INTROCUDTION

The term market research encompasses a number of activities that are designed
to connect marketers to consumers through information gathering and
evaluation. Market research provides businesses with information about their
customers, their competitors, and their overall industry. It is commonly used to
identify marketing problems and opportunities, as well as to develop and
evaluate the effectiveness of marketing strategies. Small business owners,
because of their usually limited financial resources, have a particular need for
adequate, accurate, and current information to aid them in making decisions.
Market research can help entrepreneurs evaluate the feasibility of a start-up
venture before investing a great deal of time and capital, for example, as well as
assist them in effectively marketing their goods and services. Employing such
marketing 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 make
erroneous decisions based upon bad or inadequate information. In fact, an
average business spends between 25 and 50 percent of its annual marketing
budget on research activities. Conducting large-scale market research in-house
is not possible for many small businesses, since it requires a comprehensive
understanding of the problem to be addressed, the market, and the application
of research procedures. But there is a great deal of helpful information
available to entrepreneurs who know where to look, and there are many
consultants, advertising firms, and market research specialists who offer their
services to small businesses for a fee.

The information gathered through market re-search can be divided into two
main categories. The first category—primary information—generally does not
exist in a coherent form before the marketer gathers it in response to a
particular question or problem. The most common methods of gathering
primary market research information are through direct mail, telemarketing,
and personal interviews. The other category—secondary information—has
already been compiled and organized by a source other than the marketer.
Rather than looking at a specific marketing problem faced by an individual
company, secondary information generally tracks trends within a market, an
industry, a demographic group, or a geographic region. A great deal of valuable
secondary information is available to small business owners at little or no cost.
Some possible sources of secondary market research information include
government reports, trade association records, newspaper and magazine

1
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 they
need 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 research—
and its potential cost—experts 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 problem
to be addressed. Next, a marketer should determine what information is needed
to solve the problem, as well as what sources should be used to acquire the
information. Many businesses make a preliminary investigation at this early
stage in order to give their definition of the problem more focus and to develop
tentative answers that can be tested during the next stage of the process. The
third step involves planning the research. This step includes selecting the
techniques to be used for gathering data and deciding on an appropriate group,
or sample, to be included in the research. Fourth, a marketer actually gathers
the necessary data. The fifth step involves analyzing and interpreting the
information that has been gathered. Finally, the marketer reaches a conclusion
about the marketing problem and translates the findings into changes in the
firm's overall marketing strategy.

There are three general types of market research suppliers that can assist small
businesses with one or more steps in the above process. Some firms specialize
in conducting overall market research that they release to a variety of clients for
a fee. This type of firm includes syndicated services such as A.C. Nielsen and
Company, 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 research
techniques to evaluating results and formulating new marketing strategies. In
contrast, smaller, specialty line suppliers usually concentrate on one aspect of
the process. Marketers who wish to secure the services of a market research
firm usually obtain bids from a number of suppliers. The following sections
provide more information about the various types of market research that such
suppliers perform.

2
 CHARACTERISTICS

• Systematic and continuous process: MR is a continuous process. One type

of 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 marketing
research from time to time and for facing them marketing research activities
need to be conducted on regular basis. A marketing company has to conduct
MR regularly for its survival and growth in the present dynamic marketing
environment.
• Wide in scope: MR is wide in scope as it deals with all accepts of
marketing of goods and services. Introduction of new products,
identification of potential markets, selection of appropriate selling
techniques, 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 data
collected must be reliable. It should be analyzed in a systematic manner.
This will provide comprehensive picture of the situation and possible
solutions.
• Offers benefits to sponsoring company and consumers: MR is useful to
the sponsoring company. It raises the turnover and profit of the company. It
also raises the competitive capacity and creates goodwill in the market. It
enable 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 the
intelligence tool of marketing management.
• Tool for managerial decision: MR acts as a tool in the hands of
management for identifying and analyzing marketing problems and finding
out solution to them. It is an ais to decision-making. It suggests possible
solution 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 a
specific marketing problems. It studies possible marketing problem and
suggests alternative solution and possible outcome of each alternative.
• Reduce the gap between producers and consumers: MR is an essential
supplement of modern competitive marketing. It is useful for understanding
the needs and expectations of consumers. It reduces the gap between

3
 producers and consumers and adjusts the marketing activities to suit the
needs of consumers.
• Not an exact science: MR is both science and art. It collects information
and studies marketing problems in a scientific manner. The information
collected is also applied to real life problem. However, MR is not an exact
science. It only suggests possible solution and not the exact solution to
marketing manager for consideration and selection. At present, MR is
treated as a professional activity. We have professional research agencies
dealing with the marketing problems of their clients on commission basis.

