Marketing Research tool

7/29/2019 Marketing Research tool

1/283

CONTENTS

Unit

No.TITLE

Page

No.

1. Fundamentals of Market Research

1.1 The Marketing Environment

1.2 Market Research

1.3 The Need for Market Research

1.4 Applications of Market Research

1.5 Threats to Market Research

1.6 Market Information System (MIS)

1.7 Market Decision Support System (MDSS)

1.8 Summary1.9 Keywords

1.10 Case Study

1.11 Self-assessment Questions

Application and Limitations

2.1 Introduction

2.2 Research Activities in Large Companies

2.3 The Client/Researcher Interface

2.4 Researcher Obligations to a Client

2.5 Decision Making and Research Inputs

2.6 Limitations of Market Research

2.7 Summary

2.8 Key Words

2.9 Case Study

19

2.10 Serf-assessment

Questions

Sampling

3.1 Introduction3.2 What is Sampling?

39


2/283

Unit

No. TITLEPage

No.

3.3 Reasons for Sampling

3.4 Estimating and Testing of Hypothesis

3.5 Definition and Managerial Objective of Sampling3.6 Problems Associated with Sampling

3.7 Non-response Issues in Sampling

3.8 Factors Determining the Sample Size

3.9 Advantages of Sampling

3.10 The Sampling Process

3.11 Summary

3.12 Keywords

3.13 Case Study

3.14 Serf-assessment Questions

4. Questionnaire - Design Development

4.1 Introduction

4.2 Functions and Classification of a Questionnaire

4.3 Flow Chart for Questionnaire Design

4.4 Types of Questions

4.5 Choice of Survey Methods

4.6 Close Ended and Open Ended Questions

4.7 Sample Questionnaire

4.8 Summary

4.9 Keywords


5. Scaling Methods

5.1 Introduction

5.2 Types of Scales

5.3 The Concept of Attitude

5.4 Criteria for a Good Test

5.5 Forms of a Rating Scale

61

97


3/283

Unit

No. TITLE

5.6 Selecting the Appropriate Scale to Use

5.7 Summary

5.8 Keywords


Data Collection Primary / Secondary

6.1 Introduction

6.2 Quality of Data and Data Types

6.3 Data Types

6.4 Sources of Data

6.5 Communication Media

6.6 Formulating a Data Acquisition Plan

6.7 Basic Methods of Gathering Primary Data

6.8 Advantages and Disadvantages of Primary Data

6.9 Types of Secondary Data Collection and its

Advantages and Disadvantages

6.10 Respondents and their Descriptors

6.11 Summary

6.12 Keywords

6.13 Case study


Data Preparation and Processing

7.1 Introduction

7.2 Traditional Approach of Data Processing

7.3 Principles of Coding

7.4 Editing

7.5 Tabulation

7.6 Summary

7.7 Key Words


Page

No.

117

139


4/283

Unit

_No._

8.

9.

10.

TITLE

Data Analysis and Interpretation

8.1 Introduction

8.2 Nature of Interpretation8.3 Overview of Data Analysis Process

8.4 Statistics Associated with Frequency Distribution

8.5 Measures of Shape

8.6 Measures of Dispersion

8.7 Summary

8.8 Keywords


Multivariate Analysis

9.1 Introduction

9.2 ConjointAnalysis

9.3 Applications and Problems of Conjoint Analysis

9.4 FactorAnalysis

9.5 Model, Application and Limitations of Factor Analysis

9.6 Cluster Analysis

9.7 Multi-dimensional Scaling (MDS)

9.8 Summary

9.9 Key Words


Research Process and Design

10.1 Introduction

10.2 Research Design

10.3 Formulating the Research Problem

10.4 Features of a Good Research Design

10.5 Classification of Research Design

10.6 Summary

PageNo.

159

173

193


5/283

Unit

No.

11.

12.

TITLE

10.7 Keywords

10.8 Case Study


Specialised Techniques in Market Research

11.1 Introduction

11.2 Types of Specialised Techniques

11.3 Research in Advertising Decisions

11.4 Motivation Research

11.5 Techniques of Motivational Research

11.6 Limitations of Motivational Research

11.7 Research for Pharmaceutical Products

11.8 The Source of Information for Pharma Products

11.9 Research for Industrial Products

11.10Sources of Information for Industrial Products

11.11Summary

11.12Key Words

11.13Self-assessment Questions

Market and Sales Analysis Research

12.1 Introduction

12.2 Types of Sales Analysis

12.3 Areas of Sales Analysis

12.4 Methods for Measuring Market Potential

12.5 Sales Forecasting

12.6 Methods of Sales Forecasting

12.7 Summary

12.8 Keywords


Page

No.

209

231


6/283

13.

14.

New Product Development & Test Marketing

13.1 Introduction

13.2 New Product Development

13.3 New Product Development Process

13.4 Test Marketing13.5 Uses of Test Marketing

13.6 Guidelines for Test Marketing

13.7 Advertising Research

13.8 Importance of Advertising

13.9 Need for Advertising Research

13.10 Media Research

13.11 Copy Testing

13.12 Examples of Advertising Research Studies in India

13.13 Evaluation of Advertising Research

13.14 Summary

13.15 Keywords


Presentation of Research Findings

14.1 Introduction

14.2 Types of Reports

14.3 Report Content

14.4 Principles of Report Writing

14.5 Various Graphic Representations and Ethical Issues14.6 Managing Market Research

14.7 Summary

14.8 Keywords


249

279


7/283

Unit

No. TITLE

Page

No.

15. Research in Service Segments 299

15.1 Introduction

15.2 Research through Internet Era

15.3 Methods of Online Research/Surveys

15.4 Disadvantages of Online Surveys

15.5 Ethical Issues in Marketing Research

15.6 Responsibility towards a Client

15.7 Summary

15.8 Keywords



8/283

Marketing Research

1.1 THE MARKETING ENVIRONMENT

I have a good product, I have a good brand name, I have a good marketing network and

I give the best price. I have goodwill from my customers - but still I am not achieving thevolume that I want. What is wrong? Is my product not appreciated by the customer or

haven't I reached my target customers? Does my price bother the customer while he / she

is buying? To find the solution for all these problems, I need to do a systematic research of

all the above activities. Today these questions are asked by every organisation, but only a

few organisations act on the findings of their research and they become more successful

with the right strategies. The organisations which do not act on time fail to sustain their hold

on the market.

Today, in the competitive market, one has to study all the aspects of the marketing mix

-viz. the Product, the Place, the Pricing and the Promotional/Advertisement activities, if

one wants to become successful in the market for a long time. Then all the above parametersare to be studied carefully and then launch/re-launch the product with the right price to the

right customer (target customer). For that, a detailed research has to be conducted - not

once but on regular intervals so as to be in the market for a long time, cate to the needs of

the customers and satisfy the customers with profits to concerned organisation.

1.2 MARKET RESEARCH

Before going on to Market research, let us understand what is meant by the term "research".

Research always starts with a question or a problem. The purpose of research is to find

answers to questions through the application of scientific method. It is a systematic andintensive study directed towards a more complete knowledge of the subject method.

The term marketing is a broader concept which includes all activities, which are related to

the transfer of ownership of goods and service e.g. product development, packing, branding,

warehousing, distribution, advertising, sales promotion, sales service and so on.

Market is a narrow concept which refers to all potential customers sharing a particular

need/want and might be willing to engage in activities to satisfy those wants.

Research is a process of gathering, recording and the analysis of relevant and critical

facts about a specific problem. Thus market research as per the American Marketing,

Association is "The systematic gathering, recording and analysing of data about

problems relating to the marketing of goods and services".

