In last Lesson we discussed the marketing information system. Today’s
Lesson Outlines the
marketing research process, including defining the problem and research
objectives and developing
the research plan. We will also discuss the key issues of planning
primary data collection,
implementing the research plan and interpreting and reporting the
So our today’s topics are:
A. THE MARKETING RESEARCH PROCESS:
a. Marketing Research an Introduction:
Every marketer needs marketing research, and most large companies have
their own marketing
research plan for collecting data from primary and secondary sources.
Primary data collection calls
research departments. Marketing research involves a four-step process.
The first step consists of
the manager and researcher carefully defining the problem and setting
the research objectives. The
objective may be exploratory, descriptive, or causal. The second step
consists of developing the
for choosing a research approach (observation, survey, experiment);
choosing a contact method
(mail, telephone, personal); designing a sampling plan (whom to survey,
how many to survey, and
how to choose them); and developing research instruments (questionnaire,
mechanical). The third
step consists of implementing the marketing research plan by collecting,
processing, and analyzing
the information. The fourth step consists of interpreting and reporting
the findings. Further
information analysis helps marketing managers to apply the information
and provides advanced
statistical procedures and models to develop more rigorous findings from
Some marketers face special marketing research considerations, such as
conducting research in
small-business, non-profit, or international situations. Marketing
research can be conducted
effectively by small organizations with small budgets.
marketing researchers follow
the same steps as domestic researchers but often face more challenging
organizations need to understand the major public policy and ethics
issues surrounding marketing
b. Uses & Application of Research in Marketing:
Decision-making is crucial process in all types of the organization.
This decision-making requires
then information that is collected and acquired through the marketing
research process this
information can be regarding customers companies or competitor or the
factors. Major uses of the marketing research in the organizations are
Measurement of market potential.
Analysis of market share.
Determination of market characteristics
Studies of business trends
Studies of competitors' products.
c. THE MARKETING RESEARCH PROCESS
Before researcher can provide managers with information, they must
know what kind of problem the manager wishes to solve. Marketing
research process has following steps:
1. Defining the problem and research objectives
2. Developing the research plan,
3. Implementing the research plan, and
4. Interpreting and reporting the findings.
Now we will discuss these steps in detail:
Step 1 Defining the Problem and Research Objectives
The marketing manager and the researcher must work closely together
to define the problem
carefully and agree on the research objectives. Marketing managers must
know enough about
marketing research to help in the planning and to interpret research
results. Defining the problem
and research objectives is often the hardest step in the process. After
the problem has been defined
carefully, the manager and researcher must set the research objectives.
The three general types of
1). Exploratory research where the objective is to
gather preliminary information that
will help to better define problems and suggest hypotheses for their
2). Descriptive research is where the intent is to
describe things such as the market
potential for a product or the demographics and attitudes of customers
who buy the product.
3). Casual research is research to test hypotheses
about cause-and-effect relationships.
The statement of the problem and research objectives will guide the
entire research process. It is
always best to put the problem and research objectives statements in
writing so agreement can be
reached and everyone knows the direction of the research effort.
Step 2 Developing the Research Plan
In developing the research plan, the attempt is to determine the
information needed (outline
sources of secondary data), develop a plan for gathering it efficiently,
and presenting the plan to
marketing management. The plan spells out specific research approaches,
sampling plans, and instruments that researchers will use to gather new
data. The firm should
know what data already exists before the process of collecting new data
begins. The steps that
should be followed are. Developing the research plan involves all of the
1. Determining Specific Information Needs
2. Gathering Secondary Information
3. Planning Primary Data Collection
1). Determine specific information needs.
step research objectives are translated
into specific information needs. For example, determine the demographic,
economic, and lifestyle
characteristics of a target audience.
2). Gathering secondary information.
a). Secondary data is information that already
exists somewhere, having been
collected for another purpose. Sources of secondary data include both
internal and external
sources. Companies can buy secondary data reports from outside suppliers
(i.e., commercial data
Information can be obtained by using commercial online databases.
