Everything you need to know about process of marketing research. Marketing research is the application of scientific methods to the solution of marketing problems. It embraces all research activities for systematic, objective and exhaustive search for and the study of marketing problems.
The process of marketing research initiates at the task of setting objectives and terminates by presenting the findings to the sponsor concerned.
A research plan determining data sources, methodology, tools, sampling design and data collection methods needs to be formulated following the task of setting the objectives.
The data collection process has to be initiated from primary or secondary or both sources administering a checklist and questionnaire. The data should then be subjected to an appropriate analysis in view of the set objectives and findings to be presented in a draft report.
Marketing research process involves the following seven steps:-
1. Formulating the Research Problem 2. Developing the Research Plan 3. Collect the Information 4. Processing and Analysing the Collected Data 5. Presentation of the Findings 6. Follow-Up and Making Decisions.
Marketing Research Process: 4 Step, 5 Step, 6 Step, 7 Step and 8 Step Process
Most of the research studies carried out for decision making purposes are concerning ‘specific’ problems. During the planning stage itself, the decision makers will work out the research process, which can be viewed as a series of interrelated steps.
Step # 1. Problem Formulation Stage:
This is the single most important step in the research. Because it is on the basis of how the marketing research problem is formulated that the entire research process is worked out. While formulating the problem, the researcher will determine what information is to be obtained, the specific objectives, try to work on the alternative courses of action and state the form of research hypothesis to be examined.
A hypothesis is an assertion about the “state of nature”, and from a practical viewpoint, often implies a possible course of action with a prediction of the outcome if the course of action is followed. Usually development of the hypothesis will depend on the past experience, ability to make good judgments and creativity of the researcher.
During this stage, the researcher will, for a given problem, consider the outcomes for the various alternative courses of action and then decide on the necessity of a formal investigation by comparing the additional value of the research decision against the cost of conducting the research.
There are various methods which will help to evaluate the value of the addition of new information to the decision process.
Methods to Access the Value of Marketing Research Information:
The marketing manager is always required to use relevant marketing information generating techniques for evaluating the likely outcomes of the various decisions taken by him. Usually, this is done with the help of various analytical statistical methods. A very popular analytical method frequently used by marketers is the Bayesian Theory.
The Bayesian decision theory was developed (though not in a marketing context) by an English clergyman, Thomas Bayes. Bayes had proposed a procedure for combining new information on the probability of alternative states of nature being the true state with judgments existing prior to the receipt of new information.
Incidentally, almost all decision making (may or may not be related to marketing) involves the condition of uncertainty around the variables that will have influence on the consequence of the decision.
Some of the questions evolved around the marketing problems could be, What will be the consequences of the new product being test marketed-will it succeed or fail if launched nationally? If we raise the advertisement expenses by another 5%, will there be an increase in the sales volume and profits?
More often than not, the marketing manager is compelled to take chances and consequently may run the risk of making wrong decisions. The more certain one is of the outcomes, lower is the risk.
The Bayesian decision theory tries to answer two questions:
1. How can the manager select from among alternative information gathering choices, including the option of not gathering any additional information at all?
2. After making the choice, what action is to be taken by the manager?
We have briefly touched upon the methods used by firms to understand the cost-benefit aspects before undertaking the project. Researchers, while establishing investigation methods have always sought the help of behavioural sciences. Usually, the tag ‘Scientific method’ has almost always been accepted as the ‘standard’ against which the other investigative methods were to be measured.
In the behavioural sciences, certain investigators referred to as ‘objectivists’, opine that a hypothesis test is based on publicly stated procedures and are investigator independent. Here again there are other investigators referred to as subjectivist who believe in the requirement of hypothesis test but are not very particular about the publicity of procedures nor on the investigator independence. The Bayesian approach as we have seen also tests hypothesis, either using objective or subjective methods along with (their investigators) prior judgments.
There are also certain investigators known as phenomenologists, who believe that the hypothesis need not be tested, procedures for inquiry need not be made public and also that the method of inquiry will not be investigator independent.
In the case of objectivist-subjectivist-Bayesian approaches, the discussion is to emphasise on the centrality of the explanatory hypothesis, and its testing, whereas the phenomenologists are opposed to the use of explanatory hypothesis. Moreover, hypothesis refer to preconceived ideas of the phenomenon, thus leading to selective perception and distortion of measurement.
Herber Spiegalbug has referred to the method of phenomenology as consisting of four steps, recognised by most phenomena lists, to qualify as representative of the approach generally followed:
i. Suspend prior conceptions.
ii. Description of the phenomenon.
iii. Determine the universal elements.
iv. Apprehending of relationships.
Thus, this method is evolved around the ‘problem’ where the researcher has to enquire about something that no one knows anything about.
If one is required to answer the question related to the appropriate “method of inquiry”, the answer will be dependent on the nature of the research problem and the availability of existing knowledge. Apart from deciding on the method of inquiry, the researcher will also be required to select a research methodology.
Broadly stated, two research methodologies are used for the purpose of research:
i. Experimental research.
ii. Non experimental research.
The major difference between the two methodologies lies in the control of extraneous variables. In case of the experimental research there is intervention, of atleast one variable by the investigators. While in case of non-experimental research, there is no intervention, apart from that required for the purpose of measurement.
In controlled experimental researches, there could be two types of intervention from the researcher. One, could be related to the manipulation of at least one independent variable. And the second intervention is related to assigning subjects to control and experimental groups in a random manner.
Step # 3. Develop the Research Design:
After the selection of the research methodology, the next step is to develop the research design. A simple definition of research design is “Specification of methods and procedures for acquiring the information needed”.
It provides the necessary framework for undertaking the study and collecting the data. It should be noted that the research design is developed specifically for the particular methodology.
Step # 4. Selection of the Data Collection Techniques:
This step involves the researcher deciding and selecting the particular techniques to be adopted in solving the research problem. There are many data collection techniques available for both the research methodologies.
Generally stated, data collection techniques can be divided into:
i. Observation techniques.
ii. Communication techniques.