Another simpler definition can be put in this way.


9/283

Unit 1 Fundamentals of Market Research

Market Research is the function which links the seller and the buyer through information

-information used to identify and define marketing opportunities and problems, generate,

evaluate the actions and monitor marketing performance by improving and understanding ofthe market as a process. Key aspects of the definition

Market research is a problem-solving device.

It is a continuous and evolving process as the needs and wants keep on changing.

It is a well-defined, planned process comprising of systematic and intensive

investigations.

It adopts scientific methods and objectivity in solving marketing problems.

Research can be classified into two broad categories:

i) Basic research ii) Applied research

Basic research is sometimes called fundamental research, theoretical research or 'pure'

research. It aims at expanding the frontiers of knowledge and does not directly involve

pragmatic problems. The essence of basic research is that it addresses itself to more

fundamental questions and not to the problems with immediate commercial potential.

Applied research, which is also called decisional research, on the other hand, proceeds

with a certain problem, and it specifies alternative solutions and the possible outcomes of

each alternative. Unlike basic research, it is prompted by commercial considerations. Though

one may usually be able to distinguish between basic research and applied research, the

distinction between the two sometimes gets blurred. Several firms may be engaged in

basic research which does not have any immediate commercial use. However, it may be

potentially commercial or else the firms would not have undertaken it at all.

Applied research can be divided into two categories:

i) Problem-solving research

ii) Problem-oriented research

Problem-solving research, as the name implies, is concerned with a particular issue or a

problem and is usually proprietary in character. The latter characteristic indicates that such

a research is undertaken within a firm or by an outside consultant on its behalf.


10/283

Marketing Research

Problem-oriented research, on the other hand, is concerned with a class of issues or

problems in which several firms may be interested. Research of this type is usually concerned

with the conceptual aspects but is oriented towards applied problems. ,i

x^T Activity A;

a) What do you mean by the term'research'?

b) Do you think that market research is undertaken to guide managers in the analysis ofmarketing problems? Critically examine this statement. List down any two major

problems in marketing.

1.3 THE NEED FOR MARKET RESEARCH

Market research is not a substitute for top management judgment but is an aid to judgment.

For any organisation, large or small, profit or non-profit institution, a systematic study of

their market would be useful in decision-making. The market research function in various

government departments will be useful to entrepreneurs and other business organisations.

They will be able to get authentic information on public policy impact, economic

development, technology transfers, and planning. Market research is the foundation stone

for marketing concept. Managers are separated from their customers. They need

information on their consumers. The consumer needs can be studied and thus goods and

services can be produced as desired by the consumers for greater satisfaction and

achievement of organisational goals. The significance of market research is increasing due

to the shift from local, national to international marketing and from price to non-pricecompetition.

There are several factors which have contributed to the research:


11/283

Marketing Research

run was approx 20,000 copies. Indications are that within a short time it has become one

of the leading monthly popular marathi magazine.

Nestle India Limited launched Small KTTKAT at Rs 5/- from its international portfolio. Itis wrapped in vibrant colours of White and Red in conformity with its international packaging.

Earlier, Nestle India Limited commissioned a consumer research study. The results of this

study were encouraging and showed that the Indian customers is always interested in

experimenting with new food options viz small quantity (Chotta pack) and at less price.

Pepsi Foods has assigned great importance to Market research. Through research it gets

systematic information about its markets and its customers. All its research is done by the

IMRB. Broadly, research studies done for Pepsi Foods fall in the following three areas:

(i) Studies undertaken on a continuous basis like marketing tracking studies and

retail audits.

(ii) Studies that are commissioned for specific marketing problems faced by the company.

(iii) Studies done from time to time as per the requirement of the company such as a

study to ascertain the effectiveness of an ad campaign.

All these three types of research studies have tremendously helped Pepsi Foods to strengthen

its position in the market. It feels the pulse of the market and is always in touch with the

latest developments in the market.

Multinational company Whirlpool Asia lays considerable emphasis on Market research.In this company, every activity, strategy and decision is based on data collected through

the research process. It believes in planning research in advance though it is rather difficult.

It strives to have a meaningful dialogue with the consumer in order to know his real opinion

about its products, what difficulties he experiences and what suggestions he has to offer.

Information thus received proves to be quite useful to the company in modifying its products

or in evolving new ones.

Whirlpool has gained an insight into the various segments in the market. In India, it has

segmented the market on the basis of the different stages of the product life cycle. Now

they have assigned their brand ambassador married couple as Kajol and Ajay to advertise

their product.

Decisions like which size of refrigerator should be put in the market or what should be the

price of a particular model are based on research. Marketing and Research Group (MARG)

has been the main Market research agency for Whirlpool.


12/283


JS$ Activity B:

a) Do you really think that market research should be done on a regular basis by every

organisation? Can you mention any organisations where you feel that this happens onregular basis?

b) In your opinion, where would be the problems in the different areas of marketing, in

which market research can be helpful? Give details of any four problems which you

have seen.

A. Market research

As market research does not address itself to basic or fundamental questions, it does

not qualify as basic research. On the contrary, it tackles problems which seem to

have an immediate commercial potential. In view of this major consideration, market

research should be regarded as applied research. We may also say that market research

is of both typesproblem-solving and problem-oriented.

Market research is a systematic and objective study of problems pertaining to the

marketing of goods and services. It may be emphasised that it is not restricted to any

particular area of marketing, but is applicable to all its phases and aspects.

In short, market research provides the requisite information for making marketing

decisions.

B. The Growth of Market research

Over the past several decades, there has been a gradual development in the field of

market research. The first evidence of formal research techniques being employed

could be traced as far back as 1824.


13/283

Marketing Research

However, for almost one century thereafter, market research developed rather slowly

and sporadically. It was only from 1910 that it made rapid strides. Several factors

have contributed to the growth of market research.

First, as a result of large scale production, producers do not have direct contact with

the consumers. This leads to problems in the marketing of goods. It is necessary for

a manufacturer to know the potential areas where his goods could be marketed, the

probable demand for the same and the extent of profitability and competition. This is

possible only when a systematic investigation is undertaken.

Second, there has been a shift from a seller's to a buyer's market. This necessitates

a better understanding of buyer behaviour. This aspect is studied in market research.

Third, the emergence of specialists such as statisticians, psychologists and behavioural

scientists in a fairly large number has also enhanced the importance of market research

in no small measure. These specialists have helped in the development of market

research as a separate discipline and strengthened its techniques.

Fourth, the increasing use of computers. The IT sector has further contributed to the

growth of market research. Finally, the changes in the composition of population,

particularly the shift from the rural to urban areas has given a wide scope for marketing

of various types of goods and services in an urban area.

C. Market research for Industrial Goods

Let us know the difference between consumer market research and industrial market

research. This difference arises on account of the distinction between the markets forconsumer and industrial goods. The following are the main points of distinction between

the two:

1. Derived demand

One way of classification of demand is: autonomous (direct) and derived (indirect)

demand. The demands for industrial goods are derived demands as they are

required to obtain consumer or industrial goods. For example, the demand for

compressors to be used in the manufacture of refrigerators which are consumer

goods, is a derived demand. Another example could be the demand for steel

which is required for the manufacture ofjrmghings, which are industrial goods.

Thus, the derived demand is aifmdirect demandjthere is a chain of such a

derived demand. The larger the chain, the morecomplicated is the process of

analysis compared to the analysis of the autonomous or direct demand for

consumer goods.


