MARKETING RESEARCH The Research Process

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MARKETING RESEARCH The Research Process
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Marketing Research Definition and Purpose

• Many definitions of Marketing Research
• Marketing research is the systematic design,
  collection, analysis and reporting of data and
  findings relevant to a specific marketing
  situation facing the company. Philip Kotler
• the systematic gathering, recording and
  analyzing of all data about problems relating to
  the marketing of goods and services. The
  American Marketing Association
• Basic Purpose of Marketing Research
• Marketing research reduces uncertainty or error
  in decision-making. The information collected by
  conducting marketing research is used for problem
  solving and decision making in various areas of
  marketing.

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Marketing Research ...

• Can help the marketing manager to
• (1) Identify and define marketing problems and
  opportunities accurately
• (2) Understand markets and customers and offer
  reliable prediction about them
• (3) Develop marketing strategies and actions to
  provide a competitive edge and refine and
  evaluate them
• (4) Facilitate efficient expenditure of funds
• (5) Monitor marketing performance and
• (6)Improve the understanding of marketing as a
  process.

• Is important because of
• Rapid changing marketing environment
• Need for up-to-date information for strategically
  important areas
• Importance of research as an integral part of
  better operation.

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THE MARKETING INFORMATION SYSTEM AND MARKETING
RESEARCH

• Marketing research is not the only source of
  information that marketing managers need in
  making decisions.
• Information may also be generated by various
  components of the Marketing Information System
  (MIS) consisting of a series of interactive
  components (Figure 1.1).
• There are four subsystems of the MIS internal
  reports, marketing intelligence, marketing
  research, and marketing decision support.

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THE MARKETING INFORMATION SYSTEM
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When Marketing Research may not be necessary

• Marketing research is almost always
  problem-oriented. Whether to conduct marketing
  research depends on the managers experience and
  wisdom nature of decision situation repetitive
  or atypical degree of uncertainty and the
  value and importance of the research.
• Marketing research may not be necessary if
• Information is available/outcomes known.
• Insufficient time for marketing research.
• Non-availability of resources.
• Cost Vs Value of the Research.
• Outcomes known.

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MAIN DIVISIONS OF MARKETING RESEARCH

• 1. Market and Sales Research
• 2. Product Research3. Price Research4.
  Distribution (Place) Research5. Promotion
  Research.

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Types of Research II

• Combinations of types such as applied qualitative
  research, basic primary research are common
• A sample of questions commonly answered by
  conducting primary applied research include
• What price should we charge for our product?
• What distribution channels should be used?
• How well does the product match up with the
  competitors product?
• How effective is the companys advertising?
• How will the consumers receive this new product?
• What percentage of market penetration does
  Product X have?
• What is Product Xs image in the consumers mind?

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Qualitative Vs Quantitative Research

• Qualitative research involves collecting,
  analyzing, and interpreting data by observing
  what people say or do.
• Uses a smaller number of individuals and
  observes them for a time span of between 1 and
  2 hours. -----soft approach
• Quantitative research is the traditional
  mainstream of marketing research.
• It is also called survey research. Involves the
  use of questions and large number of respondents
  within a brief span of time, say 15 to 45
  minutes.
• Its purpose is very specific-- e.g. a nationwide
  survey on the Road Pricing System for cars. The
  hard approach to marketing research.

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THE MARKETING RESEARCH PROCESS

• Every research project is different and unique.
• However, research procedures and activities are
  common and constitute the marketing research
  process .
• This process
• is an well-organized sequence of ten steps
  involved in the systematic collection and
  analysis of marketing data.
• provides a description of how a marketing
  investigation is designed and implemented, and
  helps to guide the execution of a research
  project.
• is interactive, a researcher may not follow the
  ten steps exactly in the order presented here.

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Ten Steps in the Marketing Research Process

• 1. Define the Problem
• 2. Establish Research Objective
• 3. Determine Research Design
• 4. Identify Information Needs and Sources
• 5. Determine Methods of Data Collection
• 6. Design Instrument for Data Collection
• 7. Determine Sample Plan and Sample Size
• 8. Collect Data
• 9. Analyze Data
• 10. Prepare and Present Final Report

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Step 1 Define the research problem I

• The very first, and the most important step in
  research
• A problem well-defined is half solved
• Nature of the problem determines the type of
  study to conduct.
• Symptoms, for example, declining sales, profit,
  market share, or customer loyalty are not
  problems.
• A research problem must be accurately and
  precisely defined, otherwise the task of
  designing a good research difficult.
• Marketing problems may be difficulty-related or
  opportunity-related. For both, the prerequisite
  of defining the problem is to identify and
  diagnose it.
• Conduct situation analysis. It provides the basic
  motivation and momentum for further research.