Under observation techniques, data is obtained by observing present or past behaviour. Past behaviour observation will be done with the help of secondary data (e.g., published data by external sources, internal company records etc.) and physical traces like erosion and accretion (in particular instances.)
Communication techniques involve seeking answers (or responses) by asking questions. This is sometimes done in the form of a survey research, when questions are asked and answers are received (it is hoped). This communication can be conducted via mail or telephone or sometimes in person (face to face interaction).
Of course, irrespective of whether a communication or observation technique is used, provisions should be made for recording responses or behaviour. Depending upon the data collection technique which the researcher decides to use, a suitable process of measurement and the measurement instrument will be considered.
Closely related to the research project is the question of the ‘Sample Design’. The sample design is usually consistent to the ‘relevant population’ specific to the research problem.
The researcher concentrates on three things while designing the sample:
(a) From where the sample is to be selected.
(b) The process of selection.
(c) The sample size.
The data obtained from the sample can be used for drawing inferences about the larger population.
Step # 5. Actual Data Collection:
Once the above four steps have been completed, the actual data collection begins. Since data collection involves the management of people, for effective adaptation of the method to the particular situation lies with combinations of methods. Of course, one can also look forward to newer and better methods of data collection such as computer aided interactive surveying or e-mail surveys in this new age of technology explosion.
Firms may seek the help of an outside or external research information supplier agency, at times, to conduct the research. Thus, actual data collection may involve a combination of in-house research team or external research agency, depending on the situational requirement.
Moreover, the data collection is limited on the following constraints:
i. The budget availability.
ii. Nature of the project and the complexity of the required information.
iii. Degree of accuracy desired.
iv. Time availability.
Step # 6. Analysis and Interpretation of Data:
The data obtained in the raw form will not be of any use, because it has to be formally analysed with the help of statistical tools. Needless to say that the type of analysis to be done will be based on the sampling procedures, measurement instruments and the data collection techniques used. Very often the techniques of analysis is decided prior to the actual data collections.
Step # 7. Preparation of Research Report:
The final step in the research process is the preparation of the research report. Everything that has been done and the outcome (results/conclusions) and recommendations/ suggestions have to be included in the report and presented in an accurate, clear, complete and concise form.
It is imperative to note that all the good work done by the researcher has to be communicated to the client by preparing a good research presentation/report. This is done by keeping in mind the wants and needs of the relevant audience.
Ideally speaking two approaches can be used for the preparation of report-
(a) A technical report- that emphasizes the underlying assumptions, methods employed and the research findings in a detailed manner.
(b) A common/popular report – involving minimal technical details in a simple language easily understood by all.
Process of Marketing Research – 7 Step Process: Situation Analysis, Preliminary Investigation, Research Design, Data Collection, Data Processing and a Few More Steps
Marketing Research requires the application of systematic and scientific approach to the task of collecting, processing and interpreting desired marketing data. Each step in the process is carefully planned, properly co-ordinated with all other relevant steps and executed as per plan at the proper time and in the proper, sequence.
Marketing research process involves the following seven steps:
1. Situation analysis,
2. Preliminary investigation,
3. Research design,
4. Data collection,
5. Data processing,
6. Report preparation, and
7. Recommendation follow-up.
1. Situation Analysis:
Define and analyse the marketing problem to be solved. Determine clearly the purpose of inquiry. State the immediate as well as ultimate objectives. Try to secure information about the firm, its products, the industry, the market, competitors, advertising and the general environment around the firm. You should have familiarity of the situation surrounding the problem. Personal interviews, company records, library material and trade papers are the sources for situation analysis.
2. Preliminary Investigation:
It is an investigation to secure minimum acquaintance or feel for the problem. The researcher may meet consumers, dealers, marketing executives, competitors to get background information which can throw some light on the most critical issues for study and investigation. Such an informal exploration may determine the need and justification of further formal investigation.
The exploratory study or preliminary investigation may offer the solution to a problem. But if the solution is not evident or the risks involved are considerable, we may have to undertake the formal or conclusive research to secure valid and reliable conclusions. The formal investigation project must be economically feasible.
3. Research Design:
A research design is a master plan or model for the conduct of formal investigation. Once the formal investigation is decided, the researcher must formulate the formal plan of investigation. A research design is the specification of methods and procedures for acquiring the information needed for solving the problem.
The formal investigation plan will concentrate on the selection of sources of information and the selection of methods and procedures for gathering data. Data gathering forms are prepared. Questionnaires and other forms are tested. Samples for investigation are planned.
4. Data Collection:
Once the research design or plan is finalized, the researcher will embark upon the task of collecting the data. A research study may require both primary and secondary data. Primary data must be assembled by the researcher for the first time.
Secondary data is already available for processing. Primary data is gathered through the use of sampling. Primary data can be collected through a number of methods such as survey, experimental method or observation method.
5. Processing of Data:
Collected data must be edited, tabulated and analyzed. The research team makes interpretation of the data. Conclusions and interpretations lead to recommendation for action. Electronic data processing equipment can be employed for analyzing large data quickly and at a lower cost.
6. Report Preparation:
Conclusions and recommendations supported by necessary analysis are submitted in the form of a written report and it is submitted to marketing executives. The report must clearly and effectively point out the relationship among the data, the interpretation and the recommendations.
7. Follow-Up Report:
Follow-up will ensure due implementation of all recommendations. In absence of follow-up the report may be simply filed and forgotten. It will also help evaluation of actions based on the report.
Process of Marketing Research – Basic Steps Involved in the Process
The basic steps involved in marketing research are as follows:
Step 1 – Identification of the problem for which information to be gathered.
Step 2 – Definition of research objectives.
Step 3 – Formulation of a suitable research design.
Step 4 – Selection of data collection and measurement techniques and preparation of questionnaire format.
Step 5 – Selection of sample method.
Step 6 – Selection of techniques for data analysis.
Step 7 – Presenting the report.
Step 8 – Follow-up on the report.