14/283


2. Demand concentration

There are three types of concentrated demand for industrial goods:

Geographic

Industrial

Purchasing

Geographic concentration implies that there is a general tendency among many

industries to cluster in selected areas. For example, this may be on account of

the proximity of the sources of raw material. Industrial concentration may be a

result of the inherent characteristics of industrial goods and services, leading to

a limited number of such markets. Purchasing concentration results from the fact

that a few firms account for a relatively large proportion of the total demand for

industrial goods.

Unlike industrial goods, consumer goods do not have these three types of

concentration in demand. There is no geographic concentration as consumers

are scattered all over the country. There is no industrial concentration as markets

for consumer goods are not confined to limited locations. Finally, there is no

purchasing concentration as consumer goods are not purchased in bulk by a

few consumers. This is because the demand for consumer goods emanates from

every consumer who buys in a limited quantity as per his requirement.

3. Demand volatility

The demand for industrial goods is subject to sharp variations at times. This

happens because of factors such as drastic changes in business conditions,

financial considerations and price. Industrial buyers react to such changes by

varying the level of inventory accumulation and advancing or postponing the

timing of purchases of industrial goods. In contrast to the demand for industrial

goods, the demand for consumer goods is not subject to sharp fluctuations,

particularly in respect of items of everyday use.

Consumers have to buy their daily requirements even though the prices may be

higher. Broadly, the demand for consumer goods would be less volatile on

account of changes in the business environment and financial stringency than

that for industrial goods.


15/283

10

Marketing Research

4. Purchasing procedures and organisation '

As there are several buying influences affecting industrial firms, generally an

industrial purchasing decision involves more persons than a consumer purchasingdecision. In view of this, a study of attitudes, motivations and the relative influence

of purchasing decisions is more complex than that for consumer goods. On the

other hand, persons deciding to make industrial purchases are better informed

than the average consumer. i

5. Manufacturer-buyer relationships

The relationship between the manufacturer and buyer of industrial goods i

stronger, closer and more continuous than that for consumer goods and services

This is primarily because there are less intermediaries for industrial goods than

for consumer goods.

Whenever market research relates to industrial goods, these differences between industria

and consumer goods markets must be borne in mind. Suitable changes in the emphasis o

market research techniques should be introduced. To apply the same techniques

disregarding the substantial differences between industrial and consumer goods market

would undermine the practical utility of market research for industrial goods.

Activity C;

a) Many times the management is not convinced about the money spent on marke

research as they think of it as an unnecessary activity over which no funds should bspent. Do you agree to this statement?

b) The field of market research is very large as it covers a wide variety of problems.

List any five problems which might be applicable.


16/283


1.5 THREATS TO MARKET RESEARCH

The success of Market research depends upon the cooperation of the respondents,

unprofessional or unethical Market research may seriously damage the research which inturn will give bad results in the reports the researchers may also draw wrong judgements

and results which will hamper in the decision making of their client. It is necessary to

ascertain the reaction of the respondents, the three major issues which causes threats to

marketing and survey research are:

Excessive interviewing

Lack of knowledge

Amusement of respondents

t The use of Market research as a sales ploy

It is noted that these factors pose a threat to Market research especially in the Developed

and western countries. In our country Market research is still used very rarely so these

threats are almost non-existent.

Researchers carried out reappraisal of these threats. They reported the results from five

cross sectional studies conducted at two intervals the findings were as follows;

They investigated three areas excessive interviewing lack of knowledge and abusement of

respondent and use of market research as sales ploy, it was found that use of market

research as sales ploy was the greatest threats if it is not checked it is likely to erode thetrust of customer respondents, respondents will be suspicious of the interviews and will

not cooperate in the right manner.

The researchers have expressed their concern over the fact that almost forty percent of

the college educated, middle upper income respondents and more than half of the

respondents living in the western region of U.S. have experienced Market research as

sales ploy. They feel that this may hamper the actual genuine people conducting the research,

particularly as these people may be opinion leaders of their better education and affluence.

The other two threats were not as serious as compared to the third one but there is a

potential danger in these fields also, because as research depends upon the respondentscooperation its depletion will adversely affect the interest of Market researchers. It was

also concluded that both excessive interviewing and lack of consideration and abuse of

respondent should be avoided.


17/283

Marketing Research

This can be done by screening the questions so that the persons who have been interviewed

recently or too frequently can be eliminated. It is also advisable to use non-interviewing

research techniques wherever possible so that the need to approach the respondents is

minimized

1.6 MARKET INFORMATION SYSTEM (MIS)

Market research is said to be different from Marketing Information System (MIS). Let us

define MIS as a structured, interacting complex of persons, machines, and procedures

designed to generate a flow of pertinent information collected from internal and external

sources for the use as a base for decision making in specified areas of marketing

management.

The definition indicates the interdependent activities associated with the collection of

marketing information from internal and external sources. It also shows that such information

is collected to draw the conclusion needed for decision making in different areas of

marketing management. Market research is a means of obtaining information to be used

for marketing decisions. If compared, both the concepts show that while market research

generates information, MIS concentrates more on the storage and flow of information to

marketing managers. This indicates that marketing information system is a much wider

concept than market research. Good MIS determines the information needs of the

organisation and generates and processes such information on a continuous basis. It should

also provide for its storage so that it can be used as and when required.

Let us analyse what type of information is required for our MIS systems. There are threetypes of information required for marketing managers, they are;

1. Recurrent information

2. Monitoring information

3. Requested information

Recurrent information: This type of information is provided on periodic basis, which

pertains to

information on sales

market share

customer satisfaction


18/283


perception of customers

advertising expenditure

These are or may be supplied on a weekly or monthly basis.

Monitoring information: This type of information is obtained from regular scanning of

certain sources. The sources are:

Official publications

Journals

Annual reports

These sources can be very helpful to organisations as they indicate the nature of problemsthat are likely to arise and the possible changes in the business environment, these can be

also helpful in identifying new market segments, the new use of existing products and also

the possibilities of improving product by introducing new features.

Requested information: Requested information as the name suggests, this is sought by

marketing managers. This can involve a wide range of activities such as

cost and price analysis of a competitive product

cash flow of competitive companies

quality testing of competitive companies

These are few to name, such type of information would not be usually available unless a

request is made for the same. Once a request is made for a specific information, then a

series can be built up over time provided that such information is needed by the managers.

1.7 MARKET DECISION SUPPORT SYSTEM (MDSS) __________

In a highly competitive environment, especially in the western countries, marketing managers

find themselves seeking a wide range of information in order to take the right decisions.

This means that they should not only be concerned with the availability of the requisite

information but also with its accuracy and adequacy. This paved the way for the creationof a marketing decision support system (MDSS). This system consists of a collection of

data, storage, analysis, and the reporting of marketing data. The new generation of

computers and advanced software has given a boon for setting up the MDSS.

13


19/283

14

Marketing Research

The main difference between MIS and MDSS is that whereas the former is centralised,

the latter is decentralised and allows marketing managers to interact directly with the

database.

MDS S can be classified into five components

1. Data Sources "

2. Data Management

3. Display

4. Statistical analysis

5. Modelling

Data sources are major components of MDSS. These sources can be both internal and

external. For example, a company's accounting system is an internal data source. This

source provides data pertaining to orders, sales, inventory levels, receivables and payables.

Library sources as well as syndicate services are the examples of external data sources.

Library sources contain a wide range of information such as Government publication

reports, sales of periodicals, buyer profiles, sales of retail outlets, evaluation of advertising

campaigns, major economic, social and demographic trends, etc. Both, library sources

and syndicate services can be immensely useful to the company.

Owing to a variety of internal and external data sources, it becomes necessary for the

company to device a proper database management. This involves identifying relevant data

from a variety of sources, deciding on the extent of data and keeping the data in an easily

available form.

