1_Marketingresearch

Introduction, Nature & Scope of Marketing ResearchDr. A. K. Dey

Res Method _ 1: Dr. Dey

Reference BooksBusiness Research MethodsCooper & SchindlerMarketing Research an Applied OrientationNaresh MalhotraMarketing Research Text & CasesBoyd, Westfall & Stasch


ObjectivesUnderstand Marketing Research (MR)Understand relevance of MR for marketing decisionsDevelop appreciation of MR & its applicationsKnow the procedure of conducting Develop familiarity with each step of procedure


What is Business Research?A systematic Inquiry whose objective is to provide information to solve managerial problems.


Why Study Research?Research provides you with the knowledge and skills needed for the fast-paced decision-making environment


Why Managers need Better InformationGlobal and domestic competition is more vigorous Organizations are increasingly practicing data mining and data warehousing


The Value of Acquiring Research SkillsTo gather more information before selecting a course of action To do a high-level research study To understand research designTo evaluate and resolve a current management dilemma To establish a career as a research specialist


Types of Studies Used for ResearchReportingDescriptiveExplanatoryPredictiveTypes of Marketing Research are different from type of studies


Types of StudiesReportingTo provide an account or summation of some data or generate some statisticsDescriptiveTo discover answers to questions who, what, when, where and sometimes how


Types of StudiesExplanatoryIt goes beyond description and attempts to explain the reasons for the phenomenon that the descriptive study only observedCorrelation Study or Hypothesis testing


Types of StudiesPredictiveTo predict when and in what situations the event will occurTo also control a phenomenon once we can explain and predict it


Different Styles of ResearchApplied ResearchEmphasis on solving practical (specific) problemsIt could be exploring opportunities alsoRectifying an inventory system that is resulting into lost salesOpportunity to increase stockholder wealth by acquiring another firmPure Research/Basic ResearchEmphasis on problem solving but of a general nature (not specific)Effect of coupon as against rebate to stimulate demand


What is Good Research?Following the standards of the scientific methodPurpose clearly definedResearch process detailedResearch design thoroughly plannedLimitations frankly revealedHigh ethical standards applied


What is Good Research? (cont.)Following the standards of the scientific method (cont.)Adequate analysis for decision-makers needsFindings presented unambiguouslyConclusions justifiedResearchers experience reflected


The Manager-Researcher RelationshipManagers obligationsSpecify problemsProvide adequate background informationAccess to company information gatekeepersResearchers obligationsDevelop a creative research designProvide answers to important business questions


Manager-Researcher ConflictsManagements limited exposure to researchManager sees researcher as threat to personal statusResearcher has to consider corporate culture and political situationsResearchers isolation from managers


When Research Should be AvoidedWhen information cannot be applied to a critical managerial decisionWhen managerial decision involves little riskWhen management has insufficient resources to conduct a studyWhen the cost of the study outweighs the level of risk of the decision


Need for MRA manager takes decisionsHis responsibility is to reduce risk of failure in decision makingRisk arises due to lack of relevant informationA manager always seeks information to improve quality of decision makingInformation can be collected through MRHence, MR is an important tool for managerial decision making


MR & Marketing DecisionsFor Production, Finance, PersonnelMost of the required info are available within the organization; Hence easy to collect & analyzeFormal procedures are used to improve quality : Stats Methods for QC, PERT & CPM, Queuing Theory, Optimization Techniques etcFor Marketing information mostly exist outside the organizationIn consumer behaviour, perception, mindsIn competitive movesIn new government rules & regulationsIn social & political changes


MR & Marketing DecisionsOther problems for collecting information required for marketing decisions areBeing external collection is cumbersome & expensiveVariables are often qualitative & dynamic making measurements difficult & inaccurateVariables are complex & interact with each other


Risk of using wrong informationChoice of wrong information may lead toExcessive expenditureDecision going astrayBecoming uncompetitive & losing outMarket may vanish all of a sudden fashion garments


Sources of KnowledgeEmpiricists attempt to describe, explain, and make predictions through observationRationalists believe all knowledge can be deduced from known laws or basic truths of natureAuthorities serve as important sources of knowledge, but should be judged on integrity and willingness to present a balanced case


The Essential Tenets of ScienceDirect observation of phenomenaClearly defined variables, methods, and proceduresEmpirically testable hypothesesAbility to rule out rival hypothesesStatistical justification of conclusionsSelf-correcting process


Ways to CommunicateExposition descriptive statements that merely state and do not give reasonArgumentallows us to explain, interpret, defend, challenge, and explore meaning


Important Arguments in ResearchDeduction is a form of inference that purports to be conclusiveInduction draws conclusions from one or more particular facts


The Building Blocks of TheoryConceptsConstructsDefinitionsVariablesPropositions and HypothesesTheoriesModels


Understanding ConceptsA concept is a bundle of meanings or characteristics associated with certain events, objects, conditions, situations, and behaviorsConcepts have been developed over time through shared usage


Understanding ConceptsThe success of research hinges on:how clearly we conceptualizehow well others understand the concepts we use


What is a Construct?A construct is an image or idea specifically invented for a given research and/or theory-building purpose.


