Definition of Marketing Research

The American Marketing Association formally defines marketing research as the following:
Marketing research is the function that links the consumer, customer, and public to the marketer through
information—information used to identify and define marketing opportunities and problems; generate, refine,
and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a
process.

Marketing research specifies the information required to address these issues, designs the method for collecting
information, manages and implements the data collection process, analyzes the results, and communicates the
findings and their implications.

Marketing research is the systematic and objective identification, collection, analysis, dissemination, and use
of information for the purpose of improving decision making related to the identification and solution of
problems and opportunities in marketing.

A Classification of Marketing Research (Applied Research)

Our definition states that organizations engage in marketing research for two reasons:

(1) to identify and (2) to solve marketing problems. This distinction serves as a basis for classifying
marketing research into problem-identification research and problem-solving research, as shown in Figure 1.1.
Problem-identification research is undertaken to help identify problems that are, perhaps, not apparent on the
surface and yet exist or are likely to arise in the future. Examples of problem identification research include
market potential, market share, brand or company image, market characteristics, sales analysis, short-range
forecasting, long-range forecasting, and business trends research. A survey of companies conducting marketing
research indicated that 97 percent of those who responded were conducting market potential, market share, and
market characteristics research. About 90 percent also reported that they were using other types of problem-
identification research. Research of this type provides information about the marketing environment and helps
diagnose a problem. For example, a declining market potential indicates that the firm is likely to have a
problem achieving its growth targets. Similarly, a problem exists if the market potential is increasing but the
firm is losing market share. The recognition of economic, social, or cultural trends, such as changes in
consumer behavior, may point to underlying problems or opportunities.

Once a problem or opportunity has been identified, problem-solving research is

undertaken to arrive at a solution. The findings of problem-solving research are used in making decisions that
will solve specific marketing problems. Most companies conduct problem-solving research.9 Table 1.1 shows
the different types of issues that are addressed by problem-solving research, including segmentation, product,
pricing, promotion, and distribution research.
Research Process:
Research Process consists of the following steps:
Step 1. Problem Definition
• Discover the management dilemma
• Define the management question
• Define the research question
• Refine the research questions
Step-2. Research Proposal
Step-3. Development of an Approach to the problems
• Formulating an objective/theoretical framework.
• Developing an analytical models, research questions, and hypothesis
Step-4. Research design formulation.
• Data collection design
• Sampling design.
• Instrument development and pilot testing
Step-5. Data collection and preparation
Step-6. Data preparation and analysis.
Step-7. Report preparation and presentation.
Step-8. Management Decision.

Each of these steps is discussed in great detail ….

Step 1: Problem Definition

The first step in any marketing research project is to define the problem. In defining the problem, the
researcher should take into account the purpose of the study, the relevant background information, the
information needed, and how it will be used in decision making. Problem definition involves discussion with
the decision makers, interviews with industry experts, analysis of secondary data, and, perhaps, some
qualitative research, such as focus groups. Once the problem has been precisely defined, the research can be
designed and conducted properly.
 Tasks involved

Discussions with Interviews with Secondary data Qualitative research

decision makers experts analysis

Environmental context of the problem

Step 1: Problem definition

Management decision problem

Marketing research problem

Step 2: Approach to the problem

Theoretical Analytical model: Research Hypotheses Characteristics/

framework questions factors influencing
verbal, graphical or
mathematical research design

Step 3: Research design

Discussions with Decision Makers

Discussions with decision makers (DM) are extremely important. The DM needs to understand the capabilities
and limitations of research. Research provides information relevant to management decisions, but it cannot
provide solutions because solutions require managerial judgment. Conversely, the researcher needs to
understand the nature of the decision managers face and what they hope to learn from the research. To identify
the management problem, the researcher must possess considerable skill in interacting with the DM.

