Marketing research
Encyclopedia
Marketing research is "the function that links the consumer, customer, and public to the marketer through information — information 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. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications."
Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing
products and services. The goal of marketing research is to identify and assess how changing elements of the marketing mix
impacts customer behavior. The term is commonly interchanged with market research
; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while marketing research is concerned specifically about marketing processes.
Marketing research is often partitioned into two sets of categorical pairs, either by target market:
Or, alternatively, by methodological approach:
Consumer marketing research is a form of applied sociology
that concentrates on understanding the preferences, attitudes, and behaviors of consumer
s in a market-based economy, and it aims to understand the effects and comparative success of marketing campaigns. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen
with the founding of the ACNielsen
Company in 1923.
Thus, marketing research may also be described as the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities in marketing
.
Marketing manager
s make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumer
s. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers' response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing
research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers.
Traditionally, marketing researchers were responsible for providing the relevant information
and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of marketing research in managerial decision making is explained further using the framework of the "DECIDE" model:
The DECIDE model conceptualizes managerial decision making as a series of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints. Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected. The next step is to identify and select the best alternative based on chosen criteria or measures of success. Then a detailed plan to develop and implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are evaluated.
What is the Role of Research? Managers and CEOs often want to base their brand decision on measurable market research. So, how much market research should you do? Research can never give you all the answers, but it can be effectively used to understand how target audiences might receive a new idea, or to find a new market opportunity.
Marketing research is objective. It attempts to provide accurate information that reflects a true state of affairs. It 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
. Research which is motivated by personal or political gain involves a breach of professional standards. Such research is deliberately biased so as to result in predetermined findings. The objective nature of marketing research underscores the importance of ethical considerations.
Problem identification research is undertaken to help identify problems which are, perhaps, not apparent on the surface and yet exist or are likely to company image, market characteristics, sales analysis, short-range forecasting, long range forecasting, and business trends research. Research of this type provides information about the marketing environment and helps diagnose a problem. For example, The findings of problem solving research are used in making decisions which will solve specific marketing problems.
The Stanford Research Institute, on the other hand, conducts an annual survey of consumers that is used to classify persons into homogeneous groups for segmentation purposes. The National Purchase Diary panel (NPD) maintains the largest diary panel in the United States.
Standardized services are research studies conducted for different client firms but in a standard way. For example, procedures for measuring advertising effectiveness have been standardized so that the results can be compared across studies and evaluative norms can be established. The Starch Readership Survey is the most widely used service for evaluating print advertisements; another well-known service is the Gallup and Robinson Magazine Impact Studies. These services are also sold on a syndicated basis.
All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research.
There are two main sources of data - primary and secondary. Primary research is conducted from scratch. It is original and collected to solve the problem in hand. Secondary research already exists since it has been collected for other purposes. It is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher.
A similar distinction exists between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population.
Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems (MIS).
Exploratory research is also conducted to simplify the findings of the conclusive or descriptive research, if the findings are very hard to interpret for the marketing managers.
Based on questioning:
Based on observations:
Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.
There are four key factors that make B2B market research special and different to consumer markets:
2/c
Below are some steps that could be done by SME (Small Medium Entreprise) to analyze the market :
(also called the Schmidt-Hunter technique) refers to a statistical method of combining data from multiple studies or from several types of studies. Conceptualization means the process of converting vague mental images into definable concepts. Operationalization is the process of converting concepts into specific observable behaviors that a researcher can measure. Precision refers to the exactness of any given measure. Reliability refers to the likelihood that a given operationalized construct will yield the same results if re-measured. Validity refers to the extent to which a measure provides data that captures the meaning of the operationalized construct as defined in the study. It asks, “Are we measuring what we intended to measure?”
When developing criteria for selecting an outside supplier, a firm should keep some basics in mind. What is the reputation of the supplier? Do they complete projects on schedule? Are they known for maintaining ethical standards? Are they flexible? Are their research projects of high quality?
What kind and how much experience does the supplier have? Has the firm had experience with projects similar to this one? Do the supplier's personnel have both technical and nontechnical expertise? In other words, in addition to technical skills, are the personnel assigned to the task sensitive to the client's needs and do they share the client's research ideology? Can they communicate well with the client?
The cheapest bid is not always the best one. Competitive bids should be obtained and compared on the basis of quality as well as price. A good practice is to get a written bid or contract before beginning the project. Decisions about marketing research suppliers, just like other management decisions, should be based on sound information.
