PACE ACADEMY

G12 ABM – Business Enterprise Simulation

Handouts 2.2
Lesson 2: Marketing Research Process

Objectives:

1. Explain the concept and principles of a market research process.

2. Relate the importance of a marketing research in an enterprise marketing environment.
3. Discuss the essence of a Marketing Information System in the research process.
4. Apply the research process in the prepared marketing mix during the first semester.

The Market Research Process

Marketing Research Is Systematic and Objective:

 Systematic planning is required at all the stages of the marketing research process. The
procedures followed at each stage are methodologically sound, well documented, and, as
much as possible, planned in advance. Marketing research uses the scientific method in
that data are collected and analyzed to test prior notions or hypotheses.
 Marketing research aims to provide accurate information that reflects a true state of affairs
and, thus, should be conducted impartially. While research is always influenced by the
researcher’s research philosophy, it should be free from the personal or political biases of
the researcher or the management.

Step 1: Establishing the need for marketing research

This could seem basic but is in fact fundamental to conducting marketing research. Research takes
time and money. Marketing research is not needed when information is readily available (this could
be through secondary data), when there is not enough time to conduct a proper research study and
answers are needed immediately, when you can afford the research or when the costs outweigh the
value. It could also simply be that the answer is obvious.

Step 2: Defining the Problem

Define the problem and research objectives. The first step in any marketing research study is to define
the problem, while taking into account the purpose of the study, the relevant background
information, what information is needed, and how it will be used in decision making. This stage
involves discussion with the decision makers, interviews with industry experts, analysis of secondary
data, and, perhaps, some qualitative research, such as focus groups. There are three types of
objectives that can be deployed in marketing research:

What’s the Problem?: The first stage of the marketing research process involves defining the problem.
1. Exploratory research
 Used to better define a problem or scout opportunities.
 In-depth interviews and discussions groups are commonly used.
2. Descriptive research
 Used to assess a situation in the marketplace (i.e., potential for a specific product or consumer
attitudes).
 Methods include personal interviews and surveys.

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3. Causal research
 Used for testing cause and effect relationships.
 Typically through estimation.

Step 3: Establishing research objectives

Objectives tell a researcher exactly what he or she should be looking for and what he or she must do
to obtain the information necessary to allow the manager to choose between the decision and the
alternatives.

Defining Objectives and Formulating Problems

Defining the problem and research objectives is the first step involved in the marketing research process.
Key Points
 The marketing research process involves six steps: 1: problem definition, 2: development of an
approach to the problem, 3: research design formulation, 4: data collection, 5: data
preparation and analysis, and 6: report preparation and presentation.
 The first step in any marketing research study is to define the problem, while taking into
account the purpose of the study, the relevant background information, what information is
needed, and how it will be used in decision making.
 This stage involves discussion with the decision makers, interviews with industry experts, analysis
of secondary data, and, perhaps, some qualitative research, such as focus groups.
 There are three types of objectives that can be deployed in marketing research: exploratory
research, descriptive research, and causal research.
Key Terms
 Marketing Research: The function that links the consumers, customers, and public to the
marketer through information. This information is 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.
 Objective: Not influenced by irrational emotions or prejudices.
 Systematic: Carried out using a planned, ordered procedure.
 ethnographic research: information regarding cultural phenomena

Step 4: Research Design Formulation

A research design is a framework or blueprint for conducting the marketing research project. It
details the procedures necessary for obtaining the required information, and its purpose is to design a
study that will test the hypotheses of interest, determine possible answers to the research questions,
and provide the information needed for decision making. Decisions are also made regarding what
data should be obtained from the respondents (e,g,, by conducting a survey or an experiment). A
questionnaire and sampling plan also are designed in order to select the most appropriate
respondents for the study. The following steps are involved in formulating a research design:
 Secondary data analysis (based on secondary research)
 Qualitative research
 Methods of collecting quantitative data (survey, observation, and experimentation)
 Definition of the information needed
 Measurement and scaling procedures
 Questionnaire design
 Sampling process and sample size
 Plan of data analysis