The marketing research will enable the company to identify answers to the questions like:
(a) What to produce
(b) Who are the potential buyers and where they are located
(c) What, when and how much the consumers want
(d) How much to produce and how to sell
(e) Where to sell etc.
Market research is only a part of marketing research. It is relating to gathering and analysis of information about specific markets, their makeup, their behaviour and the change in them. Market research tends to be quantitative and much of it is concerned with measurement of parameters which may have been shown to be important by marketing research.
Process of Marketing Research – 5 Step Process: Problem Definition, Research Design, Field Work, Data Analysis, Report Presentation and Implementation
Marketing research is undertaken in the effort to understand a marketing problem better. The value of the results depends upon the skill with which the marketing research project is designed and implemented.
Effective marketing research involves the following five steps:
i. Problem definition,
ii. Research design,
iii. Field work,
iv. Data analysis, and
(i) Problem Definition:
The first step in the conduct of research calls for a careful definition to the problem. If the problem is stated vaguely, if the wrong problem is defined, or if the user of the research are not made clear, then the research results may prove useless to the manager.
The poor definition of the problem is often the fault of the manager requesting the study. Thus a top administrator in the U.S. Postal System might ask the market research manager to research public attitudes toward the postal system. The marketing research manager has a fight to feel uneasy about the assignment. It is too general.
It is not clear how much interviewing should be done of home users and business users or what aspects of the postal system they should comment on. This kind of research is called exploratory research and is mostly warranted in situations where the organization’s ignorance of the market place is substantial.
Yet research is generally more efficient when the problem and the alternatives are well defined the cost of research is generally related to the total amount of information gathered, while the value of research is associated only with the proportion of information that is useful.
The problem definition stage should lead to the development of a clear set of research objectives, stated in writing if possible. The marketing research manager faces a choice among many alternative ways to collect the information that will satisfy the research objectives. The manager must decide on the data collection method, research instrument, and sampling plan.
(iii) Field Work:
After the research design has been completed, the research department must supervise, or subcontract, the task of collecting the data. This phase is generally the most expensive and the most liable to error.
Four Major Problems Arise:
(a) Interviewer bias – Interviewers are capable of introducing a variety of biases into the interviewing process, through the mere fact of their age, sex, manner, or intonation. In addition, there is the problem of conscious interviewer bias or dishonestly.
(b) Refusal to cooperate – After finding the designated individual at home, the interviewer must interest the person in cooperating.
(c) Respondent bias – The interviewer must encourage accurate and thoughtful answers.
(d) Not-at-homes – When no one is home, the interviewer must either call back later or substitute the household next door.
The fourth step in marketing research procedure is to extract meaningful information from the data, and there are four steps in this process. The first is to calculate relevant averages and measures of dispersion.
The second is to cross-tabulate the data to produce goodness- of-fit tests. The fourth is to apply multivariate statistical techniques to the data on the hope of discovering important relationships.
The most important multivariate techniques are described below:
(a) Multiple Regression Analysis:
Even marketing problem involves a set of variables. The marketing researcher is interested in one of these variables, such as sales, and seeks to understand the cause(s) of its variation over time and/or space. This variable is called the independent variables.
The researcher hypothesizes about other variables, called independent variables, whose variations over time or space might contribute to the variations in the dependent variable.
When one independent variable is involved, the statistical procedure is called simple regression; when two or more independent variables are involved, the procedure is called multiple regressions.
(b) Discriminant Analysis:
In many marketing situations the dependent variable is classificatory rather than numerical.
Consider the following situations:
An automobile company wants to explain brand preferences for Chevrolet versus Ford.
A detergent company wants to determine what consumer traits are associated with heavy, medium, and light usage of its brand.
A retailing chain wants to be able to discriminate between potentially successful and unsuccessful store sites.
In all these cases, two or more groups to which an entity (person or object) might belong are visualized. The challenge is to find discriminating variables that could be combined in a perceptive equation to produce better-than-chance assignment of the entities to the groups. The techniques for solving this problem are known as discriminant analysis.
(c) Factor Analysis:
One of the problems faced in many regression and discriminate analysis studies is multi collinearity high inter-correlation of the independent variables. The idea in multiple regressions is to use variables that are truly independent, both in the sense that they influence but are not influenced by the dependent variable and in the sense that each independent variable is independent of the others.
The simple correlation of efficient for all pairs of variables will reveal which variables are highly inter correlated, and the analyst has the option of dropping one from each pair. Another approach is to factor analyse the set of inter correlated variables in order to derive a smaller set of factors that are truly independent of each other.
Factor analysis is statistical procedure for trying to discover a few basic factors that may underlie and explain the inter-correlations among a larger number of variables. In the marketing area, factor analysis has been applied to determining the basic factors underlying attitudes toward air travel, alcoholic beverages, and the clustering of medical program types.
The last step is the preparation, presentation, and implementation of a report presenting the major findings and recommendations coming from the study. The report should begin with a short statement of the problem and the major findings.
This should be followed by an elaboration of the findings and technical appendices. The report should be discussed and decisions made on the basis of the findings.
Process of Marketing Research
Marketing research has three distinguished dimensions which are governed by the exploratory, descriptive and casual approaches. The exploratory studies are based on primary data pertaining to identified samples focusing on a set of objectives. Such studies are generally woven around hypotheses and attempts to generate new ideas to serve the objectives of the research.
The descriptive marketing research encompasses objectives to describe the magnitude and direction of a problem and brings out the output for a logical debate at the marketing managers’ floor. There are some studies which determine the cause and effect symbiosis. They may be defined as casual marketing research. The process of marketing research initiates at the task of setting objectives and terminates by presenting the findings to the sponsor concerned.
A research plan determining data sources, methodology, tools, sampling design and data collection methods needs to be formulated following the task of setting the objectives. The data collection process has to be initiated from primary or secondary or both sources administering a checklist and questionnaire. The data should then be subjected to an appropriate analysis in view of the set objectives and findings to be presented in a draft report.
