UNIT 1 PART 1: INTRODUCTION OF MARKETING RESEARCH MARKETING RESEARCH: It is a systematic & objective identification, collection, analysis, dissemination, and

use of information for the purpose of improving decision making related to identification and solution of problems and opportunities in marketing.

AIM AND OBJECTIVE OF MARKETING RESEARCH 1. To understand why customers buy a particular product. 2. To know the marketing opportunities. 3. To understand the marketing problems. 4. To help in the selection of right course of action. 5. 5. To know about customer acceptance of the product. 6. 6. To understand the distribution network of the product. 7. 7. To forecast the probable volumes of the future sales. 8. 8. To analyze the expected market share. 9. 9. To assess the competitive strengths and policies. . APPLICATION AND SCOPE OF MARKETING RESEARCH

1. RESEARCH ON MARKETING: The purpose of market research is to gather facts about markets and the forces operating therein. The areas of market research broadly include Analyzing market potential for the existing products and estimating demand for the new ones Sales forecasting Studying the characteristics of product markets Studying the market trends 2. RESEARCHON PRODUCT/ SERVICE Customer acceptance of the proposed new product Comparative study of competitive products Determining new uses of the present products Test marketing the proposed product Product line research Packaging and design research Studying the extent of customer satisfaction with the product 3. RESEARCH ON PROMOTION Evaluating advertising effectiveness

 Analyzing advertising and selling practices Selecting advertising media Establishing sales territories Evaluating the present and the proposed sales methods Studying competitive pricing Analyzing the salesmens effectiveness 4. RESERACH ON DISTRIBUTION Location and design of distribution centers Handling and packing of merchandise Cost analysis of transportation methods Dealer supply and storage requirements 5. RESEARCH ON PRICES Demand elasticity Perceived prices Cost analysis Margin analysis . MARKETING INFORMATION SYSTEM A marketing information system (MIS) is a set of procedures and methods designed to generate, analyse, disseminate, and store anticipated marketing decision information on a regular, continuous basis. An information system can be used operationally, managerially, and strategically for several aspects of marketing. A marketing information system can be used operationally, managerially, and strategically for several aspects of marketing. We all know that no marketing activity can be carried out in isolation, know when we say it doesnt work in isolation that means there are various forces could be external or internal, controllable or uncontrollable which are working on it. Thus to know which forces are acting on it and its impact the marketer needs to gathering the data through its own resources which in terms of marketing we can say he is trying to gather the market information or form a marketing information system. This collection of information is a continuous process that gathers data from a variety of sources synthesizes it and sends it to those responsible for meeting the market places needs. The effectiveness of marketing decision is proved if it has a strong information system offering the firm a Competitive advantage. Marketing Information should not be approached in an infrequent manner. If research is done this way, a firm could face these risks: 1. 2. 3. 4. 5. 6. Opportunities may be missed. There may be a lack of awareness of environmental changes and competitors actions. Data collection may be difficult to analyse over several time periods. Marketing plans and decisions may not be properly reviewed. Data collection may be disjointed. Previous studies may not be stored in an easy to use format.

7. Time lags may result if a new study is required. 8. Actions may be reactionary rather than anticipatory. The total information needs of the marketing department can be specified and satisfied via a marketing intelligence network, which contains three components. 1. Continuous monitoring is the procedure by which the changing environment is regularly viewed. 2. Marketing research is used to obtain information on particular marketing issues. 3. Data warehousing involves the retention of all types of relevant company records, as well as the information collected through continuous monitoring and marketing research that is kept by the organization. Depending on a firms resources and the complexity of its needs, a marketing intelligence network may or may not be fully computerized. The ingredients for a good MIS are consistency, completeness, and orderliness. Marketing plans should be implemented on the basis of information obtained from the intelligence network. A Marketing Information System offers many advantages: 1. 2. 3. 4. 5. 6. 7. 8. Organised data collection A broad perspective The storage of important data An avoidance of crises Coordinated marketing plans Speed in obtaining sufficient information to make decisions Data amassed and kept over several time periods The ability to do a cost-benefit analysis

The disadvantages of a Marketing information system are high initial time and labour costs and the complexity of setting up an information system. Marketers often complain that they lack enough marketing information or the right kind, or have too much of the wrong kind. The solution is an effective marketing information system. The information needed by marketing managers comes from three main sources: 1. Internal company information E.g. sales, orders, customer profiles, stocks, customer service reports etc. 2. Marketing intelligence This can be information gathered from many sources, including suppliers, customers, and distributors. Marketing intelligence is a catchall term to include all the everyday information about developments in the market that helps a business prepare and adjust its marketing plans. It is possible to buy intelligence information from outside suppliers (e.g. IDC, ORG, MARG) who set up data gathering systems to support commercial intelligence products that can be profitably sold to all players in a market. 3. Market research Management cannot always wait for information to arrive in bits and pieces from internal sources. Also, sources of market intelligence cannot always be relied upon to provide relevant or up-to-date information (particularly for smaller or niche market segments). In such circumstances, businesses often need to undertake specific studies to support their marketing strategy this is market research. 4. Analytical Marketing System (two parts)

