Definition of Marketing Research

It is the process of systematic collection and analysis of market information and data for the purpose of important decision making in marketing

Relevance Of Marketing Research Today

Today’s business decisions are extremely complex and a large variables are involved

Globalization and liberalization has intensified competition and survival has been at stake

Optimization of all levels to reduce costs

Relevance Of Marketing Research Today

Employees and shareholders are becoming increasingly aware of their rights to participate in decision making

More and more organizations are turning from selling to marketing concept

The tools used for research have increased and organizations are increasingly practicing data mining

What Constitutes Good Market Research

Clearly defining the problem and purpose Process of research well described Research design thoroughly planned Maintaining high ethical standards Limitations clearly revealed Adequate analysis of the data Findings presented unambiguously Conclusions justified Integrity of researcher

Why Market Research Sometimes Fails When the problem is not carefully designed

When researchers are less competent, not well trained and lack creativity

When sufficient time and finance is not provided

When there exists a lack of co-ordination and understanding between researchers and marketing managers

Pros & cons of In-house M R Activity

Better knowledge of the company, its history, background and current problems

Better control and liaison

Commitment may be higher

More assurance of confidentiality

Pros & cons of In-house M R Activity

Commissioning costs can be lower

Lack of objectivity due to close relations with clients

Friendship and company politics

Pros of Outsourced M R Activity

Good value

A wider skill base

Objectivity

Anonymity

Pros of Outsourced M R Activity

Superior facilities

Agency specialization

Less chance of bias since a fresh look is possible

Evaluation of external agency

Personal recommendation Recommendations by trade associations Experience and Qualifications of key

personnel Matching agency specializations of the

agency to the need Agency orientation towards client’s

decision makers

Evaluation of external agency

Facilities and resources of the agency Level of creativity and innovation in

previous research Time conscious and organization culture Stability and reliability of the agency

personnel

Qualities of a good Researcher

Must be innovative and ready to look at any problem with fresh perspective

Must have skill and knowledge and prepared to try out new ideas

Must be familiar with recent developments in industrial sectors, markets, products etc.

Must be familiar with and absorb recent trends in research techniques

Must have considerable selling skills to convince the top management or sponsor regarding the accuracy and soundness of recommendations

Research Proposal Defined

It is a researcher’s offer to render market research service to a potential buyer or a sponsor

Purpose Of Proposal

To present management question to be researched and its importance and relevance

To indicate the research efforts of other researchers on related management questions

To highlight the data necessary for solving the management questions

To present the methodology of the research To state the means of gathering and treating

the data and interpretation of the data

Exploration Exploration

Discover Management Dilemma

Define Management Question

Define Research Question

Refine Research Question

Research Proposal

Research Design

Design Strategy (type, purpose, time frame, scope)

Data CollectionDesign

SamplingDesign

Question & InstrumentPilot Testing

Instrument Revision

Data Collection& Preparation

Data Analysis& Interpretation

Report

ManagementDecision

Benefits Of Making Proposal

It helps the researcher to have a tentative work plan

Charts the logical steps needed to accomplish the stated goals

It helps the researcher to review the project steps

It helps the researcher to assess previous approaches to the problem and revise the plan accordingly

Benefits Of Making Proposal

It provides an opportunity to spot errors in assumptions and correct them if necessary

It gives the time and budget estimates It becomes a milestone for the sponsor

to review the progress of the study It serves as a logical guide for

investigation

Why Ethical Considerations in MR

• To ensure confidentiality for the sponsor organization

• To protect the rights of the respondents

• To ensure the client or sponsor organization receives genuine findings from the study

• To protect the safety of the researcher and the tea

• To ensure integrity in MR

More About Research Ethics

Ethical practices are the means to ensure that no one is harmed or suffers adverse consequences from the research activities

There is no single approach to ethics

Strict adherence to a set of laws is not practical since researcher is subjected to unforeseen constraints

More About Research Ethics

Many design based ethical problems can be eliminated by careful planning and constant vigilance

Responsible research anticipates ethical dilemmas and adjusts the design and procedures to overcome them

Be fair and frank about the limitations of research with the client as also respondents

Ethical practices towards respondents

Before starting data collection, explain the benefits to the respondents. Do not overstate or understate the benefits

Assure that the rights and well being of respondents will be protected. Show by destroying names etc.