4
 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 before
business enterprises. They can make large scale exports as well as use internal
markets for their benefit. MR is useful for exploiting the opportunities of
globalization in a purposely manner. It is also useful for dealing with the
problems creates by globalization process. Every country has to face
competition in the domestic as well as in export marketing. Survival as well as
prosperity in the global business is possible through quality improvement, cost
reduction and by attracting consumers through various sales promotion
techniques. Here, MR offers helping hand to exporting companies. It offers
suggestions for survival and growth under competitive global environment. In
brief, the importance of MR is fast growing along with the globalization of
business in India and also in other countries. It is a must for survivalist’s
growth in the context of globalization. Current marketing scenario for Indian
countries is different as compared to traditional one. There is a new trend
towards liberalization and globalization. Markets are becoming highly
competition. New companies and new products are entering in the markets.
Survival is difficult under the present marketing environment. Here, MR offers
various services. It is, now, a professional activity with new development in
regards to scope and techniques. In brief, MR has great relevance in the current
marketing scenario in India as well as in all countries development and
developing of the world. MR has enormous capacity to help and guide
marketing companies in regard to their marketing problems and challenges. For
this, companies have to conduct such global marketing research on regular
basis and use the conclusions and finding in their marketing policies, strategies
and decision-making process.

5
 ADVANTAGES

• Indicates current market trends: Marketing research keeps business unit

in touch with the current market trends and offers guidance for facing
market situation with confidence.
• Pinpoint deficiencies in marketing policies: MR pinpoint the deficiencies
as regards products, pricing, promotion, etc. it gives guidance regarding
different aspect of marketing. They include product development, branding,
packaging and advertising.
• Suggests sales promotion techniques: MR enables a manufacturer to
introduce appropriate sales promotion techniques, select most convenient
channel of distribution, suitable pricing policy for the products and
provision of discounts and concessions to dealers. Marketing research
facilitates sales promotion.
• Explains consumer resistance: MR is useful for finding out customer
resistance to company’s products. Remedial measures are also suggested by
the researcher to deal with the situation. This makes the products and
marketing policies agreeable to consumers.
• Offers guidance to marketing executives: MR offers information and
guidance to marketing executive while framing marketing policies.
Continuous research enables a company to face adverse marketing situation
boldly. It acts an insurance against possible changes in marketing
environment.
• Facilitates selection and training of sales force: Marketing research is
useful for the selection and training of staff in the sales organization. It also
suggests the incentives which should be offered for motivation of
employees concerned with marketing.
• Promotion business activities: Marketing research enables a business unit
to grow its activities. It creates goodwill in the market and also enables a
business unit to earn high profits through consumer-oriented marketing
policies and programmer.
• Facilitates appraisal of marketing policies: Research activities enable
business executives to have an appraisal of the present marketing policies in
the light of finding of research work. Suitable adjustment in the policies is
also possible as per the suggestions made by the researchers.
• Suggests new marketing opportunities: MR suggests new marketing
opportunities and the manner in which they can be exploited fully. It
identifies emerging market opportunities.

6
 DISADVANTAGES

• Marketing research offers suggestions and not decisions: Marketing

research is not a substitute for decision-making process. It only offers
possible suggestions to marketing problems. It actually acts as a tool
which facilities decision-making process. It guides marketing managers
in taking balanced, result-oriented and rational decisions. The
suggestions offered by marketing researchers are usually possible
solutions but not the exact solutions. In fact, marketing research by itself
is not an exact science. MR does not provide readymade solution to
marketing problems. It only provides indicators. It may not provide
conclusion information on marketing problems. The marketing managers
have to use available information properly and take appropriate
marketing decisions.
• Marketing research cannot predict accurately: In MR, efforts are
being made to estimate or predict the possible future situation. For this,
certain research studies are undertaken. However, the result arrived at
may not be complete, perfect or accurate. They predict possible
tendencies but not certainties. Future is always uncertain and exact
prediction about the future is just not possible through marketing
research. This is because market environment is ever changing,
consumer behavior is difficult to estimate correctly and reliable data for
research purpose may not be available. As a result, the decision taken
and 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. There
are examples where the research failed to deliver desired results or a
product failed even when the research had shown promising market
demand and consumer support. The classical example is that of coke. Its
MR showed that 68% customers in US liked the taste of the new formula
developed by the coca-cola corporation. However, the new coke failed
and in less than six months of its launch, the coke management had to
relaunch old coke under the brand name coke classic. However, this
failure of MR was mainly due to conventional approach of researchers.
• Marketing research cannot study all marketing problems: Marketing
research is rather very wide in scope. However, it cannot study all
marketing problems particularly where it is difficult to collect relevant
data. Similarly, research study is not possible where value judgments are
involved. Even it is not useful for dealing with urgent marketing
problems where quick decisions and follow-up actions are necessary.