Data formats allow the retrieval of data easily and promptly. Display formats could range

from simple adhoc retrieval to more formal displays.

A company may have a graphic display package consisting of such options as time-series

plots, bar and pie charts and scatter diagrams where the comparison of two measures is

involved.

Statistical analysis involves the performance of different statistical operations such as the

calculation of averages, standard deviation and regression. Such calculations are helpful in

understanding the relationship among marketing variables. This, in turn, brings out the

underlying' marketing issues in sharp focus.


20/283


Modelling is the last component of MDSS. Models are mathematical formulations.

Marketing decisions can be tested against the model to ascertain what could be the possible

outcome in a given situation.

$ Activity D;

"Market research is undertaken to guide managers in the analysis of marketing problems."

Critically examine this statement and comment.

1.8 SUMMARY __________________________________________ _ _ _

Market research should be given prime importance in every organisation. This not only

helps us to analyse our weakness but also gives first hand information about the latest

trends going in the market. One has to learn from the reports and take appropriate actions

on which strategies are to be adopted in the near future. Research should not be taken in

a negative way but one has to learn from the mistakes and adopt the appropriate way for

successful marketing. The choice of research activities in the organisation gives a solution

to the exact method to be adopted for survey.

1.9 KEYWORDS ______________________ _ _ ^ _ _____________

Authentic: of undisputed origin, or original

Entrepreneur: a person who undertakes a commercial venture

Emphasise: stress

Inherent: existing in something as an essential or permanent attribute

Pertinent: relevant

Perception: act or faulty of perceiving

15


21/283

16

1.10 CASE STUDY

Sony India

Sony, a famous global brand, stepped into India in 1995, in the post liberalisation period.

Within a couple of years, it started its manufacturing unit. The company makes its presence

through Sony Entertainment Television, Sony Music and Sony India. The first two arecomfortably placed while the third is expected to bring all the digital products.

The plan was cleared by the government, but Sony India is facing problems, one of the

major problems is the grey market. While Sony had targeted their sales around 1000

crores by the end of the century, it has to have a good understanding of India's economic,

social and political environment.

Sony India likes to develop itself as its parent company developed business units in US,

Europe, and Asia (Singapore), yet it is a challenging task for them in India.

Questions

a) Will research, play an important role in the development of Sony India?

b) Which will be the best research - hiring an outside agency or in-house research ?

c) For considering an outside agency what factors should it consider while selecting theagency?


22/283

20

Marketing Research

2.1 INTRODUCTION

With the increasing use of market research these days, it is being realised that mar

research is a complex task and has to be properly managed if optimum results are toobtained. At the outset, the question arises as to what we understand by resea

management.

Research management concentrates mainly on the processes, projects, personnel, finan

and agencies engaged in research. Its prime responsibilities include monitoring of the resea

design, for which the study is carried out properly in line of the management objective

also monitors that the presentation of the result to management is handled properly

that all these activities are administered within a controlled budget. It means that pro

research organisation has to be set up to handle individual projects and task.

It will be seen that research management includes a host of interrelated activities. Ttypes of research projects to be undertaken, the selection of research personnel, financ

of research manager should be the concerns of a research management. A research man

has to ensure that a suitable research design is developed and that the study is carried

on the right lines, according to a predetermined schedule and within the budget alloca

for the purpose. As these activities are interrelated, if any one of them is not conduc

properly, it will have an adverse impact on the other. For example, if a research projec

not conducted according to the time schedule laid down, it will increase the cost and m

it impossible to complete the project within the allocated funds and the time span.

A. Importance of research management

Just as the marketing concept is useful in attaining the objective of integrated market

research management is relevant for making market research really useful. By supe

management, various disjointed research techniques can be pulled together

coordinated so that market research can be made really effective.

The marketing managers or the research managers who understand only techniq

will be a failure such a study. They must understand how to put together all the eff

falling within his sphere of responsibility. No longer is market research an isola

ivory-tower operation. It is an integrated whole, making a major contribution

marketing in its own right.

An improved market research management firm can enjoy two major advantag

viz:

(i) Market research will be more helpful to marketing management in

decision-making.


23/283

Unit 2 Application and Limitations

(ii) Market research can be conducted more economically and more effectively.

B. Qualities of a market research manager

The success of market research management depends to a large extent on the quality

of leadership. A research manager must have some special qualities if he has to do

justice to his job. Some qualities which he should possess will be

innovative and always be prepared to look at any problem from a fresh

perspective.

confident of his skill and knowledge and prepared not only to accept new ideas

but also to try them out.

well-informed and up-to-date in his own area of specialisation.

familiar with recent developments in particular industries, especially the problems

faced by them in the marketing of their products.

familiar with the recent trends in research techniques and should be prepared to

absorb the latest knowledge as mush as possible.

he should have considerable selling skills so that he can convince the management

regarding the accuracy and soundness of the recommendations emerging from

his research.

One of the most crucial decisions to be taken by management is whether market

research should be undertaken and if so, what place is to be assigned to this function.

This is an administrative decision which calls for a clear perspective on the part of top

management. Even when a decision is taken in favour of the market research function,

a related issue is what budget allocations are to be made to carry out market research

efficiently. The organisation of market research activity also has to be considered so

that management gets the maximum benefit from it. These are some of the main issues

which must be given due consideration by the management. Some of these functions

are discussed briefly below.

C. Organising market research function

First of all, the question arises as to how the market research function is to be organised

within a firm. It should be noted that the organisational structure for this function will

differ according to the type of agency which is handling it. Thus, a market research

organisation in a manufacturing firm will be very different from that in a research or a

21


24/283

Marketing Research

22

consultancy firm, as the requirements and emphasis on research will be different. A

major difference between a manufacturing firm and a research firm is that whereas in

the former, research being one of the several activities is a means to an end, in the

latter, research is the only activity and is an end in itself.

The research firm has to ensure that research must ultimately lead to profit otherwise

it cannot survive. In contrast, a manufacturing firm does not aim at profit although it

would expect that research will indirectly lead to increased profitability.

Another point of difference between the two organisations is the degree of emphasis

on the practical utility of market research. A manufacturer's firm would normally

place greater emphasis on the market research findings in the day-to-day marketing

of its products. But this need not be the case in a research firm as it is not engaged in

marketing of any products.

Coming to the organisation of research activity, several alternatives are open to a

firm. For example, there could be a market research department or cell with a skeleton

staff if the market research activity is not very important. Alternatively, the firm may

have a well-developed department comprising a number of specialists as also the

other supporting staff.

These are the two extremes within which the market research organisation would

vary. The specific organisation will depend on the requirement of each firm. It is

worth emphasising that a firm, intending to set up an organisation to look after market

research function, may not be in a position to set up the most suitable one in the very

first attempt. As its management acquires experience in managing the research function,

it goes on making improvements in its organisation. In course of time, such an approach

will enable the firm to develop the most suitable organisation to manage its research

function.

A firm which has decided to introduce a market research function has to decide

which of the three options that are normally available, should be selected:

a. to set up a formalised market research department consisting of some full-time

specialists whose main responsibility would be to carry out market research

studies and report the findings to the management.

b. to assign the market research responsibility to one or more line or staff executives

on a part-time basis, who would have to undertake it in addition to the major

responsibility.


25/283


c. to assign the responsibility of undertaking market research to an outside individual

or an organisation.

There are market research consultants who do research on behalf of the firm and arepaid their consultancy fees for the same. Small firms prefer to adopt the second or

third approach whereas medium and large-sized firms, which may have frequent

marketing problems, prefer the first one. The latter would also involve the maximum

financial commitment.

