Mo dule 2

FUND AME NT ALS OF

MA RKET IN G
RES EAR CH
• I. I NTR ODU CTI ON
• Marketers need to identify their target
markets and approach them scientifically
• Through research they are able to know
who their customers are and know what
they are looking for.
• Marketing research is, therefore a tool to
assist managers in decision making about
the marketing of products and services of
a company based on consumer needs.
Marketi ng Re sea rch
(Def initi on)

• Marketing Research is the a

systematic study involving the
gathering, recording and
analyzing of data about the
problems relating to the
marketing of goods and
services.(American Marketing
Assn)
 • Systematic study implies that it
should be an objective study free
of any bias
• It studies the manifold problems
of marketing and consequently
highlights the possible
opportunities
• Marketing Research provides
valuable information for
management decision making for
solving problems and harvesting
opportunities.
• Eg. MR may indicate poor
awareness as the reason for poor
sales of a product. The marketing
manager may then decide to start a
campaign to create awareness
 Market
• A market is a place where
buyers and sellers meet for
exchange of goods and
services for transfer of
ownership against monetary
considerations
• Eg. KR Market
• A market may also be
described as the demand
made by a group of
potential buyers for goods
and services.
• Eg. demand for shoes,
telecom service etc
• A market may consist of
peopl e or
organi zat ions with
needs to satisfy, money
to spend and the
willingness to spend it.
Eg. consumers of toilet
soap(consumer market),
customers for raw
materials (industrial
• Hence, a market consists
of buyers, sellers,
consumers, products and
services, both existing and
proposed, that form the
characteri stic,
potenti al , problem s and
opportuni ti es of th e
market.
Ma rket
characterist ics
• This arises as a result of the varying
range of products and services being
offered to :
• different consumers with varying
range wants / needs, lifestyles,
demographic profiles, purchasing
power, likes & dislikes, bias &
prejudices, values, beliefs etc in
consumer markets; and
• different customers in industries of
different types serving various
business / industrial markets
 Market Potentia l

• MP for a product or
service arises out of
customer and industrial
buyer needs for various
products and services
translating to market
demand that is enhanced
by their purchasing power
 Problems of the market

• It is the challenges that

the producer faces in
marketing his product or
service to consumers and
industrial buyers amidst stiff
competition, unfavorable
conditions, multiple product /
service choices, irrational
buyer behavior etc.
Opport unities in the
mar ket

• Because every pr obl em

presents a hidden
oppor tunity and every
opportunity can translate
into a rese arch problem /
topic, the terms problems
and opportunity are used
int erchangeably.
•Dis tingui shi ng
•Market Research
and
•Marketi ng
Research
Market Research
(def initi on)
• It is a systematic study of a
place, demand, people or
organizations that make up
the market to ascertain its
char acteris tics ,
pot ential, pr oble ms and
oppor tunitie s for existing
or proposed product or
service in relation to its
buyers and sellers.
Market (definition) Cont

• It is a study of the market

itself in terms of its size,
growth, or decline, factors
affecting it, no. of
competitors, market share
etc., Market research,
therefore conveys a
nar row er meaning
 Marketing
rese arch
• It is a br oader inclusive term that covers the
entire process of market ing and not confined to
merely the market alone. It embraces various
research activities carried out with the
management of marketing that includes :
• market analysis – study of size, location, nature
and char. of markets ;
• sales research – analysis of sales data;
• consumer research – motivation, attitude, reaction,
preference etc
• advertising research – recall, awareness copy
testing etc
• product & packaging research – preference,
development inputs etc
 Mar keting
re search(Cont )
• market analysis – study of size,
location, nature and char. of
markets ;
• sales research – analysis of sales
data;
• consumer research – motivation,
attitude, reaction, preference etc
• advertising research – recall,
awareness copy testing etc
• product & packaging research –
preference, development inputs etc
• DI FFI CU LTI ES IN APP LYIN G
SCI EN TI FI C METH ODS TO
MAR KETIN G RESEARCH

OR
• WHY I S MARK ETI NG
RESEARCH CO NSIDERED
NONSCI EN TI FIC ?
• Role of investigators;
• Inaccuracy of measuring
instruments;
• Influence of measurement;
• Pressure of time frame;
• Testing of hypothesis;
• Complexity of the subject.
1. Ro le o f
in ve st igators
• Organizations are the clients of
researchers
• Sometimes, the investigator tries to
fit the results to suit the clients by
manipulating the data or not
conducting an exhaustive study
• Such a study then becomes
unscientific
2. Inaccur acy of measuri ng
ins trument s
• Accuracy of measurement
differentiates scientific and
unscientific methods
• Since human beings are the
participants in research,
subjectivity invariably creeps in
• Most of the information
obtained from the respondent is
qualitative in nature. Eg. Brand
preference of a respondent
2. Inaccuracy of m eas ur ing
ins trument s(cont)