7
 Thus, all marketing problems are not researchable and all research
problems are not answerable.
• Resistance by marketing executives: Research study marketing
problems and offer information and guidance to marketing executive in
their decision-making process. However, some executives are reluctant
to use the solution suggested by the researchers. They feel that such
extensive use will act as a threat to their personal status. Findings of the
research work may bring them in difficulties if the policy decision taken
accordingly proves to be wrong.
• Lengthy and time consuming activity: MR is a lengthy and time
consuming activity. It involves various stages which need to be complete
in an orderly manner. It is not desirable to conduct research work is an
haphazard manner. Naturally, the research work takes longer period for
completion and the finding when available may prove to be old and
outdated. Even data collected very soon become old or historical due to
fast changing market environment. As a result, research findings based
on them become irrelevant in the changed situation.
• Marketing research is a costly affair: Marketing research is costly as
research work requires the services of experts with knowledge, maturity
and 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 research
staff.
• Changing behavior of consumer: Consumer is the focal point in
marketing research. However, his buying motives are difficult to judge
precisely and accurately. This brings some sort of uncertainty in the
conclusion drawn from the research activity. The findings of the research
work may not prove to be accurate.
• Non-availability of qualified staff: For scientific MR, professional
marketing researchers with proper qualifications, training and experience
are necessary. Research work is likely to be incomplete in the absence of
such expert staff. Companies find it difficult to have the services of such
expert staff. They find it difficult to pay high salary to professional
consultants. Research activities are conducted in limited areas due to
non-availability of properly qualified staff. Such staffs include
statisticians, sociologists, economists and computer experts.

8
 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 a
seller to market his products to consumers are covered by such research.
Marketing research is primilary concerned with 4 P’s of marketing mix. these
are product, price, place, and promotion.

Important branches of marketing research are as follows:

• Product research: Product research relates to products which are to be
marketed to consumers. It is useful for introducing new product which
will be agreeable to consumers. Product research relates to various
aspects 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 to
consumers. Packaging is now treated as a tool for sales promotion. It
attracts the attention of consumers and includes them to purchase
products. Constant changes in the package design are required for sales
promotion. For innovation in the package design, packaging research is
necessary. Packaging research is now treated as an independent branch
of marketing research. Such research is conducted in order to know the
impact of packaging. Branding and packaging normally go together and
hence brand research is treated as a part and parcel of packaging
research.
• Pricing research: Pricing research relates to pricing of the products. It
relates to analysis of pricing policies and strategies, studies of market
price trends, fixation of market prices, studies relating to prices charged
by competitors, studies relating to future price trends, price incentives
for sales promotion and provision of price discount and other price
concessions to dealers and consumers.
• Market research: Market research proper relates to analysis of
consumer markets, assessment of market trends. Forecasting of business
conditions, setting of sales territories and sales quota, sales potentials
studies, studies of wholesale marketing, demographic descriptions of
customers, market competition studies, sales forecasting, estimating
demand for new products, analyzing relative profitability of sales
territories and monitoring competitive marketing activities.
• Sales research: Sales research relates to studies of sales outlets, sales
territories and their revision, trends in sales, sales forecasting, and

9
 effectiveness of sales force, sales policies and sales performance and so
on.
• Promotion and distribution research: Promotion research relates to
assessing effectiveness of the sales force and selling efforts, testing of
media selected, advertising copy and assessing effectiveness of
advertising campaigns. The scope of this area of marketing research also
includes studies of channels of distribution for modification, distribution
cost analysis of the physical distribution, problems relating to
warehousing, inventory control and handling of goods.
• Consumer research: It relates to finding out consumers needs and
preference, consumers purchasing intentions, consumer’s choice of
brands, trends in consumer’s preferences and purchasing patterns.
• Policy research: Policy research activity is connected with the
evaluation 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 policy
research studies.
• International marketing research: International marketing research
deals with foreign markets which are attractive and profitable provided
products and marketing activities are adjusted as per the need of foreign
markets and buyers. Such research is useful for exploring profitable
foreign markets, for export promotion and for making suitable
modifications in the exportable items. Data collected about foreign
markets, market surveys, etc. are undertaken under international
marketing research. Such research is costly and time consuming as
compared to internal research. International marketing research is also
undertaken by export promotion organizations such as export promotion
councils and commodity boards.

