Lesson 3

Marketing Research

 Research information is crucial in both the

short run and long run survival of firms in an

industry. It enables the organizations to
acquire usable information about the
market place as an aid to vital marketing
decision-making on a daily basis. Marketing
research can provide information that can help
in reducing the risk in decision-making, but
at a cost. Usually the more accurate the
information, the more it will cost the
organization.

Therefore, most market research studies

involve some form of a trade-off

between accuracy and cost.
Marketing research can be defined as
the systematic gathering, recording,
analyzing and reporting of data about
problems relating to the marketing of
goods and services.

The types of marketing decisions which

marketing research can help include:

1. Size of the market

2. Customers and their buying motives
3. The changing trends in the market
4. Evaluating marketing efforts like advertising is it

effective?
5. Customer satisfaction with company products
6. least and most attractive features of company
products
7. How well the company is performing in the market,
i.e. the market share
8. Help organization learn about its competitor
strategies

Sources of information
Marketing research has two sources of

information.
1.
Internal sources
2.
External sources

Internal Sources
This is a source of information that

already exists in the organization. The

information had been collected for other
uses but, can also be used for the current
research. Its important to ensure that the
organization understands how the
information was originally collected and
has to be assessed whether or not the
information is valid to be used for the
current research.
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Sources of information
include:
1. Internal record system records kept in

the organization, for example, sales

figures, profit figures, payables,
receivables and others records.
2. Information collected from the
employees, management, and
shareholders.
3. Company magazines, e.t.c
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External Sources
These are sources outside the

organization e.g.
Trade sources e.g. marketing society of
Kenya, MSK,
Government sources or statistics e.g.
Population Census, Economic growth
etc.
Media, e.g. TV statistics, Press,
Magazines Publishers etc.
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Steps in Marketing Research

Definition and identification of the

research problem:
The problem of research must be identified
clearly and it must be precise and not
ambiguous. As Churchill puts it, a problem
well-defined is a problem half solved.

Determination of the
sources of information.
1. Primary source
2. Secondary source

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Primary Source
This is a fresh field study to address the

specific question thats failing the organization.

It is carried out to address a particular purpose,
e.g.
Customer research /marketing research
Advertising research
Product research PLC
Competitor research
Pricing, packaging e.t.c.

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Methods of Collecting Primary Data.

The most common methods include:-

1.Interviews- Personal interviews, Mail
interviews, Telephone interviews.
2.Observation
3.Experimentation
4.Questionnaire method drop and pick
5.Altitude scale tests
6.Consumer panels
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Secondary Source
This is an already available data not

collected for the specific problem in

question. Sources of Secondary Data:
1.Government Press
2.Official Publications
3. Magazines or journals from Professional
bodies.

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Determination of Data Collection

This will depend on the source of data to be

collected. For secondary data, the
researcher will use desk research. That is,
perusing through all the available data
relevant to the problem in question.
Whereas for primary data, the researcher
will have to institute fresh research or field
study.

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Determination of The Sample

Designs to be used
This refers to the group of people or objects that the

researcher is about to make generalizations on the findings.

The main concern of the researcher is to:
i)
Define the population of interest All those
people likely to be interested in buying the companys
particular product.
ii) Specify the sampling frame This is a list of all
those in the population of interest. If population of interest
is women, then for hairdressers- the sampling frame will be
a list of all women who make their hair

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 iii)Specify the sampling unit - This is the type of people to be

interviewed that is it has to be very specific, for example, housewives,

businessmen and others.
iv)
Selection of sampling method Which is the sampling method
being used? How are the sampling units going to be selected for
example, every 10th, 20th or 100th name in the sampling frame is
mentioned.
v)
Determine the sample size - The sample size must be
representational of the total population. This factor is determined much
by the cost of interviews and the budget allocated. Too large a sample,
may be time wasting and costly.

