Marketing Research Process

The American Marketing Association defines marketing research as:

“Marketing research is the function that links the consumer, customer and public to the
marketer through information – information used to identify and define marketing
opportunities and problems; generate, refine and evaluate marketing actions; monitor
marketing performance; and improve understanding of marketing as a process.”

Marketing research specifies the information required to address the issues, designs the
method for collecting information, manages and implements the data collection process,
analyzes the results, and communicates the findings and their implications.

Marketing Research can be classified as:

Problem identification research

Problem solving research

– Market research involves systematic planning which is required at all stages.

– Steps under market research are followed in a chronological order.
– All data is well maintained & well documented, therefore, results in proper
analysis of the situation.
– It is expected to be from the personal bias of a researcher.
– The first step in market research is problem definition wherein the data is
collected, situation is analyzed & the problem is defined.
– Next step involves formulation of the objectives for the study, analytical models &
research questions.
– Third step is the research design formulation step wherein the type of research
design to be used is decided upon. It can be exploratory, descriptive or
conclusive.
– In the next step data collection is done through interviews, surveys,
questionnaires, etc.
– Then, the analysis of the data is done once it is documented as per the needs.
– Last step involves the preparation of the report & finally its presentation.
Marketing Research Process
Step One:

Identify the Problem and State the Marketing Research Objectives

The best objectives will lead to precise decision making information for managers.

Problem Definition

The first step in any marketing research project is to define the problem. In defining the
problem, the researcher should take into account the purpose of the study, the relevant
background information, what information is needed, and how it will be used in decision-
making. Problem definition involves discussion with the decision makers, interviews with
industry experts, analysis of secondary data, and, perhaps, some qualitative research,
such as focus groups. Once the problem has been precisely defined, the research can
be designed and conducted properly.

Defining the Problem

– The Problem Definition Process

– Identify the problem or opportunity
– Find out why the information is being sought
– Understand the decision-making environment ( the industry, company, product,
and target market)
– Use the symptoms to help clarify the problem
– Translate the management problem into a marketing research problem
– Determine whether the information already exists
– Determine whether the research problem can really be answered.
– State the research objectives
Problem Definition
Qualitativ
Interview
Secondar
Environmental
Discussio Tasks involved
Context of the
s
y
e
nswith
Data
with problem
the
Analysis
Research
the
experts
decision
makers
 Research Problems

Examples

1. To determine the percentage of families who got any electronic household instrument
in a special offer

2. To determine the demand for:

a. household vacuum cleaners

b. Microwave Oven

c. a refrigerator

d. mp3/vcd/dvd player

3. To determine the choice of cars in middle class families in a small car segment.

Step Two:

Creating the Research Design

The six W’s of the descriptive research to be adopted are:

1. Who – They have to keep in mind the type of customers that they are targeting. Like in
case of Sweet Cookies, they are targeting the premium section of the market. They
need to first understand the need of the customers in those sections who have a
requirement of chocolate – pineapple cookies.
2. What – It includes the information that is required from the customers. From example
here it can be the consumption of cookies in a week or the flavors liked by majority in a
family, etc.
3. When – It includes the availability of the customers. A researcher must always keep in
mind the time to contact the respondents.
4. Where- It refers to the places where the respondents can be contacted. For instance,
shopping malls, homes, parking lots, etc.
5. Why – It takes into account the use of the information take from the respondents. Like
in this case, information is obtained in order to understand the potential market for
chocolate – pineapple cookies & the market size.
6. Way – The ways of obtaining information from the respondents. For example, it can be
telephonic interviews, observations, surveys, personal interviews, etc.

7. Express each type of error as an equation:

a. Total error – It is the variation between the true mean value in the population & the
obtained mean value obtained in the market research. It comprises of both random
sampling errors & non- random sampling errors. Non – random sampling errors arises
out of factors other than sampling. Such as bias, non response, wrong data analysis,
etc.
b. Random sampling error – It is the misrepresentation of the population. It is the
variation between the true mean value of the population & of the original sample.
Eg: The average monthly income of the target population is Rs. 22,000 but it is comes
out to be Rs. 19,500 for the original sample.

c. Nonresponse error – It arises when some of the respondents don’t respond. The
primary reason for the same can be refusals & not-at-home.
Eg: A researcher is introducing his product to the respondent but he straight away
bangs his door on researcher’s face.

d. Response error – Such errors arises when the respondents give inappropriate answers
or their answers are either not recorded correctly or are misanalysed.
Eg: A respondent is asked about his views about the product & he is telling why does
his friends don’t use it.
Step Three:

Choosing a Basic Method of Research

Survey: an interviewer and questionnaire

Observation: to monitor respondents’ actions without direct interaction

Experiments: to measure causality

Differentiate between exploratory & conclusive research:

Exploratory Research Conclusive Research

Basis of difference
design Design

To test specific
To provide insights &
Objective hypothesis & examine
understanding
relationships
Information needed is
Information needed is
defined only loosely.
clearly defined. Research
Research process is
Characteristics design is formal &
flexible & unstructured.
structured. Sample is
Sample is small & non
large & representative.
representative.

