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II. Marketing Research: Process and Systems for Decision Making

2.1 Introduction

World is changing very rapidly with every passing day. The things which people only
dreamed years back are now coming to reality. Companies, their functions and operations
have improved tens of times and this advancement is increasing with every passing day.
Same happened with people. Their level of awareness towards products and behavior is
now quite thoughtful and demanding. Today’s buyers have forced all the business to
make necessary changes. They are very cautious and take a lot of time to make decisions
and want everything to be quick and easy. Understanding customer satisfaction, product
launches, effectiveness of pricing, product distribution and promotion activities,
countering competitors’ techniques, assessing market potential, and predicting consumer
behavior etc. have become extremely challenging and is often a cause of decline of an
organization. To deal with such problems, organizations conduct Market Research.

2.2 What is Marketing Research?

It is a systematic, objective and exhaustive gathering, recording, analysing of data

relevant to a specific marketing situation or problem in order to facilitate decision –
making.

It is systematic because scientific process is needed to attain data.

It is objective because logical reasoning is used, not biased and prejudiced to obtain data.

It is exhaustive because it is only through comprehensive study and effort that success
can be attained.

Authors have defined Marketing Research in many ways:

· Kotler (1999) defines marketing research as “systematic problem analysis, model-

building and fact-finding for the purpose of improved decision-making and control in the
marketing of goods and services”.

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Marketing Management
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· The American Marketing Association (AMA, 1961) defines it as ‘‘the systematic

gathering, recording and analyzing of data relating to the marketing of goods and
services’’.

· Green and Tull have defined marketing research as the systematic and objective search
for and analysis of information relevant to the identification and solution of any problem
in the field of marketing.

The aim of marketing management is to satisfy the needs of the consumer. Marketing
research helps in achieving this. Marketing research is a systematic and logical way of
assessing ways of satisfying customer needs. According to all the above definitions,
Marketing Research starts by stating the problem or the issue to be investigated; indicate
what kind of information is required to resolve the problem; identify where and how to
get it; specify the methodology for analysing the research findings; sum up the research
findings and then suggest the best solution for marketing decision making.

2.3 The Marketing Research Methods

Methodologically, marketing research uses four types of research designs, namely:

· Qualitative marketing research – This is generally used for exploratory purposes. The
data collected is qualitative and focuses on people’s opinions and attitudes towards a
product or service. The respondents are generally few in number and the findings cannot
be generalised to the whole population. No statistical methods are generally applied. Ex:
Focus groups, In-depth interviews, and Projective techniques

· Quantitative marketing research – This is generally used to draw conclusions for a

specific problem. It tests a specific hypothesis and uses random sampling techniques so
as to infer from the sample to the population. It involves a large number of respondents
and analysis is carried out using statistical techniques. Ex: Surveys and Questionnaires

· Observational techniques - The researcher observes social phenomena in their natural

setting and draws conclusion from the same. The observations can occur cross-sectionally

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Marketing Management
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(observations made at one time) or longitudinally (observations occur over several time-
periods) Ex: Product-use analysis and computer cookie tracing.

· Experimental techniques – Here, the researcher creates a quasi-artificial environment

to try to control spurious factors, then manipulates at least one of the variables to get an
answer to a research Ex: Test marketing and Purchase laboratories

More than one research designs could be used at a time. They may start with
secondary research to get background information, then conduct a focus group
(qualitative research design) to explore the issues. Finally, they might do a full nation-
wide survey (quantitative research design) in order to devise specific recommendations
for the client organization.

2.4 The Role of Marketing Research

It is a primary tool which helps in the decision making process. A set of techniques
and principles for systematically collecting, recording, analysing and interpreting data that
can aid decision makers involved in marketing goods, services, or ideas. It can also
provide valuable information in segmentation, positioning, product, place, and price and
promotion decisions.

1. To assist management in making sound decisions

2. To conceive and develop new products’
3. To discover new uses of products already in the market
4. To improve the operation for existing products in order to cut down “economic
waste and cost”

2.5 Marketing Research Process

Managers consider several factors before embarking on a marketing research

project. First, will the research be useful; will it provide insights beyond what the
managers already know and reduce uncertainty associated with the project? Second, is
top management committed to the project and willing to abide by the results of the

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Marketing Management
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research? Related to both of these questions is the value of the research. Marketing
research can be very expensive, and if the results won’t be useful or management does
not abide by the findings, it represents a waste of money. Third, should the marketing
research project be small or large? A project might involve a simple analysis of data that
the firm already has, or it could be an in-depth assessment that costs hundreds of
thousands of pesos and takes months to complete.

