PQ mgt- marketing research-92

8/7/2019 PQ mgt- marketing research-92

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INTROCUDTION

The term market research encompasses a number of activities that are designedto connect marketers to consumers through information gathering and

evaluation. Market research provides businesses with information about theircustomers, their competitors, and their overall industry. It is commonly used toidentify marketing problems and opportunities, as well as to develop andevaluate the effectiveness of marketing strategies. Small business owners,

because of their usually limited financial resources, have a particular need foradequate, accurate, and current information to aid them in making decisions.Market research can help entrepreneurs evaluate the feasibility of a start-upventure before investing a great deal of time and capital, for example, as well asassist them in effectively marketing their goods and services. Employing suchmarketing strategies as market segmentation and product differentiation would

be nearly impossible without first conducting market research.

Although market research can be costly, it is often even more costly to makeerroneous decisions based upon bad or inadequate information. In fact, anaverage business spends between 25 and 50 percent of its annual marketing

budget on research activities. Conducting large-scale market research in-houseis not possible for many small businesses, since it requires a comprehensiveunderstanding of the problem to be addressed, the market, and the applicationof research procedures. But there is a great deal of helpful informationavailable to entrepreneurs who know where to look, and there are many

consultants, advertising firms, and market research specialists who offer theirservices to small businesses for a fee.

The information gathered through market re-search can be divided into twomain categories. The first categoryprimary informationgenerally does notexist in a coherent form before the marketer gathers it in response to a

particular question or problem. The most common methods of gatheringprimary market research information are through direct mail, telemarketing,and personal interviews. The other categorysecondary informationhasalready been compiled and organized by a source other than the marketer.

Rather than looking at a specific marketing problem faced by an individualcompany, secondary information generally tracks trends within a market, anindustry, a demographic group, or a geographic region. A great deal of valuablesecondary information is available to small business owners at little or no cost.Some possible sources of secondary market research information includegovernment reports, trade association records, newspaper and magazine

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surveys, university-sponsored research, local chamber of commerce records,on-line services, and competitors' annual reports.

Market research can provide small business owners with the information theyneed to answer a wide range of questions, including: Who are my customers?Where are they located? How much and how often will they buy? And what

product attributes do they prefer? Given the importance of market researchand its potential costexperts recommend that businesses follow a step-by-step approach in order to gain the most benefits from their research activities.

The first step in the market research process is to define the marketing problemto be addressed. Next, a marketer should determine what information is neededto solve the problem, as well as what sources should be used to acquire theinformation. Many businesses make a preliminary investigation at this earlystage in order to give their definition of the problem more focus and to developtentative answers that can be tested during the next stage of the process. Thethird step involves planning the research. This step includes selecting thetechniques to be used for gathering data and deciding on an appropriate group,or sample, to be included in the research. Fourth, a marketer actually gathersthe necessary data. The fifth step involves analyzing and interpreting theinformation that has been gathered. Finally, the marketer reaches a conclusionabout the marketing problem and translates the findings into changes in thefirm's overall marketing strategy.

There are three general types of market research suppliers that can assist smallbusinesses with one or more steps in the above process. Some firms specializein conducting overall market research that they release to a variety of clients fora fee. This type of firm includes syndicated services such as A.C. Nielsen andCompany, which provides viewer ship ratings for national television programs.There are also custom market research firms that handle all aspects of the

process, from defining the marketing problem and designing researchtechniques to evaluating results and formulating new marketing strategies. Incontrast, smaller, specialty line suppliers usually concentrate on one aspect ofthe process. Marketers who wish to secure the services of a market research

firm usually obtain bids from a number of suppliers. The following sectionsprovide more information about the various types of market research that suchsuppliers perform.

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CHARACTERISTICS

Systematic and continuous process: MR is a continuous process. One typeof research is not adequate to resolve all marketing problems. Similarly,

new research projects will have to be undertaken to solve new marketing problems and challenge. A marketing company faces new marketingresearch from time to time and for facing them marketing research activitiesneed to be conducted on regular basis. A marketing company has to conductMR regularly for its survival and growth in the present dynamic marketingenvironment.

Wide in scope: MR is wide in scope as it deals with all accepts ofmarketing of goods and services. Introduction of new products,identification of potential markets, selection of appropriate sellingtechniques, study of market competition, introduction of suitable advertising

strategy and sales promotion measures are some areas covered by MR. Emphasizes on accurate data collection and critical analysis: In MR,

required data should be collected objectively and accurately. The datacollected must be reliable. It should be analyzed in a systematic manner.This will provide comprehensive picture of the situation and possiblesolutions.

Offers benefits to sponsoring company and consumers: MR is useful tothe sponsoring company. It raises the turnover and profit of the company. Italso raises the competitive capacity and creates goodwill in the market. Itenable a company also get agreeable goods and more satisfaction due to MR

activities. Commercial equivalent of military intelligence: MR is the commercial

intelligence activity. It is similar to military action. MR acts as theintelligence tool of marketing management.