• The questionnaire used to measure

this attitude is not precise
• Also, each interviewer will
administer the questionnaire
differently
• In addition, the respondent’s casual
answer may be due to pre-
occupation, fatigue etc making reply
inaccurate
3. Infl ue nce o f m easur ement and environment

• In physical sciences, the

researcher can repeat an
experiment anytime, anywhere
and get the same results
• In MR, when a respondent
realizes that he is being
measured, his response and
behavior undergoes a change.
This affects the validity and
reliability of the research a
great deal.
3. I nf luence of measurem ent and
envi ronment ( cont)

• Changes in the environment

may influence a different
response to the previous one
making the findings time bound
• Eg. Interest rate changes on
loans can change purchase
decisions
4.Pr essu re o f time
frame
• MR must be conducted and
completed within a given time span
• Consuming more time will encourage
competitive entry
• Time pressure may require MR to be
completed in a hurry leading to
inaccuracy of measurements and
credibility of findings
5. Testi ng of
hypothes is and
research re pe atabi li ty
• MR to test hypothesis
suffers due to repeatability
under exactly similar
conditions owing to changes
in the environment
• Eg. Preference for Maruti
800 may undergo a change
due to entry of Tata’s
cheapest car Nano
5. Testing of h ypothesis a nd
research re peatabil it y (c ont)

• Experimental studies in MR to
study impact of advertising may
suffer due to competitor
advertising making isolated
study impossible
• It is also impossible to
reproduce the same experiment
twice – reliability of research
suffers as a result
6. C omplexity of the
su bject
• Human beings interact and react
with researchers differently making
the subject complex
• Environment factors and peer
influence adds to the complexity
• Eg.1 Promotional campaign during
festive season gives different result
to off season
• Eg.2 Brand preference may change
due to peer pressure
OBJECTIV ES /
IMPOR TANCE OF
MARKET ING RES EAR CH
• 1. Marketing helps identify the
problem areas and find
solutions.
• E.g.: Drop in sales of a product.
MR may identify the reason to
be poor awareness and suggest
best media for promotional
campaigns to create
awareness.
• 2. Provides information to reduce risk
involved in management decision
making
• 3. To identify market demand for a
particular product or service and
assess market
• conditions and trends in the demand.
E.g.: MR agency ORG- MARG conducts
periodic surveys in the market and
tracks
• movements of several product
categories and trends.
• 4. To assess competitive
strengths and weaknesses
• E.g.: MR studies on
competitive structure,
products, prices,
• promotions, distribution
channels etc.,
• 5. To identify consumer
segments and assess potential
buying
• power. E.g.: MR through
demographic studies identifies
potential consumer segments
and through consumer panels
their
• purchasing power and buying
patterns.
• 6.To influence product pricing,
positioning, advertising and
• distribution strategies to get
maximum reach in the market.
• 7.To know customer acceptance
• E.g.: 1) Customer satisfaction and
customer service back up req.
• studies. 2) CRM studies.
• 8. Inputs for existing product
improvement, new product
• development. E.g.: Development
of Gillette shaving systems.
• 9. To avoid product failures
E.g.: MR studies give
valuable inputs to
understand customer needs
for various products &
services in the market.
• 10.MR helps identify new
opportunities and constraints in
the market and helps develop
marketing strategies and plans
to enter the market for various
products and services.
II. EVOLUT ION
CLA SSIF ICA TION OF
MARKET ING RES EAR CH
• Marketing Research
• 1. Problem
• Identification
• Research
• 2. Problem
• Solving
• Research
Pr oble m
Identific atio n
Re se arch
• MR that is undertaken to help
identify problems that are mot
readily apparent on the surface.
• The real problem is camouflaged by
the symptoms.
• E.g.: Declining market potential for a
product or service may be the
symptom. The real problem may be
identified as changing consumer
tastes and preferences.
• Various MR studies under this
category may be.
• Market potential research
• Market share research
• Image research
• Market characteristic research
• Business trends research
• Sales analysis research
• Consumer behavior related research.
Pr oble m Solvin g
Re se arch
• MR undertaken to help solve specific
marketing problems.
• So problem solving research helps
arrive at solution(s) to problems.
• The findings of problem solving
research are used in making
management decisions that will
solve specific marketing problems.
• Different types of problem
solving research are
• Segmentation Research
• Determines the basis of
segmentation
• Selects target markets
• Helps in management decision to
develop strategies for specific
markets.
 Product Research
• Testing concept (concept research)
• E.g.: idea of filter coffee in bags like tea
bags
• Product development
• E.g.: Manual Vs automatic option in washing
machines
• Packaging decisions
• E.g.: Costlier products in smaller packing
• Brand positioning
• E.g.: Associating higher price with quality &
reliability
• Test marketing
• E.g.: Market response in a cosmopolitan city
Pricing Research

