The term marketing research is used extensively in modem marketing management. It acts as a tool for accurate decision making as regards marketing of goods and services. It is also useful for studying and solving different marketing problems in a systematic and rational manner.
Research means detailed, systematic and comprehensive study of a problem. Here, the details of the marketing problems are collected and studied, conclusions are drawn and suggestions (recommendations) are made to solve the problems quickly, correctly and systematically. In marketing research, marketing problem is studied in depth and solutions are suggested to solve the problem relating to consumers, product, market competition, sales promotion and so on.
MR is a special branch of marketing management. It is comparatively recent in origin. MR acts as an investigative arm of a marketing manager. It suggests possible solutions on marketing problems for the consideration and selection by a marketing manager.
Steps in Marketing Research Process:
1. Identifying and Defining a Marketing Problem: The first step in the marketing research procedure is to identify the marketing problem which needs to be solved quickly. The problem may be related to product, price, market competition, sales promotion and so on. The research process will start only when the marketing problem is identified and defined clearly. The researcher has to identify and define the marketing problem in a clear manner.
2. Conducting a Preliminary Exploration (survey): The marketing team may suggest many marketing problems which they face. However, it is not possible to take up all such problems for research purpose. The researcher has to study such problems and select one major problem which is suitable for detailed investigation. For this, preliminary investigation is necessary. A sales manager may suggest a problem of declining sales. The researcher has to find out the possible reasons and which one is the most important and also suitable for detailed study. Marketing problems are not researchable and hence such preliminary exploration is necessary and useful.
3. Determining Research Objectives: The researcher has to formulate hypothesis to fit the problem under investigation. It is a tentative explanation of a problem under study. For example, the sales are declining. According to the researcher, this may be due to poor quality and high price or due to limited interest taken by middlemen or that the product has become outdated. If the first reason is accepted, the same will be investigated in full. If the first cause is rejected, he will move to the second for detailed study through data collection.
4. Determining the Data required and their sources: In this stage, the researcher has to decide the type of data required for his study purpose. The hypothesis guides the data collection process. The researcher has to decide the method which is convenient for data collection and collect the required data accordingly There are two main sources of data- primary and secondary. Primary research is conducted from scratch. It is original and collected to solve the problem in hand. Secondary research already exists since it has been collected for other purposes. It is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher. The sources of primary and secondary data are different. Similarly, for the collection of primary data, any one method such as mail survey or telephone Survey, or personal interview or observation or experimentation method can be used.
5. Creating research Design: Research design is the plan for the conduct of actual research investigation. Such design provides guideline for the researcher to keep a track on his actions and to know that he is moving in the right direction on data collection.
The research design contains answers to the following questions:
I. What is the nature and purpose of study?
II. What type of data is required?
III. How to collect required data?
IV. What is the technique of data collection?
V. How much funds will be required?
VI. How much time/period will be required for completion of research project?
6. Designing the Questionnaire: As per the objective of research project, information will be required. For collection of data, suitable questionnaire will have to be prepared. All necessary care should be taken in order to prepare ideal questionnaire, so as to collect required information easily, quickly and correctly.
7. Designing a Sample of Respondents: For data collection, a representative group will have to be selected out of the total i.e. universe. A sample designed should be adequately representative in character. It must represent the total population under study.
8. Collecting Data: Data are to be collected as per the method selected for data collection. If mail survey method is selected, questionnaires will be sent by post to respondents. If personal interview method is selected, interviewers will be given suitable guidance, information and training for the conduct of personal interview. Data collection should be quick and data collected should be reliable, adequate and complete in all respects.
9. Organizing/Processing the Data Collected: The completed questionnaires are not useful directly for tabulation and drawing conclusions. They need to be organized /processed properly for drawing conclusions. For this, scrutiny of data, editing, coding and classification of data are required. In addition, tabulation of data collected is also essential. Such processing make data integrated in a compact manner. In addition, the data are made reliable and suitably arranged for analysis and interpretation. Conclusions can be drawn only when the collected data are arranged in an orderly manner for detailed study. In short, processing of data means verification of data collected and the orderly arrangement of data for analysis and interpretation. The steps in data processing (editing, coding, etc.) are interrelated and need to be completed properly. The processing of data collected is a type of office work which can be attended by the office staff under the guidance of researcher. The processing of data is a lengthy and time-consuming activity and needs to be completed property. This is necessary for raising accuracy and reliability of the whole research project.
The processing of data collected through marketing research involves the following steps:
a) Preliminary screening of the data collected,
b) Editing of the data collected,
c) Coding of the data collected,
d) Classification of data into meaningful categories, and
e) Tabulation of data for easy and quick analysis and interpretation.
10. Analyzing and interpreting data: Tabulated data can be used for detailed and critical analysis. The purpose is to establish useful and logical relation between the information and problem. Analysis of data should be made in a rational manner. This facilitates interpretation of data in an orderly manner. Conclusions can be drawn after the analysis and interpretation of data. Such conclusions are useful for suggesting remedial measures. Various statistical techniques are used for the analysis and interpretation of data. This is necessary so that the conclusions drawn will be accurate and remedial measures recommended will be appropriate or result-oriented.
In brief, processing of data collected is one important and critical stage in the research process. The utility of the whole research process depends upon the manner in which the data are processed by the researchers. The services of experts should be used for such processing of data. Similarly, advanced statistical techniques should be used in the analysis and interpretation of data so that the conclusions drawn will be accurate and useful for the introduction of appropriate remedial measures. Processing of data is like examining patient by a doctor. Here, if the diagnosis is accurate, the follow-up treatment (remedial measures) will be appropriate and the patient will be all right within a short period. The same rule is applicable to processing of data in the marketing research activity/process.