Tool for managerial decision: MR acts as a tool in the hands ofmanagement for identifying and analyzing marketing problems and findingout solution to them. It is an ais to decision-making. It suggests possiblesolution for the consideration and selection by managers. MR is an aid to

judgment and never a substitute for it.

Applied type of research: MR is applied knowledge. It is also called

decision research as it provides specific alternative solution to deal with aspecific marketing problems. It studies possible marketing problem andsuggests alternative solution and possible outcome of each alternative.

Reduce the gap between producers and consumers: MR is an essentialsupplement of modern competitive marketing. It is useful for understandingthe needs and expectations of consumers. It reduces the gap between

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producers and consumers and adjusts the marketing activities to suit theneeds of consumers.

Not an exact science: MR is both science and art. It collects informationand studies marketing problems in a scientific manner. The informationcollected is also applied to real life problem. However, MR is not an exactscience. It only suggests possible solution and not the exact solution tomarketing manager for consideration and selection. At present, MR istreated as a professional activity. We have professional research agenciesdealing with the marketing problems of their clients on commission basis.

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RELEVANCE OF MARKETING RESEARCH UNDER

GLOBALIZATION

The business world is fast moving towards globalization in which all countries

participate. Globalization process creates opportunities and challenges beforebusiness enterprises. They can make large scale exports as well as use internalmarkets for their benefit. MR is useful for exploiting the opportunities ofglobalization in a purposely manner. It is also useful for dealing with the

problems creates by globalization process. Every country has to facecompetition in the domestic as well as in export marketing. Survival as well as

prosperity in the global business is possible through quality improvement, costreduction and by attracting consumers through various sales promotiontechniques. Here, MR offers helping hand to exporting companies. It offerssuggestions for survival and growth under competitive global environment. In

brief, the importance of MR is fast growing along with the globalization ofbusiness in India and also in other countries. It is a must for survivalistsgrowth in the context of globalization. Current marketing scenario for Indiancountries is different as compared to traditional one. There is a new trendtowards liberalization and globalization. Markets are becoming highlycompetition. New companies and new products are entering in the markets.Survival is difficult under the present marketing environment. Here, MR offersvarious services. It is, now, a professional activity with new development inregards to scope and techniques. In brief, MR has great relevance in the current

marketing scenario in India as well as in all countries development anddeveloping of the world. MR has enormous capacity to help and guidemarketing companies in regard to their marketing problems and challenges. Forthis, companies have to conduct such global marketing research on regular

basis and use the conclusions and finding in their marketing policies, strategiesand decision-making process.

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DISADVANTAGES

Marketing research offers suggestions and not decisions: Marketingresearch is not a substitute for decision-making process. It only offers

possible suggestions to marketing problems. It actually acts as a toolwhich facilities decision-making process. It guides marketing managersin taking balanced, result-oriented and rational decisions. Thesuggestions offered by marketing researchers are usually possiblesolutions but not the exact solutions. In fact, marketing research by itselfis not an exact science. MR does not provide readymade solution tomarketing problems. It only provides indicators. It may not provideconclusion information on marketing problems. The marketing managershave to use available information properly and take appropriatemarketing decisions.

Marketing research cannot predict accurately: In MR, efforts arebeing made to estimate or predict the possible future situation. For this,certain research studies are undertaken. However, the result arrived atmay not be complete, perfect or accurate. They predict possibletendencies but not certainties. Future is always uncertain and exact

prediction about the future is just not possible through marketingresearch. This is because market environment is ever changing,consumer behavior is difficult to estimate correctly and reliable data forresearch purpose may not be available. As a result, the decision takenand policies framed on the basis of such research studies may not

accurate and useful for solving current marketing problems. MR conclusions are not dependable: There are many who are sceptics

of MR. their critic are that MR conclusions are not dependable. Thereare examples where the research failed to deliver desired results or a

product failed even when the research had shown promising marketdemand and consumer support. The classical example is that of coke. ItsMR showed that 68% customers in US liked the taste of the new formuladeveloped by the coca-cola corporation. However, the new coke failedand in less than six months of its launch, the coke management had torelaunch old coke under the brand name coke classic. However, thisfailure of MR was mainly due to conventional approach of researchers.

Marketing research cannot study all marketing problems: Marketingresearch is rather very wide in scope. However, it cannot study allmarketing problems particularly where it is difficult to collect relevantdata. Similarly, research study is not possible where value judgments areinvolved. Even it is not useful for dealing with urgent marketing

problems where quick decisions and follow-up actions are necessary.

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Thus, all marketing problems are not researchable and all researchproblems are not answerable.

Resistance by marketing executives: Research study marketingproblems and offer information and guidance to marketing executive intheir decision-making process. However, some executives are reluctantto use the solution suggested by the researchers. They feel that suchextensive use will act as a threat to their personal status. Findings of theresearch work may bring them in difficulties if the policy decision takenaccordingly proves to be wrong.

