Welcome to Powerpoint slides for

Chapter 3

Research Methods and Design: Additional Inputs

Marketing Research Text and Cases by Rajendra Nargundkar

Slide 1

Sources of Secondary Data

There are two major sources of secondary data .Internal .External Internal records in the company comprise information about the product being researched, its history, company background and history, market share, and competitor information. These types of information are usually maintained by the marketing department, sales department, or a corporate cell for marketing intelligence in the company. External information sources include syndicated reports such as retail sales data, or market share data, or industry analyses. Some of this information may be available from public sources such as business newspapers , magazines, industry associations or trade bodies, or the net. A prominent source of data on Indian industry is the CMIE or Centre for Monitoring Indian Economy, which publishes monthly reports on various aspects of the Indian economy and industry. The Hindu, a prominent daily newspaper, publishes an annual Survey of Indian Industry, which is a low-priced and useful compilation which deals with industrial goods, infrastucture and core industries, consumer durables growth prospects and past performance.

Slide 2 Syndicated research studies such as the NRS (National Readership Survey) or IRS (Indian Readership Survey) are rich sources of data available to any subscriber or buyer. These studies cover a large national sample, and measure the readership of newspapers and magazines in great detail. They also cover demographics and consumption patterns of household consumer goods. The Audit Bureau of Circulation (ABC) is an autonomous body which certifies the circulation of newspapers and magazines. The Indian Newspapers Society (INS) also publishes a handbook every year with circulation, readership and advertisement tariffs for various print media in the country. There are several computer-based data sources which provide on a sale and subscription basis, updated information on financial and sales data on all publicly listed companies. Now, some of this data is available on the internet, particularly industry analyses.

Slide 3 Creating a Mechanism for Gathering Secondary Data The most useful way to gather relevant secondary data on a given industry is to have a cell within the company to monitor and keep cuttings from business magazines such as Advertising and Marketing, Business India, Business Today and Business World. This can be supplemented by newspaper reports from The Economic Times, Business Line or other business dailies. Over a period of a few years, this method ensures that we can easily look back and get a perspective on our brands, industry, competitors etc. This also creates reference material for new employees or trainees who are hired to do their internship or summer projects in the company. It is now possible to keep electronic clippings from the websites of many of these newspapers and magazines. The marketing research agency can also use this gathered material as background information, and quickly launch into designing and conducting the primary research based on what is known.

Slide 4

Disadvantages of Secondary Data

Having looked at its advantages, it is also necessary to keep in mind some disadvantages of secondary data. .It may be outdated. We may have cuttings which are 2 years old, about consumer preferences, and these may have changed over time. .It may be done for a different purpose and therefore be slanted or biased. It is important to note who has collected the data, and for what purpose, before making a judgement on its usefulness. .The sample or the methodology may be different from, or unrepresentative of, the target population we are studying. For example, the earlier study may have studied only teenagers, whereas we are looking at all adults and teenagers. .The units of data aggregation may be different from what we need. For example, we may want to know reactions from different sexes (male and female separately), and these may not be reported separately. Or, only regionwise data may be reported, not centre-wise or citywise. Or, the way income groups are formed may be different from what we want to study.

Slide 5 In spite of some obvious limitations, many types of secondary data serve the useful purposes of Better prepared primary researchers Serving as a cross check for other secondary data Provoking thinking about methodology and its impact on results of research Used judiciously, secondary research is an appropriate starting point for any marketing research project, mainly because it is much less expensive than primary research. In the age of the internet, it is worthwhile to at least download and look at what is available on the product and industry, before venturing out into the field for doing primary research.

Slide 6

Exploratory Research
Exploratory research usually does not directly lead to marketing decisions being made. Conclusive research does lead to major marketing decisions being taken. Exploratory research may be undertaken for knowing a little more about the problem, or the consumer, or the way questions should be formulated, which factors should be included in the study, or in general, to help design a follow-up conclusive research study. As the name indicates, a study which seeks to explore any of these subjects is called an Exploratory Study.

