Outline and explain the marketing research process
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Marketing research is “the planned and systematic gathering and collation of data and the analysis of information relating to all aspects of marketing and the final consumption of goods or services” -Leader & Krystis. Sometimes a company may want information about its customers, and so will carry out research.
The marketing environment is constantly changing and as marketers we need to monitor these changes through research. The research is not used to make decisions but to reduce the risk of making a wrong decision. For example Max Factor may decide to change the shade of its red lipstick after seeing that people don’t buy it as much as the red lipstick of Revlon, but unless they do marketing research they do not know whether this is because of the shade of the lipstick of any other reason. This would not only be an expensive mistake but they may also lose some of their current customers who do not like the new change. How can we know what it is that our customers want or need without asking them? Without research we will reduce our decisions to guess work.
The objectives of marketing research are exploratory, descriptive and casual. Exploratory research starts by collecting information that may assist in helping to define a problem an suggest a theory for it. For example: the manufacturer of Utterly Butterly may notice a decline in sales and the manager mar talk to wholesalers, retailers or sales representatives to try and identify possible problems.
Descriptive research is used to “…describe marketing problems, situations or markets such as the market potential for a product or the demographics and attitudes of consumers” – Armstrong.
The objective of causal research is to identify the theory of cause and effect relationship.
The first step in carrying out marketing research is to define the marketing problems and opportunities. These problems and opportunities vary, launching a new product, for example when McDonalds launched their hotdog in England they did not sell it in every restaurant in the country but only in one town which is not a tourist based area, otherwise the results would not be “true” since its success or failure would be due to the tourists and not the locals. Other problems that may occur are low awareness or utilization of your company and its products or services, a poor company image and problems with distribution.
Secondly objectives, a budget and timetable have to be set. The objective may be to explore the nature of the problem or how the packaging of your product may effect the number of people who buy your product, for example red packaging for a frozen pizza may look more appealing to a customer than brown. Your objective might be to test possible cause and effect relationships. For example, if you lower your price by 10 percent, what increased sales volume should you expect? What impact will this strategy have on your profit? As regards the budget, how much money you are willing to spend will effect the types of research you can carry out, for reasons outlined below. A detailed, realistic time frame to complete all steps of the market research process must be prepared. If your business operates in cycles, establish target dates that will allow the best accessibility to your market. For example, TerraNova may want to conduct research before or around the Christmas season buying period, when their customers are most likely to be thinking about their winter wardrobe purchases.
Research types methods and techniques then need to be selected. The types of research carried out by marketers are customer research, promotion, product, distribution, sales and marketing environment research.
Customer research provides information about where customers live, their hobbies, what they like to spend money on and their spending power. They provide information about the trends in the market.
Promotion research is aimed at how great an effect may promotion have on sales and which types of media should be used in promotion depending on the demographic of the customer.
Product research is used to identify new uses for existing products (for example, some years ago Johnson’s realized they were selling much more baby oil then could be accounted for the number of babies, after some research they found out many adults liked to use the products on themselves which opened up a new target market) and the need for new products.
Distribution research is concerned with finding the best retail outlets for products, for example Marsovin would not try to sell their wine in a mother-and-baby store. This will often overlap with consumer markets, since retail outlets will depend on where the target consumers live.
Sales research “is intended to help the sales management process by ensuring that territories are of equal size or value, that the techniques and approaches being used are effective, that the training of the salesforce is appropriate and sufficient, and that the salesforce motivation is appropriate” – Leader & Krystis.
Marketing environment research examines aspects of the micro- and macro environments. The purpose of this research is to ensure that the company and anticipate environmental changes and develop responses in advance. Three Hills for example upgraded to EU standards before Malta entered the EU.
The above can be gathered through field or desk research. Field research is directly undertaken by the organisation or an agency. It will have to be collected for the first time and is designed to answer a specific issue. It is up to date but more expensive than secondary/desk research. Field research is more expensive because of the ways in which it has to be carried out which are discussed below.
Two types of information can be gathered, these are qualitative and quantitative research. In the case of qualitative research, the information collected is very open, the questionnaire will answer how? And why? Rather than how many? Qualitative researchers generally use focus groups and in-depth-interviews, the aim being to find clues that explain behaviour through discussion. Quantitative research is assessed according to the number of responses. The sample size will have to be bigger and would consist of survey methods of research.
Quantitative research is generally gathered in any of the following methods: Postal questionnaires involve posting questionnaires to respondents in order that they may complete them and return them to the company. When it comes to postal questionnaires the cost for the research is low as compared to other methods of gathering field research but the response is low and incentives are most often necessary to increase the response rate. Also when a sample of people from a wide geographical area want to be taken they are useful and the company undertaking the research does not require a team of skilled researchers. The questionnaires must be short or people will get fed up of filling in the answers and response rate will be low, also further probing of replies is not possible and we cannot always know if the respondent is valid for the questionnaire (the respondent may be male when the questionnaire is about make-up).
Telephone interviewing involves telephoning respondents so that the interviewer can ask the respondent questions. Though not as cheap as postal questionnaires it is cheaper than personal interviewing. As in postal questionnaires respondents who are widely dispersed can be interviewed and an advantage over postal questionnaires is that further probing of replies is possible. Conversations can be recorded and so may be considered in greater detail at a later date, also the response rate is higher. Other disadvantages than the ones mentioned above are that not all people own telephones and as in postal questionnaires personal characteristics that are important cannot be precisely determined.
Personal interviewing involves trained interviewers in talking to respondents face-to-face. This is probably the most expensive of all methods of collecting data but has quite a few advantages over the others. One is that personal characteristics can be identified and so you know that the person answering the questionnaire is suitable. Also it is possible to explain question and more can be asked as well as there being a higher response rate. Unfortunately problems arise is the interviewer is inexperienced or not properly trained. Training the interviewers can be expensive and the duration of interviews can prolong the survey.
Desk-research as its name indicates can be collected even over a computer. There are many companies that sell the data they have collected and although this secondary form of data may not answer all your company needs to know it is cheaper than field research and will generally contain a lot of useful information.
Once the data has been collected it needs to be “filtered”, this involves editing and tabulating results. This is easier when working with quantitative results. To make the filtering easier you should look for relevant data that satisfies your marketing needs, analyze for consistency, for example, are the market demographics provided to you from the local media outlet consistent with your survey results?
Finally, once the marketing information about your target market, competition and environment is collected and analyzed it may be presented to the decision makers of the business. In summary, the resulting data was created to help guide your business decisions, so it needs to be readily accessible to the decision makers.
* Essential of Marketing – Jim Blythe
* Fundamentals of Marketing – W.G. Leader & N. Krystis