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Step 1 Define the research problem II

• Get the right answer to the question
• What exactly does the firm want (or need) to
  know?
• The basic question to address is
• How to know that there is a problem?
• Problems may become apparent from
• deviation from the business plan, company records
  and reports, customer complaints and grievances,
  conversations with company employees, and
  observation of inappropriate behavior or
  conditions in the firm
• the success of the firms competitors, and
  published materials reporting issues such as,
  changes in market or environmental trends, new
  government regulations, anticipated changes in
  the economy, etc.)

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Step 1 Define the research problem III

• Once the symptoms of a problem are detected..
• Conduct some initial fact finding to determine
  the nature of the true problem.
• Talk to others about the problem and conducting a
  preliminary literature search on the topic.
• In the initial stage, a problem may be recognized
  in a very broad and general form only. This may
  restrict the research program from being
  comprehensively designed.
• Both the researcher and the marketing manager (or
  the research client ) need to work together to
  formulate the problem into a precise and definite
  statement.
• This fact-finding exercise helps the researcher
  to refine his educated guess to a more accurate
  problem statement.

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Step 2 Establish Research Objectives

• If you do not know what you are looking for, you
  wont find it
• Research objectives are related to and determined
  by the problem definition. In establishing
  research objectives, the researcher must answer
  the following questions
• i) What specific information should the
  project provide?
• ii) If more than one type of information will
  be developed from
• the study, which is the most important?
  and finally,
• iii) What are the priorities?
• When specifying research objectives, development
  of hypotheses, might be very helpful.
• When achieved, objectives provide the necessary
  information to solve the problem.

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Step 3 Research Design

• 3. Research Design step involves the development
  of a research plan for carrying out the study.
• There are a number of alternative research
  designs. The choice will largely depend on the
  research purpose.

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Step 4 Specify the information required. Step
5 Design the method of collecting the needed
information.

• 4. After defining the problem the researcher must
  determine what kind of information will best meet
  the research objectives.
• Secondary information
• Primary information

• 5. Marketing research information may be
  collected in many ways
• via mail, telephone, fax, Internet, or personal
  interview.
• using consumer panels, consisting of individuals
  who have agreed to provide purchasing and media
  viewing behavior.

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Step 6 Design the questionnaire.

• A primary responsibilities of a marketing
  researcher is to design the data collection
  instrument or questionnaire in a manner so that
  it is easily understood by the respondent and
  administered to them.

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Step 7 Decide on the sampling design. Step 8
Manage and implement the data collection.

• The researcher must determine the criteria that
  would enable a respondent to take part in a
  study.
• The sampling design must result in the proper
  sample of respondents being selected. Different
  sampling designs are available to researchers.
• The researcher must properly manage and oversee
  the data collection process.
• If interview method is used, the researcher must
  train interviewers and develop procedures for
  controlling the quality of the interviewing.
• This is not necessary if survey methodology is
  used, where the research instruments are
  completed by the respondents.

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Step 9Analyze and interpret the results. Step
10 Communicate the findings and implications.

• The raw research data needs to be edited,
  tabulated and analyzed to find the results and to
  interpret them.
• the method used may be manual or computer based.
• The analysis plan follows from the research
  objective of the study.
• Association and relationships of variables are
  identified and discussed in the light of the
  specific marketing problem.
• The researcher has to submit a written report and
  often make an oral presentation to management or
  the client.
• In conducting all the marketing research
  activities the marketing researchers must adhere
  to ethical standards.

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Marketing Problems Versus Research Problems

• Not all marketing problems are researchable. To
  clearly define a researchable problem,
• the researcher must define the scope of the
  problem during the initial investigation, and try
  to determine probable cause-and-effect
  relationships between the variables by answering
  the following questions
• What is (are) the symptom(s) that indicate(s)
  that there is (are) a problem (s)?
• What is (are) the likely cause(s) of the problem?
• What information will be needed to find a
  solution to the problem?
• What possible course(s) of action may be taken if
  information is available?