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Data Collection
Data collection involves conducting desk

research, fieldwork or experiment. The

researcher should ensure that, proper data
collection instruments are put in place,
especially the interview guides (the
questionnaire), observation methods and
others. The process of data collection
should be administered carefully to ensure
that the research design is properly followed. A
lot of care is also required needed to ensure
that, factors that can bias or distort information
are avoided as much as possible
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Data Analysis
The purpose of data analysis and interpretation is to obtain
meaning from the research carried out.

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The preliminary analytical steps include:-

i) Editing data clean - up to ensure that the

questionnaires are complete, accurate and
consistent
ii)Coding giving value to responses for ease of
analysis
iii)Tabulating representing the information in a
tabular form
iv)Cross-tabulation That is, relating two or more
variables, especially e.g. finding out the
relationship between the variables like, age,
income, and gender among others.
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Besides

these simple preliminary

analyses, most researchers usually
require more rigorous analytical methods
using complex statistical tools and methods
to measure such things as measures of
central tendency, measures of dispersion,
relationships, e.t.c.

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Report Results

Regardless of how well research has been carried out, the

project is a failure if the research report fails in its mission

which is to communicate with the readers audience. That is, the
report is the yardstick for evaluating the research project.
A Good Report should therefore satisfy the following

criteria:
i)

Completeness Should not leave out input details or

procedures or research
ii)
Accuracy Reporting exactly the findings of the project
without exaggeration

iii)

Clarity Must be clear in terms of sentences, expressions

and explanations. There should be no use of jargons.

iv)

Conciseness - Must be brief - Should not elaborate on

unnecessary detail and should be non-repetitive (This is when
we talk about quality of the research report).

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Types of Research
Designs
A research design or type of research refers to the research

method to be used. Types of marketing research may be

classified according to the purpose of data collection
(Basic Research Designs) while classification according
to method of data collection is referred to as secondary
designs to be covered later.
Basic Designs include:
i) Exploratory research
ii)
Descriptive research
iii)
Causal research
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On the other hand, Secondary Research designs

include:

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i)Surveys
ii)Case studies
iii)Experiments

Exploratory Research
It can be defined as research to gather preliminary

information that will help define problems and suggest

hypotheses. It is most appropriate where there is little
or nothing known about a phenomenon and hence the
need to explore and gain insights and ideas about a
particular problem.

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Explanatory research in this case, may help to

generate explanations, which may be used as

starting points into further research or main
research. For example, customer survey to know
the markets tastes and wants. That is,
researchers first and foremost, must look at the
general tastes and preferences that customers
exhibit, then on the basis of this, carry out a main
research.

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Descriptive Research
This is marketing research to better describe

marketing problems, situations or markets,

such as the market potential for a product or
the demographics and attitudes of consumers
in a target market. It is most appropriate where
the researcher is fairly knowledgeable about a
key aspect or subject of the study but, has
little knowledge if any, regarding their
characteristics, nature or details. Hence, a
descriptive study aims to generate knowledge
that may be used to describe or develop a
profile of what is being studied.
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Causal Research
This is a marketing research to test hypotheses about

cause and effect relationship. Under this method the

researcher can do the following: i)
Manipulate one or more variables in order to
determine their effect
ii) Control extraneous variably and other variables so
that they do not affect the results of the study. For example,
one can confine the respondents in product testing, to the
extent that the researcher only asks questions to those who
have just tried out the product without any external
influence
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Problems Encountered in
Marketing Research
Variability in needs and wants in various

market segments
Problems associated with primary research
Non-response rate
Instrument error

Problems associated with secondary

research
Non-availability of data
Non-compatibility of data
Problem with the sampling size

Research is expensive/costly
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 Time consuming
Language problem,
Infra-structure,
Macro environmental factors include;
Cultural differences
Political legal
Economic
Technological
Geographical,.

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Questions Marketing
Research can help Answer
evening

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Planning
Deals largely with determining which

marketing opportunities are open to a

company. Planning gives size and scope of
the firm, hence an assessment of the
resources to be allocated. It is concerned
with, who buys the companys products,
where do they live, how many are they,
and what are their income levels? Is the
product market saturated or are there some
untapped customer segments? Is there demand
for the product in other countries? Do we need
to develop new products for new markets?
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Problem solving
This includes, short and long term decisions that the firm must

make with respect to the elements of the marketing mix, i.e.

i) Product - product design, packaging, variety and quality

Price- basic price especially on lower prices, credit terms and

discount allowed.
iii)
Place - where and by whom, products are sold, i.e.
by giving incentives to the dealers and storage facility.
Promotion - effective communication campaign, i.e.
Are the right people seeing it?