Take informed consent of the respondents

Clearly state that sensitive questions may not be answered

Survey Research

The communication approach involving questioning people and recording their responses for analysis

It is the most versatile approach for the collection of abstract information of all types

An economical and efficient means of learning opinions and attitudes, intentions and expectations of respondents

Survey Research

It depends greatly upon the ability and willingness of respondents

Interpretation of the question by the respondent can greatly vary their responses

Observation Survey

A method of collecting past and current data by recording observation

It can be used to collect data even when respondents are hostile or unable to give information

Data can be collected as it occurs in its natural environment

Observation Survey

It can record the information which most respondents would ignore

It is less demanding and has less bias involved

It is a slow and expensive process and involves interpretation skills and needs to be used with care and understanding

Questionnaire Design

A researcher first needs to answer 4 basic questions –

What type of data is needed to answer management questions?

What communication approach will be used? Should the questions be structured,

unstructured or a combination? Should the questioning be undisguised or

disguised and if so, to what degree?

Forms of Questionnaire

Structured : It is a formal list of questions framed to generate facts

Unstructured : It is one in which questions are not structured and the order in which they are to be asked is left to the researcher

Disguised : A questionnaire where the object of inquiry is not revealed to the respondent. It can be structured, or unstructured

Undisguised : It is one where the object of inquiry is revealed to the respondent

Types of Questions

Open ended questions : They give respondent complete freedom to decide the form, length and details of the answer

Dichotomous questions : They have only 2 answers in the form of yes or no, true or false etc.

Multiple choice questions : Here the respondent is offered two or more choices and the respondent has to indicate the one applicable in his case.

Phrasing and Ordering of Questions

Difficult words should be avoided as far as possible

Lengthy questions should be avoided

Two or more questions should not be combined into one

Phrasing and Ordering of Questions

Questions lacking specificity should be avoided

Simple questions should be asked in the beginning of the interview

Specialized questions needing in-depth information should be left at the end

Characteristics of informed consent Respondent must be capable of giving

free consent

Consent must be voluntary, free from coercion and unethical practices

Consent must be adequately informed to make a decision

Respondents must be told of the risks involved if any

Classification of Research Designs

The degree to which the question has been crystallized (exploratory or formal)

The method of data collection (observational or communicative)

Purpose of the study (finding who, what, when and why)

The time dimension (once or repetitive study)

The topical scope (case study or statistical study)

Exploratory Research It is a preliminary investigation where the

researcher is not sufficiently knowledgeable

The focus is to bring out different ideas relating to the management problem

It is generally based on readily available secondary data

It is an informal and unstructured design

It is independent of the size of the research

Exploratory Research

A researcher is asked for a help by the new management of an oldest and most reliable bank concerned about the erosion of profitability

Management Dilemma: How can we improve our profit?

Exploratory Research

This management Dilemma does not specify what kind of research needs to be done

This question is broad and is strictly managerial in thrust

It does not indicate the route to be taken by the bank to increase profit

Exploratory Research

The route to be taken by the bank to increase profit may be via increase in deposits, increase in loan disbursements, downsizing the manpower, outsourcing less value adding jobs outside, or by some other means

Exploratory Research

Now the management question becomes a two sub-question based:

How can we improve deposits?

How can we reduce costs?

Exploratory Research

A small focus group is conducted among employees and data is analyzed to compare financial and operating statistics with profitable banks.

It becomes obvious that the bank operations are not as progressive as its competitors’ and has its costs well in line.

Exploratory Research

Now the revised management question becomes:

What should be done to make the bank more competitive?

Exploratory Research

Now the Research question becomes:

Should the bank position itself as a modern, progressive institution with appropriate changes in services or policies

Or

Maintain its image as the oldest, most reliable institution

Exploratory Research

The investigative questions become:

1. What is the public’s position regarding financial services and their use?

a. What specific financial services are used?

b. How attractive are various services?c. What bank-specific and environmental-specific factors

influence a person’s use of a particular service?