a) Statistical Bank b) Model Bank . EVALUATION AND CONTROL OF MARKETING RESEARCH Management can use certain tools to evaluate & control research projects. They are as follows: Check list: It serves as a reminder for the types of problems that are likely to come up during the course of projects. Flow charts: It enables management to maintain an overall control over the project. Gnatt Chart: It enables the management to develop an overall research schedule by allocating a time period to each component. Advisory Committee: It comprises representatives from all functions and is the most effective way of evaluating and controlling the total MR activity. Its main task is to give directions. Marketing Research Audit Budget Control: Some % of sales or each department decides its budget or Ad hoc basis . VALUE OF INFORMATION IN DECISION MAKING Unless the information collected does not lead the manager to change or modify his decision, the information has no value. Generally, information is most useful in cases 1. Where one is unsure of what is to be done 2. Where huge values, say, huge profits or losses, are involved. The value of information used in decision making is: (Value of the outcome with the Information) (value of the outcome without the Information) . STEPS IN MARKETING RESEARCH 1: Problem Identification and Definition This is the introductory phase of the marketing research process. Basically, it involves a clear and precise understanding of the problem at hand. It is crucial that the research team identifies, understands and defines the problem in its entire capacity, as it affects all the subsequent activities involved in the research process. Research teams make use of customer feedback, internal and external data reports, sales graphs, purchasing patterns, etc. to come up with an accurate problem definition. 2: Designing a Proper Approach The next step is to come up with a near-flawless approach which is aimed at solving the identified problem. During this process, the research team has to analyze and examine a variety of factors such as the

company's targets, goals and objectives, financial resources, skill sets, manpower, industry environment, changing business trends, etc. This phase often involves joint discussions between the research team, industry experts and higher management. 3: Developing the Actual Research Design This is the decisive step, wherein, the research design is the very fulcrum of the entire marketing research process. The solidity of the research design alone decides the success or failure of the research program to a large extent. Naturally, this step is the most time-consuming of all the steps and it needs careful thinking and precise execution. Different activities involved in this process include feedback analysis, qualitative and quantitative analysis, preparing questionnaires as well as sampling of data and processes. 4: Data Collection and Survey This process mainly involves a lot of field-related work activities such as outdoor interviews, survey campaigns and feedback sessions which are done by specially assigned data collection agents or field agents. Almost all of those doorbell-ringing pamphlet guys or the irritating tele-callers who telephone at the most untimely of hours, are data collection agents who are just doing their duty, as part of their company's marketing research process. Data collection and surveying is also implemented by means of Internet surveys, group discussions, mail surveys, etc. 5: Data Structuring and Analysis Once the data collection and surveying activities have yielded sufficient and relevant data, it is time to systematically organize the data so that it can be interpreted and analyzed by decision makers. This typically involves activities such as data mining, clustering of data, preparing statistical graphs and curves, etc. 6: Report Generation and Presentation All the effort that goes into designing an approach, developing a research design, collecting data and finally analysing the data, completely goes waste, if the findings and the results are not presented properly. It is imperative that the whole marketing research project be properly documented and accounted for. The entire purpose of the research campaign is to enable the higher management to make informed decisions which will benefit the progress and the sales of the concerned product or service. Hence, it is crucial that the research findings be presented accurately, clearly and relevantly. For this purpose, the use of appropriate statistics, graphs, pie-charts, etc. is recommended. .

PART 2: RESEARCH DESIGN RESEARCH DESIGN: A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the information needed to structure or solve marketing research problems.

EXPLORATORY RESEARCH It is most commonly unstructured, informal research that is undertaken to gain background information about the general nature of the research problem. Exploratory research is systematic and flexible and allows the researcher to investigate whatever sources he or she desires. Such research may consist of going to the library and reading published secondary data; of asking questions, salespersons acquaintances for their opinions about a company, its products and services, and prices; or of simply observing everyday company practices.

REASON TO USE Formulate a problem or define a problem more precisely Identify alternative courses of action Develop hypotheses Isolate key variables and relationships for further examination Gain insights for developing an approach to the problem Establish priorities for further research

METHODS OF EXPLORATORY RESEARCH Survey of experts

Pilot surveys Secondary data analyzed in a qualitative way Qualitative research

.

DESRIPTIVE RESEARCH Which provides answers to questions such as who, what, where, where and how, as they are related to the research problem. Who- may be defined as a firms (competitors) customers? What- defined as brands, brands, sizes that are being purchased. Where- places where customers are purchasing products? Why we cannot conclusively answer the question of why using descriptive research. Need to use causal research designs.

REASON TO USE To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas. To estimate the percentage of units in a specified population exhibiting a certain behavior. To determine the perceptions of product characteristics. To determine the degree to which marketing variables are associated. To make specific predictions.

