Lec1_Introduction_to_market_research

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FUNDAMENTALS OF MARKETING RESEARCH:

1 FUNDAMENTALS OF MARKETING RESEARCH INTRODUCTION TO MARKETING RESEARCH MARKETING RESEARCH PROCESS – AN OVERVIEW

INTRODUCTION TO MARKETING RESEARCH:

2 INTRODUCTION TO MARKETING RESEARCH

Definition and purpose:

3 Definition and purpose Marketing research is the systematic design, collection, analysis and reporting of data and findings relevant to a specific marketing situation facing the company.” [Philip Kotler] Market research is an organized effort to gather information about markets or customers. It is an important component of business strategy Basic purpose - Marketing research reduces uncertainty or error in decision making. The information collected by conducting marketing research is used for problem solving and decision making in various areas of marketing

Marketing research…:

4 Marketing research… Can help the marketing manager to - Identify and define marketing problems and opportunities accurately; Understand markets and customers and offer reliable prediction about them; Develop marketing strategies and actions to provide a competitive edge; and refine and evaluate them; Facilitate efficient expenditure of funds; Monitor marketing performance; and Improve the understanding of marketing as a process.

Marketing research…:

5 Marketing research… Is important because of Rapid changing marketing environment Need for up-to-date information for strategically important areas Importance of research as an integral part of better operation

Role of marketing research in marketing framework:

6 Role of marketing research in marketing framework Marketing strategy Marketing plan Information for marketing decision Segmentation Target Market selection Positioning 4 Ps of marketing Product Price Promotion Place Level 1 – STRATEGIC Level 2 – TACTICAL

When marketing research may not be necessary:

7 When marketing research may not be necessary Marketing research is almost always problem-oriented. Whether to conduct marketing research depends on the manager’s experience and wisdom; nature of decision; degree of uncertainty; and the value and importance of the research. Marketing research may not be necessary if – Information is available/outcomes known Insufficient time for marketing research Non-availability of resources Cost Vs Value of the Research Outcomes known

When to do Marketing research?:

8 When to do Marketing research? Marketing research can be done when – There is an information gap which can be filled by doing research The cost of filling the gap through marketing research is less than the cost of taking a wrong decision without doing research The time taken for the research does not delay decision making beyond reasonable limits. A delay can have many undesirable effects like competitors becoming aware of strategies or tactics being contemplated etc

Main divisions of marketing research:

9 Main divisions of marketing research Market and Sales Research Product Research Pricing Research Distribution (Place) Research Promotion Research Customer satisfaction research Advertising research – Copy testing and media research Concept research

Types of Marketing research:

10 Types of Marketing research Marketing research Research based on purpose Research based on source of data Research based on data collection method Basic research Applied research Primary research Secondary research Qualitative research Quantitative research

Marketing Intelligence vs. Market Research:

11 Marketing Intelligence vs. Market Research Marketing intelligence Ongoing process Usually done in-house Not meant for immediate action General purpose Focus on competition and environment Marketing research Project based on information gap Mostly outsourced Action oriented Very specific answers to the questions Focus on consumers, influencers etc

Application areas of Marketing Research:

12 Application areas of Marketing Research Strategical areas Demand forecasting Sales forecasting Segmentation studies Identification of target markets Positioning studies Tactical areas Product testing Pricing research Advertising research Distribution and logistic related research Promotional research

MARKETING RESEARCH PROCESS – AN OVERVIEW:

13 MARKETING RESEARCH PROCESS – AN OVERVIEW

MARKETING RESEARCH PROCESS:

14 MARKETING RESEARCH PROCESS Every research project is different and unique. However, research procedures and activities are common and constitute the marketing research process This process - is an well-organized sequence of SEVEN steps involved in the systematic collection and analysis of marketing data provides a description of how a marketing investigation is designed and implemented and helps to guide the execution of a research project.

Steps involved in market research process:

15 Steps involved in market research process Define the research problem / objective Determine the research design Identify data types and sources Design the questionnaire Determine the sample plan and size Field work, Analysis & Interpretation Final report & presentation Marketing Action

Step 1 – Define the research problem:

16 Step 1 – Define the research problem The very first, and the most important step in research - “A problem well-defined is half solved” Nature of the problem determines the type of study to conduct Symptoms, for example, declining sales, profit, market share, or customer loyalty A research problem must be accurately and precisely defined, else the task of designing a good research will be difficult

Step 1 – …contd.:

17 Step 1 – …contd. The basic question to address – “Will I be able to take better decision if I include this research objective in the study?” Problems may become apparent from: deviation from the business plan, company records and reports, customer complaints and grievances, conversations with company employees, and observation of inappropriate behavior or conditions in the firm; the success of the firm’s competitors, and published materials reporting issues such as, changes in market or environmental trends, new government regulations, anticipated changes in the economy, etc.)