An exploratory study may not use as rigorous a methodology as is used in conclusive studies, and sample sizes may be smaller.
One of the reasons for conducting an exploratory study is that we do not know enough to even formulate a conclusive study. But if a study is designated as exploratory and treated as such, it must be followed up by another one before any major conclusions or inferences can be drawn. There is no separate methodology for doing exploratory studies. The same process and methodologies that are available for regular research are also used in exploratory studies.

Slide 7

Conclusive Research

Conclusive research, as the name indicates, seeks to draw conclusions about effects of marketing or consumer variables on other variables like sales or consumer preferences. This is usually done through a proper research methodology, rigorously designed sampling plans and field work, and appropriate analytical techniques. Conclusive research may follow exploratory research in cases where the area of investigation is new. If the field of investigation is not new, it may be a routine activity, repeated every year or half-year or quarter, as per the need. Conclusive research is more likely to use statistical tests, advanced analytical techniques, and larger sample sizes, compared with exploratory studies. Conclusive research is also more likely to use quantitative, rather than qualitative techniques. This does not mean that quantitative techniques are necessarily better, but it is a fact they are more easily understood by the sponsors of most marketing research.

Slide 8 Major Qualitative Research Techniques

In addition to the well-known quantitative techniques such as the survey, many qualitative techniques are used for various purposes by marketing researchers. We will look at three of them in some detail. These are .Depth Interview .Focus Group .Projective Techniques

Slide 9

Depth Interview

This is an unstructured and longish interview on the given subject. Most questions are open-ended, and ask for opinions, anecdotes, feelings about products, occasions of use and so on. The discussion is rich in personal detail, which is individualistic. Compared to a regular structured interview, a depth interview has only minimal instructions for the interviewer, and the respondent is free to respond in any way he likes, not constrained to a set of multiple responses or predetermined categories. But it could also be more difficult for the same reason, for both the interviewer and the interviewee. The expectation of the respondent from a regular survey is easy to answer, non-intrusive questions which do not probe too far. It is different with depth interviews. Every selected respondent may not feel comfortable being open with a stranger interviewing him, and this may hinder the process. The interviewer also must have the required training to make a focussed, but unstructured conversation over a period as long as an hour or more. An example of a depth interview would be to try and probe the feelings of a car owner about his car, what it means to him, how he feels when he is driving it, who generally he takes out with him or who else he allows to drive it, how he perceives other people who drive the same brand, and other brands or models, why he would or would not consider other brands, etc.

Slide 9contd... To define it, a depth interview could be called a process of probing for the feelings, associations, reasons for behaviour of a consumer of a product category or brand through a mostly unstructured interview consisting of a lot of open-ended questions, by a trained interviewer. Like many qualitative techniques, a depth interview tends to be subjective rather than objective, and therefore difficult to interpret. But it is capable of revealing much more about the underlying thought processes and feelings of a consumer about the product or service being researched, compared with traditional structured interviews.

Slide 10

Focus Group

This is essentially a group discussion on a given subject conducted by a trained moderator. The purpose of this is to create a less than formal situation, where people can exchange views, bringing out their opinions, attitudes, feelings about the given subject. To bring out a fruitful discussion, the subject has to be carefully thought out, and moderated if it veers away from the given subject. The participants have to be called to the venue, and a system of video or audio recording should be used to record the discussion for later analysis. The moderator and the analyser of a focus group can be different persons. The sample is selected as usual from a target population which is specified by the needs of the study. Usually, a group consists of about 6-10 persons. The length of the discussion can be about an hour to an hour and a half, or until the group has nothing left to add.

This technique is used frequently to check out opinions about new concepts, before a product is launched, and in general, as an exploratory research tool. It is sometimes also used for conclusive research, or in combination with a survey, as a cross-check for the important findings from the survey.

Slide 11

Projective Techniques

There are many different techniques which can be called projective. One popular method is to show a respondent a picture and ask him to describe the persons or objects in the picture. A particular product or brand can be shown being used, or displayed, and the respondent can be asked to guess the type of consumer who would use the product shown. This is essentially a technique which seeks to get indirectly at the underlying motivations, attitudes or emotions of the respondent, which he would not reveal under direct questioning. This method of questioning overcomes some common inhibitions of respondents such as the wish to give socially desirable responses, or giving answers acceptable to the interviewer.