Exploratory Research

2. What is the bank’s competitive position?a. What are the geographic patterns of our customers

and of our competitors’ customers?b. What are demographic differences between our and

competitors customers?c. How aware is the public of the bank’s promotional

efforts?d. What opinion does the public hold of the bank and its

competitors?e. How does growth in services compare among competing institutions?

Focus Group Discussion It is a formal discussion between representative

samples on a particular subject Ideally, the group should consist of 8-10

representatives The representatives should be homogeneous to

have a meaningful discussion It should be conducted by an experienced specialist

whose role is of a catalyst FGD is fast and cheap and is the method for

generating the hypothesis They are flexible in approach, direct and easily

understandable to the client The limitation is that the sample may be inadequate

since it may be drawn on the basis of convenience

Advantages of F G D

Ability to quickly and inexpensively grasp the core issues of a topic

They are brief and extremely flexible Provide an opportunity to observe reactions

to the research questions in an open ended group setting

They bring out surprise information and new ideas

Descriptive Research

• The focus of this research is to answer the “who, what, when, where and how” of the management dilemma

• These studies are factual and can be complex at times

• They are formal and well structured and hence the research process should be well defined in the planning stage

• Descriptive research can be of 2 types –• Cross sectional studies which are concerned with a

sample of elements from a given problem• Longitudinal studies which are based on panel data

and panel methods

Descriptive Research

In the bank example, we may be interested in developing a profile of savers by analyzing data:

• Size of accounts• No. of accounts for minors• No. of accounts opened in last six months• Amount of activity in the account• Gender of account holders• Nearness to workplace/home

Causal Research

John Stuart Mill formulated a set of principles for Causal research

When two or more cases of a given phenomenon have one and only one condition in common then that condition may be regarded as the cause of the phenomenon

Causal Research

A B C Z

D EC Z

ZC

Causal Research

Advantage: Helps ruling out irrelevant factors

Limitation: Other factors not considered may be influencing the phenomenon

Causal Research

John Stuart Mill improved the logic by having a negative canon

If a change in the amount of one variable is accompanied by a comparable change in the amount of another variable in two or more cases, and the latter change does not occur in the absence of the first change, one change is the cause of the other

Causal Research

A B C Z

NonC

NonZ

ZC

A B

Causal Research It investigates the cause and effect relationship

between 2 or more variables The study is based on the 3 possibilities viz

symmetrical, reciprocal and asymmetrical relationships

A symmetrical relationship exists when 2 variables fluctuate together in spite of being independent of one another

A reciprocal relationship exists when 2 variables mutually influence or reinforce each other

Asymmetrical relationship exists when changes in the dependent variable are responsible for changes in the independent variable.

Causal Research Stimulus-response relationship: Represents an event

that results in a response from object e.g. price rise results in sales reduction, change in Govt. policy results in company performance

Property-disposition relationship: A property is an enduring characteristic of a subject that does not depend on circumstances for its activation. Age, gender, family status ethnic group are personal properties. A disposition is a tendency to respond in a certain way under certain circumstances. It includes attitudes, opinions, habits and drives. E.g. effect of age on saving, social class and taxation

In-depth Interview It involves a detailed probing of the respondent by

specialist interviewer An informal approach where appropriate

questions are developed during the interview The focus is to identify and record subtle reactions

of the respondent It discovers the hidden motivations affecting

consumer behaviour It provides a strong stimulus to the insights of the

researcher Being unstructured, the information can be

subjective leading to different interpretations by different researchers of the same information

Sampling

Sampling – It is the process of selecting some elements in the population which are true representatives of the population

Population – It is the total collection of elements about which we wish to make some inferences

Census – It is a count of all elements in a population

Sampling

Good sample – It is one which well represents the characteristics of the population it purports to represent

It must have accuracy that is, the degree to which bias is absent from the sample and precision that is, precision of estimate. The smaller the standard error of estimate, the higher is the precision of sample

Sample Size – It is a function of the variation in the population parameters under study

