Employee performance
or Job satisfaction
– Price of a product & Demand
• Independent
– Cause, Stimulus, Predictor, Antecedent
• Dependent
– Effect, Response, Criterion, Consequence

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Types of Variables
• Moderating
– In each relationship there is one
Independent Variable (IV) & one Dependent
Variable (DV)
• Four day work week (IV) will lead to higher
productivity (DV)
– Moderating variable is a second independent
variable that has significant effect on the
originally stated IV–DV relationship
• Four day work week (IV) will lead to higher
productivity (DV), especially among young
workers (MV)

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Types of Variables
• Extraneous
– Infinite number of extraneous variables
(EV) exist that might effect the relationship
– Most of such variables have little or no
effect on the given situation and these may
be ignored
– Others may have highly random occurrence
as to have little impact
– For productivity example: election of a new
mayor, rainy days, bird flu, strike etc

23
Types of Variables
• Intervening
– Intervening variable (IVV) is defined
as a factor which theoretically effects
the observed phenomenon but can
not be seen measured or manipulated
– Its effect can be inferred from the
effects on the observed phenomenon
• Four day work week (IV) will lead to
higher productivity (DV) by increasing job
satisfaction (IVV)

24
Propositions & Hypotheses
• Proposition
– A statement about concepts that may
be judged as TRUE or FALSE if it
refers to observable phenomenon
– Proposition formulated for empirical
testing is Hypothesis
– Example
• Infosys employees have higher than
average achievement motivation

25
The Role of the Hypothesis
• Guides the direction of the study
• Identifies facts that are relevant
• Suggests which form of research
design is appropriate
• Provides a framework for
organizing the conclusions that
result

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Characteristics & Types of a Good
Hypothesis
• A good hypothesis should fulfill
three conditions:
– Must be adequate for its purpose
– Must be testable
– Must be better than its rivals
• Hypothesis types
– Descriptive
– Relational: Correlation & Causal
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Types of Hypothesis
• Descriptive
– Describes the existence, size, form or distribution of
some variables
– Eighty percent of shareholders of HLL favour
increasing the company’s cash dividend
• It can also be stated as research question
– Do shareholders of HLL favour an increased cash
dividend?
• Either form is acceptable, but descriptive
hypothesis format has advantages
– Encourages researcher to crystallize thinking
– Encourages to think about implications of either an
accepted or rejected finding
– Useful for testing statistical significance

28
Types of Hypothesis
• Relational
– Statements that describe the
relationship between two variables
with respect to some case
– Foreign (variable) refrigerators are
perceived to be of better quality
(variable) by Indian consumers (case)

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Types of Relational Hypothesis
• Two types: Correlation & Causal
• Correlation
– Merely states that variables occur
together without implying that one
causes the other
• People in Kerela give more importance to
education than people in Punjab
• In an office old employees are more
responsive than young employees

30
Types of Relational Hypothesis
• Causal (or Explanatory)
– There is an implication that existence
of (or a change in) one causes or
leads to a change in the other
• Causal variable is called Independent
variable and the other Dependent
variable
• Advertisement causes higher sales
• Increase in income leads to higher
savings

31
The Value of a Theory
• Narrows the range of facts we need to
study
• Suggests which research approaches
will yield the greatest meaning
• Suggests a data classification system
• Summarizes what is known about an
object of study
• Predicts further facts that should be
found
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Definition of Marketing Research
• American Marketing Association
MR is the systematic gathering, recording and
analyzing of data about problems related to
the marketing of goods & services
• Philip Kotler
MR is the systematic design, collection,
analysis & reporting of data & findings
relevant to a specific marketing situation
facing the company
It may be relevant to add the word “continuous” to the
above definitions

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Purpose of MR
• To improve quality of decision making
process by providing information
• To help reduce the risk associated with
managerial decision making
– Risk due to two types of uncertainties:
• About the expected outcome
• About the future environment

• To discover opportunity & exploit

profitably
For example : Frooti, Velvette, Mother Dairy,
Dhara, Pan Parag

34
Scope of MR
• Consumers of products & services
Buyer behaviour, Influencers, Buying habits, Incentives
• Product & product design
Pricing, Sourcing, Physical attributes
• Distribution Channels
Performance, Dealer Satisfaction, Own vs Multi-brand
• Advertising Impact
Image, Positioning, Media Planning, Message Content &
Prioritizing
• Macro Level Phenomenon
Govt spending. Mood of the Industry, State of Economy

35
MR Procedure
• Seven inter-related steps
1. Specifying research objectives
2. Preparing a list of needed information
3. Designing the data collection project
4. Selecting a sample type
5. Determining sample size
6. Organizing & carrying out the field work
7. Analyzing the collected data & report the
findings

36
The Management-Research
Question Hierarchy

6 Management Decision
5 Measurement Questions
4 Investigative Questions
3 Management Questions
2 Research Questions
1 Management Dilemma

37
The Management-Research
Question Hierarchy
6 Management Decision
Conduct an employee survey for
5 outcomes of change in compensation
structure
If compensation scheme is changed,
4 will good sales persons leave?