Lengthy and time consuming activity: MR is a lengthy and timeconsuming activity. It involves various stages which need to be completein an orderly manner. It is not desirable to conduct research work is anhaphazard manner. Naturally, the research work takes longer period forcompletion and the finding when available may prove to be old andoutdated. Even data collected very soon become old or historical due tofast changing market environment. As a result, research findings basedon them become irrelevant in the changed situation.

Marketing research is a costly affair: Marketing research is costly asresearch work requires the services of experts with knowledge, maturityand skill. Such experts include economists, management scientists,statisticians, and computer experts. Advanced training in economics,computer experts, sociology, etc. is also necessary on the part of researchstaff.

Changing behavior of consumer: Consumer is the focal point in

marketing research. However, his buying motives are difficult to judgeprecisely and accurately. This brings some sort of uncertainty in theconclusion drawn from the research activity. The findings of the researchwork may not prove to be accurate.

Non-availability of qualified staff: For scientific MR, professionalmarketing researchers with proper qualifications, training and experienceare necessary. Research work is likely to be incomplete in the absence ofsuch expert staff. Companies find it difficult to have the services of suchexpert staff. They find it difficult to pay high salary to professionalconsultants. Research activities are conducted in limited areas due to

non-availability of properly qualified staff. Such staffs includestatisticians, sociologists, economists and computer experts.

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SCOPE/BRANCHES

Marketing research is a subject with wide scope. Broadly speaking, it is

concerned with the marketing activities of an enterprise. All activities of aseller to market his products to consumers are covered by such research.Marketing research is primilary concerned with 4 Ps of marketing mix. theseare product, price, place, and promotion.

Important branches of marketing research are as follows:

Product research: Product research relates to products which are to bemarketed to consumers. It is useful for introducing new product whichwill be agreeable to consumers. Product research relates to variousaspects such as design, development and introduction of new products,

testing of existing products, product modification studies and so on. Packaging research: Packaging research is a part of product research

and is important for making the product attractive and agreeable toconsumers. Packaging is now treated as a tool for sales promotion. Itattracts the attention of consumers and includes them to purchase

products. Constant changes in the package design are required for salespromotion. For innovation in the package design, packaging research isnecessary. Packaging research is now treated as an independent branchof marketing research. Such research is conducted in order to know theimpact of packaging. Branding and packaging normally go together and

hence brand research is treated as a part and parcel of packagingresearch.

Pricing research: Pricing research relates to pricing of the products. Itrelates to analysis of pricing policies and strategies, studies of market

price trends, fixation of market prices, studies relating to prices chargedby competitors, studies relating to future price trends, price incentivesfor sales promotion and provision of price discount and other priceconcessions to dealers and consumers.

Market research: Market research proper relates to analysis ofconsumer markets, assessment of market trends. Forecasting of businessconditions, setting of sales territories and sales quota, sales potentialsstudies, studies of wholesale marketing, demographic descriptions ofcustomers, market competition studies, sales forecasting, estimatingdemand for new products, analyzing relative profitability of salesterritories and monitoring competitive marketing activities.

Sales research: Sales research relates to studies of sales outlets, salesterritories and their revision, trends in sales, sales forecasting, and

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effectiveness of sales force, sales policies and sales performance and soon.

Promotion and distribution research: Promotion research relates toassessing effectiveness of the sales force and selling efforts, testing ofmedia selected, advertising copy and assessing effectiveness ofadvertising campaigns. The scope of this area of marketing research alsoincludes studies of channels of distribution for modification, distributioncost analysis of the physical distribution, problems relating towarehousing, inventory control and handling of goods.

Consumer research: It relates to finding out consumers needs and preference, consumers purchasing intentions, consumers choice ofbrands, trends in consumers preferences and purchasing patterns.

Policy research: Policy research activity is connected with theevaluation of effectiveness of marketing policies, sales policies,distribution policies, pricing policies, inventory policies and so, on.

Necessary changes in such policies are possible through intensive policyresearch studies.

International marketing research: International marketing researchdeals with foreign markets which are attractive and profitable provided

products and marketing activities are adjusted as per the need of foreignmarkets and buyers. Such research is useful for exploring profitableforeign markets, for export promotion and for making suitablemodifications in the exportable items. Data collected about foreignmarkets, market surveys, etc. are undertaken under international

marketing research. Such research is costly and time consuming ascompared to internal research. International marketing research is alsoundertaken by export promotion organizations such as export promotioncouncils and commodity boards.

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METHODS OF CONDUCTING MARKETING RESEARCH

The methods of conducting marketing research are broadly classified into thefollowing four categories:

Desk research: In desk research, the required information for researchwork is collected from published and other written sources ofinformation available. Desk research is useful for the collection ofsecondary data. Secondary data are already collected for some other

purpose but can be used conveniently by browwing the same. Deskresearch is a type of in-house research.

Field research: In field survey method, the required information iscollected from the consumers, dealers and others connected withmarketing. In addition, consumers surveys are also conducted for this

purpose. The data collected from such field investigation are calledprimary data.