The most common entry-level position in marketing research for people with bachelor's degrees (e.g., BBA
) is as operational supervisor. These people are responsible for supervising a well-defined set of operations, including field work, data editing, and coding, and may be involved in programming and data analysis. Another entry-level position for BBAs is assistant project manager. An assistant project manager
will learn and assist in questionnaire design, review field instructions, and monitor timing and costs of studies. In the marketing research industry, however, there is a growing preference for people with master's degrees. Those with MBA or equivalent degrees are likely to be employed as project managers.
A small number of business schools also offer a more specialized Master of Marketing Research
(MMR
) degree. An MMR typically prepares students for a wide range of research methodologies and focuses on learning both in the classroom and the field.
The typical entry-level position in a business firm would be junior research analyst (for BBA
s) or research analyst (for MBAs or MMR
s). The junior analyst and the research analyst learn about the particular industry and receive training from a senior staff member, usually the marketing research manager. The junior analyst position includes a training program to prepare individuals for the responsibilities of a research analyst, including coordinating with the marketing department and sales force to develop goals for product exposure. The research analyst responsibilities include checking all data for accuracy, comparing and contrasting new research with established norms, and analyzing primary and secondary data for the purpose of market forecasting.
As these job titles indicate, people with a variety of backgrounds and skills are needed in marketing research. Technical specialists such as statisticians obviously need strong backgrounds in statistics and data analysis. Other positions, such as research director, call for managing the work of others and require more general skills. To prepare for a career in marketing research, students usually:
Career ladder in marketing research:
Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
products and services. The goal of marketing research is to identify and assess how changing elements of the marketing mix
Marketing mix
The term "marketing mix" was coined in 1953 by Neil Borden in his American Marketing Association presidential address. However, this was actually a reformulation of an earlier idea by his associate, James Culliton, who in 1948 described the role of the marketing manager as a "mixer of ingredients",...
impacts customer behavior. The term is commonly interchanged with market research
Market research
Market research is any organized effort to gather information about markets or customers. It is a very important component of business strategy...
; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while marketing research is concerned specifically about marketing processes.
Marketing research is often partitioned into two sets of categorical pairs, either by target market:
- Consumer marketing research, and
- Business-to-business (B2B) marketing research
Or, alternatively, by methodological approach:
- Qualitative marketing research, and
- Quantitative marketing research
Consumer marketing research is a form of applied sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
that concentrates on understanding the preferences, attitudes, and behaviors of consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
s in a market-based economy, and it aims to understand the effects and comparative success of marketing campaigns. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen
Arthur Nielsen
Arthur Charles Nielsen, Sr. was an American market analyst who founded the ACNielsen company.-Background:Arthur Charles Nielsen was born in Chicago, Illinois. He was of Danish descent. Nielsen was educated at University of Wisconsin , where he received a B.S., summa cum laude in 1918...
with the founding of the ACNielsen
ACNielsen
ACNielsen is a global marketing research firm, with worldwide headquarters in New York City. Regional headquarters for North America are located in Schaumburg, Illinois. As of May 2010, it is part of The Nielsen Company.-History:...
Company in 1923.
Thus, marketing research may also be described as the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities in marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
.
Role of marketing research (MR)
The task of marketing research(MR) is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment.Marketing manager
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
s make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumer
Consumer
Consumer is a broad label for any individuals or households that use goods generated within the economy. The concept of a consumer occurs in different contexts, so that the usage and significance of the term may vary.-Economics and marketing:...
s. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers' response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing
Marketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers.
Traditionally, marketing researchers were responsible for providing the relevant information
Information
Information in its most restricted technical sense is a message or collection of messages that consists of an ordered sequence of symbols, or it is the meaning that can be interpreted from such a message or collection of messages. Information can be recorded or transmitted. It can be recorded as...
and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of marketing research in managerial decision making is explained further using the framework of the "DECIDE" model:
The DECIDE model conceptualizes managerial decision making as a series of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints. Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected. The next step is to identify and select the best alternative based on chosen criteria or measures of success. Then a detailed plan to develop and implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are evaluated.
What is the Role of Research? Managers and CEOs often want to base their brand decision on measurable market research. So, how much market research should you do? Research can never give you all the answers, but it can be effectively used to understand how target audiences might receive a new idea, or to find a new market opportunity.
Marketing research characteristics
First, marketing research is systematic. Thus 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 is objective. It attempts to provide accurate information that reflects a true state of affairs. It 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
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...
. Research which is motivated by personal or political gain involves a breach of professional standards. Such research is deliberately biased so as to result in predetermined findings. The objective nature of marketing research underscores the importance of ethical considerations.