The primary data is collected from the earmarked sample administering a questionnaire in person or through mail. However, it is found in many studies that mailing responses are often discouraging and do not exceed 20 per cent of the sample size. The secondary sources of data are identified as published statistics in internal reports, Government publications, periodicals, books and commercial sources like reports of chamber of commerce, trade association, etc., quoted data from earlier research work, etc.
The methodology of study comprises of identifying the data sources, research approaches, tools, sampling design and data collection methods. This part forms the principal component of a research plan.
An observation research approach is commonly used for formulating the descriptive marketing research plans. The focus-group and participatory approaches are useful exercises for exploratory marketing research having limitations of perspective results. However, the survey method is proved to be an effective research approach for exploratory studies for analysing the data using quantitative methods leading to distinguished analysis of factors and future projections.
The experimental research attempts on studying the impact on the control group through different applications of business models, checks, reformative goals and qualitative/quantitative analysis methods to draw results. This approach is identified as one of the scientific methods in relating research approach with the results.
However, a good marketing research needs to be characterised by the following qualities:
i. Scientific method.
ii. Originality and creativity.
iii. Potential to use multiple methods for cross-checking the emerging results.
iv. Interdependence on analytical models and data sets.
v. Cost of research.
A marketing research plan should comprise of these qualities for drawing effective results and preparing a useful document to be used for optimizing the business proposition in a given situation.
Process of Marketing Research – 5 Step Process: From Identifying the Problem to Preparation and Presentation of a Report
The basic steps of marketing research may be analyzed under the seven major heads –
1. Identifying the problem,
2. Situation analysis,
3. Preparation of the research design,
4. Collection and Analysis of data, and
5. Preparation and Presentation of a report with reference to the problem.
The first step in marketing research is identifying and understanding the marketing problem. It is the marketing researcher who generally identifies it. What is the problem? Whether the product is not liked by the customers? Is its price has been fixed too high? Whether there is something wrong with the channels of distribution? A disease cannot be cured unless it is properly diagnosed.
The problem is then set in the context of the overall situation prevailing in the firm. This involves getting a general idea about the firm’s position, its overall approach, its market, the nature of competition and so. A situation analysis is a necessary step in the marketing research process. Here the researcher seeks to obtain all the information he can regarding the problems of the company and the environment in which the analysis has to be made.
There are four elements of this step – (a) determining the information required (b) investigating and selecting sources of information (c) methodology of research and (d) sampling plan.
(a) Determining the Information Required:
The ultimate objective of research is to secure information. So the research design should begin with determining what type of information is needed. If the problem is to find out the markets for an existing product, it involves one type of research. On the other hand, if it is to ascertain the possible reactions of potential consumers about a new product, it will require different type of information.
(b) Investigating and Selecting Sources of Information:
Facts which constitute the raw material for the marketing researcher are derived from various sources.
Sources of data may be derived into two categories — primary sources and secondary sources. Primary sources consist of (i) company’s own records, (ii) consumers, (iii) buyers and (iv) dealers. Research might start with internal facts, i.e., —facts secured from company’s own records.
Consumers and buyers generally constitute the source of information in respect of most researchers. Dealers —both wholesalers and retailers — are an important source of marketing research information. Dealers are not the users but they can give valuable indications regarding the consumers.
Secondary sources are those sources from which data can be obtained externally. There are useful Government publications of both the Central and State Governments. In India, the important sources of secondary data include the Reserve Bank Bulletin; Report on Currency and Finance, India, a Reference Annual, Government of India, Tata yearbook and the Times of India Directory and yearbook and journals of associations of different industries.
(c) Methodology of Research:
There are three basic methods of research — Observation, Experiment and Survey.
The observation method involves recording events, observing the real situation how the customers behave, what commodities they buy most frequently and so on.
The experiment method involves the establishment of a trial situation which is something like a proto-type of the real situation. But it is artificially created and so managed that all relevant factors are kept in control except the one being studied. Thus the same product may be placed in three of four retail shops and its price varied in a planned way.
The volume of sales at each price level may be noted and studied in order to find out the price elasticity of demand for the product. Take another example, A person desiring to test whether a black and white or a coloured advertisement in a newspaper would be more effective may select three areas in one of which a black and white advertisement would be inserted, in second a coloured advertisement and in the third no advertisement. The sales produced would show the effectiveness of the two advertisements in two situations and no advertisement in the third situation.
The survey method involves talking directly to consumers. There are three types of surveys — Personal Interviews, Telephone and Mail. It is not possible to interview every customer of a product. So a sample is chosen out of a large number in order to get primary data.
The data collected needs interpretation and analysis. Raw data collected has to be transformed into information that is relevant to the research project. It is only when statistical conclusions are translated into specific recommendations useful for the company that statistical analysis becomes meaningful.
The information gathered through different methods should be translated into a form so that the marketing manager can understand it. The manager is not interested in the methodology followed or in the raw data rather he is interested in the results.
The report presented should be technically accurate and sufficiently indicative and it should be written in an understandable language. It should be neither too long nor too short. Generally a report should contain an outline of the issues involved, a summary of the data and findings and recommendations.
The follow-up action is necessary to judge the performance. This provides feedback information which is very helpful in guiding future research.
Marketing Research Process – Step by Step Process: Defining the Problem and Research Objectives, Developing the Research Plan and Few Others
Defining the problem and research objectives is often the hardest step in the research process. If the managers know only a little about marketing research, they may obtain the wrong information, accept wrong conclusions or ask for information that costs too much.
For example, managers of a large discount retail store chain hastily decided that falling sales were caused by poor advertising, and they ordered research to test the company’s advertising. When this research showed that current advertising was reaching the right people with the right message, the managers were puzzled. It turned out that the real problem was that the chain was not delivering the prices, products and services promised in the advertising. Careful problem definition would have avoided the cost of advertising research.
After the problem has been defined carefully, the manager and researcher must set the research objectives. The objectives of exploratory research are to gather preliminary information that will help define the problem and suggest hypothesis. The objective of descriptive research is to describe things such as – the market potential for a product or the demographics and attitudes of consumers who buy the product.