CompuServe, Dialog, and Lexis-Nexus. Many of these sources are free.
Advantages of secondary
1. It can usually be obtained more quickly and at a lower cost than
2. Sometimes data can be provided that an individual company could not
collect on its own.
Some problems with collecting secondary data include:
1. The needed information might not exist.
2. Even if the data is found, it might not be useable.
3. The researcher must evaluate secondary information to make certain it
accurate, current, and impartial. Secondary data is a good starting
point; however, the company will
often have to collect primary data.
b). Primary data is information collected for the
specific purpose at hand.
Planning Primary Data Collection.
A plan for primary
data collection calls for a number of
decisions on research approaches, contact methods, sampling plans, and
a). Research approaches can be listed as:
1. Observational research
where information is
gained by observing relevant
people, actions, and situations. However, some things such as feelings,
attitudes, motives, and private behavior cannot be observed. Mechanical
observation can be obtained through single source data systems. This is
where electronic monitoring systems link consumers’ exposure to
advertising and promotion (measured using television meters) with what
buy in stores (measured using store checkout scanners). Observational
research can be used to obtain information that people are unwilling or
unable to provide.
2. Survey research
is the gathering of primary data
by asking people questions
about their knowledge, attitudes, preferences, and buying behavior.
Survey research is best suited
for gathering descriptive information. Survey research
is the most widely used form of primary
data collection The major advantage of this approach is flexibility
while the disadvantages include
the respondent being unwilling to respond, giving inaccurate answers, or
unwilling to spend the
time to answer.
3. Experimental research
involves the gathering of
primary data by selecting
matched groups of subjects, giving them different treatments,
controlling related factors, and
checking for differences in-group responses. This form of research tries
to explain cause-andeffect
relationships. Observation and surveys may be used to collect
information in experimental
research. This form is best used for causal
In last Lesson we discussed the marketing research process first two
steps were discussed in that
Lesson today we will continue the same topic and will be discussing the
remaining steps of the
marketing research process. Second topic of today’s Lesson is an
introduction to the consumer
So our today’s topics are:
A. THE MARKETING RESEARCH PROCESS (Continued)
B. CONSUMER MARKET
Contact methods are used to obtain the information Contact methods can
be listed as:
1. Mail questionnaires--used to collect large amounts
of information at a low cost.
2. Telephone interviewing--good method for collecting
3. Personal interviewing (which can be either
individual or group interviewing).
A form of personal interviewing is “focus group interviewing”.
Focus-group interviewing consists of inviting six to ten people to
gather for a few hours with a
trained interviewer to talk about a product, service, or organization.
The interviewer “focuses”
the group discussion on important issues.
4. Online (Internet) marketing research can consist of Internet
surveys or online focus groups.
Many experts predict that online research will soon be the primary tool
of marketing researchers.
5. Computer interviewing is a new method being used in
the technology age. Consumers read
questions from a computer screen and respond.
Sampling plans are used to outline how samples will be constructed and
1. A sample is a segment of the population selected for marketing
research to represent the
population as a whole.
2. Marketing researchers usually draw conclusions about large groups of
studying a small sample of the total consumer population.
3. Designing a sample calls for three decisions:
a. Who is to be surveyed (what sampling unit)?
b. How many people should be surveyed (what
c. How should the sample be chosen
(what sampling procedure)?
4. Kinds of samples include:
a. Probability samples--each population member has a
known chance of being
included in the sample, and researchers can calculate confidence limits
b. Nonprobability samples--sampling error cannot be
In collecting primary data, marketing researchers have a choice of two
instruments—the questionnaire and mechanical devices.
The questionnaire is by far the most
common instrument, whether administered in person, by phone, or online.
Questionnaires are very
flexible—there are many ways to ask questions. However, they must be
developed carefully and
tested before they can be used on a large scale. A carelessly prepared
questionnaire usually contains
In preparing a questionnaire, the marketing researcher must first decide
what questions to ask.
