Marketing Research: Meaning, Importance, Scope, Process

Meaning/Definition

- According to American Marketing Association, Marketing Research is the function that links the consumer,
customer and public to the marketer through information-information used to identify and define marketing and
improve understanding of marketing as a process.

- Marketing research is a set of techniques and principles for systematically, collecting, recording, analyzing, and
interpreting data that can aid decision makers involved in marketing goods, services, or ideas.

- Market research is the process of collecting valuable information to help you find out if there is a market for your
proposed product or service. The information gathered from market research helps budding entrepreneurs make
wise and profitable business decisions.

It is a technique to know:

1. Who are customers of our products or services?

2. Where do they live?

3. When and how do they buy the product and services?

4. Are customers of our products satisfied with the products?

5. Who are our main competitors in the market?

Importance of Marketing Research:

By forecasts of probable sales in the coming years.

2. Discovery of causes of consumers resistance:

It helps in identifying the reasons for consumer resistance to existing or new products.

3. Correction of defects:

It reveals defects and therefore makes corrective action possible.

4. Reveals the nature of demand:

It brings out whether the product is in constant demand throughout the year or has a seasonal demand.

5. Effectiveness of existing channels of distribution:

made to remove such grievances of the customers.

6. Product utility:

It indicates why exactly the product is being purchased by the people and what exact service do they get out of it. For

example, a market research conducted by Hindustan Lever Ltd., revealed that their Sunlight Soap which was originally

intended to serve as a washing soap, was being used as toilet soap by many people.

7. New uses of the product:

Marketing research may reveal certain new uses for the existing products.

8. Market information:

It provides complete information about the market and the changes that are likely to occur in demand for a certain

product.

9. Discovery of potential market:

It provides information about the possibility of potential (future) market.

10. Discovery of new lines of production:

It helps in the discovery of supplementary lines of products.

Scope of Marketing Research:

Scope of marketing research means the possible applications of marketing research in corporate environment. Bulk of
research is done to measure consumer needs and wants. Besides, marketing research is carried out to assess the impact of
past marketing actions. Some research is done to understand the competitive, technological, social, economic, cultural,
political or legal environments of the market.

Another way of looking at the scope of marketing research is the look at the particular decision area, where research
results are used.

They may be outlined as follows:

Much research is done in these areas which are broadly referred to as sales analysis measurement of market
potential/demand projection, determination of market characteristics, market share estimation, studies of business trends,
etc.
Sales Methods and Policies:

Marketing research studies are also conducted with a view to evaluating the effectiveness of present distribution system.
Such studies are used in establishing or revising sales territories. They are also helpful in establishment of sales quotas,
design of territory boundary, compensation to sales force, physical distribution, cost analysis, etc. It is also done to assess
the effectiveness of different promotional activities, such as premiums, deals, coupons, samples, etc.
Product Management:

Market research is also conducted in order to better manage the existing and new productsto assess consumer feedback,
to assess consumer reaction before launching a new product, etc. Sometimes pricing studies, packaging research, and
design or physical characteristics studies have also been conducted.
Advertising Research:

These include media research, and advertising copy research.

Corporate Research:

Corporate research studies about the social value research, political studies {e.g., research to ascertain the public opinion
about the election results), and consumer service studies (e.g., many banks and large industrial houses have conducted
market research to know the consumers changing needs, for service and possible grievances about existing operations).
Syndicated Research:

Several research agencies collect and tabulate marketing information on a continuing basis. Reports are sent periodically
(i.e., weekly, monthly or quarterly) to clients who pay subscription for them.

Scope of Market Research:

Market research covers the following items of study:

The Marketing Research Process: Marketing Research Process

1. Defining the Problem:

In order to carry out the research programme, the researcher should know the basic problem. He
must be clear in mind as to what is exactly needed. The basic problem i.e., marketing problem is
given importance and not the marketing research problem. A competent researcher will not accept
a research project, until he understands the problem clearly. Thus crystalizing the marketing
problem is fundamental.

After identifying the problem, the researcher formulates a plan when the problem is defined. The
purpose of the project determines the nature of the problem and the ways to solve it. When the
researcher gets a clear idea of the problem, he analyses the situation and understands more about
the problem. He analyses the company, its markets, its competition etc. The informal investigation
or preliminary exploration consists of getting background information relating to the problem.

2. Determining the Information Needed:

The researcher must consider the information and decide which is relevant and which is irrelevant
to the study. In determining the kind of information needed, the objectives of the research must be
borne in mind. The information should be necessary and relevant. If the available data are
insufficient, fresh data have to be collected.

3. Determining the Source of Information:

The Source of information may be classified into primary source and secondary source. When the information is obtained
directly, specially for the problem, it is known as primary data. When the information is already collected by someone for
some other purpose, and at the same time is helpful to the problem on hand, it is known as secondary data (see collection
of data).
4. Deciding Research Methods:

When secondary data are insufficient, the researcher has to be satisfied with the primary sources of data. The sources may
be by experimental method, observation method or survey method.

5. Tabulation, Analysis and Interpretation of the Data:

After the collection of data, they are to be classified and tabulated into statistical summarization. They may be in
percentage, average, ratios etc., so as to give the greatest value in the interpretation work. Interpretation is the important
stage in the process of research. Correct interpretation of data makes a research meaningful.

The mean or median classifies the nature of the average respondent, and the standard deviation shows how far
respondents are dispersed around the average. Tests of significance are useful in measuring whether two occurrences are
related to each other. It is important, for example, to know whether a price decrease caused an increase in sales, or
whether the two events just happened simultaneously.

Correlation and association provide a more sophisticated method of making the same kind of analysis done in cross
tabulation. One of the most useful of these is regression analysis, which allows the researcher to estimate the relationship
between a dependent variable and one or more independent variables and to determine whether or not one variable
causes another.

6. Preparation of the Report:

Draw conclusions from the tabulated summaries. Conclusions, recommendations and suggestions supported by detailed
analysis of findings, must be in a written form-report of the researcher.

The language should be clear and properly paragraphed. Generally, a report may be in the following form:

1. Title of research.

2. The name of the organisation.

3. The objectives of the research.

4. The methodology used.

5. Organisation and the planning of the report.

6. A table of contents, along with charts and diagrams followed in the report.

7. The main report.

8. Conclusions drawn and recommendations suggested.

9. Appendices.

7. Follow up study:

Follow up will ensure the implementation of recommendations made by the marketing researchers. Otherwise, the report

may be left unopened.