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Phrasing a Researchable Problem I

• A marketing problem that can be researched, must
  be translated or written into a form that
  includes
• A relationship between two (or among several)
  variables.
• Each variable is operationally defined,
• A population for the research is implied or
  identified.
• Consider the observation, We need to find why
  our stores image seem to be have gone down?
• This problem is not researchable because it
  does not clarify
• (I) the relationships that are described
• (ii) how the conclusion seems to be have gone
  down? is reached, and
• (iii) gone down compared to what?

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Phrasing a Researchable Problem II

• This research problem suffers because the terms
  are not specifically defined.
• When image is referred to, what does it mean?
  The number of customer that frequent the store?
  The number of complaints lodged by customers?
  The stores market share? Or what?
• Similarly, what does gone down actually mean?
  Is it referring to reduction in the number of
  people frequenting the store? Or what?
• Finally, what population is being implied? Does
  it refer to all sales to all customers or
  particular types of customers?

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Operational Definitions of a Variable

• It is a definition that is determined by the
  operations needed to measure the variable in
  question.
• A term may not have only one, universal meaning.
• In the statement, I want to buy a car, the
  variable car is not operationally defined.
• A car may mean, among others, a sedan, a sports
  car, a pick-up or a mini van it may also refer
  to an American, or a Japanese built car. Hence
  just saying car could be misleading.
• One must be specific as to what it exactly means.
  Operational definitions reduce ambiguity.

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Variables and Constructs

• A variable is a factor that
• (i) causes some other factor(s) to vary, and
• (ii) may assume different numerical values.
• Price is a variable since it can cause sales
  levels to vary and may assume different numerical
  values.
• A Construct is a variables with special
  interpretation. Constructs are concepts that are
  deliberately invented or adopted for a special
  scientific purpose.
• In statistical analysis, a variable is generally
  identified by a symbol, such as X or Y. If a
  researcher is using SPSS, or other computer
  packages, he or she may use the name of the
  variable itself or its abbreviated form e.g.,
  age marstat (for marital status), occupn
  (for occupation), etc.

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Classification of Variables

• 1.Categorical or Classificatory Variables
• have a limited number of values, e.g., gender
  (male or Female) , marital status (married,
  single, widowed/ widower) etc.
• 2.Continuous variables
• have an infinite number of values, e.g.,
  temperature, sales in or number, profit in .
• 3. Dependent Variables
• Variables expected to be predicted or explained.
• 4. Independent Variables
• Variables that are expected to influence, predict
  or explain another. For example, in the following
  relationship Income (I) F (Age, Level
  of education), Income is a dependent variable
  Age and Level of education are independent
  variables. An independent variable is something
  that the researcher can control.

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Constructs Widely Used by Marketing Researchers

• Marketing Constructs Operational
  definitionsAttitudes towards brands Number of
  people with positive, negative or neutral feeling
  Brand Awareness Percent of
  respondents that have heard of the brand Brand
  familiarity Consumers that have
  tried or seen the brand Brand loyalty
  How many times the respondent bought
  (used) the product Comprehension of
• product benefits Respondents opinion as to
  what the product does to themDemographics
  Respondents age, sex, marital status
  etc.Past purchase or use Percent of
  respondents that bought(used) the product/service
  Psychographics How consumers think and
  behavePurchase intention Number () of
  respondents planning to buy a product
  Reach The number () of households exposed to
  an advertisement schedule during a given
  period of time.Satisfaction How the respondents
  evaluate the performance of the product
  or the service

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RESEARCH PROPOSAL I

• A research proposal
• a plan showing step by step description of how a
  proposed research project will be undertaken.
• reflects the researchers understanding of the
  problem and ability to conduct the research.
• If the research is to be conducted through a
  research agency, the research proposal acts as an
  important selection criterion.
• Upon its acceptance, the research proposal
  becomes the basis for the contract or agreement
  between the research agency and the client, and
  serves as a record of what was agreed on.

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RESEARCH PROPOSAL II

• There is no fixed or standard format for a
  research proposal as it is dependent on the
  nature of the specific research project. However,
  most research proposals contain the following
  items.
• 1. Introduction
• 2. Statement of the Marketing Problem
• 3. Specification of the Research Objectives
• 4. Details of the Proposed Research Plan
• 5. Time schedule
• 7. Research team