In some firms, where a separate marketing information system exists, the market

research function may form a part of such a system. In such cases, market research

acts as one of the inputs to the marketing information system. Wherever market

research is undertaken frequently, it is desirable to formalise this function and to

integrate it not only with marketing activity but with the overall management of the

organisation.

It should be noted that if a firm decides to have a separate market research department,

then sufficient freedom should be given to them to carry out its tasks. Many a time the

departments are set up with high hopes and expectations but are not given the

necessary finances and freedom. As a result, they are unable to do much for their

firms. Market research departments should be encouraged to develop, carry out and

analyse their research as they want. The top management must delegate necessary

authority to the research personnel to enable them to carry out their work smoothly.

Another aspect that is relevant is whether a large firm should have a centralised

market research department or whether alternatively each division or operating unitshould have its own research cell. The main advantage of the centralised market

research department is that there will be more effective coordination of market research

with marketing management. Effective control and supervision of research can also

be ensured. On the other hand, if market research is undertaken by each division or

operating unit, it will enable researchers to be more knowledgeable about divisional

markets and their problems. In addition, such an approach will offer greater autonomy

to divisions and operating units in their research activity which will ultimately be

beneficial to the firm.

Both these approaches are in vogue and it is difficult to say which is more popular. In

this context, it is pertinent to note that the organisation of market research function

need not remain static for all time to come. It should be dynamic and flexible so that

it can be adapted to the changing requirements of the firm.

23


26/283

24

Marketing Research

If a company has decided to set up a separate market research department, it is ver

essential that it should be clear about its role in the overall organisation. The mark

research department should take up problems faced by the company, study them

objectively and report its findings to the management. It should develop a plan, withou

which it will lack focus and utility to the management. Like any other plan, the ke

elements of a market research plan are the same, namely, objectives, policies, specif

projects, resources required both in terms of manpower and budget and a time schedu

for research projects. In identifying research projects, it is expected that clear prioritie

are laid down on the basis of which they can be taken up for investigation. Thes

priorities should be matched by proper allocation of funds and manpower.

The market research plan should be written out in sufficient details. Before it is finalise

it should be circulated amongst the concerned officials in the company. It should f

into the marketing plan of the company as it is an important input in it. Although

should be followed and implemented as far as possible, there should be an element

flexibility in it so that certain changes, if found necessary, can be made.

^Activity A:

a) List any five qualities of a good research manager.

b) Why is research regarded as useful to marketing management?

D. Selection of market research

Many a time, companies do not set up market research departments as they do no

have an adequate amount of research work to warrant a separate department. The

prefer to hire the services of a market research consultant as and when they feel th

need for research. In our country, the number of companies having their own marke


27/283


research departments is extremely limited. Many 'buy' market research from outside.

Such companies should know how to select a market research agency before

sponsoring a research study.

E. Selection of research agency

Why should one hire market research agency? If a firm does not have persons or

well-versed market research department or cell, or has a market research dept. may

sometimes find at a particular point of time that, it is fully engaged on certain other

studies and, as such, it cannot take up an additional problem, for detailed investigation.

In that case, it has to assign the study to an outside market research agency. The firm

may find that an outside agency may complete the study faster, at a lower cost as well

as with the laid down objective. As such it may decide to assign its sudy to an outside

agency. Selections can be made from entities such as market research consultancy

firms, advertising agencies, suppliers of syndicated services, etc.

Now how does the firm go about choosing an outside market research agancy. In

developed countries, there are a large number of such agencies which either undertake

complete ad hoc research project or perform one or more specialised services such

as drawing a proper sample of respondents, interviewing respondents, or processing

data. In all those cases where it is necessary to hire outside research agancies, the

market researcher must be able to evaluate such specialised services. The criteria

for evaluating specialised agencies are as follows:

Criteria for hiring outside agencies

Technical expertise

The market researcher should know who is to undertake the study and what is their

proficiency in market research. The client firm may find that a research agency is

good at basic studies but is not competent enough to undertake complex studies.

Some research agencies are poorly staffed and as such they should be avoided.

Objectivity

The question of objectivity is very important. Outside agencies should be reputable

for their objective approach in research projects.

Confidentiality

The client firm must ensure that the research agency maintains strict confidentiality

regarding the project/study.


28/283

26

Marketing Research

Economic factors

A client firm may invite research proposals from more than one agency. In such a

case, it would choose the most economical agency. However, client firms should notoverlook the fact that some agencies are very economical because the quality of their

work is rather poor. It is not advisable to be economical at the cost of quality.

Timely submission of reports

The client firm should enquire about the reputation of the research agency especially

in relation to its timely submission of reports. Sometimes, outside agencies are quick

in taking up assignments from clients but are not so prompt in carrying out the task.

Experience of the supplier

The client firm should ascertain the standing of the agency. While general experience

is very important, relevant and specific research experience is what should be looked

for.

Reputation of the agency

It is necessary to ensure that the agency has a good reputation. This consideration is

important for lending credibility to the research findings. This is of special importance

particularly when the client firm intends to use the study for creating an impact.

Since no single agency is likely to be strong on all these considerations, it is necessary that

the client firm adopt a reasonable approach in this regard. It should ascertain which of the

above criteria are crucial for its research project and then apply these criteria in selecting

an agency from amongst those short-listed. In order to facilitate comparison amongst the

agencies, the client firm should send the same study specifications to all of them for gathering

research proposals and cost estimates.

In our country, there are some organisations that take up research studies on behalf of

their clients. Acomplete list of such organisations, the nature of research usually undertaken

by them along with their strengths and limitations, is not yet available. Here, we are mainly

concerned with research projects undertaken by research agencies at the instance of their

clients. It may, however, be mentioned that some of these above mentioned organisationsare well established and have been engaged in syndicated research and related spheres of

activity for the past several years. They have professionally qualified staff, and they undertake

sponsored research on widely diversified themes.


29/283

28

Marketing Research

Test marketing studies

Corporate image studies

Campaign evaluation - Media studies

Opinion surveys

Industrial market research

It may be mentioned that in our country, marketing research is still not well developed and

there are only a few large marketing research agencies in the country. However, some of

the studies carried out by these agencies were of pioneering nature, involving the development

of appropriate concepts as well as sampling and measurement techniques. They have a

large field set-up supported by full-time investigators in different parts of the country havingseveral years of professional expertise.

A company intending to buy marketing research may adopt one of the two courses. First,

it may straightaway ask a marketing research agency to prepare a research proposal

including an estimate of cost. Second, it may give some thought to its problem, spell it out

and provide certain specifications according to which the concerned agency has to carry

out the research. In this case the company will pay the agency its fees for carrying out the

task as per its specifications.

Advantages of research proposals

There are some advantages of getting a research proposal from an outside consulting firm.

There is conceptual thinking on the marketing problem referred to by the company. This is

because the outsider's approach is not subject to any constraints which may be applicable

within company.

It enables the company to evaluate the research capability of the consulting firm and its

dependability. When the company invites research proposals from more than one consulting

firm, it can compare them with respect to the nature and extent of work involved, the

quality of proposals, cost and time. This comparison will enable it to choose the most

appropriate proposal.

Research proposal is always desirable as it offers some sort of a commitment from the

consultant to the company. In its absence, there may arise some misunderstanding and

differences between the client and researcher regarding the specifications, time or price.


30/283


Last but not least, the research proposal once approved by the company, becomes a

contract, binding both the parties. The company can then turn to other problems, since it

is sure that the research will be taken care of by the consulting firm.

Contents of research proposal

It is very important to know the contents of a research proposal. While the style and

format will differ from one consulting firm to another, the research proposal should invariably

deal with some important aspects of research such as:

A research proposal should give some background of the problem, indicating the

manner in which it is to be investigated. Then, a clear statement of the problem needs

to be given. Utmost clarity is required in defining the problem.