Comparison with other forms of business research
Other forms of business research include:- Market researchMarket researchMarket research is any organized effort to gather information about markets or customers. It is a very important component of business strategy...
is broader in scope and examines all aspects of a business environment. It asks questions about competitorsCompetitionCompetition is a contest between individuals, groups, animals, etc. for territory, a niche, or a location of resources. It arises whenever two and only two strive for a goal which cannot be shared. Competition occurs naturally between living organisms which co-exist in the same environment. For...
, market structureMarket structureIn economics, market structure .* Monopolistic competition, also called competitive market, where there are a large number of firms, each having a small proportion of the market share and slightly differentiated products.* Oligopoly, in which a market is dominated by a small number of firms that...
, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment (see environmental scanningEnvironmental scanningEnvironmental scanning is one component of the global environmental analysis. Environmental monitoring, environmental forecasting and environmental assessment complete the global environmental analysis. Environmental scanning refers to the macro environment.The global environment refers to the...
). Sometimes the term refers more particularly to the financial analysis of companies, industries, or sectors. In this case, financial analysts usually carry out the research and provide the results to investment advisors and potential investors.
- Product research - This looks at what productsProduct (business)In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
can be produced with available technology, and what new product innovations near-future technology can develop (see new product developmentNew product developmentIn business and engineering, new product development is the term used to describe the complete process of bringing a new product to market. A product is a set of benefits offered for exchange and can be tangible or intangible...
).
- Advertising researchAdvertising researchAdvertising research is a specialized form of marketing research conducted to improve the efficiency of advertising. According to MarketConscious.com, “It may focus on a specific ad or campaign, or may be directed at a more general understanding of how advertising works or how consumers use the...
- is a specialized form of marketing research conducted to improve the efficacy of advertising. Copy testingCopy testingCopy testing is a specialized field of marketing research. It is the study of television commercials prior to airing them, and is defined as research to determine an ad’s effectiveness based on consumers’ responses to the ad. It covers all media including print, TV, radio, Internet etc...
, also known as "pre-testing," is a form of customized research that predicts in-market performance of an ad before it airs, by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. Pre-testing is also used on ads still in rough (ripomatic or animatic) form. (Young, p. 213)
Classification of marketing research
Organizations engage in marketing research for two reasons: (1) to identify and (2) solve marketing problems. This distinction serves as a basis for classifying marketing research into problem identification research and problem solving research.Problem identification research is undertaken to help identify problems which are, perhaps, not apparent on the surface and yet exist or are likely to company image, market characteristics, sales analysis, short-range forecasting, long range forecasting, and business trends research. Research of this type provides information about the marketing environment and helps diagnose a problem. For example, The findings of problem solving research are used in making decisions which will solve specific marketing problems.
The Stanford Research Institute, on the other hand, conducts an annual survey of consumers that is used to classify persons into homogeneous groups for segmentation purposes. The National Purchase Diary panel (NPD) maintains the largest diary panel in the United States.
Standardized services are research studies conducted for different client firms but in a standard way. For example, procedures for measuring advertising effectiveness have been standardized so that the results can be compared across studies and evaluative norms can be established. The Starch Readership Survey is the most widely used service for evaluating print advertisements; another well-known service is the Gallup and Robinson Magazine Impact Studies. These services are also sold on a syndicated basis.
- Customized services offer a wide variety of marketing research services customized to suit a client's specific needs. Each marketing research project is treated uniquely.
- Limited-service suppliers specialize in one or a few phases of the marketing research project. Services offered by such suppliers are classified as field services, coding and data entry, data analysis, analytical services, and branded products. Field services collect data through mail, personal, or telephone interviewing, and firms that specialize in interviewing are called field service organizations. These organizationOrganizationAn organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...
s may range from small proprietary organizations which operate locally to large multinational organizations with WATS line interviewing facilities. Some organizations maintain extensive interviewing facilities across the country for interviewing shoppers in malls. - Coding and data entry services include editing completed questionnaires, developing a coding scheme, and transcribing the data on to diskettes or magnetic tapes for input into the computer. NRC Data Systems provides such services.
- Analytical services include designing and pretesting questionnaires, determining the best means of collecting data, designing sampling plans, and other aspects of the research design. Some complex marketing research projects require knowledge of sophisticated procedures, including specialized experimental designs, and analytical techniques such as conjoint analysis and multidimensional scaling. This kind of expertise can be obtained from firms and consultants specializing in analytical services.
