Marketing research notes: Week One and Two

Introduction

Marketing is a restless, changing, and dynamic business activity. The role of

marketing itself has changed dramatically due to various crises—material and
energy shortages, inflation, economic recessions, high unemployment, dying
industries, dying companies, terrorism and war, and effects due to rapid
technological changes in certain industries. Such changes, including the
Internet, have forced today’s marketing executive to becoming more market
driven in their strategic decision-making, requiring a formalized means of
acquiring accurate and timely information about customers, products and the
marketplace and the overall environment. The means to help them do this is
marketing research.

Defining marketing research

It will be important for us to know what is research before attempting a

definition of marketing research.

Research always starts with a question to which we seek an answer using

scientific methods. We define the question as a “Problem”. Research is a
systematic and objective investigation of a subject or problem in order to
discover relevant information or principles. It can be considered to be either
primarily fundamental or applied in nature. Fundamental research, frequently
called basic or pure research, seeks to extend the boundaries of knowledge in a
given area with no necessary immediate application to existing problems, for
example, the development of a research method that would be able to predict
what people will be like x years in the future. In contrast, applied research, also
known as decisional research, attempts to use existing knowledge to aid in the
solution of some given problem or set of problems.

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Undertaking research is basically applying scientific methods to find solution to
a problem. It is a systematic and explorative study carried out to analyse and
apply various solutions to a defined problem. Research can be classified into
two broad categories:

1. Basic Research and

2. Applied Research

Basic research

Basic research is also called fundamental or pure research. As the name itself
refers, Basic Research is of basic nature which is not carried out in response to a
problem. It is more educative, towards understanding the fundamentals and aim
at expanding the knowledge base of an individual or organisation. It does not
have any commercial potential.

Applied research

Applied Research on the other hand is carried out to seek alternate solutions for
a problem at hand. Applied research is done to solve specific, practical
questions; its primary aim is not to gain knowledge. It specifies possible
outcomes of each of the alternatives and its commercial implications. Applied
research can be carried out by academic or industrial institutions. Often, an
academic institution such as a university will have a specific applied research
program funded by an industrial partner interested in that program. Electronics,
informatics, computer science, process engineering and drug design are some of
the common areas of applied research.

Applied research can further be divided into:

1. Problem-solving research: It involves research oriented towards a crucial

problem facing the organisation which may be issue specific. Ex: How do
we improve the communication skills of our employees?

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 2. Problem-oriented research: The research is oriented towards a crucial
problem facing the organisation. It is undertaken inside the organisation
or by an external consultant on its behalf. This research is conceptual in
nature and newer innovative techniques of problem-solving are applied.
Ex: How to improve the production yield from machine X using modern
techniques?

What then is marketing research and why companies conduct market

research?

Marketing research (also called consumer research) is a form of business

research. The field of marketing research as a statistical science was pioneered
by Arthur Nielsen with the founding of the ACNielsen Company in 1923.

Marketing research is a systematic and objective study of problems pertaining

to the marketing of goods and services. It is applicable to any area of marketing.
Research is the only tool an organization has to keep in contact with its external
operating environment. In order to be proactive and change with the
environment simple questions need to be asked:

 What are the customer needs and how are they changing? How to meet
these changing needs? What do the customers think about existing
products or services?
 What more are they looking at?  What are the competitors doing to
retain customers in this environment? Are their strategies exceeding or
influencing yours? What should you do to be more competitive?
 How are macro and micro environmental factors influencing your
organisation? How will you react to this environment?

Authors have defined Marketing Research in many ways:

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 Kotler (1999) defines marketing research as “systematic problem
analysis, model-building and fact-finding for the purpose of improved
decision-making and control in the marketing of goods and services”.
 The American Marketing Association (AMA, 1961) defines it as “the
systematic gathering, recording and analysing of data relating to the
marketing of goods and services”.
 Green and Tull have defined marketing research as the systematic and
objective search for and analysis of information relevant to the
identification and solution of any problem in the field of marketing.

The aim of marketing management is to satisfy the needs of the

consumer. Marketing research helps in achieving this. Marketing research
is a systematic and logical way of assessing ways of satisfying customer
needs. According to all the above definitions, Marketing Research starts
by stating the problem or the issue to be investigated; indicate what kind
of information is required to resolve the problem; identify where and how
to get it; specify the methodology for analysing the research findings;
sum up the research findings and then suggest the best solution for
marketing decision making.

Scope of marketing research

Marketing research can be used in:

 Product Management: One of the major scope of marketing

research is to manage the current products and new products. In
product management Marketing Research is helpful in:
a) Competitive Intelligence – To understand the competitive
product strategy.
b) Prelaunch strategy for new products

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 c) Test Marketing – To monitor the performance of the brand by
launching in a select area and then taking it across the country.
In other words, it is a small-scale product launch used to
determine the likely acceptance of the product when it is
introduced into a wider market.
d) Concept testing - to test the acceptance of a concept by target
consumers.
 Sales analysis: Marketing research is used to study the sales trend
and make suitable strategies when required. It is used to
a) Assess market potential
b) Estimation of demand for a product
c) Market share estimation
d) Study seasonal variation for a product
e) Market segmentation studies
f) Estimate size of the market
g) Need analysis to find out where the product fits in
 Corporate Research: Marketing Research is used to analyse the
corporate effectiveness. Some examples are:
a) Assessing the image of the company
b) Knowledge of the company activities
 Advertising Research: Advertising is an arena in which Marketing
Research is extensively used. Some scope are:
a) Readership feedbacks – Mainly carried out for newspapers and
magazines
b) Advertising Recall – To assess the recall of television or other
advertising and thereby assess its effectiveness.
 Syndicated Research: This is compiled by agencies on a regular
basis and sold to organisations on subscription basis.

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All of these forms of marketing research can be classified as either problem
identification research or as problem-solving research.

A similar distinction exists between exploratory research and conclusive

research.

 Exploratory research provides insights into and comprehension of

an issue or situation. It should draw definitive conclusions only
with extreme caution.
 Conclusive research draws conclusions: the results of the study can
be generalized to the whole population.

Research can also be:

 Primary Marketing Research: It is research conducted by an

organisation for its own purpose which addresses its requirements.
It is generally expensive but is specific and objective to the
organisation‘s requirement.
 Secondary Marketing Research: This is used if the organisation is
considering extending its business into new markets or adding new
services or product lines. This type of research is based on
information obtained from studies previously performed by
government agencies, chambers of commerce, trade associations
and other organizations. This also includes Census Bureau
information. In other terms this is research published previously
and usually by someone else. Secondary research costs less than
primary research, but seldom comes in a form that exactly meets
the needs of the researcher. It can cater to anyone who wishes to
use the data. This data can be found in local libraries or on the
Web, but books and business publications, as well as magazines
and newspapers, are also great sources.

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Hence, Primary research delivers more specific results than secondary research,
which is an especially important while launching a new product or service. In
addition, primary research is usually based on statistical methodologies that
involve sampling as small as 1 percent of a target market. This tiny
representative sample can give an accurate representation of a particular market.
With the advance in technology a lot of software have been developed which
help in primary market research online and offline thereby making analysis and
interpretation easier.

The ideal way to conduct Marketing Research is to do secondary research first

and then do the primary research for the data not available form secondary
sources. Hence, secondary research lays the groundwork and primary research
helps fill in the gaps. By using both types of market research, organisations get
a better picture of their market and have the information they need to make
important business decisions.