The marketing research process itself consists of five steps are as follows:

1. Defining the objectives and research needs

The most important part of the marketing research process is defining the
problem. In order to do any research and collect data, you have to know what you
are trying to learn from the research. In marketing research, defining the problem
you need to solve will determine what information you need and how you can get that
information. This will help your organization clarify the overarching problem or
opportunity, such as how to best address the loss of market share or how to launch
a new product to a specific demographic.
2. Designing the research
After you’ve examined all potential causes of the problem and have used those
questions to boil down exactly what you’re trying to solve, it’s time to build the
research plan. Your research plan can be overwhelming to create because it can
include any method that will help you answer the research problem or explore an
opportunity identified in step one.
Oftentimes, we do all of this work and gather all of the data only to realize that
we didn’t have to reinvent the wheel because someone has already run a similar,
credible study or solved the same problem. That doesn’t mean you don’t need to do
any research, but learning about what other organizations have done to solve a
problem or seize an opportunity can help you tweak your research study and save
you time when considering all of the research options. In marketing research, this is

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Marketing Management
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called secondary data because it has already been collected, versus the primary data
that you would collect through your own research study.
3. Collecting the data
In marketing research, most of the data you collect will be quantitative (numbers
or data) versus qualitative, which is descriptive and observational. Ideally, you will
gather a mix of the two types of data. For example, you might run an A/B test on
your website to see if a new pricing tier would bring in more business. In that research
study, you might also interview seven customers about whether or not the new pricing
tier would appeal to them. This way, you’re receiving hard data and qualitative data
that provide more color and insight.
When collecting data, make sure it’s valid and unbiased. You would never ask a
research interviewee, “You think that we should offer a higher pricing tier with
additional services, correct?” This type of question is clearly designed to influence the
way the person responds. Try asking both open-ended and closed-ended questions
(for instance, a multiple-choice question asking what income range best describes
you).
4. Analysing the data and developing insights
Now that you’ve gathered all of the information you need, it’s time for the fun
part—analysing the data. While one piece of information or data might jump out at
you, it’s important to look for trends as opposed to specific pieces of information. As
you’re analysing your data, don’t try to find patterns based on your assumptions prior
to collecting the data.
Sometimes, it’s important to write up a summary of the study, including the
process that you followed, the results, conclusions, and what steps you recommend
taking based on those results. Even if you don’t need a formal marketing research
report, be sure that you review the study and results so that you can articulate the
recommended course of action. Sharing the charts and data you collected is pointless
if it doesn’t go hand in hand with action.

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Marketing Management
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5. Developing and implementing an action plan

The last phase of the Market Research Process focuses on reporting the research
findings and communication of newly created information, recommendations and
conclusions to management. The overall objective is to develop a report that is useful
to a non-research-oriented person.
This is a key step in the process because a marketing researcher who wants project
conclusions acted on must convince the manager that the results are credible and
justified by the data collected.
Ta-da! Your research is complete. It’s time to present your findings and take
action. Start developing marketing campaigns. Put your findings to the test and get
going! The biggest takeaway here is that, although this round of research is complete,
it’s not over.
The problem, business environment, and trends are constantly changing, which
means that your research is never over. The trends you discovered through your
research are evolving. You should be analysing your data on a regular basis to see
where you can improve. The more you know about your buyer personas, industry,
and company, the more successful your marketing efforts and company will be. When
you look at it that way, you should start to wonder why so many organizations don’t
budget time and resources for marketing research.

Although it was presented in a step-by-step progression, of course research does

not always, or even usually, happen that way. Researchers go back and forth from one
step to another as the need arises. For example, marketers may establish a specific
research objective, which they follow with data collection and preliminary analysis. If they
uncover new information during the collection step or if the findings of the analysis
spotlight new research needs, they might redefine their objectives and begin again from
a new starting point. Another important requirement before embarking on a research
project is to plan the entire project in advance. By planning the entire research process
prior to starting the project, researchers can avoid unnecessary alterations to the research
plan as they move through the process.
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Marketing Management
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There are three (3) classifications of research designs based on data gathering
effort, 1) exploratory, (2) descriptive, and (3) causal.