11. Preparing Research Report: After drawing conclusions, the researcher can make concert suggestions/recommendations for solving the marketing problem in a satisfactory manner. A researcher also prepares a document giving details of research problem, data collected, conclusions drawn and the recommendations made. Such document is called research report which is the final outcome of lengthy research process. The report will be prepared in a suitable format for the convenience of readers. It acts as a self-explanatory document.
12. Presenting Research Report: The researcher will submit the report to the decision-makers in the field of marketing. The decision-makers will study the report minutely and find out the desirability of execution of the recommendations made. The final decision is to be taken by the decision-makers (marketing managers and top level management) only.
13. Follow-Up Steps: If the recommendations made are accepted, the decision-makers have to take follow-up steps for the execution of the recommendations made. The follow-up steps should be controlled effectively so as to have positive results in the cause of time.
The steps in the MR process (as noted above) are normally used in all MR projects. Certain modifications are also possible in a specific research project. The research process is lengthy and time consuming and needs to be completed in a rational and systematic manner. This gives promising results in the sense that appropriate solution to marketing problem is available.
The researcher has to follow this lengthy MR procedure carefully. He has to take various decisions while conducting the research work. The research project may be conducted by an outside consultancy firm or an advertising agency. Sometimes, the research work is conducted internally i.e. through the marketing research department or sales department. Here, the research department takes up the major marketing problem (e.g. declining sales or profits of the company) and organize the research project in order to find out the causes (e.g. causes for declining sales or profit) and appropriate remedial measures. A sales manager may be asked to organize the research project for dealing with the problem of declining sales. Here, he has to organize the whole research project and finalize the details of different steps involved.
Methods of Research- Methodologically, marketing research uses the following types of research designs:
Based on questioning
• 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. Techniques include choice modelling, maximum difference preference scaling, and covariance analysis.
Based on observations
• Ethnographic studies- by nature qualitative, 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. See also Ethnography and Observational techniques.
• Experimental techniques- by nature quantitative, 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, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nationwide survey (quantitative research design) in order to devise specific recommendations for the client.
Business to Consumer
B2C is a form of applied sociology that concentrates on understanding the preferences, attitudes, and behaviors of consumers in a market-based economy, and it aims to understand the effects and comparative success of marketing campaigns.
Business to Business
B2B research is inevitably more complicated than consumer research. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to find the answers using just one method. Finding the right respondents is crucial in B2B research since they are often busy, and may not want to participate. Encouraging them to “open up” is yet another skill required of the B2B researcher. Last, but not least, most business research leads to strategic decisions and this means that the business researcher must have expertise in developing strategies that are strongly rooted in the research findings and acceptable to the client.
There are four key factors that make B2B market research special and different from consumer markets.
• The decision making unit is far more complex in B2B markets than in consumer markets
• B2B products and their applications are more complex than consumer products
• B2B marketers address a much smaller number of customers who are very much larger in their consumption of products than is the case in consumer markets
• Personal relationships are of critical importance in B2B markets.
Marketing research techniques come in many forms, including:
• Ad Tracking- periodic or continuous in-market research to monitor a brand’s performance using measures such as brand awareness, brand preference, and product usage.
• Concept testing- to test the acceptance of a concept by target consumers
• Coolhunting- to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle
• Buyer decision making process research- to determine what motivates people to buy and what decision-making process they use; over the last decade, Neuromarketing emerged from the convergence of neuroscience and marketing, aiming to understand consumer decision making process
• Advertising Research- used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ad’s ability to get attention (measured with Attention Tracking), communicate the message, build the brand’s image, and motivate the consumer to purchase the product or service.
• Brand equity research- how favorably do consumers view the brand?
• Brand association research- what do consumers associate with the brand?
• Brand Attribute research- what are the key traits that describe the brand promise?
• Brand name testing- what do consumers feel about the names of the products?
• Commercial eye tracking research- examine advertisements, package designs, websites, etc. by analyzing visual behavior of the consumer
• Copy testing- predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion.
• Customer satisfaction research- quantitative or qualitative studies that yields an understanding of a customer's satisfaction with a transaction
• Demand estimation- to determine the approximate level of demand for the product
• Distribution channel audits- to assess distributors’ and retailers’ attitudes toward a product, brand, or company
• Internet strategic intelligence- searching for customer opinions in the Internet: chats, forums, web pages, blogs where people express freely about their experiences with products, becoming strong opinion formers.
• Marketing effectiveness and analytic- Building models and measuring results to determine the effectiveness of individual marketing activities.
• Segmentation research- to determine the demographic, psychographic, cultural, and behavioral characteristics of potential buyers
• Online panel- a group of individual who accepted to respond to marketing research online
• Store audit- to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service
• Test marketing- a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market
• Viral Marketing Research- refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individual's Social Network. Estimates of Social Networking Potential (SNP) are combined with estimates of selling effectiveness to estimate ROI on specific combinations of messages and media.
• Mystery consumer or mystery shopping- An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products.
• Positioning research- how does the target market see the brand relative to competitors? - what does the brand stand for?
• Price elasticity testing- to determine how sensitive customers are to price changes
• Sales forecasting- to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc.
All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research.
There is distinction between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population.
Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems (MIS).
Exploratory research is also conducted to simplify the findings of the conclusive or descriptive research, if the findings are very hard to interpret for the marketing managers.