Plan the Research Design

The research design is a framework or blueprint for conducting the marketing research project.
Key Points
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  The marketing research process is comprised of six steps: 1: problem definition, 2: development
of an approach to the problem, 3: research design formulation, 4: field work or data
collection, 5: data preparation and analysis and, 6: report preparation and presentation.
 It details the procedures necessary for obtaining the required information, and its purpose is to
design a study that will test the hypotheses of interest, determine possible answers to the
research questions, and provide the information needed for decision making.
 Decisions also are made regarding what data should be obtained from the respondents (e.g.,
by conducting a survey or an experiment), and a questionnaire and sampling plan also are
designed in order to select the most appropriate respondents for the study.
 Research design involves secondary data analysis; qualitative research; quantitative data
methods (survey, observation, and experimentation); information needed; measurement
and scaling procedures; questionnaire design; sampling process and sample size; and a
plan of data analysis.
Key Terms
 Marketing Research: The function that links the consumers, customers, and public to the
marketer through information. This information is 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.
 secondary data: information collected by someone other than the user of the data
 Qualitative research: A method of inquiry employed in many different academic disciplines,
traditionally in the social sciences but also in market research and further contexts.
 Secondary Research: This process involves the summary, collation, and synthesis of existing
research rather than primary research, where data is collected from subjects or
experiments.
 survey research: information from a predetermined set of questions that is given to a sample
and is used to assess thoughts, opinions, and feelings

Conducting Secondary Research: Secondary data analysis is one of the steps involved in formulating
a research design.

Developing the research plan for collecting information:

The research plan outlines sources of existing data and spells out the specific research approaches,
contact methods, sampling plans, and instruments that researchers will use to gather data. This plan
includes a written proposal that outlines the management problem, research objectives, information
required, how the results will help management decisions, and the budget allocated for the
research.

Step 5: Field Work or Data Collection (Information types and resources)

Field work, or data collection, involves a field force or staff that operates either in the field, as in the
case of personal interviewing (focus group, in-home, mall intercept, or computer-assisted personal
interviewing), from an office by telephone (telephone or computer-assisted telephone
interviewing/CATI), or through mail (traditional mail and mail panel surveys with pre-recruited
households). Proper selection, training, supervision, and evaluation of the field force helps minimize
data-collection errors. In marketing research, an example of data collection is when a consumer
goods company hires a market research company to conduct in-home ethnographies and in-store
shop-along in an effort to collect primary research data.

Marketing Research is Systematic and Objective

 Systematic planning is required at all stages of the marketing research process, especially in
the data collection step. The procedures followed at each stage are methodologically
sound, well documented, and, as much as possible, planned in advance. Marketing
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 research uses the scientific method in that data are collected and analyzed to test prior
notions or hypotheses.
 Marketing research aims to provide accurate information that reflects a true state of affairs
and thus, should be conducted impartially. While research is always influenced by the
researcher’s philosophy, it should be free from the personal or political biases of the
researcher or the management. This is especially important in the data collection phase.
The data collected will be analyzed and used to make marketing decisions. Hence, it is vital
that the data collection process be free of as much bias as possible.

Primary versus Secondary Research

There are many sources of information a marketer can use when collecting data. The Nielsen Ratings
is an audience measurement system that provides data on audience size and the composition of
television markets in the United States. The Gallup Polls conduct public opinion polls with its results
published daily in the form of data driven news. The U.S Census Bureau, directed by the U.S.
Government is the principal agency that is responsible for producing data about American people
and the economy. Population, housing and demographic characteristics are gathered to help plan
and define transportation systems, police and fire precinct, election districts and schools.

Step 6: Determining methods of accessing data

This can be done through observing consumers, surveys, online etc.

Step 7: Designing data collection forms

Designing the form in which data will be collected. It can be a questionnaire or an observation form.

Step 8: Determining sample plan and size

Sample plan: describes how each sample element is to be drawn from the total population
Sample size: how many elements of
the population should be used to make up the sample

Step 9: Collecting Data

Data collection is a crucial step in the research process because it enables the generation of insights
that will influence the marketing strategy.
Key Points
 The marketing research process is comprised of six steps: 1. problem definition, 2. development
of an approach to the problem, 3. research design formulation, 4. field work or data
collection, 5. data preparation and analysis, and 6. report preparation and presentation.
 Data collection involves a field force or staff that operates either in the field, as in the case of
personal interviewing, from an office by telephone, or through mail (traditional mail and
mail panel surveys with pre-recruited households).
 Proper selection, training, supervision, and evaluation of the field force helps minimize data-
collection errors.
Key Terms
 Scientific method: The scientific method is a body of techniques for acquiring new knowledge
or correcting and integrating previous knowledge. To be termed scientific, a method of
inquiry must be based on empirical and measurable evidence subject to specific principles
of reasoning.
 Data: Data are values of qualitative or quantitative variables belonging to a set of items; Data
are typically the results of measurements and can be visualized using graphs or images
 Mall intercept: a survey whereby respondents are intercepted in shopping in malls. The process
involves stopping the shoppers, screening them for appropriateness, and either

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 administering the survey on the spot or inviting them to a research facility located in the mall
to complete the interview.