Observation method: In observation method, the required informationis called through actual physical observation of one or more phenomenaunder study. This method is also useful for the collection of primarydata.

Experimentation method: In experimental method, the requiredinformation is collected through a small scale experiment under

controlled conditions. This method is used for primary data collection.

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PROCESS

A research project is conducted through several steps called research process.Various steps involved in this process are interwoven into each other in the

sense that each step will have some influence on the successive steps. Thus,MR procedure means a sequence of steps to be taken to initiate and completethe entire research project.

They are as follows: Identifying and defining a marketing problems: The first step in the

MR process is to identify the marketing problems which needs to bestudied in depth and solved. There are several marketing problems

before a marketing firm. However, research is neither possible toconsider the basis, the most complicated and challenging problem for

research purpose. A good problem definition is the key to getting themost out of the marketing research. Defining a marketing problemmeans understanding the problem in an exact manner. It suggests thescope of the problem, the type of information needed and other details ofthe research project.

Conducting preliminary survey: The marketing team may suggestmany marketing problems problems which they face. However, theresearcher has to select one major problem which is suitable for detailedinvestigation. All marketing problems are not researchable and hencesuch preliminary survey of the situation is necessary. The step in the

research process avoids wastage of time and money on unsuitableresearch project and facilities quick completion of research projectwhich will be useful to the company in promotion sales, turnover and

profits.

Determining research objectives: After defining the research problem,the researcher has to state what he wants to achieve. The objectivesdecided should be specific, measurable and also attainable. The researchobjective decided act as a guide to the researcher and help him inmaintaining a focus on the whole research defined by the researcher.

Creating research design: Research design is the grand plan for theconduct of actual research work. it is next to problem definition. Aresearch design is a blueprint of the whole research activity. It is like anarchitects plan for building construction. The actual construction workwill be as per the plan prepared. Similarly, the researcher preparescomplete plan of his project and accordingly the whole research processmoves. The research design is a plan of the whole research work to beundertaken.

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Determining the data needs and sources: After defining the researchproblem and creating research design, the researcher has to decide thenature of data required for his study. The hypothesis guides the datacollection process. The data needs are directly related to the research

project undertaken. The researcher can use primary and secondary datafor his project. Here, he has to decide whether to use primary data,secondary data or both. He should also consider the time and costrequired for data collection. The sources of primary data, any suitablesurvey method can be used. The researcher has to decide the convenientmethod for data collection. He can use internal for the collection of

primary data. Designing a sample of respondents: Data act as the foundation of

research work. Here, sampling technique is normally used. Sample is asmall representative group selected from the total population forintensive study purpose. For data collection, a repetitive group ofrespondents will have to be selected out of the total.

Designing the questionnaire: Questionnaire aspect relates to theselection of research instruments employed in research for collectingrequired information. The questionnaire is one research instrument usedextensively in a survey type research. In an obersavation based research,the instrument of research can be a trained observer. In short, decision onthe selection of research instruments need to be made at this stage.

Preparation of research report: After drawing conclusion from thedata collected, the researcher can make concrete recommendations for

solving the marketing problem. A researcher also prepares a documentgiving details of research problem, data collected, conclusions drawnand the recommendations made. It will be prepared in a suitable formatfor the convenience of readers. It acts as a self explanatory, complete andcompact document. Report is used for reference purpose.

Submission of research report: in this stage, the researcher willssubmit his research report to the appointing authority. The researchermay submit his findings, recommendation, etc. orally to the topexecutives of the management. In addition, the detailed written reportwill be submitted for scrutiny by the marketing executives. The decision-

makers will study the report minutely and find out the desirability ofexecution of the recommendations made. The final decision on theresearch report is be taken by the appointing authority.

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TYPES OF MARKETING RESEARCH

Audience research . Research on who is listening, watching, and readingis important to marketers of television and radio programs and printpublicationsas well as to advertisers who wish to reach a certain targetaudience with their message. Television and radio ratings demonstratethe popularity of shows and determine how much stations can charge foradvertising spots during broadcasts. Publication subscription lists, whichare audited by tabulating companies to ensure their veracity, areimportant in determining the per page rate for advertising.

Product research . Product research includes simple, in-person research

such as taste tests conducted in malls and in the aisles of grocery stores,as well as elaborate, long-term "beta testing" of high-tech products byselected, experienced users. The objective of product research can besimple; for example, a company may tweak the taste of an existing

product, then measure consumers' reactions to see if there is room in themarket for a variation. It can also be more extensive, as when a companydevelops prototypes of proposed new products that may be intended formarket introduction months down the road. In product research, as in allmarket research, there is a danger to paying too much attention to thewrong things. For instance, the introduction of New Coke was based on

the outcome of taste tests that showed the public wanted a sweeterproduct. But later an angry public, outraged that Coca-Cola was planningto change the familiar formula, forced the company to ignore its tastetests and leave the original Coke on the market. The company had puttoo much stock in the results of the taste test studies, and had failed tofactor in research that showed consumers were happy with the product asit was.