10
 METHODS OF CONDUCTING MARKETING RESEARCH

The methods of conducting marketing research are broadly classified into the
following four categories:
• Desk research: In desk research, the required information for research
work is collected from published and other written sources of
information available. Desk research is useful for the collection of
secondary data. Secondary data are already collected for some other
purpose but can be used conveniently by browwing the same. Desk
research is a type of in-house research.

• Field research: In field survey method, the required information is

collected from the consumers, dealers and others connected with
marketing. In addition, consumer’s surveys are also conducted for this
purpose. The data collected from such field investigation are called
primary data.

• Observation method: In observation method, the required information

is called through actual physical observation of one or more phenomena
under study. This method is also useful for the collection of primary
data.

• Experimentation method: In experimental method, the required

information is collected through a small scale experiment under
controlled conditions. This method is used for primary data collection.

11
 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 complete
the 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 be
studied in depth and solved. There are several marketing problems
before a marketing firm. However, research is neither possible to
consider the basis, the most complicated and challenging problem for
research purpose. A good problem definition is the key to getting the
most out of the marketing research. Defining a marketing problem
means understanding the problem in an exact manner. It suggests the
scope of the problem, the type of information needed and other details of
the research project.
• Conducting preliminary survey: The marketing team may suggest
many marketing problems problems which they face. However, the
researcher has to select one major problem which is suitable for detailed
investigation. All marketing problems are not researchable and hence
such preliminary survey of the situation is necessary. The step in the
research process avoids wastage of time and money on unsuitable
research project and facilities quick completion of research project
which 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 objectives
decided should be specific, measurable and also attainable. The research
objective decided act as a guide to the researcher and help him in
maintaining a focus on the whole research defined by the researcher.
• Creating research design: Research design is the grand plan for the
conduct of actual research work. it is next to problem definition. A
research design is a blueprint of the whole research activity. It is like an
architects plan for building construction. The actual construction work
will be as per the plan prepared. Similarly, the researcher prepares
complete plan of his project and accordingly the whole research process
moves. The research design is a plan of the whole research work to be
undertaken.

12
• Determining the data needs and sources: After defining the research
problem and creating research design, the researcher has to decide the
nature of data required for his study. The hypothesis guides the data
collection process. The data needs are directly related to the research
project undertaken. The researcher can use primary and secondary data
for his project. Here, he has to decide whether to use primary data,
secondary data or both. He should also consider the time and cost
required for data collection. The sources of primary data, any suitable
survey method can be used. The researcher has to decide the convenient
method 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 a
small representative group selected from the total population for
intensive study purpose. For data collection, a repetitive group of
respondents will have to be selected out of the total.
• Designing the questionnaire: Questionnaire aspect relates to the
selection of research instruments employed in research for collecting
required information. The questionnaire is one research instrument used
extensively in a survey type research. In an obersavation based research,
the instrument of research can be a trained observer. In short, decision on
the selection of research instruments need to be made at this stage.
• Preparation of research report: After drawing conclusion from the
data collected, the researcher can make concrete recommendations for
solving the marketing problem. A researcher also prepares a document
giving details of research problem, data collected, conclusions drawn
and the recommendations made. It will be prepared in a suitable format
for the convenience of readers. It acts as a self explanatory, complete and
compact document. Report is used for reference purpose.
• Submission of research report: in this stage, the researcher wills
submit his research report to the appointing authority. The researcher
may submit his findings, recommendation, etc. orally to the top
executives of the management. In addition, the detailed written report
will be submitted for scrutiny by the marketing executives. The decision-
makers will study the report minutely and find out the desirability of
execution of the recommendations made. The final decision on the
research report is be taken by the appointing authority.