A research proposal should specify the research methods to be used in the study.This part should contain information on the sample design and the sample size, the

designing of the questionnaire, data collection procedure, and the processing and

analysis of data. This is the most important part of a research proposal.

t A proposal should then indicate the form and content of the final research report. It

should also indicate if the consulting firm will make a personal presentation of research

findings.

A proposal should indicate the time needed to carry out the task and also the cost. It

is desirable that a broad time schedule covering major research operations be given.

The consulting firm should also state the assumptions on which cost and time estimateshave been worked out. A statement of this type will help avoid any misunderstanding

that might otherwise arise.

JS$ Activity B:

a) List out five qualities required for a market research agency.

29


31/283

Marketing Research

b) What criteria should be considered while hiring an outside agency? Name any

three.

c) List the important Qualitative and Consumer Research.

d) Could you list out on your own any new Qualitative Research which you have

noticed in your curriculum?

2.2 RESEARCH ACTIVITIES IN LARGE COMPANIES _________________

Earlier, we have read the different types of research taken by the agencies, some of the

common activities are listed by the type of research activities takenup by large companies

which they do by themselves or hire an agency to do the study.

Research activity *Usage frequency

30

Business economics and Corporate research

1. Short range forecast (


32/283


5. Pricing studies

6. International trade

7. MIS (Management Information System)

8. Product mix studies

9. Operation research

10. Company Employees

High

Low

Average

Low

Average

Average

Sales and market research

1. Market Potential measurement

2. Market share analysis

3. Market characteristics

4. Sales analysis

5. Establishment of sales quota & territories

6. Physical Distribution alternatives

7. Test marketing

8. Consumer panel operations

9. Sales force effectivity studies

High

High

High

High

Average

Average

Average

Low

Average

Advertising research

1. Motivation research

2. Copy research

3. Media research

4. Ad-effectiveness research

5. Sales Promotion studies

6. CompetitiveAdvertising

Low

Low

Average

High

Average

Average

Product/service research

1. New ProductAcceptance

Mgh

3

1


33/283

Marketing Research

2. Testing existing Products

3. Competitive Products

4. Packaging Research

5. Brand Loyalty Studies

High

High

High

High

32

Corporate responsibility research

1. Ecological impact studies Low

2. Legal constraints (Advertising & Sales Promotion) Low

3. Socio-Political studies Low

*Frequency of usage

High 75%

Average 51 -74 %

Low 50%

Note: The usage of research pattern may vary based on consumer goods, industrial

goods and services.

2.3 THE CLIENT/RESEARCHER INTERFACE ________________________

To get maximum benefit of research, the client and researcher must co-operate and

collaborate with each other in the following ways. The person in-charge must give full and

frank information on

1. Precise problem (What the problem is?)

2. Background and environment related to the problem (this is in regards to down in the

sales due to brand image or pricing problem)

3. Time and cost constraints (this is very important because the study is to be completed

in the stipulated time. For example, if one has to decrease the prices effectively from

the new financial year then the study is to be completed three months in advanceprior to the union budget.)

4. Limitations if any.


34/283


5. Data availability with the company (refers to the primary or secondary data)6. Any situational change while the study is proceeded (may be the raw material prices

have suddenly gone up or may have dropped)

2.4RESEARCHER OBLIGATIONS TO A CLIENT_________ ,

1. Honest and clear reporting (the reports should not be fake and should haveconfidentiality)

2. Briefing regarding study limitations (what limitations have they faced while collectingthe data)

3. Explanation of report conclusions and aiding client's application (the conclusion shouldbe presented in a detailed presentation to the top management)

4. Demanding complete facts and expliciting the goals and problems faced (the problemsfaced by the researcher e.g. some of the respondents have not given the correctanswers or may have given fake information).

5. Unwillingness to bow to client's biases, prejudices and pre-judgment.2.5 DECISION MAKING AND RESEARCH INPUTS

The Research Inputs depend upon the problems faced by the organisation. These cannot

be same for each organisation for example, a firm has a good reputation in the market buttheir product is priced high, hence, he will be interested in survey of price factor and a partof that survey can be assigned for customer satisfaction in terms of quality and service ofthe product. On the basis of the results, he has got he can take decisions and adopt theright strategies for costing of his product or any additional services to be added in thesame cost.

2.6 LIMITATIONS OF MARKET RESEARCH________________________

1. Inexact science

Market research is concerned with human beings for information, the most dynamicfactor; hence probable trends can be identified. Moreover, in absence of properproblem definition, it becomes a data collection exercise.

33


35/283

34

Marketing Research

2. Limitation of the researcher

Inexperienced, partially trained and educated researchers can hardly give quality

work. Besides this the element of subjectivity mars the findings because of individualpsyche and background.

3. Expensive exercise

Most of the organisations hire outside agencies to carry out extensive research, which

requires a lot of time and money.

4. Time lag

There is a difference of time between the research and its implementation. In the

mean time, the marketing dynamics may render it obsolete.

5. Historic data

Market research delves into the past data to predict the future, which has its own

limitations.

6. Interpretation of problems

Certain problems are complex in nature and various elements are involved which

cannot always be measured e.g., psychographic studies. Ascribing the result to specific

factors becomes difficult in these cases.

7. Environmental constraints

Market Research is likely to reflect the environmental constraints it functions under.

8. Fragmented v/s Holistic approach

Due to financial, time and management constraints partial problems are studied which

do not have a great impact, as it would have been with a holistic approach.

9. Inadequate commitment

Often organisations share partial facts and commitment towards research. Under

isolated condition the results are erroneous. Also it is used as a window dressing tool

to justify decisions already taken. (Pseudo research)


36/283

36

Marketing Research

Ten years had passed and the firms market share totally declined. For increase o

market share the company thought they should concentrate more on the image o

company from the scratch.

Questions

Q1. How will you help the firm to achieve its objective? Is a study required?

Q2. In your opinion what type of study is required? If possible, outline a research prop

for the client.

2.10 SELF-ASSESSMENT QUESTIONS _____________________________

Q1. 'Market research is the corner stone of marketing.' Comment

Q2. Market research helps in 'decision making'. Elaborate

Q3. Client - researcher interface is a must for research? If yes, explain in detail.

Q4. Market research has its application areas and limitations. Comment

Q5. What is meant by research management?


37/283

40

Marketing Research

3.1 INTRODUCTION

When the researcher has analysed the problem and developed a research des

including the questionnaire, he has to decide whether the information is to be collecfrom all the people comprising the population. In case the data to be collected from e

member of the population of interest, it is known as the census survey.

If the data is to be collected only from some members of the population, it is known as

sample survey. Thus, the researcher has to decide whether he wants to conduct a cen

or a sample survey to collect the data needed for his study.

In this unit, we will discuss some basic aspects of sampling. As we are concerned with

practical aspects of sampling rather than the theoretical considerations, it would

interesting to know why we should use sampling.

3.2 WHAT IS SAMPLING? ________________________________________

Sampling is a familiar idea with all of us as it frequently occurs in the course of our d

events. Judgments are arrived at the entire number of items (population) on the basi

analysis of a limited number of items (sample) e.g. a housewife tasting a spoonful of c

to check the flavour and readiness of the vegetables, a fruit-seller slicing a fruit to show

ripeness of the fruit to his customers, an executive doing a test drive of a car bef

purchasing it. These are examples of sampling for the personal decision-making done

haphazard manner and with substantial risk of the sampling error.