(Several factors may complicate this interaction. Access to the DM may be difficult, and some organizations
have complicated protocols for access to top executives. The organizational status of the researcher or the
research department may make it difficult to reach the key DM in the early stages of the project. Finally, there
may be more than one key DM and meeting with them collectively or individually may be difficult. Despite
these problems, it is necessary that the researcher interact directly with the key decision makers.)
 The problem audit provides a useful framework for interacting with the DM and identifying the
underlying causes of the problem. The problem audit, like any other type of audit, is a comprehensive
examination of a marketing problem with the purpose of understanding its origin and nature. It is important
to perform a problem audit because the DM, in most cases, has only a vague idea of what the problem is.
For example, the DM may know that the firm is losing market share but may not know why, because DMs
tend to focus on symptoms rather than on causes. Inability to meet sales forecasts, loss of market share, and
decline in profits are all symptoms. The researcher should treat the underlying causes, not merely address
the symptoms.

Interviews with Industry Experts

In addition to discussions with the DM, interviews with industry experts, individuals knowledgeable about the
firm and the industry, may help formulate the marketing research problem. These experts may be found both
inside and outside the firm. If the notion of experts is broadened to include people very knowledgeable about
the general topic being investigated, then these interviews are also referred to as an experience survey or the
key-informant technique. Another variation of this in a technological context is the lead-user survey that
involves obtaining information from the lead users of the technology.

Secondary Data Analysis

Secondary data are data collected for some purpose other than the problem at hand. Primary data, on the other
hand, are originated by the researcher for the specific purpose of addressing the research problem. Secondary
data include information made available by business and government sources, commercial marketing research
firms, and computerized databases. Secondary data are an economical and quick source of background
information. Analysis of available secondary data is an essential step in the problem definition process:
Primary data should not be collected until the available secondary data have been fully analyzed.

Qualitative Research
Information obtained from the DM, industry experts, and secondary data may not be sufficient to define the
research problem. Sometimes qualitative research must be undertaken to gain an understanding of the problem
and its underlying factors. Qualitative research is unstructured, exploratory in nature, based on small samples,
and may utilize popular qualitative techniques
such as focus groups (group interviews), word association (asking respondents to indicate their first responses
to stimulus words), and depth interviews (one-on-one interviews that probe the respondents’ thoughts in
detail). Other exploratory research techniques, such as pilot surveys and case studies, may also be undertaken
to gain insights into the phenomenon of interest. Pilot surveys tend to be less structured than large-scale
surveys in that they generally contain more open-ended questions and the sample size is much smaller. Case
studies involve an intensive examination of a few selected cases of the phenomenon of interest. The cases
could be consumers, stores, firms, or a variety of other units such as markets, Web sites, and so on.

Environmental context to the problems

Factors having impact on the definition of the Research Problems.

1) Past information and forecasts.
2) Resources and constraints.
3) Objectives
4) Test unit property (Respondents’ Behaviour) 5) Legal Environment
6) Economic Environment 7) Technological skills.
Step 2: Development of an Approach to the Problem
Development of an approach to the problem includes formulating an objective or theoretical framework,
analytical models, research questions, and hypotheses and identifying the information needed.

Objective/Theoretical Framework
Research should be based on objective evidence and supported by theory. Objective evidence is gathered by
compiling relevant findings from secondary sources. Theory is a conceptual scheme based on foundational
statements called axiom, which are assumed to be true. The researcher should rely on theory to determine
which variables should be investigated.

Analytical Model
An analytical model is a set of variables and their interrelationships designed to represent, in whole or in part,
some real system or process. Models can have many different forms. The most common are verbal, graphical,
and mathematical structures. In verbal models, the variables and their relationships are stated in prose form.
Such models may be mere restatements of the main tenets of a theory. Graphical models are visual. They are
used to isolate variables and to suggest directions of relationships but are not designed to provide numerical
results. They are logical preliminary steps to developing mathematical models. Mathematical models
explicitly specify the relationships among variables, usually in equation form. These models can be used as
guides for formulating the research design and have the advantage of being amenable to manipulation.

Verbal Model
A consumer first becomes aware of a department store. That person then gains an understanding of the store by
evaluating the store in terms of the factors comprising the choice criteria. Based on the evaluation, the
consumer forms a degree of preference for the store. If preference is strong enough, the consumer will
patronize the store.

Graphical Model

Mathematical Model
where
y = degree of preference
a0, ai model parameters to be estimated statistically
xi store patronage factors that constitute the choice criteria ■
As can be seen from this example, the verbal, graphical, and mathematical models depict the same
phenomenon or theoretical framework in different ways.