Questionnaires frequently leave out questions that should be answered
and include questions that
cannot be answered, will not be answered, or need not be answered. Each
question should be
checked to see that it contributes to the research objectives.
The form of each question can influence the response. Marketing
researchers distinguish between
closed-end questions and open-end questions. Closed-end questions
include all the possible
answers, and subjects make choices among them. Examples include
multiple-choice questions and
scale questions. Open-end questions allow respondents to answer in their
own words. Open-end
questions often reveal more than closed-end questions because
respondents are not limited in their
answers. Open-end questions are especially useful in exploratory
research, when the researcher is
trying to find out what people think but not measuring how many people
think in a certain way.
Closed-end questions, on the other hand, provide answers that are easier
to interpret and tabulate.
Researchers should also use care in the wording and ordering of
questions. They should use
simple, direct, unbiased wording. Questions should be arranged in a
logical order. The first
question should create interest if possible, and difficult or personal
questions should be asked last
so that respondents do not become defensive.
Although questionnaires are the most common research instrument,
mechanical instruments also
are used. We discussed two mechanical instruments, people meters and
earlier in the chapter. Another group of mechanical devices measures
subjects' physical responses.
Step 3 Implementing the Research Plan
The researcher next puts the marketing research plan into action. This
processing, and analyzing the information. Data collection can be
carried out by the company's
marketing research staff or by outside firms. The company keeps more
control over the collection
process and data quality by using its own staff. However, outside firms
that specialize in data
collection often can do the job more quickly and at a lower cost.
The data collection phase of the marketing research process is generally
the most expensive and
the most subject to error. The researcher should watch fieldwork closely
to make sure that the plan
is implemented correctly and to guard against problems with contacting
respondents who refuse to cooperate or who give biased or dishonest
answers, and with
interviewers who make mistakes or take shortcuts.
Step 4 Interpreting and Reporting the Findings
The final step in the marketing research process is interpreting
and reporting the findings. The
researchers should keep from overwhelming managers with numbers and
techniques. Researchers should present important findings that are
useful in the major decisions
faced by management. Interpretation should not be left only to
researchers. Marketing managers
will also have important insights into the problems. Interpretation is
an important phase of the
marketing process. The best research is meaningless if the manager
blindly accepts wrong
interpretations from the researcher.
The researcher must now interpret the findings, draw conclusions, and
report them to
management. The researcher should not try to overwhelm managers with
numbers and fancy
statistical techniques. Rather, the researcher should present important
findings that are useful in
the major decisions faced by management.
However, interpretation should not be left only to the researchers. They
are often experts in
research design and statistics, but the marketing manager knows more
about the problem and the
decisions that must be made.
In many cases, findings can be interpreted
in different ways, and
discussions between researchers and managers will help point to the best
manager will also want to check that the research project was carried
out properly and that all the
necessary analysis was completed. Or, after seeing the findings, the
manager may have additional
questions that can be answered through further sifting of the data.
Finally, the manager is the one
who ultimately must decide what action the research suggests. The
researchers may even make the
data directly available to marketing managers so that they can perform
new analyses and test new
relationships on their own.
Interpretation is an important phase of the marketing process. The best
research is meaningless if
the manager blindly accepts faulty interpretations from the researcher.