Brand research . Brands, the named products that advertising pushesand for which manufacturers can charge consumers the most money, are

always being studied. Advertisers want to know if consumers havestrong brand loyalty ("I'd never buy another brand, even if they gave mea coupon"); if the brand has any emotional appeal ("My dear motherused only that brand"); and what the consumer thinks could be improvedabout the brand ("If only it came in a refillable container").Brandresearch, too, has its perils. Campbell's Soup once convened a focusgroup comprised of its best soup customers. One of the findings was that

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those customers saw no need for a low-salt alternative soup Campbell'swanted to market. Concerned that the general public seemed to wantlow-sodium products, Campbell's retested groups other than their bestcustomers. This research found a market interested in a low-sodiumsoup. The loyal Campbell's customers loved the saltier product, while alarger group of potential customers preferred the low-salt alternative.

Psychological research . Perhaps the most controversial type of marketresearch is psychological research. This type of research tries todetermine why people buy certain products based on a profile of the waythe consumers live their lives. One company has divided all Americansinto more than 60 psychological profiles. This company contends thelifestyles these people have established, based upon their past buyinghabits and their cultural upbringing, influences their buying decisions sostrongly that individual differences can sometimes be negated.Psychological research is controversial because it measures attitudesabout buying rather than the buying itself. Critics point to conflictinginformation uncovered through other market research studies. In oneseries of research projects, researchers asked people what they were

planning to buy before they entered a store. After the people surveyedleft the store, the same researcher examined what was actually in theirshopping carts. Only 30 percent of the people bought what they had saidthey planned to buy just a half hour earlier.

Scanner research . In contrast, there is no fooling the checkout scannerat the supermarket or the department store: it records what was actuallypurchased. This is valuable information an advertiser can use to helpplan an ongoing marketing strategy. Scanner technology has changed theway advertisers track the sale of consumer products. Before scanners,advertisers received sales information only when retailers reorderedstock, generally every two weeks. This meant that the advertisers had noway to quickly measure the effect of national advertising, in-store sales

promotions, or the component of similar products by their competitors.Now, computer technology can send scanner information to advertisers

within days or even hours.

Database research . Virtually every type of consumercredit cardholders, smokers, drinkers, car buyers, video buyersshows up onthousands of lists and databases that are regularly cross-referenced tomine nuggets of marketing research. Database research is growing in

popularity among marketers because the raw data has already been

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contributed by the purchaser. All the marketer has to do is develop acomputer program to look for common buying patterns. Databaseresearch can be thought of as the ultimate tool in market segmentationresearch. For example, from zip code lists, marketers may determinewhere the wealthy people live in a city. That list can be merged with alist of licensed drivers. The resulting list can be merged with another listof owners of cars of a certain make older than a certain year. Theresulting list can be merged with another list of subscribers to carenthusiast magazines. The final list will deliver a potential market for anew luxury car soon to be introduced and profiled in the car magazines.The people on the potential buyers' list could then be mailed aninvitation to come see the new car. Database research also allowscompanies to build personal relationships with people who have provenfrom past purchases that they are potential customers. For example, amotorcycle manufacturer such as Harley Davidson may discover fromdatabase research that a family with a motorcycle has a teenage son.That son is a potential new customer for everything from clothes to anew motorcycle of his own. Maintaining a personal relationship withcustomers also provides businesses with a basis for more detailed andeconomical market research than might be possible through randomsampling.

Post-sales or customers satisfaction research . Most companies nolonger believe that a sale ends their relationship with a customer. Nearly

one-third of the research revenues generated by the leading Americanmarket research firms concern customer satisfaction. Many companiesnow wait a few days or weeks, then contact customers with surveyquestionnaires or telephone calls. Companies want reassurance that thecustomer enjoyed the buying experience and that the product or servicehas met the buyer's expectations. The reason behind post-sales researchis to ensure that current customers are happy, will consider themselvesfuture customers, and will spread positive word-of-mouth messagesabout the product and company. One study found that 70 percent ofcustomers believed it was important for companies to stay in contact

with them, but less than one-third of those same customers reported thatthey had heard from companies whose products they purchased. Nearly90 percent of those surveyed said they would be more likely to choose acompany's products if it stayed in touch with them and sought theirsatisfaction.

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COMMONLY USED MARKETING RESEARCH TERM

Market research techniques resemble those used in political polling and socialscience research. Meta-analysis (also called the Schmidt-Hunter technique)refers to a statistical method of combining data from multiple studies or fromseveral types of studies. Conceptualization means the process of convertingvague mental images into definable concepts. Operationalization is the processof converting concepts into specific observable behaviors that a researcher canmeasure. Precision refers to the exactness of any given measure. Reliabilityrefers to the likelihood that a given operationalzed construct will yield the sameresults if re-measured. Validity refers to the extent to which a measure providesdata that captures the meaning of the operationalized construct as defined in the

study. It asks, Are we measuring what we intended to measure?