- Data analysis services are offered by firms, also known as tab houses, that specialize in computer analysis of quantitative data such as those obtained in large surveys. Initially most data analysis firms supplied only tabulations (frequency counts) and cross tabulations (frequency counts that describe two or more variables simultaneously). With the proliferation of software, many firms now have the capability to analyze their own data, but, data analysis firms are still in demand.
- Branded marketing research products and services are specialized data collection and analysis procedures developed to address specific types of marketing research problems. These procedures are patented, given brand names, and marketed like any other branded product.
Types of marketing research
Marketing research techniques come in many forms, including:- Ad TrackingAd TrackingAd tracking, also known as post-testing or ad effectiveness tracking is in-market research that monitors a brand’s performance including brand and advertising awareness, product trial and usage, and attitudes about the brand versus their competition....
– periodic or continuous in-market research to monitor a brand’s performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005) - Advertising ResearchAdvertising researchAdvertising research is a specialized form of marketing research conducted to improve the efficiency of advertising. According to MarketConscious.com, “It may focus on a specific ad or campaign, or may be directed at a more general understanding of how advertising works or how consumers use the...
– used to predict copy testingCopy testingCopy testing is a specialized field of marketing research. It is the study of television commercials prior to airing them, and is defined as research to determine an ad’s effectiveness based on consumers’ responses to the ad. It covers all media including print, TV, radio, Internet etc...
or trackAd TrackingAd tracking, also known as post-testing or ad effectiveness tracking is in-market research that monitors a brand’s performance including brand and advertising awareness, product trial and usage, and attitudes about the brand versus their competition....
the efficacy of advertisements for any medium, measured by the ad’s ability to get attention (measured with AttentionTrackingAttentionTrackingAttentionTracking is an attention measurement procedure. In contrast to classical machine-based eye tracking, during AttentionTracking the attention is measured with a computer mouse or a comparable pointing device...
), communicate the message, build the brand’s image, and motivate the consumer to purchase the product or service. (Young, 2005) - Brand equityBrand equityBrand equity is the marketing effects and outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. Fact of the well-known brand name is that, the company can sometimes charge premium prices from the consumer . And,...
research - how favorably do consumers view the brand? - Brand association research - what do consumers associate with the brand?
- Brand attribute research - what are the key traits that describe the brand promise?
- Brand name testingBrand managementBrand management is the application of marketing techniques to a specific product, product line, or brand.The discipline of brand management was started at Procter & Gamble as a result of a famous memo by Neil H...
- what do consumers feel about the names of the products? - Commercial eye tracking research - examine advertisements, package designs, websites, etc. by analyzing visual behavior of the consumer
- Concept testingConcept testingConcept testing is the process of using quantitative methods and qualitative methods to evaluate consumer response to a product idea prior to the introduction of a product to the market. It can also be used to generate communication designed to alter consumer attitudes toward existing products...
- to test the acceptance of a concept by target consumers - CoolhuntingCoolhuntingCoolhunting is a term coined in the early 1990s referring to a new breed of marketing professionals, called coolhunters. It is their job to make observations and predictions in changes of new or existing cultural trends...
- to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle - Buyer decision processesBuyer decision processesBuyer decision processes are the decision making processes undertaken by consumers in regard to a potential market transaction before, during, and after the purchase of a product or service....
research - to determine what motivates people to buy and what decision-making process they use - Copy testingCopy testingCopy testing is a specialized field of marketing research. It is the study of television commercials prior to airing them, and is defined as research to determine an ad’s effectiveness based on consumers’ responses to the ad. It covers all media including print, TV, radio, Internet etc...
– predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. (Young, p 213) - Customer satisfaction researchCustomer satisfaction researchCustomer satisfaction research is that area of marketing research which focuses on customers' perceptions with their shopping or purchase experience....
- quantitative or qualitative studies that yields an understanding of a customer's satisfaction with a transaction - DemandDemand- Economics :*Demand , the desire to own something and the ability to pay for it*Demand curve, a graphic representation of a demand schedule*Demand deposit, the money in checking accounts...
estimation - to determine the approximate level of demand for the product - Distribution channelDistribution (business)Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
audits - to assess distributors’ and retailers’ attitudes toward a product, brandBrandThe American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
, or company - Internet strategic intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong opinion formers.
