Marketing Research: Definition, Objectives and Types

Introduction

The subject of marketing research is the result of consumer oriented marketing. Today, it has become necessary to study systematically the different aspects relating to marketing process with regard to fulfilling the expectations and needs of the consumer by the right thing (product), at the right time and at the right place. In the simple words, marketing research is concerned with all those factors, which have a direct impact upon the marketing of products and services. It links the organisation with its marketing environment. It involves gathering, analysing, processing and interpreting the information to help the management to understand the environment, identify problem(s) and opportunities and develop the courses of action to achieve the marketing objectives. Marketing research is directly interested in offering sound alternative solutions to all marketing problems relating to exchange of goods and services from marketer to buyer.

Definitions of marketing research

“Marketing research is the systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in. the marketing of goods and services.” -Philip Kotler

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“Marketing research is the systematic gathering, recording and analysis of the data about marketing problem towards the end of providing information useful in marketing decision making” -Cundiff and still

Objectives/need of marketing research

According to Still and Cundiff, marketing research is needed the following circumstances:

1. Knowing the consumer’s taste for the new products.
2. Accelerating the demand of the present product and finding out the reasons of lesser sales.
3. Finding out the public interest, habits and changes in them.
4. Finding out the quantum of sales, trends and reasons for them.
5. Knowing about the pricing policy.
6. Finding out the effect of packaging on the psychology of the customers.

Scope of marketing research

Marketing research can be successfully applied to do the research under the following areas:

1. Analysis of the market size according to age, sex, income, and standard of living of the customers.
2. To know about prospective customers.
3. To get a knowledge of competitors’ share in the market.
4. Estimating the territorial demand of different markets.
5. Studying the market changes and market conditions affecting the market changes.
6. Knowing about the profitability of different markets and the market segments.
7. Analysing the working of various channels of distribution.
8. To know all about competitors and their products.

Importance/Benefits 0f Marketing Research

P. White has pointed out the following benefits of marketing research:

1. Marketing conditions and their potential may be known through marketing research.
2. Information about customers is obtained.
3. Test and improvement of present selling activities is possible through data collection.
4. Sales territories can be distributed more efficiently after conducting marketing research which gives the potential of each territory.
5. Determination of sales quota is possible.
6. Study of old commercial policies and test of new policies may be conducted easily.
7. Efficiency of promotion can be determined by the promotional analysis.
8. Power and weaknesses of competitors may be studied and fair policies may be determined.
9. Knowledge of this fact may be obtained by customers like one product in comparison to others.
10. Knowledge about habits of customers and retailers may be obtained.

Types of marketing research

1. Exploratory Research

As the name implies, the objective of exploratory research is to explore or search through a problem to provide insights and understanding. Exploratory research could be used for any of the following purposes:

1. Formulate a problem or define a problem more precisely.
2. Identify alternative courses of action.
3. Develop hypotheses
4. Isolate key variables and relationships for further examination.
5. Gain insights for developing an approach to the problem.
6. Establish priorities for further research.

In general, exploratory research is meaningful in any situation where the researcher does not have enough understanding to proceed with the research project. Exploratory research is characterized by flexibility and versatility with respect to the methods because formal research protocols and procedures are not employed. It rarely involves structured questionnaires, large samples, and probability sampling plans. Rather, researchers are alert to new ideas and insights as they proceed. Once a new idea or insight is discovered, they may redirect their exploration in that direction. That new direction is pursued until its possibilities are exhausted or another direction is found. For this reason, the focus of the investigation may shift constantly as new insights are discovered. Thus, the creativity and ingenuity of the researcher play a major role in exploratory research.

Further, the researcher are not the sole determinants of good exploratory research. Exploratory research can greatly benefit from use of the following methods

• a) Survey of experts
• b) Pilot surveys
• c) Case studies secondary data analysed in a qualitative way
• d) Qualitative research

2. Descriptive Research

As the name implies, the major objective of descriptive research is to describe something Usually market characteristics or functions. Descriptive research is conducted for the following reasons:

1. To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas.
2. To estimate the percentage of units in a specified population exhibiting a certain behaviour. For example, we might be interested in estimating the percentage of heavy users of prestigious department stores who also patronize discount department stores.
3. To determine the perceptions of product characteristics. For example, how do households perceive the various department stores in terms of salient factors of the choice criteria?
4. To determine the degree to which marketing variables are associated. For example, to what extent is shopping at department stores related to eating out?
5. To make specific predictions

3. Causal Research

Causal research is used to obtain evidence of cause-and-effect (causal). Marketing managers continually make decisions based on assumed causal relationships. These assumptions may not be justifiable, and the validity of the causal relationships should be examined via formal research. For example, the common assumption that a decrease in price will lead to increased sales and market share does not hold in certain competitive environments. Causal research is appropriate for the following purposes:

1. To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon
2. To determine the nature of the relationship between the causal variables and the effect to be predicted

Like descriptive research, causal research requires a planned and structured design. Although descriptive research can determine the degree of association between variables, it is not appropriate for examining causal relationships. Such an examination requires a causal design, in which the causal or independent variables are manipulated in a relatively controlled environment. A relatively controlled environment is one in which the other variables that may affect the dependent variable are controlled or checked as much as possible. The effect of this manipulation on one or more dependent variables is then measured to infer causality. The main method of causal research is experimentation.