Applied research sets out to prove a specific hypothesis of value to the clientspaying for the research. For example, a cigarette company might commissionresearch that attempts to show that cigarettes are good for one's health. Manyresearchers have ethical misgivings about doing applied research.

Sugging (or Selling under the Guise of market research) forms a salestechnique in which sales people pretend to conduct marketing research, butwith the real purpose of obtaining buyer motivation and buyer decision-making

information to be used in a subsequent sales call.

Frugging comprises the practice of soliciting funds under the pretense of beinga research organization.

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PERSONAL RESEARCH METHODS

Closed-ended questionnaire. A closed-end questionnaire is the type of marketresearch most people have experienced. It includes such common activities as

filling out a comment card at a restaurant or responding to a telephone survey.In closed-end questionnaires, the person being surveyed cannot expound ontheir answers. Such surveys usually ask for "yes" or "no" responses or formeasures of multiple choice opinion (e.g., "extremely interested, somewhatinterested, not interested"). This type of market research is generallyconducted to elicit the opinions and beliefs of the public. It is commonly usedfor political polling and to determine the awareness or popularity of a productor service.

The inherent problem with multiple-choice questionnaires that ask for clear-cut

answers is that many people do not think in a clear-cut fashion. If not carefullyprepared, closed-ended questions may elicit answers that do not provide a clearview of the person being surveyed. Sometimes, the company conducting thesurvey may intentionally or inadvertently write questions that elicit the answersit wants to receive, rather than answers that provide a true picture of what ishappening in the marketplace.

Open-ended questionnaire. Over time, market researchers have grownincreasingly aware that people often have opinions that do not fit into amultiple-choice questionnaire. To capture these opinions and try to analyze

them, researchers are shifting toward open-ended researchasking people tosay exactly what is on their minds. For example, manufacturers are givingcustomers plenty of space on questionnaires to explain their likes and dislikesabout products and services, and telephone researchers will frequently mixclosed-end and open-end questions on the same survey to try to delve deeper. A"no" response to whether a person watches a particular cable television stationmay trigger a follow-up question of "Why not?, " for instance, and the answerwill be taken down word for word.

A problem with both closed- and open-ended questionnaire researches,

particularly when conducted over the telephone, is that people graduallybecome bored or annoyed and stop providing their true opinions. In addition,some studies have shown that a large percentage of Americans refuse to answermarketing research surveys.

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Focus groups. In-person, sit-down discussions around a table with groups ofconsumers, would-be consumers, never-buyers, or any other demographicgroup a company wishes to bring together are called focus groups. This can bethe least expensive type of market research when handled on a local basis by asmall business wanting to get a handle on its customers. Or, it can be one of themost expensive if a major corporation wants to test its plans in various sectionsof the country. Small, local businesses may invite a focus group to aneighborhood home to sit around the dinner table and discuss how the companycan develop new markets. In contrast, most major corporations conduct theirfocus groups in a controlled environment, usually with a one-way mirror at oneend of the room. This allows executives to observe the proceedingsunobtrusively or to videotape the session for further study.

The key to gathering good information from a focus group is for the moderatorto keep the conversation flowing freely without taking a side. The moderator's

job is to involve everyone in the discussion and prevent any individuals fromdominating the conversation. Most market research experts agree that focusgroup research should be accompanied by other types of research and not bethe sole basis for launching new products. The reason is that opinionsexpressed among strangers may not always reflect the way people would reactwhen alone. For example, a focus group discussing low-fat foods may garneran enthusiastic response from people who want to be publicly perceived as

being concerned about their health. The same people, however, might say theynever buy low-fat products if questioned during an anonymous phone

interview.

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MAERKETING RESEARCH METHODS

Methodologically, marketing research uses four types of research designs,namely:

Qualitative marketing research - generally used for exploratorypurposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated -examples include focus groups, in-depth interviews, and projectivetechniques

Quantitative marketing research - generally used to draw conclusions- tests a specific hypothesis - uses random sampling techniques so as toinfer from the sample to the population - involves a large number ofrespondents - examples include surveys and questionnaires

Observational techniques - the researcher observes social phenomenain their natural setting - observations can occur cross-sectionally(observations made at one time) or longitudinally (observations occurover several time-periods) - examples include product-use analysis and

computer cookie traces

Experimental techniques - the researcher creates a quasi-artificialenvironment to try to control spurious factors, then manipulates at leastone of the variables - examples include purchase laboratories and testmarkets

Researchers often use more than one research design. They may start

with secondary research to get background information, and thenconduct a focus group (qualitative research design) to explore the issues.Finally they might do a full nation-wide survey (quantitative researchdesign) in order to devise specific recommendations for the client.

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REPORT

After finalizing conclusion and recommendations, the researcher has tocommunicate the details of his research work in the form of a summarydocument called marketing research report. He has to make research reportingto the sponsoring agency for consideration, approval and follow-up measures.

Research reporting means presentation of research report to the sponsoringagency. It is the concluding part of research study.