13
 TYPES OF MARKETING RESEARCH

• Audience research. Research on who is listening, watching, and reading

is important to marketers of television and radio programs and print
publications—as well as to advertisers who wish to reach a certain target
audience with their message. Television and radio ratings demonstrate
the popularity of shows and determine how much stations can charge for
advertising spots during broadcasts. Publication subscription lists, which
are audited by tabulating companies to ensure their veracity, are
important 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 by
selected, experienced users. The objective of product research can be
simple; for example, a company may tweak the taste of an existing
product, then measure consumers' reactions to see if there is room in the
market for a variation. It can also be more extensive, as when a company
develops prototypes of proposed new products that may be intended for
market introduction months down the road. In product research, as in all
market research, there is a danger to paying too much attention to the
wrong things. For instance, the introduction of New Coke was based on
the outcome of taste tests that showed the public wanted a sweeter
product. But later an angry public, outraged that Coca-Cola was planning
to change the familiar formula, forced the company to ignore its taste
tests and leave the original Coke on the market. The company had put
too much stock in the results of the taste test studies, and had failed to
factor in research that showed consumers were happy with the product as
it was.

• Brand research. Brands, the named products that advertising pushes

and for which manufacturers can charge consumers the most money, are
always being studied. Advertisers want to know if consumers have
strong brand loyalty ("I'd never buy another brand, even if they gave me
a coupon"); if the brand has any emotional appeal ("My dear mother
used only that brand"); and what the consumer thinks could be improved
about the brand ("If only it came in a refillable container").Brand
research, too, has its perils. Campbell's Soup once convened a focus
group comprised of its best soup customers. One of the findings was that

14
 those customers saw no need for a low-salt alternative soup Campbell's
wanted to market. Concerned that the general public seemed to want
low-sodium products, Campbell's retested groups other than their best
customers. This research found a market interested in a low-sodium
soup. The loyal Campbell's customers loved the saltier product, while a
larger group of potential customers preferred the low-salt alternative.

• Psychological research. Perhaps the most controversial type of market

research is psychological research. This type of research tries to
determine why people buy certain products based on a profile of the way
the consumers live their lives. One company has divided all Americans
into more than 60 psychological profiles. This company contends the
lifestyles these people have established, based upon their past buying
habits and their cultural upbringing, influences their buying decisions so
strongly that individual differences can sometimes be negated.
Psychological research is controversial because it measures attitudes
about buying rather than the buying itself. Critics point to conflicting
information uncovered through other market research studies. In one
series of research projects, researchers asked people what they were
planning to buy before they entered a store. After the people surveyed
left the store, the same researcher examined what was actually in their
shopping carts. Only 30 percent of the people bought what they had said
they planned to buy just a half hour earlier.

• Scanner research. In contrast, there is no fooling the checkout scanner

at the supermarket or the department store: it records what was actually
purchased. This is valuable information an advertiser can use to help
plan an ongoing marketing strategy. Scanner technology has changed the
way advertisers track the sale of consumer products. Before scanners,
advertisers received sales information only when retailers reordered
stock, generally every two weeks. This meant that the advertisers had no
way 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 consumer—credit card

holders, smokers, drinkers, car buyers, video buyers—shows up on
thousands of lists and databases that are regularly cross-referenced to
mine nuggets of marketing research. Database research is growing in
popularity among marketers because the raw data has already been

15
 contributed by the purchaser. All the marketer has to do is develop a
computer program to look for common buying patterns. Database
research can be thought of as the ultimate tool in market segmentation
research. For example, from zip code lists, marketers may determine
where the wealthy people live in a city. That list can be merged with a
list of licensed drivers. The resulting list can be merged with another list
of owners of cars of a certain make older than a certain year. The
resulting list can be merged with another list of subscribers to car
enthusiast magazines. The final list will deliver a potential market for a
new luxury car soon to be introduced and profiled in the car magazines.
The people on the potential buyers' list could then be mailed an
invitation to come see the new car. Database research also allows
companies to build personal relationships with people who have proven
from past purchases that they are potential customers. For example, a
motorcycle manufacturer such as Harley Davidson may discover from
database research that a family with a motorcycle has a teenage son.
That son is a potential new customer for everything from clothes to a
new motorcycle of his own. Maintaining a personal relationship with
customers also provides businesses with a basis for more detailed and
economical market research than might be possible through random
sampling.

• Post-sales or customers satisfaction research. Most companies no

longer believe that a sale ends their relationship with a customer. Nearly
one-third of the research revenues generated by the leading American
market research firm’s concern customer satisfaction. Many companies
now wait a few days or weeks, then contact customers with survey
questionnaires or telephone calls. Companies want reassurance that the
customer enjoyed the buying experience and that the product or service
has met the buyer's expectations. The reason behind post-sales research
is to ensure that current customers are happy, will consider themselves
future customers, and will spread positive word-of-mouth messages
about the product and company. One study found that 70 percent of
customers believed it was important for companies to stay in contact
with them, but less than one-third of those same customers reported that
they had heard from companies whose products they purchased. Nearly
90 percent of those surveyed said they would be more likely to choose a
company's products if it stayed in touch with them and sought their
satisfaction.