Slide 12

Word Associations

Another variation of projective techniques is to ask respondents to associate brands with one word - a person, a celebrity, or an animal, which they associate with the brand. Interpretation of such association is best left to a psychologist, or a researcher with a psychoanalytical background and experience. Sentence Completion Another type of projective technique is to give an incomplete sentence to the respondent, and askihim to complete it. For example, People who use Brand B coffee tend to be . This method is similar to word associations, and may result in surprising or unexpected associations. It is equally difficult to interpret, and needs a trained hand to do it. Indirect methods such as projective techniques have proved themselves useful in many classic research situations, where direct methods proved unsatisfactory

Slide 13

Validity of Research

Let us assume that we changed the price of a `brand of pen, and its sales were affected in the following week. Can we conclude that the price change was responsible for the change in its sales? We cannot be really sure, unless we know what else remained the same and what else changed during the period. An experiment could be designed to draw a "valid" conclusion that price was a major cause of change in sales. Validity of a result refers to it generalisability and its robustness. Is the result of an experiment occurring merely by chance, or is it due to the intervention of some variables we have no data on, or is it a valid relationship between the variables under study? To obtain a reasonably valid result, a researcher must be aware of all likely variables (assume these are a, b and c) affecting the variables being studied (let us assume these are Price and Sales), be able to control or keep constant a, b and c, and vary the independent variable (price) to find its impact on the dependent (sales).

Slide 14

Experiments

Experiments can be conducted with varying designs and varying amounts of controls or rigour. Laboratory experiments typically have the best controls, and field experiments have the least.

Simulations done on a computer can control any variable, which may not be possible when we deal with human beings in a contrived setting in an experiment designed to measure the effect of price, packaging and promotion on sales.
Human or psychological factors such as the effect of brand name, ambience of the simulated store etc. may affect human respondents participating in an experiment. Test Marketing is the name used for a class of controlled experiments in marketing research. Its objective is to predict sales (either absolute in terms of units, or relative in terms of market share), based on changes in marketing variables such as price, distribution, promotion, advertising etc.

Slide 15

Disadvantages of Test Marketing

Although a good method for testing the product in a limited geographical area (one city, or one region) before going for a national launch, test marketing can have a few problems. For example, novelty of the product being tested may result in high one-time sales due to curiosity. Once having tried the product, there may be no repeat sales of the same magnitude as trial sales.

Another disadvantage that when you are test marketing, your competitors become aware of your product design, and may counter your efforts by introducing a similar product before you. For example, before Procter and Gamble could launch their concentrated detergent Ariel in the Indian market and while they were test marketing it a few years ago, Hindustan Lever launched their brand called Surf Ultra.
There have also been allegations of an outright sabotage of test markets by competitors. For example, they may buy up big quantities of your brand to give the impression of a huge success, and mislead you into launching a product nationally. It is also a common tactic for a competitor to launch special promotional offers in your test market area to reduce your sales. There is also the question of which centre or centres to use for test marketing, because the wrong choice of centres can affect the generalisability of your interpretation, leading to wrong estimates of national sales.

Slide 16

STM

Some of these disadvantages, along with long lead times, have encouraged marketers to use Simulated Test Marketing (STM). In a simulated test market for FMCG products, consumers are shown product information, are sometimes exposed to commercials (advertisements) for the brand, and then given money or coupons to buy the products made available in a simulated store containing all the major competing brands in the product category. Non-purchasers of the sponsor's brand are given free samples. After a use period, the users are interviewed to gauge reactions and repeat purchase intention. A computer model is then used to predict real world market share and penetration based on simulated data on many market and product variables. A few years ago, Mahindra and Mahindra, the multi-utility vehicle manufacturer, did a Simulated Test Marketing exercise for their new brand called ARMADA. Experimental designs are discussed in greater detail, with numerical examples, in the chapter titled ANOVA in Part 2 of the book.