Research reporting needs to be done in a systematic manner so that changes ofany confusion will be minimized. The practical value of a research studydepends on the manner in which the research report is prepared and sold tothose who are expected to act as per the findings and recommendations.

Research reporting may be an anti-climax to the researchers. However, it is theonly part of the research process in which the sponsoring agency is reallyinterested as it is the net result of research activity undertaken.

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AN EXPERIMENTAL APPROACH

When analyzing a case, students can frequently overlook how a competing

company will respond to their recommendations that the target company cutprices, conduct trade promotions, target new markets, etc. I developed a role-playing exercise that vividly reminds students how important it is to predicthow a competitor might respond to their marketing efforts. This exercise can beused with full-length cases that students have prepared in advance, or it can beused in "real time" by describing a recent newsworthy situation involving twocompeting companies (such as Pepsi vs. Coke).

I begin the class session by telling students that it is critical to not makemarketing decisions in a vacuum but to always consider how the competition

will respond to their decisions. In the same way a good chess player anticipatesthe moves of his opponent, so too should they always be thinking ahead aboutthe moves of the competition.

In preparing to discuss the case, I separate the students into two groups: onegroup which represents the target company and one group which represents thecompetitor. Each group is then given 30 minutes to develop their marketing

plan and to develop any contingency plans that might be necessary, based uponwhat they think their "opponent" will do. In particular, I ask them to think ofthis as a two round game. That is, they should develop a Round 1 strategy,

which consists of their opening move; and a Round 2 strategy, which is basedon how they believe the other group will respond.

Since all the students will have prepared the case from the target companysviewpoint, I leave that group in the classroom by themselves to develop aconsensus as to what they will recommend. I take those students representingthe competing company to an empty classroom and help them develop theirstrategy. We reconvene after 30 minutes. The target company group explainstheir strategy, and then the competing group explains what they would do next,and how it relates to what the target company recommended. Next,

representatives of the target company provide next recommendation and how itreconciles any problems that have arisen. The competing company then gets alast response.

This discussion is fairly easy to track on the blackboard if the instructor candivide the board into four sections: The first section will be allocated to the

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OBJECTIVE

The marketing manager and the researcher must work closely together to definethe problem carefully and agree on the research objectives. The manager best

understands the decision for which information is needed; the researcher bestunderstands marketing research and how to obtain the information.Managers must know enough about marketing research to help in the planningand to interpret research results. Managers who know little about theimportance of research may obtain irrelevant information or accept inaccurateconclusions. Experienced marketing researchers who understand the manager's

problem should also be involved at this stage. The researcher must be able tohelp the manager define the problem and to suggest ways that research can helpthe manager make better decisions.Defining the problem and research objectives is often the hardest step in the

research process. The manager may know that something is wrong withoutknowing the specific causes. For example, managers of a retail clothing storechain decided that falling sales were caused by poor floor set-up and incorrect

product positioning. However, research concluded that neither problem was thecause. It turned out that the store had hired sales persons who weren't properlytrained in providing good customer service. Careful problem definition wouldhave avoided the cost and delay of research and would have suggested researchon the real problem.When the problem has been defined, the manager and researcher must set theresearch objectives. A marketing research project might have one of three types

of objectives. Sometimes the objective is exploratoryto gather preliminaryinformation that will help define the problem and suggest hypotheses.Sometimes the objective is descriptiveto describe things such as the market

potential for a product or the demographics and attitudes of consumers who buythe product. Sometimes the objective is casualto test hypotheses about cause-and-effect relationships.

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DEVELOPING THE RESEARCH PLAN

The second step of the marketing research process calls for determining theinformation needed, developing a plan for gathering it efficiently, and

presenting the plan to marketing management. The plan outlines sources ofsecondary data and spells out the specific research approaches, contactmethods, sampling plans, and instruments that researchers will use to gather

primary data.A marketing researcher can gather secondary data, primary data, or both.Primary data consists of information collected for the specific purpose at hand.Secondary data consists of information that already exists somewhere, having

been collected for another purpose. Sources of secondary data include internalsources such as profit and loss statements, balance sheets, sales figures, andinventory records; and external sources such as government publications,

periodicals, books, and commercial data. Primary data collection requires moreextensive research, more time, and more money. Secondary sources cansometimes provide information that is not directly available or would be tooexpensive to collect.Secondary data also present problems. The needed information may not exist.Researchers can rarely obtain all the data they need from secondary sources.The researcher must evaluate secondary information carefully to make certainof its relevance (fits research project needs), accuracy (reliably collected andreported), currency (up to date enough for current decisions), and impartiality(objectively collected and reported). Researchers must also understand how

secondary sources define basic terms and concepts, as different sources oftenuse the same terms but mean slightly different things, or they attempt tomeasure the same thing but go about it in different ways. Either way, the resultcan be that statistics found in secondary sources may not be as accurate or asrelevant as they appear on the surface.