- Marketing effectivenessMarketing effectivenessMarketing effectiveness is the quality of how marketers go to market with the goal of optimizing their spending to achieve good results for both the short-term and long-term...
and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities. - Mystery consumer or mystery shoppingMystery shoppingMystery shopping or a mystery consumer is a tool used externally by market research companies or watchdog organizations or internally by companies themselves to measure quality of service or compliance to regulation, or to gather specific information about products and services...
- An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products. - PositioningPositioning (marketing)In marketing, positioning has come to mean the process by which marketers try to create an image or identity in the minds of their target market for its product, brand, or organization....
research - how does the target marketTarget marketA target market is a group of customers that the business has decided to aim its marketing efforts and ultimately its merchandise. A well-defined target market is the first element to a marketing strategy...
see the brandBrandThe American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
relative to competitors? - what does the brand stand for? - Price elasticityPrice elasticity of demandPrice elasticity of demand is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price. More precisely, it gives the percentage change in quantity demanded in response to a one percent change in price...
testing - to determine how sensitive customers are to price changes - Sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc.
- Segmentation researchMarket segmentMarket segmentation is a concept in economics and marketing. A market segment is a sub-set of a market made up of people or organizations with one or more characteristics that cause them to demand similar product and/or services based on qualities of those products such as price or function...
- to determine the demographicDemographicsDemographics are the most recent statistical characteristics of a population. These types of data are used widely in sociology , public policy, and marketing. Commonly examined demographics include gender, race, age, disabilities, mobility, home ownership, employment status, and even location...
, psychographicPsychographicIn the fields of marketing, demographics, opinion research, and social research in general, psychographic variables are any attributes relating to personality, values, attitudes, interests, or lifestyles. They are also called IAO variables...
, and behavioural characteristics of potential buyers - Online panelOnline panelAn Online panel is a group of selected research participants who have agreed to provide information at specified intervals over an extended period of time.A panel can be distinguished from a database in the following ways:...
- a group of individual who accepted to respond to marketing research online - Store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market shareMarket shareMarket share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
, or to determine whether a retail store provides adequate service - Test marketTest marketA test market, in the field of business and marketing, is a geographic region or demographic group used to gauge the viability of a product or service in the mass market prior to a wide scale roll-out...
ing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market - Viral Marketing ResearchViral Marketing ResearchViral Marketing Research is a subset of marketing research that measures and compares the relative Return On Investment of advertising and communication strategies designed to exploit social networks....
- refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individual's Social NetworkSocial networkA social network is a social structure made up of individuals called "nodes", which are tied by one or more specific types of interdependency, such as friendship, kinship, common interest, financial exchange, dislike, sexual relationships, or relationships of beliefs, knowledge or prestige.Social...
. Estimates of Social Networking PotentialSocial networking potentialSocial networking potential is a numeric coefficient, derived through algorithms to represent both the size of an individual's social network and their ability to influence that network...
(SNP) are combined with estimates of selling effectiveness to estimate ROI on specific combinations of messages and media.
All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research.
There are two main sources of data - primary and secondary. Primary research is conducted from scratch. It is original and collected to solve the problem in hand. Secondary research already exists since it has been collected for other purposes. It is conducted on data published previously and usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher.
A similar distinction exists between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population.
Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems (MIS).
Exploratory research is also conducted to simplify the findings of the conclusive or descriptive research, if the findings are very hard to interpret for the marketing managers.
Marketing research methods
Methodologically, marketing research uses the following types of research designs:Based on questioning:
- Qualitative marketing researchQualitative marketing researchQualitative marketing research is a set of research techniques, used in marketing and the social sciences, in which data is obtained from a relatively small group of respondents and not analyzed with inferential statistics...
- generally used for exploratory purposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated - examples include focus groupFocus groupA focus group is a form of qualitative research in which a group of people are asked about their perceptions, opinions, beliefs and attitudes towards a product, service, concept, advertisement, idea, or packaging...
s, in-depth interviews, and projective techniques - Quantitative marketing researchQuantitative marketing researchQuantitative marketing research is the application of quantitative research techniques to the field of marketing. It has roots in both the positivist view of the world, and the modern marketing viewpoint that marketing is an interactive process in which both the buyer and seller reach a satisfying...
- generally used to draw conclusions - tests a specific hypothesisHypothesisA hypothesis is a proposed explanation for a phenomenon. The term derives from the Greek, ὑποτιθέναι – hypotithenai meaning "to put under" or "to suppose". For a hypothesis to be put forward as a scientific hypothesis, the scientific method requires that one can test it...