However, research requires sampling to be done in a scientific manner for the validity areliability of results that have far reaching effects.

3.3 REASONS FOR SAMPLING ___________________________________

1. Decision makers have a limited time frame to take a decision. It is impossible

collect information on the entire population during such a period, hence sampling

used.

2. The budgetary constraints may prohibit the entire population study.

3. If the universe/population size is large, greater is the chance of using sampling.

4. Sampling is used when measuring a particular element of the product would rend

them useless after examination. For example, testing of a photographic film, the usef

life of a fuse, etc.


38/283

Unit 3 Sampling

5. When an approximate idea serves the purpose rather than exact numbers.

6. The impossibility of finding all the population whereof e.g. plants.

3.4 ESTIMATING AND TESTING OF HYPOTHESIS

This stage involves the distinguishing of two objectives of sample surveys:

a) Population parameters

b) Testing a hypothesis

Estimation of a parameter refers to a situation in which the presence of a given populationis to be estimated. For example, one may be interested in the annual expenditure incurred

on tea drinkers or the proportion of workers working overtime in an industrial unit. In thefirst example, the parameter refers to the average tea drinkers and in the second example,the proportion of employees working overtime. Now to estimate a parameter, first a sampleis chosen, the elements in the sample are contacted and the necessary information is collectedfrom them.

From the information gathered, the statistics (average or proportion) is calculated. Thisstatistic is used as an estimate of the population parameter.

The second objective of sample surveys may be to test a hypothesis involving a comparisonof two or more numerical values. For example, if one would like to test the hypothesis thatat least 60 % of households have an internet connection in a town.

A sample survey is undertaken and the relevant survey data reveals that the overall percentageis 55. The question now is whether these two percentages are significantly different.

3.5 DEFINITION AND MANAGERIAL OBJECTIVE OF SAMPLING

Sampling should provide the following benchmarks:

1. The data is representative of the population concerned.

2. Sufficient occurrence in a sample should exist to provide consistent results.

3. Using research resources as efficiently as time requirements permit.

41


39/283

42

Marketing Research

De f in i t ion o f S amp l in g t e r ms -*>>.:. >-


40/283

Unit 3 Sampling

be selected in the first instance; and then more detailed lists or maps be constructed by the

compilation of the available information or by direct observation only of the first-stage

units actually selected.

Sampling Error: Sampling error is that part of the difference between a population

value and an estimate thereof, derived from a random sample, which is due to the fact that

only a sample of values is observed; as distinct from errors due to imperfect selection, bias

in response or estimation, errors of observation and recording, etc. The totality of sampling

errors in all possible samples of the same size generates the sampling distribution of the

statistic which is being used to estimate the parent value.

Five steps in Sample Planning

1. Define the target population

2. Establish a "frame" of that population

3. Choose the method of selecting the sample unit

4. Determine the sample size

5. Selection of the actual (sample) members

1) Defining the Target Population: Sampling is intended to gain information about a

population. So it is critical at the outset to identify the population clearly and accurately.

Often target population identification is ignored as it appears obvious and

non-controversial, but attention to selection pays off.

Guidelines for identification of the target population

1. Well-defined research objectives lead to clear target population definition as

well.

2. Consider alternative, reasonable, target population definitions

3. If the research objectives is to learn the market response to the marketing

programme then detailed knowledge about the market is essential. Otherwise

the population definition will unnecessarily become broad.

4. Consider the appropriate sampling unit e.g. the individual / family as a unit.

43


41/283

Marketing Research

5. Specifications for exclusions in target population should be clear.

6. Over-definition of population makes the research costly and time consuming.

For example, all working wives between the age group of 25 - 40 years with anincome of Rs. 1 0,000 or more.

7. Consider the convenience: Preference should be given to a convenient sample if

it suits the research purpose. For example, a study on noise pollution.

Respondents will be best chosen from a township adjoining an industrial area.

2)

3)

4)

5)

Establish the framework of population : The sampling frame is usually a li

population members used to obtain a sample. These boundaries could be geogra

or any distinguishable feature. For physical sciences, boundaries may not be signifi

but for marketing they are a must.

Choose the method of selecting sampling unit : Sampling units may be sele

in a number of ways. It depends on the nature of the research, time and cost constra

research objectives and the expertise of the interviewer.

Determine the sample size : In order to make the survey, we have to determ

the sample size. For example, if one has to conduct the survey of teenagers smo

cigarettes in a particular area, then how much sample size is to be considered

giving the proper result, whether to choose 50 or 70 or 100 etc.

Selection of the actual sample member : As discussed above in point 4, ou

the 70 samples selected, which samples should be taken for hypothesis. The ensample cannot be taken and many of them may give the wrong interpretation.

Activity A ;

44

a) What do you understand by the

following?

Population

Elements

Frame


42/283

Unit 3 Sampling

b) What are the various steps involved in the sampling process? Give any three importantsteps.

Sampling Design

Non-Probability Samples

Convenience

Snowball Quota

Judgment

Sample Design

Probability Samples

Simple Random

Systematic Area

Stratified

1. Non-Probability samples: These are in which specific members are selected ina non-random fashion as per convenience or due to a deliberate choice as per plan.

to a) Convenience sampling: The researcher chooses respondents on the basisof convenience or accessibility. It is used for exploratory research.

b) Snowball sampling: In this method, the initial sample size is selected by usingprobability methods but additional units are obtained through the informationsupplied by initial units (referrals). This technique is used to locate sampling unitswhich have similar characteristics but are difficult to find. The referral processmay bring an element of bias in selection.

c) Judgement sampling: This method is of sampling by opinion. The researcherwho is acquainted with the population may decide arbitrarily, as per his judgement,the units which represent the parameter of the study. Another form of judgementalsampling is statistical judgement. In this method, the selection criterion is specified,data on these factors are scrutinised and the elements meeting these specifications

are chosen for the same. The choice is (purposive) deliberate not random. Thismethod is valid when adequate data is available for the whole populationparameters and the individual elements in it.

45


43/283

Marketing Research

d) Quota control sampling: Is judgemental sampling with the constraint that the

sample includes minimum number from each specified subgroup in the population.

Demographic data such as geography, location, age, sex, education and income

group are used as qualifying parameters. The quota control has potential

weaknesses like

i Field workers may be unscrupulous in finding the exact sampling units

and numbers for the survey.

ii Population with listed characteristics may be hard to identify.

iii. Data available for classification may be obsolete and incorrect. For example,

population census.

Quota controls are used for national panel studies. A panel is a semi permanentsample whose members may be included repetitively for successive studies.

2. Probability samples: In Probability samples, each population has a known

chance of being selected for inclusion in the study.

a)

b)

Simple random sampling is an approach in which each element has equ

probability of being selected. Such numbers may be selected through rando

number tables or generated computer. For example, a lottery draw, dice.

Systematic sampling involves spreading the sample through the entire list

population following a regular pattern.

e.g. Total population

Random unit

Total No. of winners

= 100 customers = Every 1

Otn'customer to get a prize 10

c)

d)

Stratified sampling : In stratified sampling, the population is divided in

subgroups (strata) within the sample framework and random samples are draw

to improve the efficiency of the sampling plan and its reliability with a small

sample size. Sample sizes tend to be inversely proportional to the cost of t

sampling. Smaller the cost, larger will be the sample size.

Cluster /Area sampling: In cluster sampling the population is divided in

subgroups called clusters. A random sample of the subgroups is selected and a

tit .16-


44/283

Unit 3 Sampling

members of the subgroups become a part of the sample. This method is useful

when subgroups can be identified which are representative of the whole

population.