Types of VariablesIndependent DependentModeratingExtraneousIntervening


Types of VariablesIndependent & DependentLeadership style & Employee performance or Job satisfactionPrice of a product & DemandIndependentCause, Stimulus, Predictor, AntecedentDependentEffect, Response, Criterion, Consequence


Types of VariablesModeratingIn each relationship there is one Independent Variable (IV) & one Dependent Variable (DV)Four day work week (IV) will lead to higher productivity (DV)Moderating variable is a second independent variable that has significant effect on the originally stated IVDV relationshipFour day work week (IV) will lead to higher productivity (DV), especially among young workers (MV)


Types of VariablesExtraneousInfinite number of extraneous variables (EV) exist that might effect the relationshipMost of such variables have little or no effect on the given situation and these may be ignoredOthers may have highly random occurrence as to have little impactFor productivity example: election of a new mayor, rainy days, bird flu, strike etc


Types of VariablesInterveningIntervening variable (IVV) is defined as a factor which theoretically effects the observed phenomenon but can not be seen measured or manipulatedIts effect can be inferred from the effects on the observed phenomenonFour day work week (IV) will lead to higher productivity (DV) by increasing job satisfaction (IVV)


Propositions & HypothesesPropositionA statement about concepts that may be judged as TRUE or FALSE if it refers to observable phenomenonProposition formulated for empirical testing is HypothesisExampleInfosys employees have higher than average achievement motivation


The Role of the HypothesisGuides the direction of the studyIdentifies facts that are relevantSuggests which form of research design is appropriateProvides a framework for organizing the conclusions that result


Characteristics & Types of a Good HypothesisA good hypothesis should fulfill three conditions:Must be adequate for its purposeMust be testableMust be better than its rivalsHypothesis typesDescriptiveRelational: Correlation & Causal


Types of HypothesisDescriptiveDescribes the existence, size, form or distribution of some variables Eighty percent of shareholders of HLL favour increasing the companys cash dividendIt can also be stated as research questionDo shareholders of HLL favour an increased cash dividend?Either form is acceptable, but descriptive hypothesis format has advantagesEncourages researcher to crystallize thinkingEncourages to think about implications of either an accepted or rejected findingUseful for testing statistical significance


Types of HypothesisRelationalStatements that describe the relationship between two variables with respect to some caseForeign (variable) refrigerators are perceived to be of better quality (variable) by Indian consumers (case)


Types of Relational HypothesisTwo types: Correlation & CausalCorrelationMerely states that variables occur together without implying that one causes the otherPeople in Kerela give more importance to education than people in PunjabIn an office old employees are more responsive than young employees


Types of Relational HypothesisCausal (or Explanatory)There is an implication that existence of (or a change in) one causes or leads to a change in the otherCausal variable is called Independent variable and the other Dependent variableAdvertisement causes higher salesIncrease in income leads to higher savings


The Value of a TheoryNarrows the range of facts we need to studySuggests which research approaches will yield the greatest meaningSuggests a data classification systemSummarizes what is known about an object of studyPredicts further facts that should be found


Definition of Marketing ResearchAmerican Marketing AssociationMR is the systematic gathering, recording and analyzing of data about problems related to the marketing of goods & servicesPhilip KotlerMR is the systematic design, collection, analysis & reporting of data & findings relevant to a specific marketing situation facing the company

It may be relevant to add the word continuous to the above definitions


Purpose of MRTo improve quality of decision making process by providing informationTo help reduce the risk associated with managerial decision makingRisk due to two types of uncertainties:About the expected outcomeAbout the future environmentExample : FORD Edsel car for youthTo discover opportunity & exploit profitablyFor example : Frooti, Velvette, Mother Dairy, Dhara, Pan Parag