- uses random samplingSampling (statistics)In statistics and survey methodology, sampling is concerned with the selection of a subset of individuals from within a population to estimate characteristics of the whole population....
techniques so as to infer from the sample to the population - involves a large number of respondents - examples include surveysStatistical surveySurvey methodology is the field that studies surveys, that is, the sample of individuals from a population with a view towards making statistical inferences about the population using the sample. Polls about public opinion, such as political beliefs, are reported in the news media in democracies....
and questionnairesQuestionnaire constructionA questionnaire is a series of questions asked to individuals to obtain statistically useful information about a given topic. When properly constructed and responsibly administered, questionnaires become a vital instrument by which statements can be made about specific groups or people or entire...
. Techniques include choice modellingChoice ModellingChoice modelling attempts to model the decision process of an individual or segment in a particular context. Choice modelling may also be used to estimate non-market environmental benefits and costs....
, maximum difference preference scalingMaxDiffMaximum difference scaling is a discrete choice model first described by Jordan Louviere in 1987 while on the faculty at the University of Alberta. The first working papers and publications occurred in the early 1990s...
, and covariance analysis.
Based on observations:
- Ethnographic studies - by nature qualitative, the researcher observes social phenomena in their natural setting - observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) - examples include product-use analysis and computer cookie traces. See also EthnographyEthnographyEthnography is a qualitative method aimed to learn and understand cultural phenomena which reflect the knowledge and system of meanings guiding the life of a cultural group...
and Observational techniquesObservational techniquesIn marketing and the social sciences, observational research is a social research technique that involves the direct observation of phenomena in their natural setting...
. - Experimental techniquesExperimental techniquesExperimental research designs are used for the controlled testing of causal processes.The general procedure is one or more independent variables are manipulated to determine their effect on a dependent variable...
- by nature quantitative, the researcher creates a quasi-artificial environment to try to control spurious factors, then manipulates at least one of the variables - examples include purchase laboratories and test markets
Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.
Business to business market research
Business to business (B2B) research is inevitably more complicated than consumer research. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to find the answers using just one method. Finding the right respondents is crucial in B2B research since they are often busy, and may not want to participate. Encouraging them to “open up” is yet another skill required of the B2B researcher. Last, but not least, most business research leads to strategic decisions and this means that the business researcher must have expertise in developing strategies that are strongly rooted in the research findings and acceptable to the client.There are four key factors that make B2B market research special and different to consumer markets:
- The decision making unit is far more complex in B2B markets than in consumer markets
- B2B products and their applications are more complex than consumer products
- B2B marketers address a much smaller number of customers who are very much larger in their consumption of products than is the case in consumer markets
- Personal relationships are of critical importance in B2B markets.
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Marketing research in small businesses and nonprofit organizations
Marketing research does not only occur in huge corporations with many employees and a large budget. Marketing information can be derived by observing the environment of their location and the competitions location. Small scale surveys and focus groups are low cost ways to gather information from potential and existing customers. Most secondary data (statistics, demographics, etc.) is available to the public in libraries or on the internet and can be easily accessed by a small business owner.Below are some steps that could be done by SME (Small Medium Entreprise) to analyze the market :
- Provide secondary and or primary data (if necessary);
- Analyze Macro & Micro Economic data (e.g. Supply & Demand, GDP,Price change, Economic growth, Sales by sector/industries,interest rate, number of investment/ divestment, I/O, CPI, Social anlysis,etc.);
- Implement the marketing mix concept, which is consist of: Place, Price, Product,Promotion, People, Process, Physical Evidence and also Political & social situation to analyze global market situation);
- Analyze market trends, growth, market size, market share, market competition (e.g. SWOT analysis, B/C Analysis,channel mapping identities of key channels, drivers of customers loyalty and satisfaction, brand perception, satisfaction levels, current competitor-channel relationship analysis, etc.),etc.;
- Determine market segment, market target, market forecast and market position;
- Formulating market strategy & also investigating the possibility of partnership/ collaboration (e.g. Profiling & SWOT analysis of potential partners, evaluating business partnership.)
- Combine those analysis with the SME's business plan/ business model analysis (e.g. Business description, Business process, Business strategy, Revenue model, Business expansion, Return of Investment, Financial analysis (Company History, Financial assumption, Cost/Benefit Analysis, Projected profit & Loss, Cashflow, Balance sheet & business Ratio,etc.).
- Note as important : Overall analysis should be based on 6W+1H (What, When, Where, Which, Who, Why and How)question.