The objective of causal research is to test hypotheses about cause-and-effect relationships. For example, would a 10% decrease in tuition fee at a private college result in increase in enrollment sufficient to compensate the reduced tuition fee? Would a 10% decrease in price result in increase in sales to compensate the reduction in price?
Managers often start with exploratory research and follow with descriptive or casual research.
The second step of marketing research process calls for determining the information needed, and developing a plan for gathering it efficiently. The plan outlines the sources of existing data and spells out the scientific research approaches, contact methods, sampling plans and instruments that researchers will use to gather new data.
Determining Specific Information:
Research objectives must be translated into specific information needs. For example, let us suppose Campbell decides to conduct research on how consumers would react to the company replacing its familiar red and white soup can with new bowl-shaped plastic containers. The containers would cost more, but would allow consumers to heat the soup in a microwave oven and consume it without using cooking utensils?
The research might call for the following specific information:
i. The demographic, economic and lifestyle characteristics of people taking soups. (Busy working couples might find the convenience of the new packaging worth the price, families with children might want to pay less and use washable pan and bowls.)
ii. Consumer-usage patterns for soups, how much soup they would eat, where and when. (The new packaging might be ideal for adults eating lunch on the go but less convenient for parents those feeding lunch to several children.)
iii. Retailer reaction to the new packaging.
iv. Consumer attitudes towards the new packaging. (The red and white Campbell can have become an American institution. Will consumers accept the new packaging?)
v. Forecasts of sales of both new and current packages. (Will the new packaging increase Campbell’s profits?)
The researcher next puts the marketing research plan into action. Researchers must process and analyse the collected data to isolate important information and findings. They need to check data from questionnaires for accuracy and completeness and code it for computer analysis. The researchers then tabulate the results and compute averages and statistical measures.
Managers and researchers must work together closely when interpreting research results and both must share responsibility for the research process and resulting decisions.
Sometimes managers may need more help to apply the information to their marketing problems and decisions. Statistical analysis may be useful for the managers. Analytical model will help marketer to make better decisions.
Marketing scientists have developed numerous models that help marketing managers to make better marketing mix decisions, design sales territories, develop optimal advertising mixes and forecast new product sales.
The information gathered through marketing intelligence and marketing research must be distributed to the marketing managers at the right time. Most companies have centralized marketing information systems that provide managers with regular performance reports and intelligence updates. Managers need these routine- reports for making regular planning. But marketing managers may also need non-routine information for special situations and for the on-spot decisions.
For example, a sales manager having trouble with a large customer may want a summary of the account’s sales and profitability over the past year.
With recent advances in computer software, most companies have decentralized their marketing information systems. Many companies have direct access to the information network through personal computers and other means. Managers analyse the information using statistical packages and models, prepare reports using word processing and presentation software.
Process of Marketing Research – 6 Step Process: Formulating, Developing, Collecting Information, Processing and Reporting the Research Plans and Problems
Effective marketing research involves the six steps which are described below:
Step # 1. Formulating the Research Problem:
It is the first and the most important step in applied research. Poor defined research problems in applied research will not yield useful results, as it cause confusion and do not allow the researcher to develop a good research design. It is rightly said that “a problem well defined is half-solved”.
For identifying the research problem, symptomatic situations should be studied. There are three categories of symptomatic situations, namely, over difficulties, latent difficulties and unnoticed opportunities.
i. Overt difficulties are those which are quite apparent and which manifest themselves. For example, decline in sales experienced by the firm for sometime, is considered as the over difficulty as decrease in the sales figure can be assessed, and becomes quite apparent from the books of accounts of that firm.
ii. Latent difficulties are those which are not so apparent and which, if not checked, would soon become evident, and affect the organization’s performance adversely.
For example, although evident decline in sales from the books of accounts, but the reason behind these declining sales may by hidden, like demoralized sales staff, inefficiency of the dispatch department to meet the delivery dates of orders, or the mistakes on the part of the accountant in recording the transactions and receiving of the bills.
All these reasons for the decline in sales may surface after an investigation into an apparent overt difficulty.
iii. Unnoticed opportunities indicate the potential for growth in a certain area of marketing. The marketing environment is dynamic, offering diverse opportunities wrapped with varied intensity of the risk factors. Such opportunities are not clearly seen and some effort is required to explore them. Effective marketing environment scanning does benefit the firm, through marketing research.
There is no concise prescription for recognizing problems from the varied marketing situations. But, a person with an inquisitive nature and the necessary background would recognize a problem or an opportunity in less time.
After identifying various problems or opportunities, the researcher then has to identify the problems or opportunities that are to determine priorities in the light of their importance to the organization, as dealing with all the identified problems or opportunities at a particular time may not be possible on account of limited finances and time constraints.
The selection of the problem should justify the commitment of resources allocated for the research process by the researcher. Thus, the problem which gives the maximum net value of research should be selected.
Once the problem is selected, a good deal of care on the part of marketing researchers will be required to formulate research problem precisely. Formulation of the problem implies a clear statement or definition of the problem.
Step # 2. Developing the Research Plan:
Developing the research plan calls for decisions on the research design, data sources, research approaches, research instruments, sampling plan, and contact methods.
i. Research Design:
A good research design that answers the questions put earlier and which is appropriate in achieving the objectives of the study should be selected, as the extent to which the research projects are specific-detailed, varies from one research project to the other. Research design can be broadly exploratory, descriptive or causal.
a. Exploratory Research Design:
Exploratory research emphasize on the real nature of the problem. It suggests possible solutions or new ideas for the problem or opportunity emphasized in the research problem. An exploratory research focuses on the discovery of ideas and is generally based on secondary data.
It is generally a preliminary investigation without any rigid design as the researcher engaged in an exploratory study may have to change his focus according to the emergence and identification of new ideas and relationship among the variables.
b. Descriptive Research Design:
The objective of the descriptive type of research design is to ascertain magnitudes. Exploratory research design does not have any concrete structure, unlike descriptive research studies, which are well-structured. A descriptive study is undertaken when the researcher wants to know the characteristics of certain groups such as age, sex, educational level, income, occupation, etc.
c. Causal Research Design:
When the researcher is interested in knowing the cause and effect relationship between two or more variables, a causal research is undertaken. Thus, causal research studies are based on reasoning along well tested lines.