Step 10: Analyzing Data

Data Analysis is an important step in the Marketing Research process where data is organized,
reviewed, verified, and interpreted.
Key Points
 The Marketing Research Process is comprised of 6 steps: 1: Problem Definition, 2: Development
of an Approach to the Problem, 3: Research Design Formulation, 4: Field Work or Data
Collection, 5: Data Preparation and Analysis, 6: Report Preparation and Presentation.
 Data is carefully edited, coded, transcribed, and verified so it can be properly analyzed
during this phase of the research process.
 Verification ensures that the data from the original questionnaires have been accurately
transcribed, while data analysis gives meaning to the data that have been collected.
 Bias must be avoided when interpreting data because only the results (not personal opinion)
should be communicated.

Key Terms
 Data mining: A technique for searching large-scale databases for patterns; used mainly to find
previously unknown correlations between variables that may be commercially useful.
 Marketing Research: The function that links the consumers, customers, and public to the
marketer through information. This information is 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.
 Business intelligence: Any information that pertains to the history, current status or future
projections of a business organization.

Analysis of data is a process of inspecting, cleaning, transforming, and modeling data with the goal
of highlighting useful information, suggesting conclusions, and supporting decision making. Data
analysis has multiple facets and approaches, encompassing diverse techniques under a variety of
names in different business, science, and social science domains. Data mining is a particular data
analysis technique that focuses on modeling and knowledge discovery for predictive rather than
purely descriptive purposes. Marketers use databases to extract applicable information that identifies
customer patterns, characteristics and behaviors.

Data Output: Types of data analysis outputs include a heat map, bar plots, and scatter plots.
Helpful tips to keep in mind during data analysis:
 Communicate the results.
 Try to avoid bias when interpreting data.
 Just because results fail to confirm original hypotheses, does not mean the research results are
useless.

Step 11: Report Preparation & Presentation

During the Report Preparation & Presentation step, the entire project should be documented in a
written report that addresses the specific research questions identified; describes the approach, the
research design, data collection, and data analysis procedures adopted; and present the results
and the major findings. This permanent document is also helpful because it can be easily referenced
by others who may not have been part of the research.

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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.

Presentation: Report preparation and presentation is the sixth step in the market research process.
A successful presentation will include but is not limited to the following elements:
 Final conclusions (based on the insights gathered from data collected) that effectively meet
the initial objectives of the research
 Recommendations about how to apply the research
 Charts, graphs, and visual elements that help showcase important facts and make the
presentation easily digestible and memorable

A formal research report presentation typically includes the following:

 Table of Contents
 Executive Summary
 Background
 Research Objectives
 Research Methodology
 Highlights of Fieldwork Data Collected
 Appendix (including Respondent Screening Instrument and Questionnaire)
 Findings/Insights
 Recommendations/Implications and Action Plan

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Technology to Assist Market Research

Marketing Information Systems

A marketing information system (MIS) is a management information system designed to support
marketing decision making.
Key Points
 An MIS brings together many different kinds of data, people, equipment, and procedures to
help an organization make better decisions.
 MIS not only indicates how things are going, but also why and where performance is failing to
meet the plan.
 MIS produce fixed, regularly scheduled reports to middle and operational level managers to
identify and inform structured and semi-structured decision problems.
 An MIS can provide endless benefits to any organization including: enabling managers to
share information and work together virtually, helping marketers collaborate with customers
on product designs and customer requirements, and addressing operational needs through
customer management systems.
Key Terms
 Philip Kotler: An American academic focused on marketing. The author of Marketing
Management, among dozens of other textbooks and books, and the S.C. Johnson & Son
Distinguished Professor of International Marketing at the Kellogg School of Management at
Northwestern University.

Marketing Information Systems

A marketing information system (MIS) is a management information system designed to support
marketing decision making. It brings together many different kinds of data, people, equipment and
procedures to help an organization make better decisions. American academic Philip Kotler has
defined it more broadly as “people, equipment, and procedures to gather, sort, analyze, evaluate,
and distribute needed, timely, and accurate information to marketing decision makers. ” Not to be
confused for a management information system, marketing information systems are designed
specifically for managing the marketing aspects of the business.