16
 COMMONLY USED MARKETING RESEARCH TERM

Market research techniques resemble those used in political polling and social
science research. Meta-analysis (also called the Schmidt-Hunter technique)
refers to a statistical method of combining data from multiple studies or from
several types of studies. Conceptualization means the process of converting
vague mental images into definable concepts. Operationalization is the process
of converting concepts into specific observable behaviors that a researcher can
measure. Precision refers to the exactness of any given measure. Reliability
refers to the likelihood that a given operationalzed construct will yield the same
results if re-measured. Validity refers to the extent to which a measure provides
data 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 clients
paying for the research. For example, a cigarette company might commission
research that attempts to show that cigarettes are good for one's health. Many
researchers have ethical misgivings about doing applied research.

Sugging (or Selling under the Guise of market research) forms a sales
technique in which sales people pretend to conduct marketing research, but
with 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 being
a research organization.

17
 PERSONAL RESEARCH METHODS

Closed-ended questionnaire. A closed-end questionnaire is the type of market

research 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 on
their answers. Such surveys usually ask for "yes" or "no" responses or for
measures of multiple choice opinion (e.g., "extremely interested, ““somewhat
interested, ““not interested"). This type of market research is generally
conducted to elicit the opinions and beliefs of the public. It is commonly used
for political polling and to determine the awareness or popularity of a product
or 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 carefully
prepared, closed-ended questions may elicit answers that do not provide a clear
view of the person being surveyed. Sometimes, the company conducting the
survey may intentionally or inadvertently write questions that elicit the answers
it wants to receive, rather than answers that provide a true picture of what is
happening in the marketplace.

Open-ended questionnaire. Over time, market researchers have grown

increasingly aware that people often have opinions that do not fit into a
multiple-choice questionnaire. To capture these opinions and try to analyze
them, researchers are shifting toward open-ended research—asking people to
say exactly what is on their minds. For example, manufacturers are giving
customers plenty of space on questionnaires to explain their likes and dislikes
about products and services, and telephone researchers will frequently mix
closed-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 station
may trigger a follow-up question of "Why not?, " for instance, and the answer
will 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 gradually
become bored or annoyed and stop providing their true opinions. In addition,
some studies have shown that a large percentage of Americans refuse to answer
marketing research surveys.

18
Focus groups. In-person, sit-down discussions around a table with groups of
consumers, would-be consumers, never-buyers, or any other demographic
group a company wishes to bring together are called focus groups. This can be
the least expensive type of market research when handled on a local basis by a
small business wanting to get a handle on its customers. Or, it can be one of the
most expensive if a major corporation wants to test its plans in various sections
of the country. Small, local businesses may invite a focus group to a
neighborhood home to sit around the dinner table and discuss how the company
can develop new markets. In contrast, most major corporations conduct their
focus groups in a controlled environment, usually with a one-way mirror at one
end of the room. This allows executives to observe the proceedings
unobtrusively or to videotape the session for further study.

The key to gathering good information from a focus group is for the moderator
to keep the conversation flowing freely without taking a side. The moderator's
job is to involve everyone in the discussion and prevent any individuals from
dominating the conversation. Most market research experts agree that focus
group research should be accompanied by other types of research and not be
the sole basis for launching new products. The reason is that opinions
expressed among strangers may not always reflect the way people would react
when alone. For example, a focus group discussing low-fat foods may garner
an enthusiastic response from people who want to be publicly perceived as
being concerned about their health. The same people, however, might say they
never buy low-fat products if questioned during an anonymous phone
interview.

19
 MAERKETING RESEARCH METHODS

Methodologically, marketing research uses four types of research designs,

namely:

• Qualitative marketing research - generally used for exploratory

purposes - small number of respondents - not generalizable to the whole
population - statistical significance and confidence not calculated -
examples include focus groups, in-depth interviews, and projective
techniques

• Quantitative marketing research - generally used to draw conclusions

- tests a specific hypothesis - uses random sampling techniques so as to
infer from the sample to the population - involves a large number of
respondents - examples include surveys and questionnaires

• Observational techniques - the researcher observes social phenomena

in their natural setting - observations can occur cross-sectionally
(observations made at one time) or longitudinally (observations occur
over several time-periods) - examples include product-use analysis and
computer cookie traces

• Experimental techniques - the researcher creates a quasi-artificial

environment to try to control spurious factors, then manipulates at least
one of the variables - examples include purchase laboratories and test
markets

• Researchers often use more than one research design. They may start
with secondary research to get background information, and then
conduct a focus group (qualitative research design) to explore the issues.
Finally they might do a full nation-wide survey (quantitative research
design) in order to devise specific recommendations for the client.