Research Questions
Research questions (RQs) are refined statements of the specific components of the problem. Although the
components of the problem define the problem in specific terms, further detail may be needed to develop an
approach. Each component of the problem may have to be broken down into subcomponents or research
questions. Research questions ask what specific information is required with respect to the problem
components. If the research questions are answered by the research, then the information obtained should aid
the decision maker. The formulation of the research questions should be guided not only by the problem
definition, but also by the theoretical framework and the analytical model adopted. For a given problem
component, there are likely to be several research questions, as in the case of the department store project.

The theoretical framework and the analytical model play a significant role in the operationalization and
measurement of variables specified by the research questions.

Hypotheses
A hypothesis (H) is an unproven statement or proposition about a factor or phenomenon that is of interest to
the researcher. It may, for example, be a tentative statement about relationships between two or more variables
as stipulated by the theoretical framework or the analytical model. Often, a hypothesis is a possible answer to
the research question. Hypotheses go beyond research questions because they are statements of relationships or
propositions rather than merely questions to which answers are sought. Whereas research questions are
interrogative, hypotheses are declarative and can be tested empirically. An important role of a hypothesis is to
suggest variables to be included in the research design. The relationship among the marketing research
problem, research questions, and hypotheses, along with the influence of the objective/theoretical framework
and analytical models, is described in Figure 2.4 and illustrated by the following example from the department
store project.
Step 3: Research Design Formulation
Research design is a blueprint for the collection , measurement, and analysis of data. It specifies the details of
the procedures necessary for obtaining the information needed to structure and/or solve research problems.

Components of a Research Design:

• Design the exploratory, descriptive, and/or causal phases of the research

• Define the information needed
• Specify the measurement and scaling procedures
• Construct and pretest a questionnaire (interviewing form) or an appropriate form for data collection
• Specify the sampling process and sample size
• Develop a plan of data analysis

Exploratory Research:

The objective of exploratory research is to explore or search through a problem or situation to provide insights
and understanding. Exploratory research could be used for any of the following purposes:

 Formulate a problem or define a problem more precisely.

 Identify alternative courses of action.
 Develop hypotheses.
 Isolate key variables and relationships for further examination.4
 Gain insights for developing an approach to the problem.
 Establish priorities for further research.

Exploratory research can greatly benefit from use of the following methods:
 • Survey of experts
• Pilot surveys
• Secondary data analyzed in a qualitative way
• Qualitative research

Conclusive research

Conclusive research is typically more formal and structured than exploratory research. It is based on large,
representative samples, and the data obtained are subjected to quantitative analysis. The findings from this
research are considered to be conclusive in nature in that they are used as input into managerial decision
making.

Descriptive Research
The major objective of descriptive research is to describe something— usually market characteristics or
functions . Descriptive research is conducted for the following reasons:

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

Cross-Sectional Designs
The cross-sectional study is the most frequently used descriptive design in marketing research. Cross-sectional
designs involve the collection of information from any given sample of population elements only once. They
may be either single cross-sectional or multiple cross-sectional .

In single cross-sectional designs, only one sample of respondents is drawn from the target population, and
information is obtained from this sample only once. These designs are also called sample survey research
designs.
In multiple cross-sectional designs, there are two or more samples of respondents, and information from each
sample is obtained only once. Often, information from different samples is obtained at different times over
long intervals. Multiple cross-sectional designs allow comparisons at the aggregate level but not at the
individual respondent level. Because a different sample is taken
each time a survey is conducted, there is no way to compare the measures on an individual respondent across
surveys. One type of multiple cross-sectional design of special interest is cohort analysis.

COHORT ANALYSIS Cohort analysis consists of a series of surveys conducted at appropriate time intervals,
where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the
same event within the same time interval.8 For example, a birth (or age) cohort is a group of people who were
born during the same time interval, such as 1951 through 1960. The term cohort analysis refers to any study in
which there are measures of some characteristics of one or more cohorts at two or more points in time.