As for example, In the context of the department store patronage project, a researcher wishes to determine whether the presence and helpfulness of salespeople (causal variable) will influence the sales of housewares (effect variable). A causal design could be formulated in which two groups of otherwise comparable housewares departments of a particular chain are selected. For four weeks, trained salespeople are stationed in one group of housewares departments but not in the other. Sales are monitored for both groups, while controlling for other variables. A comparison of sales for the two groups will reveal the effect of salespeople on housewares sales in department stores. Alternatively, instead of selecting two groups of stores, the researcher could select only one set of department stores and carry out this manipulation for two comparable time periods. Salespeople are present in one-time period and absent in the other.

Relationships among exploratory, descriptive, and causal research

Descriptive, and causal research are major classifications of research designs, but the distinctions among these classifications are not absolute. A given marketing research project may involve more than one type of research design and thus serve several purposes. Which combination of research designs should be employed depends on the nature of the problem. Here are the following general guidelines for choosing research types:

1. When little is known about the problem situation, it is desirable to begin with exploratory research. Exploratory research is appropriate when the problem needs to be defined more precisely, alternative courses of action identified, research questions or hypotheses developed, and key variables isolated and classified as dependent or independent.
2. Exploratory research is the initial step in the overall research design framework. It should, in most instances, be followed by descriptive or causal research. For example, hypotheses developed via exploratory research should be statistically tested using descriptive or causal research.
3. It is not necessary to begin every research design with exploratory research. It depends upon the precision with which the problem has been defined and the researcher’s degree of certainty about the approach to the problem. A research design could well begin with descriptive or causal.
4. Although exploratory research is generally the initial step, it need not be. Exploratory research may follow descriptive or causal research.

Role of marketing research

Marketing research and its role can be discussed under the following heads

I. Manufacturers and Marketing Research:

Every agile manufacturer is expected to design the most matching policies and marketing strategies. A policy is the guiding principle established by the firm to govern the actions usually under repetitive conditions.

Strategy, on the other hand, is a kind of plan formulated basically to meet the challenges of special circumstances. It is a counter plan to kill the plans of competitors.

II. Distributors and Marketing Research:

Though production has the pride of place in any economic system, distribution becomes still more important because, production has no meaning unless it is made to absorb by markets through marketing efforts.

III. Advertising Agencies and Marketing Research:

Advertising agency does the work of planning and placing of ads created, copy-testing, media selection, assessment of ad effectiveness and so on. They do render a valuable service like consultation, research, planning of incentive campaign plans for salesmen and dealers, merchandising and the like. As marketing research is one of the major services rendered by advertising agencies, each such agency has an independent marketing department.

IV. Government and the Marketing Research:

Today’s states are no more ‘police’ states but ‘welfare’ states. That is why; modern governments have turned commercial to prove their worth in protecting the legitimate interests of consumers at large.

Marketing research process

Marketing research process involves the following steps:

• STEP 1: DEFINING THE PROBLEM AND SETTING THE OBJECTIVE
• STEP 2: CONDUCTING SITUATION ANALYSIS
• STEP 3: CONDUCTING AN INFORMAL INVESTIGATION
• STEP 4: PLANNING AND CONDUCTING A FORMAL INVESTIGATION
• STEP 5: ANALYSING AND INTERPRETING DATA
• STEP 6: PREPARING A WRITTEN REPORT

STEP-I-Defining the problem and setting the objectives:

The precise definition of the problem helps in determining the techniques to be used, the extent of information to be collected. It is said that a problem well defined is half solved. If the problem is clearly defined, it will help the researcher to handle the problem effectively. After defining the basic problem, the researcher must specify the objectives of the study. It is essential for the researcher to have a clear picture of the purpose of the research, because this will guide the rest of the research process.

STEP-II-Conducting situation analysis:

Situation analysis means collecting information about the business. The researcher tries to make himself familiar with the situation surrounding the problem, business environment, its market, its competitor(s) and industry in general.

STEP-III-Conducting an informal investigation:

After obtaining the information about the business environment, the researcher must conduct an informal investigation (investigation with people outside. The researcher may talk to outside people like wholesaler, competitors, advertising agencies, consumers etc. This step will determine whether a detailed study is necessary and feasible or not.

STEP-IV-Planning and conducting a formal investigation:

If the informal investigation shows that the detailed enquiry is necessary, then the researcher plans the enquiry i.e., to decide where and how to obtain desired information. The planning of enquiry includes the following steps:

• (a) Selecting the sources of information.
• (b) Deciding methods of data collection.
• (c) Preparing frames and forms.
• (d) Pre-testing the forms
• (e) Planning the sample
• (f)Collecting the data

STEP-V-Analysing and interpreting data:

Data are analyse to draw conclusion in the light of which policies can be framed. The various statistical techniques are being used. The analysis of data enables the researcher to interpret the data and draw conclusion and to make recommendations. The real value of research lies in giving specific recommendations to the company.

STEP-VI-Preparing a written report:

The last step is making the written report clearly presented and highlighting the findings. The presentation should be such that the decision maker should be able to take decisions effectively after going through the findings and recommendations.

Conclusion

Marketing Research also known as Market Research is a field of study mainly concerned with the identification and study of markets. But in deeper sense it indeed has a wider implication. The main objective of marketing research is to increase the efficiency and effectiveness of marketing activities. A well carried out marketing research contributes to the prosperity of the enterprise at the micro as well as on the macro level. Each and every stakeholder in business be it the producers, distributors and advertisers derives benefits from marketing research.