Step 1 – …contd.:

Step 1 – …contd. The decision problem which is faced by management must be translated into a market research problem in the form of questions that define the information which is required to make the decision. Thus, the decision problem is translated into a research problem. For example, the decision problem may be whether to launch a new product. The corresponding research problem might be to assess whether the market would accept the new product . 18

Step 2 – Determine the research design:

19 Step 2 – Determine the research design Research design involves the development of research plan for carrying out the study. It gives a framework for collecting and analyzing the data. Research design Exploratory Descriptive Causal

Exploratory research:

20 Exploratory research The main objective is to formulate the problems more precisely, clarify the concepts, gather explanations, to gain insights and to form hypotheses This can be performed using literature search, surveying certain people about their experiences, focus groups and case studies An example – a manufacturer wants to identify ten most important variables his consumers use to decide on whether to buy his brand

Descriptive research 1/2:

21 Descriptive research 1/2 This is more rigid than exploratory research and seeks to describe users of product or predict the future demand for the product Descriptive research defines questions, people surveyed and methods of analysis prior to begin data collection. It should answer the – who, what, where, when, why and how aspects of the research There are two basic types of descriptive studies – Longitudinal studies Cross-sectional studies

Descriptive research 2/2:

22 Descriptive research 2/2 Longitudinal studies are time series analysis that make repeated measurements of same individuals. It helps to monitor the behavior such as brand switching Cross sectional studies take the sample from the population to make measurements at specific point of time. It helps in long term demand forecasting of a product

Causal research:

23 Causal research Causal research helps to find out the cause and effect relationship between the variables. It is generally done through laboratory and field experiments. It helps to study how actions taken now will affect a business in future It explores the effect of one variable on another. For example, if a clothing company currently sells blue denim jeans, causal research can measure the impact of the company changing the product design to the colour white. This would help to decide whether changing the colour of jeans to white will be profitable

Step 3 – Identify data types and sources:

24 Step 3 – Identify data types and sources Types of data are classified into two types – I. Secondary data and II. Primary data Secondary data sources - Company literature Syndicated reports Internet Newspapers Magazines Primary data sources - Demographics Lifestyles characteristics Attitudes and opinion Awareness Purchase intention Consumer behavior

Step 4 – Design the questionnaire:

25 Step 4 – Design the questionnaire A questionnaire is a structured technique for collecting primary data. It is a series of written or verbal questions to which a respondent provides answers. Steps involved in developing a questionnaire – Determine which information is being sought Select the exact question wording Arrange the questions in an effective sequence Specify the physical characteristics (no. of questions per page, paper type) Test the questionnaire and revise as it needed (pilot interviews)

Step 5 – Determine the sample plan:

26 Step 5 – Determine the sample plan Sampling plan is the statement of what will be the sample size and composition. This is the most critical of all decisions in marketing research process. 2 precautions to be taken to ensure a good sample – Use a probabilistic sampling technique which is not biased Divide the population to be sampled into segments based on relevant parameters such as users/non-users or classes based on age, income etc. Ensure that each segment is adequately represented in the final sample

Step 6 – Analysis & Interpretation:

27 Step 6 – Analysis & Interpretation The ‘raw’ research data collected needs to be edited, tabulated and analyzed to find the results and to interpret them. the method used may be manual or computer based. The analysis plan follows from the research objective of the study. Association and relationships of variables are identified and discussed in the light of the specific marketing problem. Analysis and interpretation is done by using statistical packages like SAS, SPSS, quantum, etc.

Step 7 – Final report & presentation:

28 Step 7 – Final report & presentation The researcher has to submit a written report and often make an oral presentation to management or the client. In conducting all the marketing research activities; the marketing researchers must adhere to ethical standards. A final research report includes a summary of major findings and some recommendations.

Step 7 – …contd:

29 Step 7 – …contd The format of marketing research report varies with the needs of organization. But usually the report contains following sections – Executive summary Table of contents Introduction Research objectives Research Methodology – Sample design, Field work plan and dates, Analysis plan, Questionnaire copy as annexure

Step 7 – …contd:

Step 7 – …contd Analysis Simple tabulation Cross tabulation Any special analysis Findings Limitations Conclusions and recommendations for action Bibliography / List of references Appendices containing copies of questionnaire etc

RESEARCH PROPOSAL 1/2:

31 RESEARCH PROPOSAL 1/2 A research proposal a plan showing step by step description of how a proposed research project will be undertaken. reflects the researcher’s understanding of the problem and ability to conduct the research. If the research is to be conducted through a research agency, the research proposal acts as an important selection criterion. Upon its acceptance, the research proposal becomes the basis for the contract or agreement between the research agency and the client, and serves as a record of what was agreed on.

RESEARCH PROPOSAL 2/2:

32 RESEARCH PROPOSAL 2/2 There is no fixed or standard format for a research proposal as it is dependent on the nature of the specific research project. However, most research proposals contain the following items. Executive summary Statement (title) of the Marketing Research Problem Purpose of the study Details of the Proposed Research Plan - Research design, sample design, data collection and analysis Budget and cost estimation Time schedule Research team

VARIABLES:

33 VARIABLES A variable is any entity that can take on different values (anything that can vary can be considered a variable) e.g. age, price, income, country. Variables are the things that we measure, control or manipulate in the research A “variable” is a factor that: Causes some other factors to vary, and May assume different numerical values Represents responses to each question asked in the survey In statistical analysis, a variable is generally identified by a symbol, such as X or Y. If a researcher is using SPSS, or other computer packages, he or she may use the name of the variable itself or its abbreviated form e.g., ‘age’ ‘marstat’ (for marital status), ‘occupn’ (for occupation), etc.

CLASSIFICATION OF VARIABLES:

34 CLASSIFICATION OF VARIABLES 1.Categorical or Discrete Variables: have a limited number of values, e.g., gender (male or Female) , marital status (married, single, widowed/ widower) etc. 2.Continuous variables: have an infinite number of values, e.g., temperature, sales in $ or number, profit in $. 3. Dependent Variables (is what is affected by independent variable) Variables expected to be predicted or explained. 4. Independent Variables (are what you manipulate) Variables that are expected to influence, predict or explain another. For example, in the following relationship: Income (I) = F (Age, Level of education), Income is a dependent variable; Age and Level of education are independent variables. An independent variable is something that the researcher can control.

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