3 Introduce individual incentive? Quota based

incentive? Advertise more?
2 How can we improve sales in
south?
1 Why are sales declining in south while
sales are booming in all other regions?

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Working with the Hierarchy
• Management Dilemma
– The symptom of an actual problem
– Not difficult to identify a dilemma,
however choosing one to focus on
may be difficult
– Needs proper prioritizing

39
Working with the Hierarchy
• Management Question Categories
– Choice of purposes or objective
– Generation and evaluation of
solutions
– Troubleshooting or control
situation

40
Working with the Hierarchy
• Fine tune the research question
– Examine concepts and constructs
– Break research questions into specific
second-and-third-level questions
– Verify hypotheses with quality tests
– Determine what evidence answers the
various questions and hypothesis
– Set the scope of your study

41
Working with the Hierarchy
• Investigative Questions
– Questions the researcher must
answer to satisfactorily arrive at
a conclusion about the research
question

42
Working with the Hierarchy
• Measurement Questions
– The questions we actually ask to
extract information from
respondents

43
Other Processes in the Hierarchy
• Exploration
– Recent developments
– Predictions by informed figures about
the prospects of the technology
– Identification of those involved in the
area
– Accounts of successful ventures and
failures by others in the field

44
Research Process Problems
• The Favored Technique Syndrome
• Company Database Strip-Mining
• Unresearchable Questions
• Ill-Defined Management Problems
• Politically Motivated Research

45
MR Procedure
• Seven inter-related steps
1. Specifying research objectives (Problem
Definition)
2. Preparing a list of needed information
3. Designing the data collection project
4. Selecting a sample type
5. Determining sample size
6. Organizing & carrying out the field work
7. Analyzing the collected data & report the
findings

46
Problem Definition
• Any situation requiring further investigation is
a problem
• Not all problems require fresh MR to be carried
out. Many can be decided upon based on past
data, trend, experience
• Distributor Credit
• Manufacturing out put
• Stocking level
• Problem Definition should be
• Specific – neither too broad nor too narrow
• Target outcome should be precise
• Should be manageable within time & resource
available

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Problem Definition – an example
Incomplete Better Problem Definition
Problem Definition
1. Product Refrigerator Refrigerator – Ordinary & Frost free
2. Market West Zone West Zone with spl ref to Mumbai, Nashik,
Pune & Nagpur
3. Market ---- Office & Institutional Sector & NOT
Segment Households
4. Current Mkt Not available 12% over all
Share 3% in Office & Inst
5. Problem Sales not picking Last year our growth 5%
up at the rate at Industry grew by 25%
which they should
6. MR Problem To find out the To find out the reasons for shortfall in our
reason growth rate in office & inst segments &
suggest specific strategies followed by Brands
A&B

48
Research Design
• It spells out how to achieve stated
MR objectives
• Consists of
– Data Collection Method
– Specific Research Instruments
– Sampling Plan

49
Research Design
– Data Collection Method
• Secondary Data
• Primary Data
– Observation
– Survey (Most widely used)
– Experimentation
– Specific Research Instruments
Camera, Tape, People Meter, Tally Sheet, Questionnaire
– Sampling Plan
– Who is to be surveyed? Sampling unit
– How many? Sample size
– How are they to be selected? Sampling Procedure
– How are they to be reached? Sampling Media

50
Field Work
• Involves planning, execution,
supervision & checking for errors
• MR must be planned & executed well so
as to complete within resource & time
limits
• Progress to be closely monitored to
avoid time & cost overrun
• Extensive back checks & spot checks
will improve the quality of MR output

51
Data Analysis
• Done in two phases
– Classification of raw data
• Quantitative vs Qualitative
• Chronological, Geographical,
Demographic
– Summarizing the data
• Frequency distribution, Mean, Median,
Mode, Range, Variance, Standard
Deviation
• Data Analysis Methods – Four classes

52
Report Presentation
• Report must have following sections
– Executive Summary
– Objectives & Methodology
– Summary, Conclusion, Recommendation
– Sample Characteristics & Basis of selection
– Detailed findings
– Questionnaires & other supporting
documents

53
Marketing Research

54
Secondary Research

Secondary Data
Inexpensive
May not be relevant
May be old
55
Internal Sources

• Company Accounts
• Internal Reports and Analysis
• Stock Analysis
• Retail data - loyalty cards, till data, etc.

56
External Sources

• Government Statistics
• Trade publications
• Commercial Data – IMRB, Gallup, Mintel, etc.
• Household Expenditure Survey
• Magazine surveys
• Other firms’ research
• Research documents – publications, journals,
etc.

57
 Marketing Research
• Advantages of Marketing Research
– Helps focus attention on objectives
– Aids forecasting, planning and strategic
development
– May help to reduce risk of new product
development
– Communicates image, vision, etc.
– Globalisation makes market information
valuable (HSBC adverts!!)

58
 Marketing Research
• Disadvantages of Marketing
Research
– Information only as good as the
methodology used
– Can be inaccurate or unreliable
– Results may not be what the business wants
to hear!
– May stifle initiative and ‘gut feeling’
– Always a problem that we may never know
enough to be sure!

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