Decide the target population

Develop aframe

ChooseSamplingtechnique

Decide the sample size

Choose sampling methods

Sampling Frame

Decide on each type of element that will be covered to represent the population

Sampling Technique

Probability based i.e. statistical

Non-probability i.e. judgmental sampling

Sample Size

Calculate the standard deviation of population

Decide the sampling error acceptable to the specific study under consideration

On the basis above, derive a sample size arithmetically

Sampling Methods

Simple random – It is the method in which each element of the population has an equal chance of selection

Systematic sampling – Here, every kth element in the population is sampled, beginning with a random start of an element in the range of 1 to k

Sampling Methods

Stratified random sampling – Here the population is divided into mutually exclusive and exhaustive strata and then a simple random sample is selected within each of the strata

Cluster sampling – It is one where entire group or clusters are selected at random instead of selecting individual units from the population

Sampling Methods

Quota sampling involves fixation of certain quotas to be fulfilled

For example, we want to conduct a survey of households numbering 2,00,000 in totality

A quota of 1% is fixed i.e. 2000 households

1200 in rural area and 800 in urban

Sampling Methods

Rural 1200 Rich 150

Urban 800 Middle class

650

Poor 1200

Total 2000 Total 2000

Independent Controls

Sampling Methods

Inter-related Controls

Rural Urban Total

Rich 100 50 150

Middle class

400 250 650

Poor 700 500 1200

Total 1200 800 2000

Advantages of Quota Sampling

Economical

Administratively convenient

Time saving

Suitable when a sampling frame is not available

Disadvantages of Quota Sampling

Calculation of standard error may be difficult

May not be representative

Quality may suffer

Bias creeps in into the process

Other forms of Judgmental Sampling

Master sample

Panel sample

Convenience sample

Types Of Scales

Nominal scales : Numbers serve as labels to identify persons, objects or events. The identification can be made on the basis of a certain characteristic or attribute. Here, a set is split into subsets which are mutually exclusive and collectively exhaustive

Ordinal scales : These are ranking scales which besides having the unique characteristics of the nominal scale, indicate the order by distinguishing elements on the basis of single direction

Types Of Scales

Interval scale : They are the combination of nominal and ordinal scales with additional strength of determination of the equality of differences.

Ratio scales : They possess order, distance and unique origin and are the most superior amongst all scales.

Criteria for Ascertaining Good Scale

Reliability : It is the extent to which repeat measurements made by it under constant conditions will yield the same result.

Validity : It is the success of the scale in measuring what it sets out to measure, so that the difference between individual’s scores can be taken as representing true differences in the characteristic under study.

Attitude Scales

Paired comparison scale : It requires the respondent to select two objects of a set with regard to an attribute of interest

Thurstone scale : It is a technique in which a large number of statements in a random order are administered to one or more respondents in the form of a questionnaire. Depending upon the acceptance or rejection of a statement by the respondent, his scale score is determined by averaging the scale values for the statements accepted by him

Attitude Scales

Summated rating scale : Researcher collects a large number of

statements and eliminates those which are ambiguous, irrelevant or deficient

The remaining statements are administered to one or more respondents for their reaction using a five point rating system i.e. strongly approve, approve, undecided, disapprove, and strongly disapprove.

These categories are assigned value 5,4,3,2 and 1 respectively

Attitude Scales

In case of negatively worded statements, this scoring is reversed

The correlation between the statement scores and the total score is ascertained

Statements with a high correlation with total score are selected for final scale

Attitude Scales• Scalogram analysis : This method of scaling is

based on the assumption that, an individual with a more favourable attitude score than another must be just as favourable or more favourable in his response to every statement in the set than the other individual

• Semantic differential : This technique involves three dominant factors viz. evaluation, potency and activity factor. It is a bi-polar scale conforming to the basic concept of motivation, attraction or repulsion from an object

Data Processing

• Editing : It is the process of identifying, examining errors and omissions in the collected data and making necessary corrections. The errors can be in the form of inconsistency in the responses, partial or a vague response

Data Processing

• Coding : It is the procedure of classifying the answers to a question into meaningful categories to carry out subsequent operations of tabulating and analysis. In the absence of coding, it will be impossible to reduce a large number of heterogeneous responses into meaningful categories resulting in a weak and ineffective data analysis.