METHODS OF DESCRIPTIVE RESEARCH Secondary data analyzed in a quantitative as opposed to a qualitative manner Surveys Panels Observational and other data

REASON TO USE CASUAL RESEARCH A type of conclusive research where the major objective is to obtain evidence regarding cause-andeffect (causal) relationship. It requires a planned & structured design. PURPOSE To understand which variables are cause (independent variables) & which variables are the effect (dependent variables) of a phenomenon. To determine the nature of the relationship between the causal variables & the effect to be predicted. METHOD: Experiments

. CROSS- SECTIONAL DESIGNS Involve the collection of information from any given sample of population elements only once. In single cross-sectional designs, there is only one sample of respondents and information is obtained from this sample only once. In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times. Cohort analysis consists of a series of surveys conducted at appropriate time intervals, where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the same event within the same time interval. MULTIPLE CS DESIGN A CS design in which there are two or more samples of respondents, and information from each sample is obtained only once. SINGLE CS DESIGN A CS design in which one sample of respondents is drawn from the target population and information is obtained from the sample once. .

LONGITUDINAL DESIGNS

A fixed sample (or samples) of population elements is measured repeatedly on the same variables A longitudinal design differs from a cross-sectional design in that the sample or samples remain the same over time The sample remains the same over time, thus providing a series of pictures which when viewed together portray an illustration of the situation & the changes that are taking place over time.

. SOURCES OF EXPERIMENTAL ERRORS Several potential sources of error can affect a research design. The errors are as follows:

TOTAL ERROR

It is the variation between the true mean value in the population of the variable of interest and the observed mean value obtained in the marketing research project. Example: Avg income acc. to census record is different from the marketing research project estimate. It consists of 2 types of error:

1. RANDOM SAMPLING ERROR The error due to the particular sample selected being an imperfect representation of the population of interest. It can be defined as the variation between the true mean value for the sample and the true mean value of the population.

2. NON- SAMPLING ERROR Non-sampling errors can be attributed to sources other than sampling, and they may be random or nonrandom: including errors in problem definition, approach, scales, questionnaire design, interviewing methods, and data preparation and analysis. It consists of 2 types of error: 1. NON- RESPONSE ERROR A type of non-sampling error that occurs when some of the respondents included in the sample do not respond. This error may be defined as the variation between the true mean value of the variable in the original sample and the true mean value in the net sample.

2. RESPONSE ERROR A type of non-sampling error arising from respondents who do respond but give inaccurate answers or their answers are misreported or misanalysed. It may be defined as the variation between the true mean value of the variable in the net sample and the observed mean value obtained in the research project. It consists of 3 types of error: A. RESEARCH ERROR: A type of response error made by the researcher is called researcher error. Researcher error includes: 1. Surrogate information error: Surrogate information error may be defined as the variation between the information needed for the research and the information sought by the researcher. Example: Instead of obtaining information on consumer choice ,researcher gets it on consumer preference 2. Measurement error: Measurement error may be defined as the variation between the information sought and the information generated by the measurement process employed by the researcher. Example: liking scale instead of satisfaction scale 3. Population definition error: It may be defined as the variation between the actual population relevant to the problem at hand and the population as defined by the researcher. 4. Sampling frame error: It may be defined as the variation between the population defined by the researcher and the population as implied by the sampling frame used. Example: the telephone directory used to generate a list of no. does not accurately represent the population because of unlisted, disconnected and new no. in service. 5. Data analysis error: It occurs when raw data is transformed into research findings using an inappropriate statistical procedure, resulting in incorrect interpretation and findings. B. INTERVIEWER ERROR: Response errors can be made by the interviewer also. This kind of error is known as interviewer error. Interviewer error includes:

1. Respondent selection error: It occurs when interviewers select respondents other than those specified by the sampling design. 2. Questioning error: Errors made in asking questions of the respondents or in not probing when more information is needed are called questioning errors. 3. Recording error: Recording error arises due to errors in hearing, interpreting, and recording the answers given by the respondents. 4. Cheating error: Cheating error arises when the interviewer fabricates answers to a part or all of the interview. Example: Not asking sensitive question related to respondent debt but later fills in the answers based on personal assessment.

C. RESPONSE ERRORS: Response errors made by the respondent are called respondent errors. Respondent errors includes: 1. Inability error: It results from the respondents inability to provide accurate answers. Respondents may provide inaccurate answers because of unfamiliarity, fatigue, boredom, faulty recall, question format and other factors. 2. Unwillingness error: It arises from the respondents unwillingness to provide accurate information. Respondents may intentionally misreport their answers because of a desire to provide socially acceptable answers, avoid embarrassment, or please the interviewer. .

In formulating a research design, the researcher should minimize the total error. Increasing the sample size may decrease sampling error but may increase non sampling error (Interviewer error). Non sampling error is likely to be more problematic than sampling error.