As there are several alternative methods for solving a particular problem, similarly, it should be noted that there is no one ‘best’ research design. It is through experience that one is able to select the most appropriate research design. The research, therefore, in the hunt for the ‘ideal’ research design, should not be delayed.
ii. Data Sources:
The researcher can gather secondary data, primary data, or both.
Secondary data are data that were collected for another purpose and already exists somewhere. Primary data is freshly gathered for a specific purpose or for a specific research project. Researchers usually start their investigation by examining secondary data to see whether the problem can be partly or wholly solved without collecting costly primary data.
Secondary data provides a starting point for research and offer the advantages low cost and ready availability. Primary data is collected when the needed data do not exist or is outdated, inaccurate, incomplete, or unreliable, the researcher will have to collect primary data. Some primary data collection is involved in most of the marketing research projects.
iii. Research Approaches:
Primary data can be collected in five ways- through observation, focus groups, surveys, behavioural data, and experiments.
(a) Observational Research:
This method suggests that data is collected through one’s observation. Fresh data can be gathered by observing the relevant factors and settings. If the researcher is keen observer with integrity he would be in a position to observe and record data faithfully and accurately.
The responses recorded through observation method are more accurate and realistic, providing more objective picture of the respondents’ observable (external/overt) behaviour.
For example, instead of asking respondents about their current behaviour, marketer/ researcher may observe it (respondents’ movements in the shop; the product display which made them to stop at; eye movements of the shoppers/respondents, etc.), and record the observations.
There are several methods of observation of which any one or a combination of some of them can be used by the observer. Thus, there are structured or unstructured methods, disguised or undisguised methods, or observations made in a natural setting or laboratory setting, direct-indirect observations, or human-mechanical observation.
While the observational method may be suitable in case of some studies, several things of interest such as attitudes, opinions, motivations and other intangible states of mind cannot be observed. Only the current behaviour of the person or group of persons can be observed, and that too becomes difficult when there is a large number of people are to be contacted.
Certain other difficulties that come in the way of accurate observation and cause it to become distorted are inadequacies of sense organs of an observer, interdependence of observation and inference and effects of interaction between the observer and the observed.
(b) Focus Group Research:
A focus group research is a gathering of six to ten people who are invited to spend few hours with a skilled moderator to discuss a product, service, organization or other marketing entity or with the objective of understanding group dynamics or the behaviour of the respondents (consumer/customer).
For this the moderator needs to be objective, knowledgeable on the issue, and skilled in group dynamics, to record the discussion through note taking or on audio or on videotape. Generalizations of the findings of the focus group respondents’ responses by the researcher should be avoided as it resembles very small non-random sampling size.
Participants are normally paid a small sum for attending. The meeting is typically held in pleasant surroundings and refreshments are served.
It is the method of assisting gathering more information about the particular product or services or marketing issues at the core, as it also yields insight into consumer perceptions, attitudes and satisfaction, enabling to accomplish the objectives of exploratory research design.
Consumer goods companies have been using focus-groups for many years, and an increasing number of newspapers, law firms, hospitals, and public-service organizations are discovering their value. With the development of the Web, many companies are now conducting online focus group research.
(c) Survey Research:
In marketing research, field surveys are commonly used to collect primary data from the respondents. Surveys are best suited for descriptive research. Companies undertake surveys to learn about people’s knowledge, beliefs, preferences, satisfaction, socio-economic characteristics, attitudes, opinions and to measure its magnitudes in the general population.
Marketers use survey method for gathering information for making various marketing decisions like planning for product features, message and media decisions for advertising, the preference of the customers/consumers to various sales promotion schemes, the channels of distribution frequently used by the target customers, etc.
Surveys can be personal, telephonic, by mail or by diary. Of these, personal and mail surveys are more frequently used in India. A choice has to be made regarding the type of survey for collecting data. In survey, questions are directly asked to the respondents by using a questionnaire. Information pertaining to, etc., can be gathered by this type of research method.
There are certain advantages and limitations of each type of survey method. Broadly speaking, telephonic survey is suitable when very limited information is to be sought in a short period of time. Moreover, such information should be readily available with the respondents. In contrast, surveys, based on personal interviews are suitable when detailed information is to be collected. Sometimes, a combination of two or more methods could also be used.
(d) Behavioural Data:
Customers leave traces of their purchasing behaviour in store scanning data, catalogue purchases and customer databases. Much can be learned by analyzing these data. Customers’ actual purchases reflect preferences and often are more reliable than statements they offer to market researchers. People may report preferences for popular brands, and yet the data show them actually buying other brands.
For example, grocery shopping data show that high-income people do not necessarily buy the more expensive brands, contrary to what they might state in the interviews; and many low-income people buy some expensive brands.
The most scientifically valid research is experimental research. The purpose of experimental research is to capture cause-and-effect relationships by eliminating competing explanations of the observed findings. To the extent that the design and executions of the experiment eliminate alternative hypotheses that might explain the results, research and marketing managers can have confidence in the conclusions.
It calls for selecting the matched groups of subjects, subjecting them to different treatments controlling extraneous variables and checking whether observed response differences are statistically significant. To the extent that extraneous factors are eliminated or controlled, the observed effects can be related to the variations in the treatments.
iv. Research Instruments:
Marketing researchers have a choice of three main research instruments in collecting primary data- questionnaires, psychological tools, and mechanical devices.
A questionnaire consists of a set of questions presented to respondents. Because of its flexibility, the questionnaire is by far the most common instrument used to collect primary data. Questionnaires need to be carefully developed, tested and debugged before they are administered on a larger-scale.
In preparing the questionnaire, the researcher carefully chooses the questions and their form, wording and sequence. The form of the question asked can influence the response. Marketing researchers distinguish between close-ended and open-ended questionnaire, as the form of the questionnaire also influences the response of the respondents.