20
 REPORT

After finalizing conclusion and recommendations, the researcher has to

communicate the details of his research work in the form of a summary
document called marketing research report. He has to make research reporting
to the sponsoring agency for consideration, approval and follow-up measures.
Research reporting means presentation of research report to the sponsoring
agency. It is the concluding part of research study.

Research reporting needs to be done in a systematic manner so that changes of

any confusion will be minimized. The practical value of a research study
depends on the manner in which the research report is prepared and sold to
those who are expected to act as per the findings and recommendations.

Research reporting may be an anti-climax to the researchers. However, it is the

only part of the research process in which the sponsoring agency is really
interested as it is the net result of research activity undertaken.

21
 AN EXPERIMENTAL APPROACH

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

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

I begin the class session by telling students that it is critical to not make
marketing decisions in a vacuum but to always consider how the competition
will respond to their decisions. In the same way a good chess player anticipates
the moves of his opponent, so too should they always be thinking ahead about
the moves of the competition.

In preparing to discuss the case, I separate the students into two groups: one
group which represents the target company and one group which represents the
competitor. Each group is then given 30 minutes to develop their marketing
plan and to develop any contingency plans that might be necessary, based upon
what they think their "opponent" will do. In particular, I ask them to think of
this 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 based
on how they believe the other group will respond.

Since all the students will have prepared the case from the target company’s
viewpoint, I leave that group in the classroom by themselves to develop a
consensus as to what they will recommend. I take those students representing
the competing company to an empty classroom and help them develop their
strategy. We reconvene after 30 minutes. The target company group explains
their 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 it
reconciles any problems that have arisen. The competing company then gets a
last response.

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

22
target company, the second to the competing company, the third to the target
company, and the fourth to the competing company.

In my experience, the students in the comp In order for my principles students

to receive proper research direction and not have the erroneous perception that
"good" research has to be survey oriented, two research assignments are built
into their exposure to Marketing Research. These assignments are easy to do
for the students, easy to grade by the instructor, and meaningful in content and
concepts.

The first assignment is a secondary research assignment, SIC based, which

forces students to look up a SIC number in the SIC Manual, follow up by
finding some general industry information in the U.S. Industrial Outlook, go on
to learn about industry concentration in the Census of Manufacturers, and cap
off their research by finding a company's listing in the industry in Standard &
Poor’s or Dun & Bradstreet. Consequently, they go from a position where they
barely know that SIC numbers exist to a state where they have learned about
the industry, its industrial concentration and output, and the actual names,
addresses and telephone numbers of individuals they might call in that industry.
The process is reinforced in subsequent examinations by objective questions on
sources and content.

The second assignment is a primary research study, but instead of having the
general survey orientation of most research assignments, I have opted for an
observation study. This study compares the apparent strategy differences of full
line grocers from their convenience store counterparts. Quantitative
observations in stocking patterns are made particularly easy by the fact that
most stores have tiled floors. Thus by merely counting tiles for a brand,
students can get an estimate of expected relative sales of a brand in a particular
store. By comparing information from two different types of retailers, they also
gain insight into actual marketing strategy. By contributing to the initial steps
of the study, an instructor can lead a student through the research process and
even to elementary stages in report writing.

I like to use the same industry in the secondary study as used in the primary
research so that students can see that the two approaches really do complement
each other. Thus, if I were going to do a primary study on cereal, the secondary
research would be a cereal study also.