How does it compare with the competitors campaigns?

What kind of sales promotion?
What combination of media, e.g. newspapers, radios, T.V.

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Control
Control of the marketing activities helps

management to isolate trouble spots

and keep abreast of current operations,
i. e
What market share do we control?
Are the customers satisfied with our
products?
Whats the publics perception of our
company?
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Marketing Information
System (MIS)

MIS consists of people, equipment and

procedures to gather, sort, analyze,

evaluate and distribute; needed, timely and
accurate information to marketing decision
makers.
Note: MIS starts and ends with the
marketing managers.

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1. Assess information needs

2. Develop needed information
3. Information Analysis
4. Distribute information to managers

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Assessing Information
Needs
A good MIS should balance the information the

managers require against what they really need

and what is feasible to offer given the
organizations resources. This can be
ascertained through interviews with
managers. Care should be taken on too
much information, as well as, too little
information both can be dangerous. The
company also looks at the cost of obtaining
the information from elsewhere in terms of
affordability.
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Developing Information
The information the marketing managers require may be
obtained from: Internal record System (I.R.S)
This consists of information gathered from operations
within the company, to evaluate marketing performance
and to identify marketing problems and opportunities.
Many companies now build extensive databases,
computerized collections of information obtained from data
sources within the company.
I.R.S includes sales figures, receivables, payables, costs
and cash flows and other sources. This information is
vital for day-to-day planning, implementation and
control of decisions and can be used to evaluate
company performance, detect problems and create new
marketing opportunities.

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Marketing Intelligence
System (MIS).

It is the systematic collection and analysis of publicly

available information about competitors and

developments in the marketing environment. That
is, it is the every day information about
developments in the environment. It determines what
intelligence is needed, gathers, analyzes and distributes
the information about the companys competitive,
technological, customer, economic, social and
political and regulatory environments and delivers it
to the marketing managers for decision-making. The
main goal of marketing intelligence is to improve
strategic decision-making process in organizations,
assess and track competitors actions, and provide
an early warning of opportunities and threats.

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Much intelligence can be collected from

companys personnel, suppliers,

distributors, competitors, annual reports,
share holders or even subscribing for
on-line databases. Some staff can also
scan the available publications,
summarize important news and send the
bulletins to the marketing managers.
This improves the quality of information
within an organization.
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Much intelligence can be collected from

companys personnel, suppliers,

distributors, competitors, annual reports,
share holders or even subscribing for
on-line databases. Some staff also can
also scan the available publications,
summarize important news and send the
bulletins to the marketing managers.
This improves the quality of information
within an organization.
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Marketing Research
This is the function that links the

consumer or customer and the public to

the marketer through information used to
identify and define marketing opportunities
and problems: to generate, refine and
evaluate marketing actions; to monitor
marketing performance; and to improve
understanding of the marketing process.

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Information Analysis
Information gathered from the marketing

intelligence and the company research

systems requires more analysis in order
for managers to apply the information
to their marketing problems and
decisions. This might involve more
advanced statistical tools to find out the
relationship between variables, as well as,
mathematical tools to enable them come
up with quality information vital for
effective decision making.
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Distributing the Information

Marketing information has no value until

the managers use it to make better
decisions. The information gathered from all
these processes must be distributed to the
marketing managers at the right time. With
the recent developments in information
technology, most companies are
decentralizing their marketing operations and
most of the times, the managers have direct
access to information network through
personal computers and outside sources.

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Conclusion
Marketing research is a vital tool in

decision making within an organization

Care should be taken in order to guard
against too little or too large an
amount of information. The
information to the decision-makers
must also be prompt so as to make
quick decisions and capitalize on the
opportunity at hand.

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