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AFFORDABLE MARKETING

Until the Internet became a reality, limited budgets kept most types ofmarketing research (or market research if you are researching a target market)

out of reach for entrepreneurs and other small-budget businesses.

Today, through the Internet, small-budget businesses have more researchoptions. Secondary research sources are easier to find. More affordable primaryresearch methods - both qualitative and quantitative - are available online aswell.

Marketing / Market Research Categories

There are four broad types of research, categorized by where the researchoriginated and how the research is conducted.

Where the Marketing / Market Research Originated: Primary versus

Secondary

Primary research originates with your company. Generally, the results areproprietary and belong to you. You may find, however, that some researchfirms will conduct limited but relatively inexpensive primary research with therequirement that they can make the results available to other companies.

An alternative to conducting primary research is to find secondary research, orresearch that originated elsewhere. You can obtain secondary research either by

purchasing the information or finding it through free resources.

How the Marketing / Market Research is Conducted: Qualitative Versus

Quantitative

Qualitative research tends to be exploratory and directional in nature. It isdesigned to bring out issues associated with the subject matter as well as clueyou in to the best general direction to proceed.

Quantitative research, on the other hand, is designed to be analytical and rigid.This type of research produces results that are more statistically accurate than

qualitative research results.

Often, companies first conduct qualitative research when developing a conceptor looking for ideas then later completes quantitative research to fine-tune andoptimize.

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Combining the Two Marketing / Market Research Categories

Combining the primary/secondary and qualitative/quantitative categoriesresults in the four types of research. These are: primary quantitative, primaryqualitative, secondary quantitative and secondary qualitative research.

Secondary Marketing / Market Research

As a small-budget business, much of your research will be limited to secondaryresearch. Both the good news and the bad news is that there is a lot of it outthere. By doing a targeted Internet search you are likely to find a lot of free,useful information.

Potentially, you can find secondary research from numerous sources. Pressreleases and news articles often quote studies. Industry leaders and suppliers

publish white papers or other studies. Annual reports are also good places tolook for industry information.

Research firms sites are another source of secondary research. Their mainbusiness is conducting primary research for clients or compiling and sellingdetailed syndicated reports. Often, they have top line data available in the formof press releases or executive summaries.

The Federal government is another increasingly useful source of secondarydata. At last count, 100 different government agencies publish freely availabledata.

Primary Qualitative Research

Qualitative research is conducted with a somewhat flexible format so theparticipants can give their opinions and feedback. Inexpensive ways to conductyour own qualitative research via the Internet are through do-it-yourself onlinefocus groups and via feedback forms.

Online Focus Groups

Offline, a set of focus groups could cost about $10,000 and up. Online focus

group services are a little more economical by can still be pricey for a small-budget business. An online focus group is essentially a formal chat session. Atrained moderator leads a group of participants through a pre-determineddiscussion over the Internet. Participants are often recruited through a researchfirms own panel and are paid a fee for participating.

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If your budget cannot handle a professional service, you can conduct a focusgroup yourself by setting up a chat room and recruiting your own participants.Be sure to test the chat room service first, paying attention to perceived

professionalism and any glitches your participants may encounter. Also, forbest results, you should consider hiring a trained moderator to conduct theonline focus groups.

Feedback Forms

A simple way to conduct ongoing qualitative research is through a feedbackform. You can gain valuable insight by asking your visitors how you are doing,asking them for suggestions, and/or asking them their opinions. You can do thisthrough a form directly on your site and/or via email to those on your opt-inlist.

Primary Quantitative Marketing / Market Research

Quantitative research is used when you are looking for hard numbers andprecision. To produce a top-quality primary quantitative research study youmust generally work through a research agency. For a small-budget business,this type of research is expensive. The Internet has made more inexpensivemeans of data collection and analysis possible. With the help of software orWeb-based tools you can perform research through customer surveys andcollect visitor use patterns through Web logs.

Customer Surveys

The Internet has made conducting surveys quicker and less expensive. Optionsrange from do-it-yourself programs to research services with screened panels.You can use surveys in a variety of ways - segmenting your customers,improving/developing your product or site, and gauging brand awareness, forexample.

Use Patterns

Another approach to quantitative research on the Web is to look for visitor usepatterns such as, routes taken through your site, pages viewed, or orderingbehavior. By studying Web logs you can know which pages are most popular,

how visitors navigate through your site, common entry pages, and wherevisitors often leave the site.

You can also determine the number of different visitors to your site as well asthe percent of visitors converted to customers. By using a traffic analysisservice or software (often available through your hosting service), you canstreamline the process.

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Risk Assessment

Keep in mind the risks involved with taking action based upon your researchresults. When resulting actions are low-cost and/or easily reversible, movingforward based on qualitative or subjective results may be easily justified.

Conversely, if large dollar or potentially damaging projects will be completedbased upon your marketing / market research, you will want to move forwardmore carefully. Make decisions based upon more substantial quantitative and/orobjective results.

In any case, conducting online research will almost certainly provide you withnew insights.

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PQ mgt- marketing research-92

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