International Marketing Research plan
International Marketing Research follows the same path as domestic research, but there are a few more problems that may arise. Customers in international markets may have very different customs, cultures, and expectations from the same company. In this case, Marketing Research relies more on primary data rather than secondary information. Gathering the primary data can be hindered by language, literacy and access to technology.Commonly used marketing research terms
Market research techniques resemble those used in political polling and social science research. Meta-analysisMeta-analysis
In statistics, a meta-analysis combines the results of several studies that address a set of related research hypotheses. In its simplest form, this is normally by identification of a common measure of effect size, for which a weighted average might be the output of a meta-analyses. Here the...
(also called the Schmidt-Hunter technique) refers to a statistical method of combining data from multiple studies or from several types of studies. Conceptualization means the process of converting vague mental images into definable concepts. Operationalization is the process of converting concepts into specific observable behaviors that a researcher can measure. Precision refers to the exactness of any given measure. Reliability refers to the likelihood that a given operationalized construct will yield the same results if re-measured. Validity refers to the extent to which a measure provides data that captures the meaning of the operationalized construct as defined in the study. It asks, “Are we measuring what we intended to measure?”
- Applied research sets out to prove a specific hypothesis of value to the clients paying for the research. For example, a cigarette company might commission research that attempts to show that cigarettes are good for one's health. Many researchers have ethical misgivings about doing applied research.
- SuggingSuggingSugging is a market research industry term, meaning "selling under the guise of research". This behavior occurs when a product marketer falsely pretends to be a market researcher conducting a survey, when in reality they are simply trying to sell the product in question.Generally considered...
(from SUG, for "selling under the guise" of market research) forms a sales technique in which sales people pretend to conduct marketing research, but with the real purpose of obtaining buyer motivation and buyer decision-making information to be used in a subsequent sales call. - FruggingFruggingIn market research, frugging is "fund-raising under the guise of research". This behavior occurs when a product marketer falsely purports to be a market researcher conducting a statistical survey, when in reality the "researcher" is attempting to solicit a donation.Generally considered unethical,...
comprises the practice of soliciting funds under the pretense of being a research organizationOrganizationAn organization is a social group which distributes tasks for a collective goal. The word itself is derived from the Greek word organon, itself derived from the better-known word ergon - as we know `organ` - and it means a compartment for a particular job.There are a variety of legal types of...
.
Selecting a research supplier
A firm that cannot conduct an entire marketing research project in-house must select an external supplier for one or more phases of the project. The firm should compile a list of prospective suppliers from such sources as trade publications, professional directories, and word of mouth. When deciding on criteria for selecting an outside supplier, a firm should ask itself why it is seeking outside marketing research support. For example, a small firm that needs one project investigated may find it economically efficient to employ an outside source. Or a firm may not have the technical expertise undertake certain phases of a project or political conflict-of-interest issues may determine that a project be conducted by an outside supplier.When developing criteria for selecting an outside supplier, a firm should keep some basics in mind. What is the reputation of the supplier? Do they complete projects on schedule? Are they known for maintaining ethical standards? Are they flexible? Are their research projects of high quality?
What kind and how much experience does the supplier have? Has the firm had experience with projects similar to this one? Do the supplier's personnel have both technical and nontechnical expertise? In other words, in addition to technical skills, are the personnel assigned to the task sensitive to the client's needs and do they share the client's research ideology? Can they communicate well with the client?
The cheapest bid is not always the best one. Competitive bids should be obtained and compared on the basis of quality as well as price. A good practice is to get a written bid or contract before beginning the project. Decisions about marketing research suppliers, just like other management decisions, should be based on sound information.
Careers in marketing research
Some of the positions available in marketing research include vice president of marketing research, research director, assistant director of research, project manager, field work director, statistician/data processing specialist, senior analyst, analyst, junior analyst and operational supervisor.The most common entry-level position in marketing research for people with bachelor's degrees (e.g., BBA
BBA
BBA may refer to:*Bachelor of Business Administration, degree*Bachpan Bachao Andolan, an NGO against child labour in India*Backyard Brawlers Association, a wrestling promotion based primarily out of Rockville Centre, NY*Balanced Budget Act, U.S...
) is as operational supervisor. These people are responsible for supervising a well-defined set of operations, including field work, data editing, and coding, and may be involved in programming and data analysis. Another entry-level position for BBAs is assistant project manager. An assistant project manager
Project manager
A project manager is a professional in the field of project management. Project managers can have the responsibility of the planning, execution, and closing of any project, typically relating to construction industry, architecture, computer networking, telecommunications or software...
will learn and assist in questionnaire design, review field instructions, and monitor timing and costs of studies. In the marketing research industry, however, there is a growing preference for people with master's degrees. Those with MBA or equivalent degrees are likely to be employed as project managers.