Open-end questions allow respondents to answer in their own words, often revealing more about what people think, are useful in exploratory stage of research. These often reveal more because respondents are not restricted. While, the close-ended questions pre-specify all the possible answers, provide answers that are easier to interpret and tabulate after respondents have made a choice among them.
One can easily spot many errors in a casually prepared questionnaire. Due care should be taken while framing the questions, in terms of the selection of the simple, direct and unbiased words, appropriate fonts and colour of the wordings, headings and underlining, logical order of the questions, etc.
Therefore, it is necessary to design a suitable questionnaire, suiting the research approach, and conduct a pilot study as well as undertake a pretesting of the questionnaire. The pretesting will enable the researcher to realize the shortcomings of his questionnaire.
In the light of this ‘reaction’ of the respondents, coupled with the personal observation of the researcher, the questionnaire should be modified. The steps in the process of designing the questionnaire should be taken into consideration further, for the same.
(b) Psychological Tools:
Marketing researchers can probe a buyer’s deeper beliefs and feelings using psychological tools such as laddering techniques, depth interviews, and Rorshach tests. Depth interviewing involves going deeply into the thoughts that an individual may have about a product or services.
The late Ernest Dischet was a master of depth interviewing and came out with many surprising findings. Zaltman introduced a psychological instrument called the Zaltman Metaphoric Elicitation Technique (ZMET), which uses metaphors to access nonverbal images. This techniques gets an association that are less likely to emerge during normal interviewing.
(c) Mechanical Devices:
Mechanical devices are occasionally used in the marketing research. Some of such mechanical devices and their use in the marketing research are outlined. Galvanometers measure the interest or emotions aroused by exposures to a specific ad or picture. The tachistoscope flashes an ad to a respondent with an exposure interval that may range, from less than one hundredth of a second to several seconds.
After each exposure, the respondent describes everything he or she recalls. Eye cameras study respondents’ eye movements to see where their eye land first, how long they linger on a given item, and so on. An audiometer is attached to television sets in participating homes to record when the set is on and to which channel it is tuned.
(d) Qualitative Instruments:
Some marketers prefer more qualitative methods for gauging consumer opinion because consumer actions do not always match their answers to survey questions. New tools such as videos, pagers, and informal interviewing will help marketers overcome the limitations of traditional research methods.
In addition to the new qualitative research tools, marketers have developed the methodologies to help them understand the target consumers. Two of these are Prototype and Articulate interviewing. Customer prototyping attempts to paint a realistic portrait of an individual describing a specifying customer type (for example- ideal customer or “non-user”) in qualitative terms.
To arrive at prototype, marketers strive to answers questions such as “What is important to this person”? and “How this person does wants other persons to view him or her”? The process is repeated until the prototypes begin to overlap. The areas of overlap describe the marketers’ target customers.
Articulate interviewing is designed to determine what social values interviewees hold dear by having them talk about broad topics such as their various roles in life and their daily activities. This broad format enables the marketers to draw out relevant information; the interviewee is likely to reveal valuable information regarding core beliefs and other social factor that many influence product decisions.
v. Sampling Plan:
After designing on the research plan, marketing researcher must design a sampling plan.
Sampling plan involves decisions on Sampling Unit, Sampling Size and Sampling Procedure.
(a) Sampling Unit:
Who is to be surveyed? The answer to this question refers to the decisions on the sampling unit. For this, the marketing researcher must define the target population that will be sampled, so that the information collected is relevant. In other words, it should be collected from those units who are most likely to have information.
Once the sampling unit is determined, a sampling frame is developed, so that everyone in the target population has an equal or known chance of being sampled.
(b) Sampling Size:
How many people should be surveyed? Undoubtedly, large sample gives more reliable results as compared to the small samples. The cost of collecting the data and the reliability of information gathered thereby, through large number of samples and that through small numbers of sampling units should be considered, while taking decisions on the sampling size.
However, it is not necessary to sample the entire target population or even a substantial portion to achieve reliable results. Samples of less than one per cent of a population can often provide good reliability, with a credible sampling method.
(c) Sampling Procedure:
How should the respondents be chosen? There are two methods of the sampling, Probability Sampling and Non-probability Sampling method. To obtain a representative sample, a probability sample of the population should be drawn. Probability sampling allows the calculation of confidence limits form sampling error. When the cost or time involved in the probability sampling is too high, marketing researchers will take non-probability samples.
vi. Contact Methods:
Once the sampling has been determined, the marketing researcher must decide how the subject should be contacted.
The contact methods are discussed below:
(a) Mail Questionnaire:
It is the best way to reach people who would not give personal interviews or whose responses might be biased or distorted by the interviewers. Mail questionnaires require simple and clearly worded questions. Unfortunately, the response rate is usually low or slow.
(b) Telephone Interviewing:
It is the best method for gathering information quickly; the interviewer is also able to clarify questions if respondents do not understand them. The response rate is-typically higher than in the case of mailed questionnaires. The main drawback is that the interviews have to be short and not too personal. Telephone interviewing is getting more difficult because of answering machine and people becoming suspicious of telemarketing.
(c) Personal Interviewing:
It is the most versatile method. The interviewer can ask more questions and record additional observations about the respondent, such as dress and body language. Braind Wansink has developed a customer profiling technique based on personal interviews that generation interesting hypotheses which can be further tested or used in communication strategy.
At the same time, personal interviewing is the most expensive method and requires more administrative planning and supervision than the other three. It is also subject to interviewer bias or distortion.
Personal interviewing takes two forms. In arranged interviews, respondents are contacted for an appointment and often a small payment or incentive is offered. Intercept interviews involve stopping people at a shopping mall or busy street corner and requesting an interview. Intercept interviews have the drawback of being non-probability samples, and the interviewing must not require too much time.
(d) Online Methods:
There is increased use on online methods. Online product testing is expected to grow and provide information faster than traditional marketing research techniques. A company can include a questionnaire on its website and offer an incentive to answer the questionnaire; or it can place a banner on some frequently visited site such as Yahoo!, inviting people to answer some questions and possibly win a prize.