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Example of an MIS: A marketing information system supports the decision-making process in
marketing.

Jobber (2007) defines it as a “system in which marketing data is formally gathered, stored, analyzed
and distributed to managers in accordance with their informational needs on a regular basis. ”
MIS not only indicates how things are going, but also why and where performance is failing to meet
the plan. These reports include near real-time performance of cost centers and projects with detail
sufficient for individual accountability. MISs produce fixed regularly scheduled reports to middle and
operational level managers to identify and inform structured and semi-structured decision problems.

A traditional marketing information system can provide endless benefits to any organization in the
private or public sector, despite its size or level of managerial sophistication. Some of these benefits
include:
 It enables managers to share information and work together virtually.
 It helps marketers collaborate with customers on product designs and customer requirements.
 It addresses operational needs through customer management systems that focus on the day-
to-day processing of customer transactions from the initial sale through customer service.
 The availability of the customer data and feedback can help the company align their business
processes according to the needs of the customers. The effective management of
customer data can help the company perform direct marketing and promotional activities.
 Information is considered to be an important asset for any company in the modern
competitive world. The consumer buying trends and behaviors can be predicted by the
analysis of sales and revenue reports from each operating region of the company.

Digital Surveys
Digital surveys are research tools that ask consumers questions in a virtual environment.
Key Points
 With the increasing use of the Internet, online questionnaires have become a popular way to
collect information.
 Online Research Methods include: ethnography, focus groups, interviews, web-based
experiments and clinical trials.
 The advantages of digital surveys include: questions can be displayed in different ways, data
can be received immediately, collection is more cost-effective than traditional methods,
and adapting surveys is quick and affordable.
 The disadvantages of digital surveys include: response rates are limited to people who can
access the web, many people dislike completing questionnaires online, and people who
respond to online questionnaire invitations tend to be younger.
Key Terms
 Ethnography: The branch of anthropology that scientifically describes specific human cultures
and societies.
 Online Research Method: A way in which researchers can collect data via the Internet. This is
also referred to as Internet research.
 Focus group: A group of people, sampled from a larger population, interviewed in open
session for market research or political analysis.

Digital surveys, also referred to as online questionnaires, are research tools that ask consumers
questions in a virtual environment. These surveys are a type of Online Research Method (ORM). Many
of these ORMs are related to older research methodologies that have been re-invented and re-
imagined to work with new technologies and the on-the-go conditions of a digital environment.
With the increasing use of the Internet, online questionnaires have become a popular way of
collecting information. However, the online research field remains relatively new and continues to
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evolve. With the growth of social media, new levels of complexity and opportunity have been
created for using digital surveys to conduct market research.

Advantages of Digital Surveys

 The administrator has greater flexibility in displaying questions. Questions can be displayed with
check boxes, pull down menus, popup menus, help screens, or submenus.
 An online forum allows responses to be received from more subjects and from anywhere in the
world.
 This method is also cheaper to use, because there are fewer costs incurred from buying paper,
printing materials or paying postage.
 Since data is collected into a central database, the time for analysis is substantially reduced.
 It is easier to correct errors on an online questionnaire, since the administrator does not have to
reprint and redistribute all the questionnaires.
Disadvantages of Digital Surveys
 Not everyone has access to the Internet, so the response rate is limited.
 Many people are not receptive to completing questionnaires online.
 Studies indicate that the demographic that responds to online questionnaire invitations are
generally younger people.

Databases
In market research, databases contain information that is collected, aggregated, and used to define
segments of homogeneous consumers.
Key Points
 Researchers keep consumer databases up-to-date with as much available data as possible
regarding consumer behavior and product consumption.
 When companies want to conduct consumer market research, they call on these research
facilities to request consumers who fit a specific demographic and behavioral profile so that
these prospective respondents can then be contacted to participate in research studies.
 Database research provides the raw data that has already been contributed by the
purchaser when they complete brief surveys that ask for their contact and demographic
information during or after a product purchase.
 Marketers can use database research to identify common buying patterns among consumers.
 Lists that can be found in existing databases include: credit card holders, smokers, drinkers, car
buyers, video buyers.
Key Terms
 Market Research: The systematic collection and evaluation of data regarding customers’
preferences for actual and potential products and services.
 Baby boomer: A person born in the postwar years (generally considered in the USA and other
Allied countries as between 1945 and the early 1960s), when there was an increase in the
birth rate following the return of servicemen at the end of World War II.
 Database: An organized collection of data. The data are typically organized to model
relevant aspects of reality (for example, the availability of rooms in hotels), in a way that
supports processes requiring this information (for example, finding a hotel with vacancies).
A database is an organized collection of data that is typically organized to model relevant aspects
of reality (for example, the availability of rooms in hotels) in a way that supports the processes that
require this information (for example, finding a hotel with vacancies). In market research, a database
contains information that is collected, aggregated, and used to define segments of homogeneous
consumers.