A small number of business schools also offer a more specialized Master of Marketing Research
Master of Marketing Research
Master of Marketing Research is a graduate degree program that may be from one to three years in length. About 75 percent of the fulltime programs can be studied in about one year while part-time Masters in Marketing are studied besides the job and usually need a minimum of two years to be...
(MMR
MMR
MMR has numerous meanings.In science and medicine:* Measles, mumps and rubella, as in MMR vaccine* DNA mismatch repair, a genetic repair pathway* Mass miniature radiography, a screening X-ray photofluorography technique* Maternal Mortality Ratio...
) degree. An MMR typically prepares students for a wide range of research methodologies and focuses on learning both in the classroom and the field.
The typical entry-level position in a business firm would be junior research analyst (for BBA
BBA
BBA may refer to:*Bachelor of Business Administration, degree*Bachpan Bachao Andolan, an NGO against child labour in India*Backyard Brawlers Association, a wrestling promotion based primarily out of Rockville Centre, NY*Balanced Budget Act, U.S...
s) or research analyst (for MBAs or MMR
MMR
MMR has numerous meanings.In science and medicine:* Measles, mumps and rubella, as in MMR vaccine* DNA mismatch repair, a genetic repair pathway* Mass miniature radiography, a screening X-ray photofluorography technique* Maternal Mortality Ratio...
s). The junior analyst and the research analyst learn about the particular industry and receive training from a senior staff member, usually the marketing research manager. The junior analyst position includes a training program to prepare individuals for the responsibilities of a research analyst, including coordinating with the marketing department and sales force to develop goals for product exposure. The research analyst responsibilities include checking all data for accuracy, comparing and contrasting new research with established norms, and analyzing primary and secondary data for the purpose of market forecasting.
As these job titles indicate, people with a variety of backgrounds and skills are needed in marketing research. Technical specialists such as statisticians obviously need strong backgrounds in statistics and data analysis. Other positions, such as research director, call for managing the work of others and require more general skills. To prepare for a career in marketing research, students usually:
- Take all the marketingMarketingMarketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
courses. - Take courses in statisticsStatisticsStatistics is the study of the collection, organization, analysis, and interpretation of data. It deals with all aspects of this, including the planning of data collection in terms of the design of surveys and experiments....
and quantitative methods. - Acquire computerComputerA computer is a programmable machine designed to sequentially and automatically carry out a sequence of arithmetic or logical operations. The particular sequence of operations can be changed readily, allowing the computer to solve more than one kind of problem...
skills. - Take courses in psychologyPsychologyPsychology is the study of the mind and behavior. Its immediate goal is to understand individuals and groups by both establishing general principles and researching specific cases. For many, the ultimate goal of psychology is to benefit society...
and consumer behavior. - Acquire effective written and verbal communicationCommunicationCommunication is the activity of conveying meaningful information. Communication requires a sender, a message, and an intended recipient, although the receiver need not be present or aware of the sender's intent to communicate at the time of communication; thus communication can occur across vast...
skills. - Think creatively.
Career ladder in marketing research:
- Vice-President of Marketing Research: This is the senior position in marketing research. The VP is responsible for the entire marketing research operation of the company and serves on the top management team. Sets the objectives and goals of the marketing, research department.
- Research Director: Also a senior position, the director has the overall responsibility for the development and execution of all the marketing research projects.
- Assistant Director of Research: Serves as an administrative assistant to the director and supervises some of the other marketing research staff members.
- (Senior) Project Manager: Has overall responsibility for design, implementation, and management of research projects.
- Statistician/Data Processing Specialist: Serves as an expert on theory and application of statistical techniques. Responsibilities include experimental design, data processing, and analysis.
- Senior Analyst: Participates in the development of projects and directs the operational execution of the assigned projects. Works closely with the analyst, junior analyst, and other personnel in developing the research design and data collection. Prepares the final report. The primary responsibility for meeting time and cost constraints rests with the senior analyst.
- Analyst: Handles the details involved in executing the project. Designs and pretests the questionnaires and conducts a preliminary analysis of the data.
- Junior Analyst: Handles routine assignments such as secondary data analysis, editing and coding of questionnaires, and simple statistical analysis.
- Field Work Director: Responsible for the selection, training, supervision, and evaluation of interviewers and other field workers.
External links
- Consumer Confidential: Get paid to shop at Money.CNN.com
- Market Research: Market Insights at Netscribes.com