The company can enter a target chat room and seek volunteers for a survey, or sponsor a chat room and introduce questions from time-to-time.
A company can learn about individuals who visit its site by following how they click stream through the website and move to other sites. Computers contain cookies that capture this data. By analyzing the click stream of different visitors, the company can make inferences about consumer behaviour.
A company can post different prices, use different headlines, offer different product features on different websites or at different times to learn the relative effectiveness of its offerings.
Not everyone is on the web however, and online market researchers must find creative ways to reach certain population segments. One option is to combine offline sources with online findings. Providing temporary internet access at locations such as malls and recreation centres is another strategy. Some research firms use statistical models to fill in the gaps in market research left by offline consumer segments.
Many companies are now using automated telephone surveys to solicit market research information. One popular approach is to distribute prepaid phone cards as an incentive. A survey is programmed into an interactive call system that not only administers the survey, but also sorts the result vitality in any way the client wants them.
When the call users place their free calls, a voice prompt asks them if they would like to gain additional minutes by taking a short survey. Coca-Cola is one of the companies that have used prepaid phone cards to survey their customers.
Step # 3. Collect the Information (Field Work):
After the research design is determined the next step is the actual data collection. The job of data collection may be done by the research department of the company, or may be subcontracted. The data collection phase of marketing research is generally the most expensive and the most prone to error.
In the case of surveys, four major problems arise which are outlined below:
While data collection, many times it happens that the respondent is not available at home. In such situations, the interviewer must either call back later in case of telephonic interviews or confirm for personal interviews the presence of the respondent at their residence, or otherwise will have to collect the same information from some other respondent.
2. Refusal to Cooperate:
One of the other data collection problems is the refusal of the respondent to cooperate the interviewer, by providing the responses to the questionnaire.
The interviewer must develop the skills of motivating the respondents to cooperate and provide the necessary information, generally by disentangling the confusion and hesitation restricting them to respond to provide necessary information.
3. Respondent Bias:
Moreover, the interviewer must also encourage the respondent to provide accurate and meaningful information, which is free from bias, serving the actual purpose of the research. The inaccurate information and biased responses will affect the findings and interpretations of the data, thus collected.
4. Interviewer Bias:
Many a times, it also happens that an interviewer introduces a variety of biases because of their age, sex, experiences, beliefs, perceptions, etc., interfering intentionally or unintentionally in the data collection procedure. An interviewer or the data collector has to be very careful in these contexts, and thus assure the recording of the accurate and to the point responses of the respondents.
The modern economy and digitalized world, has introduced the rapid improvements in the telecommunications sectors, enabling the professional interviewers to collect the data from the centralized location, by asking questions, reading from the monitor, sitting in the booths formed for this purpose.
The respondents’ responses are typed in the computer by the interviewer, eliminating the procedure of editing and coding, along with the reduction in time and errors, and get the required statistics. Other research firms have set up interactive terminals in shopping centres.
Persons willing to be interviewed sit at a terminal, read the questions from the monitor, and type in their answers. Most respondents enjoy this form of “robot” interviewing. Several recent technical advances have permitted marketers to research the sales impact of ads and sales promotion.
The next step after data collection is to aggregate the data in meaningful manner, i.e., by data processing and analysis. Data analysis refers to the process of analyzing the collected data to derive some meaningful information. Data analysis includes consolidation, classification, tabulation and analysis of the data.
The researcher should have a well thought out framework for processing and analyzing data, and this should be done prior to the collection. In order to bring out the main characteristics of the data, number of tables are prepared. It is advisable to prepare dummy tables, as such an exercise would indicate the nature and extent of tabulation as also the comparisons of data that can be undertaken.
One or more of the following four steps are used by the researcher in order to derive meaningful results from the statistical tables-
The first step is to tabulate the data and one-way and two-way frequency distributions.
The second step is to calculate relevant measures of central tendency as also of dispersion, highlighting the major aspects of the data.
The third step is to cross tabulate the data to ascertain some ‘useful relationships’.
The fourth step is to calculate the correlation coefficient and undertake a regression analysis between variables.
The fifth step is to undertake a multivariate analysis. Such an analysis is used to determine important relationships amongst several variables by using variety of techniques.
Thus, adequate thought should be given to the use of particular analytical techniques, while designing a research study. With the emergence of the computer and information technology, many such analytical techniques have proliferated. The researcher now has access to an increasing assortment of techniques and it is desirable to know well in advance as to what analytical techniques are going to be used, so that the data can be collected accordingly.
The researcher should essentially give as much importance to the analysis and interpretation of data as given to the collection of the data, or else the data may be rendered useless resulting in a waste of time and money.
The next step after the data analysis is the presentation of the research findings that are relevant to the major marketing decisions faced by the management. Once the data have been tabulated, interpreted and analyzed, the marketing researcher is required to prepare his report embodying the findings of the research study and his recommendations and presentation of the relevant research findings.
As a poor report on an otherwise good research will considerably undermine its utility, it is necessary that the researcher gives sufficient thought and care to its preparation.
Although report writing needs some skill which can be developed with practise, the researcher should follow the main principles of writing a report. Some of these principles are objectivity, coherence, clarity in the presentation of ideas and use of charts and diagrams. The essence of a good research report is that it effectively communicates its research findings.
As management is generally not interested in details of the research design and statistical findings, the research report should not be loaded with such details, otherwise, there is a strong likelihood of its remaining unattended on the manager’s desk. In view of this, the researcher has to exercise extra care to make the report a useful and a worthwhile document for the management.
Sometimes, a detailed marketing research study show one or more areas where further investigation is needed. Since research on those areas or aspects could not have been fitted into the original project, a separate follow-up study has attempted.
The researcher has to make constant follow-up to see that the relevant findings and suggestions of the research conducted has been implemented by the managers or not. The managers who commissioned the research need to weigh the evidence. They know that the findings could suffer from a variety of errors.
The marketing managers, when satisfied about the results and the alternative actions thereby provided in the research reports, in accordance to the time, element and other resources, will make necessary arrangements for its execution after approval of the same.