JS$ Activity B;

Give one example of each of the following sample designs:

Cluster sampling

Stratified sampling

Simple random sampling

Quota sampling

Judgement sampling

3.6 PROBLEMS ASSOCIATED WITH SAMPLING ______________________

The accuracy and reliability of sampling data are affected by two different types of errors,

i.e. sampling error and non-sampling error.

Sampling Error: Sampling error occurs when the selected samples are not representative

of the population. Regardless of the care taken in sampling, some amount of sampling

error exists. It is the result of chance and subject to the law of probability. A sampling error

may be reduced by increasing the size of the sample. This is applicable to probability

sampling only.

Non-Sampling Errors: The name suggests all kind of errors except sampling errors.

These errorsjnclude,

respondents due to poor recall, inaccurate memory, bias,

2. Deceit by respondents when they do not want to

admit lack of knowledge, social status issues, taboos, etc.

47


45/283

Marketing Research

3. Poor sampling design, e.g. inaccessible respondents

due to wrong addresses, instructions, etc.

4. Unfinished interviews due to

length/boringness/tocipersonal nature of the interview.

5. Recording errors, coding and editir

6. Misinterpretation due to ambiguous wording or lack of proper instructions.

Lipstein offers rules for minimising non-sampling errors in a survey. They are as

follows:

1. Sample survey should be as easy to execute as possible.

2. Use the smallest sample consistent with the research objectives.

3. Restrict the questionnaire to the data essential to the study.

4. Pre-test the questionnaire to check respondent fatigue.

5. Keep the interviewer and the respondent involved.

6. Don't ask consumers the questions which they really cannot answer.

7. Don't ask the interviewer to do the impossible. It encourages cheating.

3.7 NON-RESPONSE ISSUES IN SAMPLING

Non-response can be broadly classified into two problem area

Low response rates

Refusal

Inaccessibility

Refusal can be minimised by ,

1. Prior notification on the imminent survey rather than taking the respondent by surprise.

2. Motivating the respondents to participate in the survey by increasing their interestand involvement.

3. Monetary and non-monetary incentives may be provided. For example, coupons,

pens, books, etc.

48


46/283

Umt 3 Sampling

4. Questionnaire design and administration should be brief, clear, low on fatigue quotient

and should be able to cover sensitive issues in a non-offending manner.

5. Follow up / reminder should be given to respondents after initial contact to submit thecompleted forms.

6. Personalisation of letters increases the response rate.

In accessibility / not at home phenomenon

1. Prior appointments should be made.

2. Periodic follow up/call back should be attempted to get a response from the respondent.

Determining the sample size-adhoc methods

1. Rules of Thumb: The researcher suggests that the sample should be large enoughso that when it is divided into groups, each group will have a minimum sample size of

100 or more.

2. Budget constraint: The sample size will be determined by the total expenditureone can incur for the process. However, it cannot guarantee the adequacy of the

sample size.

Total money to be spent

N = Cost / unit coverage

3. Comparable studies : Another approach is to find similar studies and use their

sample sizes as a guide.

3.8 FACTORS DETERMINING THE SAMPLE SIZE ___________________

1. Number of groups and subgroups that will be analysed.

2. Value of information and study in general and the level of accuracy required.

3. Cost of the sample. A cost benefit analysis must be done.

4. Variability of the population. Greater the variance, larger will be the sample size

required.

49


47/283

Unit 3 \ Sampling

Since the magnitude of operations involved in a sample survey is small, both theexecution of the field work and the analysis of the results can be carried out speedily.

j Sampling results in a greater economy of effort as a relatively small staff isrequired toI carry out the survey and to tabulate and process the survey data.

>

f A sample survey enables the researcher to collect more detailed information than

would otherwise be possible in a census survey. Also, information of a more specialisedtype can be collected, which would not be possible in a census survey on account ofthe availability of a small number of specialists.

Since the scale of operations involved in a sample survey is small, the quality of theinterviewing, supervision and other related activities can be better than the quality ina census survey.

Limitations of Sampling

a) When the information is needed on every unit in the population such as individuals,dwelling units or business establishments, a sample survey cannot be of much help forit fails to provide information on individual count.

b) Sampling gives rise to certain errors. If these errors are too large, the results of thesample survey will be of extremely limited use.

c) In a census survey it may be easy to check the omissions of certain units in view ofcomplete coverage, this is not so in the case of a sample survey.

3.10 THE SAMPLING PROCESS _________________________

In this unit, we have learnt about the major advantages and limitations of sampling. Wenow turn to the sampling process. It is the procedure required right from defining a populationto the actual selection of sample elements. Following are the steps involved in this process.

1. Define population : It is the aggregate of all the elements defined prior to the.1$ selection of the sample. It is necessary to define population in terms of

Elements

Sampling units

Area

Tirneframe

51


48/283

0{iit 3 Sampling

Since the magnitude of operations involved in a sample survey is small, both the

execution of the field work and the analysis of the results can be carried out speedily.

Sampling results in a greater economy of effort as a relatively small staff is required to

carry out the survey and to tabulate and process the survey data.

A sample survey enables the researcher to collect more detailed information than

would otherwise be possible in a census survey. Also, information of a more specialised

type can be collected, which would not be possible in a census survey on account of

the availability of a small number of specialists.

Since the scale of operations involved in a sample survey is small, the quality of the

interviewing, supervision and other related activities can be better than the quality in

a census survey.

Limitations of Sampling

a) When the information is needed on every unit in the population such as individuals,dwelling units or business establishments, a sample survey cannot be of much help forit fails to provide information on individual count.

b) Sampling gives rise to certain errors. If these errors are too large, the results of thesample survey will be of extremely limited use.

c) In a census survey it may be easy to check the omissions of certain units in view of

complete coverage, this is not so in the case of a sample survey.

3.10 THE SAMPLING PROCESS _____________________________ _ ^

In this unit, we have learnt about the major advantages and limitations of sampling. We

now turn to the sampling process. It is the procedure required right from defining a population

to the actual selection of sample elements. Following are the steps involved in this process.

1. Define population : It is the aggregate of all the elements defined prior to

the selection of the sample. It is necessary to define population in terms of

Elements

Sampling units

Area

Timeframe

51


49/283

52

Marketing Research

Let us consider an example. If you were to conduct a survey on the consumption of

Taj Mahal tea in the state of Maharashtra, then the specifications might be as follows:

Element: Housewives

Sampling units: Households/housewives

Area: State of Maharashtra

Time frame: April 1 to 15,2006

If a launching of a new consumer appliance/product is done, then the population will

change. It will now become

Element: Product (Washing Machine)

Sampling units: Retail outlets, super markets Area: Mumbai and the suburbs

Time frame: April 7- 30,2006 . ,

It may be emphasised that all these four specifications must be contained in the

m designated population. Omission of any of them would render the definition o

population incomplete.

2. Identify the Sampling frame : Which could be a telephone directory, a list of

blocks and localities of a city, a map or any other list consisting of all the sampling

units. It may be pointed out that if the frame is incomplete or otherwise defective,

sampling will not be able to overcome these shortcomings.

The question is - how to ensure that the frame is perfect and free from defect. A

perfect frame is one where every element appears on the list separately, once, only

once, and nothing else appears on the list. This type of perfect frame would indicate

one-to-one correspondence between frame units and sampling units. But such perfect

frames are rather rare. Accordingly, one has to use frames with one deficiency or

another, but one should ensure that the frame is not too deficient so as to be given up

altogether.

This leads to several questions

What are the criteria for a suitable frame?

Does it adequately cover the population to

Date post:	04-Apr-2018
Category:	Documents
Upload:	yaronbaba
View:	217 times
Download:	0 times

Marketing Research tool

Documents