Findings Tentative Conclusive

Generally followed by
Findings used as inputs
Outcome further exploratory or
in decision making
conclusive research.

Differences between qualitative research & quantitative research techniques

 Qualitative Quantitative

Basis Of differences Research Research

To gain a qualitative To quantify the data & generalize
Objective understanding of the underlying the results from the sample to the
research & motivation population of interest

Small number of non Large number of representative

Sample
representative cases cases

Data Collection Unstructured Structured

Data analysis Non statistical Statistical

Recommend a final course of

Outcome Develop an initial understanding
action

Qualitative Techniques

– Focus group discussion

– In-depth interviews
– Observation
– Ethnography

Quantitative Techniques

– Face to face
– Telephone interviewing
– Self administered questionnaire (online, fax) and postal research

Step Four:
Selection of the Sampling Procedure

• Probability & nonprobability sampling

• Quota sampling

Main Points to consider.

– Accuracy of the findings from the total sample

– Sub-group analysis
– Coverage of the universe
– Prior knowledge
– Resource

Step Five:

Collection of the Data

• Marketing research field service

Starting procedure

1. Recruitment

2. Training

3. Selection

4. Field Work

5. Control

Three virtues of good questionnaire

– Being clear and unambiguous

– Simple and comfortable to respond to
– Relevant to the respondent

Sources of Data

Primary and Secondary

There are two main sources of data - primary and secondary. Primary research is
conducted from scratch. It is original and collected to solve the problem in hand.
Secondary research, also known as desk research, already exists since it has been
collected for other purposes.

We have given a general introduction to marketing research. Marketing research is a

huge topic area and has many processes, procedures, and terminologies that build
upon the points above.

Primary - Marketing Research.

Primary marketing research is collected for the first time. It is original and collected for a
specific purpose, or to solve a specific problem. It is expensive, and time consuming,
but is more focused than secondary research. There are many ways to conduct primary
research. We consider some of them:

1. Interviews 6. Diaries

2. Mystery shopping 7. Omnibus Studies

3. Focus groups

4. Projective techniques

5. Product tests

Interviews.

This is the technique most associated with marketing research. Interviews can be
telephone, face-to-face, or over the Internet.

Telephone Interview.

Telephone ownership is very common in developed countries. It is ideal for collecting

data from a geographically dispersed sample. The interviews tend to be very structured
and tend to lack depth. Telephone interviews are cheaper to conduct than face-to-face
interviews (on a per person basis).

Advantages of telephone interviews

• Can be geographically spread

• Can be set up and conducted relatively cheaply

 • Random samples can be selected

• Cheaper than face-to-face interviews

Disadvantages of telephone interviews

• Respondents can simply hang up

• Interviews tend to be a lot shorter

• Visual aids cannot be used

• Researchers cannot behavior or body language

Face-to-face Interviews.

Face-to face interviews are conducted between a market researcher and a respondent.
Data is collected on a survey. Some surveys are very rigid or 'structured' and use
closed questions. Data is easily compared. Other face-to-face interviews are more 'in
depth,' and depend upon more open forms of questioning. The research will probe and
develop points of interest.

Advantages of face-to-face interviews

• They allow more 'depth'

• Physical prompts such as products and pictures can be used

• Body language can emphasize responses

• Respondents can be 'observed' at the same time

Disadvantages of face-to-face interviews

• Interviews can be expensive

• It can take a long period of time to arrange and conduct.

• Some respondents will give biased responses when face-to-face with a

researcher.

The Internet

The Internet can be used in a number of ways to collect primary data. Visitors to sites
can be asked to complete electronic questionnaires. However responses will increase if
an incentive is offered such as a free newsletter, or free membership. Other important
data is collected when visitors sign up for membership.

Advantages of the Internet

• Relatively inexpensive

• Uses graphics and visual aids

• Random samples can be selected

• Visitors tend to be loyal to particular sites and are willing to give up time to
complete the forms

Disadvantages of the Internet

• Only surveys current, not potential customers.

• Needs knowledge of software to set up questionnaires and methods of

processing data

• May deter visitors from your website.

Mail Survey

In many countries, the mail survey is the most appropriate way to gather primary data.
Lists are collated, or purchased, and a predesigned questionnaire is mailed to a sample
of respondents. Mail surveys do not tend to generate more than a 5-10% response rate.
However, a second mailing to prompt or remind respondents tends to improve response
rates. Mail surveys are less popular with the advent of technologies such as the Internet
and telephones, especially call centers.