23
 OBJECTIVE

The marketing manager and the researcher must work closely together to define
the problem carefully and agree on the research objectives. The manager best
understands the decision for which information is needed; the researcher best
understands marketing research and how to obtain the information.
Managers must know enough about marketing research to help in the planning
and to interpret research results. Managers who know little about the
importance of research may obtain irrelevant information or accept inaccurate
conclusions. Experienced marketing researchers who understand the manager's
problem should also be involved at this stage. The researcher must be able to
help the manager define the problem and to suggest ways that research can help
the 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 without
knowing the specific causes. For example, managers of a retail clothing store
chain decided that falling sales were caused by poor floor set-up and incorrect
product positioning. However, research concluded that neither problem was the
cause. It turned out that the store had hired sales persons who weren't properly
trained in providing good customer service. Careful problem definition would
have avoided the cost and delay of research and would have suggested research
on the real problem.
When the problem has been defined, the manager and researcher must set the
research objectives. A marketing research project might have one of three types
of objectives. Sometimes the objective is exploratory—to gather preliminary
information that will help define the problem and suggest hypotheses.
Sometimes the objective is descriptive—to describe things such as the market
potential for a product or the demographics and attitudes of consumers who buy
the product. Sometimes the objective is casual—to test hypotheses about cause-
and-effect relationships.

24
 DEVELOPING THE RESEARCH PLAN

The second step of the marketing research process calls for determining the
information needed, developing a plan for gathering it efficiently, and
presenting the plan to marketing management. The plan outlines sources of
secondary data and spells out the specific research approaches, contact
methods, 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 internal
sources such as profit and loss statements, balance sheets, sales figures, and
inventory records; and external sources such as government publications,
periodicals, books, and commercial data. Primary data collection requires more
extensive research, more time, and more money. Secondary sources can
sometimes provide information that is not directly available or would be too
expensive 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 certain
of its relevance (fits research project needs), accuracy (reliably collected and
reported), 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 often
use the same terms but mean slightly different things, or they attempt to
measure the same thing but go about it in different ways. Either way, the result
can be that statistics found in secondary sources may not be as accurate or as
relevant as they appear on the surface.

25
 AFFORDABLE MARKETING

Until the Internet became a reality, limited budgets kept most types of
marketing 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 research

options. Secondary research sources are easier to find. More affordable primary
research methods - both qualitative and quantitative - are available online as
well.

Marketing / Market Research Categories

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

Where the Marketing / Market Research Originated: Primary versus

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

An alternative to conducting primary research is to find secondary research, or

research 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 is
designed to bring out issues associated with the subject matter as well as clue
you 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 concept

or looking for ideas then later completes quantitative research to fine-tune and
optimize.

26
Combining the Two Marketing / Market Research Categories
Combining the primary/secondary and qualitative/quantitative categories
results in the four types of research. These are: primary quantitative, primary
qualitative, secondary quantitative and secondary qualitative research.

Secondary Marketing / Market Research

As a small-budget business, much of your research will be limited to secondary
research. Both the good news and the bad news is that there is a lot of it out
there. 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. Press
releases and news articles often quote studies. Industry leaders and suppliers
publish white papers or other studies. Annual reports are also good places to
look for industry information.

Research firms’ sites are another source of secondary research. Their main
business is conducting primary research for clients or compiling and selling
detailed syndicated reports. Often, they have top line data available in the form
of press releases or executive summaries.

The Federal government is another increasingly useful source of secondary

data. At last count, 100 different government agencies publish freely available
data.

Primary Qualitative Research

Qualitative research is conducted with a somewhat flexible format so the
participants can give their opinions and feedback. Inexpensive ways to conduct
your own qualitative research via the Internet are through do-it-yourself online
focus 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. A
trained moderator leads a group of participants through a pre-determined
discussion over the Internet. Participants are often recruited through a research
firm’s own panel and are paid a fee for participating.

27
If your budget cannot handle a professional service, you can conduct a focus
group 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, for
best results, you should consider hiring a trained moderator to conduct the
online focus groups.

Feedback Forms
A simple way to conduct ongoing qualitative research is through a feedback
form. 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 this
through a form directly on your site and/or via email to those on your opt-in
list.

Primary Quantitative Marketing / Market Research

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

Customer Surveys
The Internet has made conducting surveys quicker and less expensive. Options
range 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, for
example.

Use Patterns
Another approach to quantitative research on the Web is to look for visitor use
patterns such as, routes taken through your site, pages viewed, or ordering
behavior. By studying Web logs you can know which pages are most popular,
how visitors navigate through your site, common entry pages, and where
visitors often leave the site.

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

28
Risk Assessment
Keep in mind the risks involved with taking action based upon your research
results. When resulting actions are low-cost and/or easily reversible, moving
forward based on qualitative or subjective results may be easily justified.

Conversely, if large dollar or potentially damaging projects will be completed

based upon your marketing / market research, you will want to move forward
more carefully. Make decisions based upon more substantial quantitative and/or
objective results.

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

29
30