• Consumer perception on pricing

• Helps in marketing approach to
pricing based on stage of PLC,
competition and market trend.
• Exchange offers
• Price discounts in combination
packing as in tooth paste and
brush
Promotional research
• Optimal promotional mix
• E.g.: percent budget for print & TV media and
display promotions.
• Copy testing
• E.g.: Concept of story board in a TV commercial
• Media decisions
• E.g.: Which TV channels; % budget for prime time
and off
• time , Research into TV viewer ship, print media
• readership, Demographic details of people reached
by
• each medium
• Evaluation of ad effectiveness
• E.g.: ad recall, understanding of story board etc
• Research into TV viewer ship, print media
readership
• Demographic details of people reached by each
medium
Distribution research

• Types of distribution
• Channel length
• Channel margins
• Attitudes of channel members
• Location of wholesale and retail
outlets
• Retail merchandising
• Problem identification
research and problem
solving research go hand in
hand and usually MR
projects may combine both.
Rol e of Marketi ng
Rese arch ( MR) i n a
Mark etin g Pl an
• Every business works on a
comprehensive business plan
which comprises both corporate
and competitive strategies of
the firm. Business plan
strategies are implemented
through functional areas of
business, namely, marketing,
production, finance, HRM etc
Rol e of Marketi ng
Rese arch ( MR) i n a
Mark etin g Pl an (cont)
• A marketing plan involves marketing
strategy that incudes operations in
segmentation, targeting and
positioning strategies for a
company’s products and services.
MR plays an important role in
deciding on the marketing strategy
by providing info rmatio n necessary
for choosing an appropriate strategy.
This is termed as MR at the
stra te gic le vel of marketing.
Rol e of Marketi ng
Rese arch ( MR) i n a
Mark etin g Pl an (cont)
Rol e of Marketi ng
Rese arch ( MR) i n a
Mark etin g Pl an (cont)
• Once marketing strategy is in
place at Level 1, the marketing
plan at Level 2, i.e., tactical
level comes into force with 4
‘P’s of marketing , namely
product, price, promotion, and
place (distribution).
Rol e of Marketi ng
Rese arch ( MR) i n a
Mark etin g Pl an (cont)
• Most of the decisions related to
marketing plan would be
product design, packaging,
pricing, promotions and
distribution & logistics. To
make decisions regarding
these, a marketing manager
needs information which is
fulfilled by MR
Mark etin g Intel lig enc e
(MI) Vs Mark etin g
research ( MR)
 Marketing information system
(MIS) is a combination of
marketing intelligence (MI) and
Marketing Research (MR), two
distinct processes that act as
information providers for
management decision making
 Marketing Intelligence (MI)
refers to a set of procedures
and sources used by managers-
to obtain every day
inf ormati on about
developments in the marketing
environment.
 So MI is an on going process of
continuously monito rin g th e
envir onment and colle cting
in fo rma tio n about th e industr y,
comp etito rs ’ moves, re late d
in dust rie s, Go ve rn ment polic ie s
on tra de, export & imp ort ,
taxatio n, lib eraliza tio n,
consume r pro tectio n,
envir onment protection etc.,
 Whereas, MR is a more
speci fic st ud y done to cover
the inf ormatio n gap – it is a
search for answers to som e
questi ons, which if
answ er ed woul d lead a
comp an y to make criti cal
mar keti ng dec isi ons on
strategic and / or tacti cal
level .
Di ffer en ce between
Mark etin g Intel lig enc e
and Marketi ng
Rese arch
• 1)MI is an on going process of
continuously monitoring the
environment
• MR is based on problem or
information gap to make critical
mktng decisions
• 2)MI is usually done in house
• MR is mostly outsourced to MR
companies
• 3)MI is not an immediate
solution for a problem
• MR is directed to get solution to
the problem soon
• 4)MI is not meant for immediate
action
• MR is action oriented to
conduct study and get infmn for
mgmnt. decision making
• 5)MI has no specific
methodology to gather data
• MR - Specific methodology is
adopted to collect data
• 6)MI serves general purpose
• MR - Very specific to the
problem
• 7)MI - Data collection not specific
• MR - Data specific to the problem
• 8)MI - Focus on status & changes in
business environment
• MR - Focus on consumers,
influencers etc
• 9)MI - Relatively inexpensive
• MR - Highly expensive – taken
up as a short term project with
a clearly defined time schedule,
budget etc
• 10)MI - No research design
• MR - Specific research design
 Marketing managers gather
marketing intelligence by
reading books, newspapers,
trade publications, talking to
customers, suppliers and
distributors.
• Quality of marketing intelligence can be
improved by
• Training and motivating sales force.
• Motivating distributors, retailers and other
intermediaries to pass along important
intelligence.
• Purchasing competitive products, attending
trade shows, attending stock holders meetings,
talking to employees, dealers and suppliers
freight agents etc
• Setting up customer advisory panel made up of
customer , largest customers, out spoken
customers etc.,
• Purchase information from outside suppliers.
• Market information system in the form of
internet browsing, data warehousing and data
mining.