Mystery Shopping

Companies will set up mystery shopping campaigns on an organizations behalf. Often

used in banking, retailing, travel, cafes and restaurants, and many other customer
focused organizations, mystery shoppers will enter, posing as real customers. They
collect data on customer service and the customer experience. Findings are reported
back to the commissioning organization. There are many issues surrounding the ethics
of such an approach to research.

Focus Groups.

Focus groups are made up from a number of selected respondents based together in
the same room. Highly experienced researchers work with the focus group to gather in
depth qualitative feedback. Groups tend to be made up from 10 to 18 participants.
Discussion, opinion, and beliefs are encouraged, and the research will probe into
specific areas that are of interest to the company commissioning the research.

Advantages of focus groups

• Commissioning marketers often observe the group from behind a one-way

screen

• Visual aids and tangible products can be circulated and opinions taken

• All participants and the research interact

• Areas of specific interest can be covered in greater depth

Disadvantages of focus groups

• Highly experienced researchers are needed. The are rare.

• Complex to organize

• Can be very expensive in comparison to other methods

Projective techniques.

Projective techniques are borrowed from the field of psychology. They will generate
highly subjective qualitative data. There are many examples of such approaches
including: Inkblot tests - look for images in a series of inkblots Cartoons - complete the
'bubbles' on a cartoon series Sentence or story completion Word association - depends
on very quick (subconscious) responses to words Psychodrama - Imagine that you are
a product and describe what it is like to be operated, warn, or used.

Product tests.

Product tests are often completed as part of the 'test' marketing process. Products are
displayed in a mall of shopping center. Potential customers are asked to visit the store
and their purchase behavior is observed. Observers will contemplate how the product is
handled, how the packing is read, how much time the consumer spends with the
product, and so on.

Diaries.

Diaries are used by a number of specially recruited consumers. They are asked to
complete a diary that lists and records their purchasing behavior of a period of time
(weeks, months, or years). It demands a substantial commitment on the part of the
respondent. However, by collecting a series of diaries with a number of entries, the
researcher has a reasonable picture of purchasing behavior.

Omnibus Studies.

An omnibus study is where an organization purchases a single or a few questions on a

'hybrid' interview (either face-to-face or by telephone). The organization will be one of
many that simply want to a straightforward answer to a simple question. An omnibus
survey could include questions from companies in sectors as diverse as heath care and
tobacco. The research is far cheaper, and commit less time and effort than conducting
your own research.

We have given a general introduction to marketing research. Marketing research is a

huge topic area and has many processes, procedures, and terminologies that build
upon the points above.

Secondary - Marketing Research.

Secondary marketing research, or desk research, already exist in one form or another.
It is relatively cheap, and can be conducted quite quickly .However, it tends to have
been collected for reasons other than for the problem or objective at hand. So it may be
untargeted, and difficult to use to make comparisons (e.g. financial data gather on
Australian pensions will be different to data on Italian pensions). There are a number of
such sources available to the marketer, and the following list is by no means conclusive:

• Trade associations
 • National and local press Industry magazines

• National/international governments

• Websites

• Informal contacts

• Trade directories

• Published company accounts

• Business libraries

• Professional institutes and organisations

• Omnibus surveys

• Previously gathered marketing research

• Census data

• Public records

We have given a general introduction to marketing research. Marketing research is a

huge topic area and has many processes, procedures, and terminologies that build
upon the points above.

Step Six:

Preparation and Tabulation of Data

Data

is defined as any collections of facts

Data Processing

involves the conversion or reduction of information that one collects into a form
that permits statistical tabulation, ease of storage and access for future use any process
that uses a computer program to enter data and summarise, analyse or otherwise
convert data into usable information. The process may be automated and run on a
computer. It involves recording, analysing, sorting, summarising, calculating,
disseminating and storing data.
Data Processing Cycle

1. Input – the initial data are prepared in some convenient form for processing. The
form will be depend on the processing machine
2. Processing – the input data are changed, and usually combined with the other
information, to produce data in a more useful form.
3. Output – the result of the preceding processing steps are collected.

Input Processing Output

Three Basic Steps In Data Processing.

1. Classification or Categorization of Data

2. Coding of Raw Data
3. Tabulation of Data
Categorization of Data

Categorization

The partitioning or grouping of information according to certain principles or rules

which tell how to assign the subjects under study to groups and subgroups

The Five Rules in Categorization

1. Categories are set up according to the research problem

2. Categories are mutually exclusive and independent
3. Categories are exhaustive
4. Easy category is derived from one classification principle.
5. Any categorization scheme must be on one level of discourse.
Coding Of Raw Data

Raw data are usually transformed to codes which could e either alphabetical or
numerical.
Data Tabulation

Data Matrix

The final output of processed quantities information

Dummy Tables

These tables have all the features of real tables except for the absence of
statistical figures.