1. Exploratory Study:

Exploratory Research is used to collect preliminary data to clarify the nature of a

marketing problem before designing a more extensive research project. It follows a

format that is less structured and more flexible. This approach works well when the
marketer doesn't have an understanding of the topic or the topic is new and it is hard to
pinpoint the research direction. For example: a marketer has heard news reports about
a new Internet technology that is helping competitors but the marketer is not familiar
with the technology and needs to do research, to discover and learn more about the
technology in-order to take advantage from it. Such a research is an exploratory research,
conducted to clarify and define the nature of a problem, formulating it more precisely,
gathering explanation and insight and eliminate impractical ideas (if there are any).

2. Descriptive Study:

Descriptive research describes marketing mix characteristics. It is also used to explain

a particular issue or problem. The focus of descriptive research is to provide an accurate
description for something that is occurring. For example, what age group is buying a
particular brand? A product's market share within a certain industry; how many
competitors a company may face? etc. This research is used extensively when the
purpose is to explain, monitor and test hypotheses.

The principal difference between exploratory and descriptive research is that, in case
of the latter, specific research questions have been formulated before the research is
undertaken. When descriptive research is conducted the researcher must already know
a great deal about the research problem, perhaps because of a prior exploratory study,
and is in a position to clearly define what to measure and how to measure.

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Marketing Management
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3. Causal Research:

Causal or predictive research is used to test the cause and effect relationships. Using
causal research allows researchers to answer "What if" or "Why" type of questions. To
conduct causal research, the researcher designs an experiment that controls or holds
constant, all of a product's marketing elements except one. The one variable is changed,
and the effect is then measured.

If researchers understand the causes of the effects observed, then the ability to
predict and control such events is increased. Therefore, to be effective, the design of
causal research is highly structured and controlled so that other factors being studied do
not affect.

2.6 The Marketing Information System (MkIS)

A marketing information system (MIS) is intended to bring together a lot of data into
an understandable body of information. An MIS provides processed data which is suitable
for decision making.

According to Kotler, an MIS is more than a system of data collection or a set of

information technologies:

"A Marketing Information System is a continuing and interacting structure of people,

equipment and procedures to gather, sort, analyse, evaluate, and distribute pertinent,
timely and accurate information for use by marketing decision makers to improve their
marketing planning, implementation, and control".

According to Smith, Brien and Stafford MIS is:

“A structured, interacting complex of persons, machines and procedures designed to

generate an orderly flow of pertinent information, collected from both intra-and extra –
firm sources, for use as the basis for decision-making in specified responsibility areas of

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Marketing Management
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marketing management. Hence, such a system facilitates decision-making in different

areas of marketing management.

2.7 Marketing Research and Marketing Information System:

There are differences between Marketing Research and Marketing Information

System.

Marketing Research is about seeking information from external sources. Its main
purpose is to solve the research problem. It tends to focus on past information and is not
computer based. It is one source of information for Market Information System.

Marketing Information System handles both data from internal sources like orders,
sales, inventory levels, payables, etc. and also data from external sources like
developments in the macro environment.

2.8 Components of an effective Marketing Information System:

According to Kotler, an effective Marketing Information System has the following

components:

1. Internal Accounting System: Maintains data pertaining to sales, receivables, costs, etc.
that are internal to the organisation.

2. Market Intelligence System: As the name itself implies, it speaks about the external
changes occurring in the macro environment and prepares managers to make effective
strategies.

3. Marketing Research System: This undertakes studies on specific marketing problems

and provides solution to the management.

4. Marketing Management Science System: It mainly helps in building models for better
understanding of the marketing process.

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Marketing Management
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Figure 4 illustrates the major components of an MIS, the environmental factors

monitored by the system and the types of marketing decision which the MIS seeks to

help in.

With the help of this model all the four important constituents can be explained. A
fully fledged MIS should have the following components, the methods (and technologies)
of collection, storing, retrieving and processing data. Three levels of decision making can
be observed here: strategic, control (or tactical) and operational. MIS has to support all
these three decision making. Strategic decisions are very important as they have
implications on changing the structure of an organisation. Therefore, the MIS must
provide precise and accurate information. Control decisions deal with broad policy issues.
Operational decisions concern the management of the organisation's marketing mix. MIS
should help the manager in his decision making process for problem identification,
generation and evaluation of alternative courses of action, to acquire necessary feedback
on implementing his decision and help him to take corrective action.

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Marketing Management
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Conclusion:

Marketing research by itself does not arrive at marketing decisions, nor does it
guarantee that the organization will be successful in marketing its products. However,
when conducted in a systematic, analytical, and objective manner, marketing research
can reduce the uncertainty in the decision-making process and increase the probability
and magnitude of success.

Marketing Research Process and Systems for Decision Making/Report /

Eduardo C. De Mesa
Marketing Management