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16/06/2015 04:40:20 PM

Marketing Research Process

1. Define the Problem

The decision problem faced by management must be translated into a marketing research problem in the form of questions that define the information that is required to make the decision and how this information can be obtained. Thus, the decision problem is translated into a research problem. For example, a decision problem may be whether to launch a new product. The corresponding research problem might be to assess whether the market would accept the new product.

The objective of the researchshould be defined clearly. To ensure that the true decision problem is addressed, it is useful for the researcher to outline possible scenarios of the research results and then for the decision maker to formulate plans of action under each scenario. The use of such scenarios can ensure that the purpose of the research is agreed upon before it commences.

Three Main Types of Marketing Research

Marketing research can be classified in one of three categories:

·      Exploratory research

·      Descriptive research

·      Causal research

These classifications are made according to the objective of the research. In some cases the research will fall into one of these categories, but in other cases different phases of the same research project will fall into different categories.

Exploratory researchhas the goal of formulating problems more precisely, clarifying concepts, gathering explanations, gaining insight, eliminating impractical ideas, and forming hypotheses. Exploratory research can be performed using a literature search, surveying certain people about their experiences, focus groups, and case studies. When surveying people, exploratory research studies would not try to acquire a representative sample, but rather, seek to interview those who are knowledgeable and who might be able to provide insight concerning the relationship among variables. Case studies can include contrasting situations or benchmarking against an organization known for its excellence. Exploratory research may develop hypotheses, but it does not seek to test them. Exploratory research is characterized by its flexibility.

Descriptive researchis more rigid than exploratory research and seeks to describe users of a product, determine the proportion of the population that uses a product, or predict future demand for a product. As opposed to exploratory research, descriptive research should define questions, people surveyed, and the method of analysis prior to beginning data collection. In other words, the who, what, where, when, why, and how aspects of the research should be defined. Such preparation allows one the opportunity to make any required changes before the costly process of data collection has begun.

Causal researchseeks to find cause and affect relationships between variables. It accomplishes this goal through laboratory and field experiments.

Measures of success. Measures of success are criteria or standards used in evaluating proposed solutions to the problem. One test of whether marketing research should be undertaken is if different outcomes will lead to different marketing actions.

2. Develop the Research Plan

Specifying constraints. Constraints are restrictions placed on potential solutions by the nature and importance of the problem. Common constraints are time and money limitations. There is also the human constraint of "tunnel vision," not being able to open up your mind enough to find creative alternatives.

Determine how to collect data. Three kinds of relevant information are used by marketing researchers: concepts and methods.

A. Concepts. concepts are ideas or hypotheses that pertain to the problem.

- One valuable type of concept is a hypothesis, or a conjecture about the relationship of two or more factors or about what might happen in the future.

- Another is a new product concept, which is a tentative description of a product or service a firm might offer for sale.

B. Methods. Methods are approaches that can be used to solve part or all of a problem.

- Sampling. Sampling is selecting representative elements from a population -- such as a group of distributors, customers, or prospects. Probability sampling involves using precise rules to select the sample such that each element of the population has a specific known chance of being selected. Non-probability sampling uses arbitrary judgments to select the sample so that the chance of selecting a particular element may be unknown or zero.

- Statistical Inference. Statistical inference involves drawing conclusions about a population (the "universe" of all people, stores, on salespeople about which they wish to generalize) from a sample (some elements of the universe) taken from that population. The sample elements should be representative of the entire universe.

3. Collecting Relevant Information

A. Secondary data. Data are the facts and figures pertinent to a problem. Secondary Data are those facts and figures which have already been recorded before the project at hand. In contrast, primary data are those facts and figures which are newly collected for the project.

- Internal secondary data have already been collected and exist inside the business firm or other organization.

- External secondary data are published facts and figures from outside the firm such as U.S. census reports.

- Advantages and disadvantages of secondary data - a general rule: always use secondary data first and then collect primary data.

a. Advantages of secondary data

(1) time savings

(2) low cost

b. Disadvantages of secondary data

(1) may be obsolete or out of date

(2) definitions and categories may not be appropriate

(3) data may not be specific enough

B. Primary data. As mentioned above, primary data are facts and figures which are newly collected for the project. The two ways to collect primary data are by observing and asking questions, but there are variations for each method.

1. Observational data are facts and figures obtained by watching, either mechanically or in person, how people actually behave.

2. Questionnaire data are facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors. It is essential that the researcher concentrate on those questions directly related to the marketing problem at hand, or the questionnaires can get too long and antagonize respondents.

a. Many marketing researchers separate collecting questionnaire data into two stages:

(1) Hypothesis generation to uncover hypotheses that can be evaluated in later research. Common methods for this include:

(a) individual interviews that involve a single interviewer asking questions of one respondent.

(b) focus groups that involve 6 to 10 respondents who are directed by a discussion leader (often called a "moderator") to discover what they do and don't like about a firm's products and those of its competitors.

(2) Hypothesis evaluation involves testing hypotheses discovered in the hypothesis generation stage to recommend specific marketing actions. This usually involves large samples using one of three techniques for collecting the data:

(a) mail surveys

(b) telephone interviews

(c) personal interviews

b. Phrasing a question properly is critical to get useful marketing research information.

c. A number of alternatives exist for asking questions. These include:

(1) open-end questions a respondent can answer in his or her own words

(2) closed-end or fixed alternative questions for which respondent just checks an answer. Several variations of these exist:

(a) dichotomous question in which respondent just checks "yes" or "no"

(b) scale, a fixed alternative question with three or more choices such as:

i. Semantic differential scale, a seven-point scale in which opposite ends have opposite meanings

ii. Likert scale, in which respondent is asked to indicate extent he or she agrees or disagree with the statement

3. Panels and Experiments. Two special ways that observations and questionnaires are sometimes used are panels and experiments. A Panel is a sample of consumers or stores from which researchers take a series of measurements. An Experiment involves obtaining data by manipulating factors under tightly controlled conditions to test cause and effect.

(1) An independent variable in an experiment is a causal variable that can affect the result being studied. There are 2 main kinds:

a. An experimental independent variable is the causal condition manipulated or controlled by the experimenter. In marketing these are likely to be a marketing mix factor.

b. An extraneous independent variable is the causal condition that is the result of outside factors that the experimenter cannot control. These may also affect the behavior of what is studied.

(2) The dependent variable in an experiment is the effect variable--the change in behavior of what is studied. In marketing this variable is likely to be a change in sales, profits, or awareness.

4. Advantages and disadvantages of primary data

a. Advantages of primary data - more timely and specific than secondary data

b. Disadvantages of primary data - more costly and time consuming to collect than secondary data

5. Ethical aspects of collecting questionnaire data - Several possible abuses exist:

a. Pretending to be collecting marketing research data when the real objective is to start a sales presentation.

b. Covering up a bad sample that has too many nonrespondents

c. Reporting only part of the data so the client will be pleased with the results.

4. Develop Findings

Findings should be clear and understandable from the way the data are presented. Managers are responsible for actions. Often it means delivering the results in clear pictures and, if possible, in a single page.

5. Take Marketing Actions

Actions are the whole point of the research: You have to know what’s going on in the market. If you find that there is a problem, you have to take steps to fix it. Evaluation is an ongoing process. There are really two aspects of this evaluation process:

·      Evaluate the decision itself: This involves monitoring the marketplace to determine if action is necessary in the future.

·      Evaluate the decision process used: This involves keeping vigilant for other news from the marketplace that corroborates or refutes the analysis.

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