Step Seven:

Analyzing the Data

To interpret and draw conclusions

Data Preparation and Analysis

Data preparation includes the editing, coding, transcription, and verification of data.
Each questionnaire or observation form is inspected, or edited, and, if necessary,
corrected. Number or letter codes are assigned to represent each response to each
question in the questionnaire. The data from the questionnaires are transcribed or
keypunched on to magnetic tape, or disks or input directly into the computer.
Verification ensures that the data from the original questionnaires have been accurately
transcribed, while data analysis, guided by the plan of data analysis, gives meaning to
the data that have been collected. Univariate techniques are used for analyzing data
when there is a single measurement of each element or unit in the sample, or, if there
are several measurements of each element, each RCH variable is analyzed in isolation.
On the other hand, multivariate techniques are used for analyzing data when there are
two or more measurements on each element and the variables are analyzed
simultaneously.

– Questionnaire registration and editing

– Listing of open-ended responses and classification

– Coding and code transfer

– Data entry and entry verification/cleaning

– Development of analysis plan

– Program development as per the analysis plan

– Program running and report generation

Step Eight:

Preparing and Writing the Report

• Using the internet to disseminate reports

• Judging the quality of a report

Report Preparation and Presentation

The entire project should be documented in a written report which addresses the
specific research questions identified, describes the approach, the research design,
data collection, and data analysis procedures adopted, and presents the results and the
major findings. The findings should be presented in a comprehensible format so that
they can be readily used in the decision making process. In addition, an oral
presentation should be made to management using tables, figures, and graphs to
enhance clarity and impact.
For these reasons, interviews with experts are more useful in conducting marketing
research for industrial firms and for products of a technical nature, where it is relatively
easy to identify and approach the experts. This method is also helpful in situations
where little information is available from other sources, as in the case of radically new
products.

Expectations of Decision Makers From Marketing Researchers

1. Maintenance of client confidentiality

2. Honesty

3. Punctuality

4. Flexibility

5. Delivery of project specifications

6. Provision of high-quality output

7. Maintenance of high quality-control standards

8. Customer-orientation

9. Keeps the client informed

Good Research Management Motivates Decision-Makers To Use Research

Information

The determinants of whether a manager used research data:

(1) conformity to prior expectations

(2) clarity of presentation

(3) research quality

(4) political acceptability

Case Study

PHILIPS GoGear (Audio/Video Player & Audio Recorder)

Features include:

• Intuitive user interface

• Double action search key

• Fast data transfer

• Support wide range of music formats

Introduction

• MP3 players are considered to be a style statement

• Major players

– Philips

– Apple

– LG

– Sony

– Transcend
 • Apple –Market leader

Market Research

Research Design

• Decision Maker’s problem

To increase the sales of PHILIPS GoGear MP3 players

Components of MR problem

• Identifying the target segment

• Identifying the pricing pattern

• Positioning of the product

• The features the people look for

• The major competitors

• Factors affecting buying decision

• Most effective medium of communication

Exploratory Research

– Questionnaires
– Expert Interviews
– Focus groups
– Internet and Technology magazines

Major findings

– The target segment – Students and working professionals

– Preference is given to branded MP3 players
– Importance of additional features
– Usage of music phones
– Owning MP3 players- statement of style
 – Low awareness of Philips GoGear
– Lack after sales service

Descriptive Research

– Pre-test and questionnaire design

– Personal methods
– Online surveys

Findings

• Willingness of respondents depend on various factors

• Place and time influences the attitude of respondents

– Sample size of respondents- 197

– Sample size of dealer interview- 30

Data analysis-Findings

– Target segment –students and young working professionals

– Major competitors are Apple, Sony, and Samsung
– Primary use- Listening to music but respondents prefer add-on features
– -Mainly used while travelling or leisure time
– -MP3 players – not considered cool and trendy
– -Sound quality and battery life- most important features

Recommendations

– Setting up kiosks in shopping malls

– Setting up stalls and canopies in trade fares
 – Pamphlets and catalogues with purchase of other products of Philips
– Distributing hand bills with news papers and magazines
– Sponsoring youth events
– More emphasize on after sales service
– Providing display shelves in electronic mega stores
– Working out an incentive plan for the dealer
– Preferably changing the name ‘GoGear’

My Learnings…

– Better insight to MR process

– Importance of a holistic perspective
– Importance of observational and exploratory research
– Magic of numbers
– Launch pad towards a marketing career