Data Processing

• Tabulation : It comprises sorting of the data into different categories and counting the number of cases that belong to each category. Tabulation can be –

Univariative Bivariative Multivariative

Report Writing

• The findings and interpretation of the research study needs to be reported to the management or the sponsor in the form of a formal report, which should ideally be in the form of a written document

• Principles of good report : Report must be written objectively Written in a concrete and impersonal style Organized and coherent Absolute clarity of ideas Precise, to the point, neat and tidy in approach

Report Format• An ideal market research report follows the following

format – Title page Name of sponsor Index of contents Introduction Methodology Statistical tables, charts and illustrations Findings Limitations Summary and conclusions Executive summary/recommendations Appendices and bibliography

Statistical Methods for Data Analysis

• Correlation – It is a statistical technique used for measuring

the relationship or interdependence of two or more variables

A graph of the two series in question is drawn, known as cattle diagram

Values of two variables are plotted such that a point on the graph indicates a pair of values

Independent variable is taken on the X axis and the dependent on the Y axis

Statistical Methods for Data Analysis• Regression analysis – It is a technique used for estimating or predicting

the value of one variable given the value of another.

When relationship between two variables is linear, a change in the independent variable is followed by a constant absolute change in the dependent variable.

The model does not necessarily imply any cause and effect relationship between two variables.

The relationship is given by the equation Y=a+bX

Statistical Methods for Data Analysis

• Cluster analysis – Used to classify persons or objects into a small

number of mutually exclusive and exhaustive groups.

There needs to be high homogeneity within the cluster and high heterogeneity between clusters.

Used extensively in marketing research for resolving the problem of classifying consumers, products etc.

Applications of Marketing Research contd

• Advertising effectiveness –Recognition study Carried out for printed advertisement and referred

to as a readership study. Respondents are shown a particular page of the

magazine and the following measures of recognition are taken –

o Noted : The percentage of readers who have seen the ado Seen – associated : The percentage of readers who read a

part of the ad indicating the brando Read must : Percentage of readers who read a major part of

the ad Scores are assigned to these and related to the

expenditure incurred.

Applications of Marketing Research

• Advertising effectiveness –Recall test – Respondents are asked to recall specifics of an

ad Copies of test magazines are sent to a sample of

respondents for normal reading Respondents are read out a list of ads and

asked to identify those they remember and the extent to which they can recall

Scores are assigned to the ability of the respondent to remember name of the product, underlying message, and favourable attitude.

Applications of Marketing Research

• Advertising effectiveness –Sales test – This method measures the effect of an ad

on sale of the products Assumption is that, changes in sales are a

result of ad Isolate the influence of other factors while

determining the impact of an ad

Experimental Design Experimental Treatment – It is a study of alternatives

whose effects are to be measured and compared

Test units – The individuals or organizations whose response to the experimental treatment is being studied

Experimental Error – A measure of the apparent variation in performance of test units treated alike by the experimenter after the effect of extraneous forces is removed from the data.

Extraneous forces – All other forces and conditions which affect the response of test units to experimental treatments.

Experimental Design It originated in the field of agricultural research

It is the process in which the researcher intervenes to manipulate the indirect or exploratory variable in a setting and observe how it affects the subject being studied

There must be a complete agreement of independent and dependent variables

The 2 variables must occur almost simultaneously

Other extraneous variables should not influence the dependent variable

Advantages of Experimental Design

Researcher’s ability to manipulate the independent variable

Effect of extraneous variables can be controlled more effectively

Convenient and cost effective design

Replication of an experiment with different subject groups and conditions is possible

Disadvantages of Experimental Design Artificiality of the laboratory

Generalization from non probability samples can pose problems despite random assignment

Despite lower costs of experimentations, many applications of experimentation far outrun the budgets for other primary data collection methods

Experimental studies of the past are not feasible

There are limits to the type of manipulation and controls that are ethical