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Consumer Databases in Market Research
Researchers keep consumer databases up-to-date with as much available data as possible
regarding consumer behavior and product consumption. This customer information oftentimes
includes, but is not limited to, a variety of data, including name and address, history of shopping and
purchases, demographics, and brand and product consumption. When companies want to conduct
consumer market research, they call on these research facilities to request consumers who fit a
specific demographic and behavioral profile so that these prospective respondents can then be
contacted to participate in research studies.
Companies may also acquire prospect data directly through the use of sweepstakes, contests, online
registrations, and other lead generation activities.

Database Research
Database research provides the raw data that has already been contributed by the purchaser when
they complete brief surveys that ask for their contact and demographic information during or after a
product purchase. Marketers can use database research to identify common buying patterns
among consumers. Lists that can be found in existing databases include: credit card holders,
smokers, drinkers, car buyers, video buyers.

Customers asked for information at counter: Retail outlets such as pharmacies can request
customer’s contact information at check-out for specific products as a way to help build a consumer
database.
Database research is considered an extremely helpful tool in market segmentation research. For
example, from zip code lists, marketers may determine where the wealthy consumers live in a city.
That list can be merged with a list of moms of children 0-5 years old. The resulting list can be merged
with another list of women who are Hispanic and African American to further target this niche
demographic. The final list will deliver a potential market for a new baby product to be introduced
and profiled in Hispanic and African American women’s magazines. The people on the potential
buyers’ list could then be mailed an invitation to come test this new baby product.

Decision Support Systems

Companies across all industries rely on decision support tools, techniques, and models to help them
assess and resolve business questions. One example of this is a decision support system (DSS). A DSS is
a computer-based information system that helps businesses or organizations make better decisions
by providing a flexible tool for analysis. With supporting software and hardware, this tool collects data
that helps an organization gather and interpret relevant business information. It then converts the
information into a basis for marketing action.

Example of a DSS: A decision support system helps a company resolve business questions.
Decision support systems enable managers to obtain and manipulate information as they are making
decisions. In addition to helping management, DSSs also serve the operations and planning levels of
an organization by helping them make decisions, which may be rapidly changing and not easily
specified in advance. Decision support systems can be either fully computerized, human, or a
combination of both.

A key component to any DSS is business intelligence reporting tools, processes, and methodologies.
DSSs also include knowledge-based systems and an interactive software-based system intended to
help decision makers compile useful information from a combination of raw data, documents,
personal knowledge, or business models.

Typical information that a decision support application might gather and present includes:
 Comparative sales figures between one period and the next
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  Projected revenue figures based on product sales assumptions

Decision support systems can be developed to support the types of decision-making faced by
managers in specific industries such as the airline and real estate industry. For example, American
Airlines produced a DSS that helps to decide how much to overbook and how to set prices for each
seat so that a plane is filled and profits are maximized. Decision support systems have become
critical and useful across all types of business. In today’s global marketplace, it is imperative that
companies respond quickly to market changes. Companies with comprehensive decision support
systems have a significant competitive advantage.
The top benefits of decision support systems include:
 Speeding up the process of decision making
 Increasing organizational control
 Speeding up problem solving in an organization
 Helping automate managerial processes
 Improving personal efficiency
 Eliminating value chain activities

Internet: The Internet is one method that’s used to gather information for competitive analysis.
Although the Internet is a first stop in information gathering, CI typically entails spending more time
and effort gathering information by means of primary research, such as speaking with one’s own
employees, customers, suppliers, or outside industry experts. CI can typically be executed via the
following methods:
 Primary research – This process involves the use of a human network to access meaningful
intelligence.
 Secondary research – This process involves the use of secondary research sources, such as by
gathering published information.
 Analysis – This process involves the use of analytical tools.
In essence, CI is a hybrid process of marketing research and strategic analysis that ultimately seeks to
provide companies and their products with a competitive advantage in the marketplace.

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