It is unlikely that any of the individuals studied at time one will also be in the sample at time two. For example,
the age cohort of people between 8 and 19 years old was selected and their soft drink consumption was
examined every 10 years for 30 years. In other words, every 10 years a different sample of respondents was
drawn from the population of those who were then between 8 and 19 years old. This sample was drawn
independently of any previous sample drawn in this study from the population of 8 to 19 years old. Obviously,
people who were selected once were unlikely to be included again in the same age cohort (8 to 19 years old),
as these people would be much older at the time of subsequent sampling. This study showed that this cohort
had increased consumption of soft drinks over time. Similar findings were obtained for other age cohorts (20 to
29, 30 to 39, 40 to 49, and 50+). Further, the consumption of each cohort did not decrease as the cohort aged.
These results are presented in Table 3.3, in which the consumption of the various age cohorts over time can be
determined by reading down the diagonal. These findings contradicted the common belief that the
consumption of soft drinks will decline with the graying of America. This common but erroneous belief was
based on single cross-sectional studies. Note that if any column of Table 3.3 is viewed in isolation as a single
cross-sectional study (reading down the column), the consumption of soft drinks declines with age, fostering
the erroneous belief.
Longitudinal Designs
In longitudinal designs, a fixed sample (or samples) of population elements is measured repeatedly on the same
variables. A longitudinal design differs from a cross-sectional design in that the sample or samples remain the
same over time. In other words, the same people are studied over time and the same variables are measured. In
contrast to the typical crosssectional design, which gives a snapshot of the variables of interest at a single point
in time, a longitudinal study provides a series of pictures that give an in-depth view of the situation and the
changes that take place over time.

Relative Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs:

The relative advantages and disadvantages of longitudinal versus cross-sectional designs are summarized in
Table 3.4.

Tables 3.5 and 3.6 demonstrate how cross-sectional data can mislead researchers about changes over time. The
cross-sectional data reported in Table 3.5 reveal that purchases of Brands A, B, and C remain the same in time
periods 1 and 2. In each survey, 20 percent of the respondents purchased Brand A; 30 percent, Brand B; and 50
percent, Brand C. The longitudinal data presented in Table 3.6 show that substantial change, in the form of
brand-switching, occurred in the study period. For example, only 50 percent (100/200) of the respondents who
purchased Brand A in period 1 also purchased it in period 2. The corresponding repeat purchase figures for
Brands B and C are, respectively, 33.3 percent (100/300) and 55 percent (275/500). Hence, during this interval,
Brand C experienced the greatest loyalty and Brand B the least. Table 3.6 provides valuable information on
brand loyalty and brand switching. (Such a table is called a turnover table or a brand-switching matrix.)
Causal Research

Causal research is used to obtain evidence of cause-and-effect (causal) relationships. Causal research is
appropriate for the following purposes:
1. To understand which variables are the cause (independent variables) and which variables are the effect
(dependent variables) of a phenomenon
2. To determine the nature of the relationship between the causal variables and the effect to be predicted

Exploratory Research Design: Secondary Data

Step 5: Data Preparation and Analysis
Data preparation includes the editing, coding, transcription, and verification of data. Each questionnaire or
observation form is inspected or edited and, if necessary, corrected. Number or letter codes are assigned to
represent each response to each question in the questionnaire. The data from the questionnaires are transcribed
or keypunched onto magnetic tape or disks, or input directly into the computer. The data are analyzed to derive
information related to the components of the marketing research problem and, thus, to provide input into the
management decision problem.

Step 6: Report Preparation and Presentation

The entire project should be documented in a written report that addresses the specific research questions
identified; describes the approach, the research design, data collection, and data analysis procedures adopted,
and presents the results and the major findings. The findings should be presented in a comprehensible format
so that management can readily use them in the decision-making process. In addition, an oral presentation
should be made to management using tables, figures, and graphs to enhance clarity and impact. The Internet is
also being used to disseminate marketing research results and reports, which can be posted on the Web and
made available to managers on a worldwide basis.
Although we have described the research process as a sequence of steps, it should be noted that these steps are
interdependent and iterative. Thus, at each step, the researcher should not only look back at the previous steps
but also look ahead to the following steps. As indicated by the Marriott example, our description of the
marketing research process is fairly typical of the research being done by major corporations.