Similarly, managers may be
biased—they might tend to accept research results that show what they
expected and to reject
those that they did not expect or hope for. Thus, managers and
researchers must work together
closely when interpreting research results, and both must share
responsibility for the research
process and resulting decisions
A. Consumer Market:
a. Defining Consumer Market:
All individuals and households who buy or acquire goods and services for
are termed as consumers. Markets have to be understood before marketing
strategies can be
developed. People using consumer markets buy goods and services for
Consumers vary tremendously in age, income, education, tastes, and other
factors. Consumer behavior
is influenced by the buyer's characteristics and by the buyer's decision
process. Buyer characteristics
include four major factors: cultural, social, personal, and
Consumer Buying Behavior refers to the buying
behavior of final consumers—individuals and
households who buy goods and services for
The world consumer market consists of more than 6 billion
people. At present growth rates, the
world population will reach almost 8 billion people by 2025
Consumers around the world vary tremendously in age, income, education
level, and tastes. They
also buy an incredible variety of goods and services. How these diverse
consumers connect with
each other and with other elements of the world around them impacts
their choices among various
products, services, and companies. Here we examine the fascinating array
of factors that affect
b. Why to Study Consumer Behavior:
Basic objective of the studying consumer behavior is that the firm needs
to know who buys their
product? How they buy? When and where they buy? Why they buy? How they
marketing stimuli. Because they study consumer behavior (CB) what
Consumer Behavior is about?
How, why, where and when consumers make purchase decisions? Considers
who influences the
decisions? What is Consumer Behavior about? All these are important
questions, which are to be
known to the companies so that they can design, and implement marketing
strategies to satisfy the
customers. Consumers determine the sales and profits of a firm by their
purchase decisions, thus
the economic viability of the firm. In late 1990, US consumers were
spending enough dollar bills to
stretch from the Earth to the Sun and back, with enough left over for
over 600 lines to the moon!
Along with these questions companies should also be knowing some other
factors like what is
Disposable income and what is Discretionary income what is the stage of
family life cycle stage
because these all these factors influence the consumer behaviors which
are very important to the
c. Consumer Behavior
Consumer behavior is the process through which the ultimate buyer makes
This can be defined as the processes involved when individuals or groups
select, purchase, use, or
dispose of products, services, ideas, or experiences to satisfy needs
and desires (Solomon, 1996).
Those actions directly involved in obtaining, consuming and disposing of
products and services,
including the decision processes that precede and follow those actions
(Engel et al. 1995).
Consumer behavior examines mental and emotional processes in addition to
the physical activities
as by (Wilkie 1990).
d. Marketing Applications:
Consumer behaviors plays important role in almost all types of decisions
to be made in marketing.
For the reason being that all functions performed in marketing revolve
around the customers and
Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target consumers.
Some firms find it easy to choose their positioning strategy. For
example, a firm well known for
quality in certain segments will go for this position in a new segment
if there are enough buyers
seeking quality. But in many cases, two or more firms will go after the
same position. Then, each
will have to find other ways to set itself apart. Each firm must
differentiate its offer by building a
unique bundle of benefits that appeals to a substantial group within the
The positioning task consists of three steps: identifying a set of
possible competitive advantages
upon which to build a position, choosing the right competitive
advantages, and selecting an overall
positioning strategy. The company must then effectively communicate and
deliver the chosen
position to the market.
Dividing a market into distinct groups of
buyers on the basis of needs,
characteristics, or behavior who might require separate products or
marketing mixes. Market
segmentation reveals the firm's market segment opportunities. The firm
now has to evaluate the
various segments and decide how many and which ones to target. We now
look at how companies
evaluate and select target segments. The company also needs to examine
major structural factors
that affect long-run segment attractiveness. For example, a segment is
less attractive if it already
contains many strong and aggressive competitors. The existence
of many actual or potential substitute
products may limit prices and the profits that can be earned in
a segment. The relative power of buyers
also affects segment attractiveness. Buyers with strong bargaining power
relative to sellers will try
to force prices down, demand more services, and set competitors against
one another—all at the
expense of seller profitability. Finally, a segment may be less
attractive if it contains powerful suppliers
who can control prices or reduce the quality or quantity of ordered
goods and services.
A strategy for company growth by
offering modified or new products to
current market segments. Developing the product concept into a physical
product in order to
ensure that the product idea can be turned into a workable product.
—offering modified or new products
to current markets.
A strategy for company growth by
identifying and developing new market
segments for current company products.