Scope of MRConsumers of products & servicesBuyer behaviour, Influencers, Buying habits, IncentivesProduct & product designPricing, Sourcing, Physical attributesDistribution ChannelsPerformance, Dealer Satisfaction, Own vs Multi-brand Advertising ImpactImage, Positioning, Media Planning, Message Content & Prioritizing Macro Level PhenomenonGovt spending. Mood of the Industry, State of Economy


MR ProcedureFive StepsProblem DefinitionResearch DesignField WorkData AnalysisReport Preparation & Implementation


The Management-ResearchQuestion Hierarchy1


The Management-ResearchQuestion Hierarchy1Why are sales declining in south while sales are booming in all other regions?Conduct an employee survey for outcomes of change in compensation structureIf compensation scheme is changed, will good sales persons leave?How can we improve sales in south?Introduce individual incentive? Quota based incentive? Advertise more?Management Decision23456


Working with the Hierarchy Management DilemmaThe symptom of an actual problemNot difficult to identify a dilemma, however choosing one to focus on may be difficultNeeds proper prioritizing


Working with the Hierarchy Management Question CategoriesChoice of purposes or objectiveGeneration and evaluation of solutionsTroubleshooting or control situation


Working with the Hierarchy Fine tune the research questionExamine concepts and constructs Break research questions into specific second-and-third-level questionsVerify hypotheses with quality testsDetermine what evidence answers the various questions and hypothesisSet the scope of your study


Working with the Hierarchy Investigative QuestionsQuestions the researcher must answer to satisfactorily arrive at a conclusion about the research question


Working with the HierarchyMeasurement QuestionsThe questions we actually ask to extract information from respondents


Other Processes in the HierarchyExplorationRecent developmentsPredictions by informed figures about the prospects of the technologyIdentification of those involved in the areaAccounts of successful ventures and failures by others in the field


Research Process ProblemsThe Favored Technique SyndromeCompany Database Strip-MiningUnresearchable QuestionsIll-Defined Management ProblemsPolitically Motivated Research


MR ProcedureFive StepsProblem DefinitionResearch DesignField WorkData AnalysisReport Preparation & Implementation


1. Problem DefinitionAny situation requiring further investigation is a problemNot all problems require fresh MR to be carried out. Many can be decided upon based on past data, trend, experienceDistributor CreditManufacturing out putStocking levelProblem Definition should beSpecific neither too broad nor too narrowTarget outcome should be preciseShould be manageable within time & resource available


1. Problem Definition an example


2. Research DesignIt spells out how to achieve stated MR objectivesConsists of Data Collection MethodSpecific Research InstrumentsSampling Plan


2. Research DesignData Collection MethodSecondary DataPrimary DataObservationSurvey (Most widely used)ExperimentationSpecific Research InstrumentsCamera, Tape, People Meter, Tally Sheet, QuestionnaireSampling PlanWho is to be surveyed? Sampling unitHow many? Sample sizeHow are they to be selected? Sampling ProcedureHow are they to be reached? Sampling Media


Questionnaire Design Some commentsArrangement should be from easy to difficultEasy to understand languageSequencing should be proper no back & forth referencesOnly important questions must be askedShort questionnaire helps in obtaining better responseMore close ended questions they help in analysisResponse should be captured on proper scalingDecide whether to give incentive to respond or not


3. Field WorkInvolves planning, execution, supervision & checking for errorsMR must be planned & executed well so as to complete within resource & time limitsProgress to be closely monitored to avoid time & cost overrunExtensive back checks & spot checks will improve the quality of MR output


4. Data AnalysisDone in two phasesClassification of raw dataQuantitative vs QualitativeChronological, Geographical, DemographicSummarizing the dataFrequency distribution, Mean, Median, Mode, Range, Variance, Standard DeviationData Analysis Methods Four classes


4. Data Analysis.Contd.Analytical Methods Four classes:Tests of Significance :Sampling Statistics, Chi Square Analysis & Analysis of VarianceExplaining Observed difference I: Cross Tabulation, Correlation & Regression Explaining Observed difference II: Linear Discriminant Analysis & Automatic Interaction DetectorIdentifying Interdependencies: Cluster, Factor & Conjoint Analysis


5. Report PresentationReport must have following sectionsExecutive SummaryObjectives & MethodologySummary, Conclusion, RecommendationSample Characteristics & Basis of selectionDetailed findingsQuestionnaires & other supporting documents


Marketing Research


Secondary Research


Internal SourcesCompany AccountsInternal Reports and AnalysisStock AnalysisRetail data - loyalty cards, till data, etc.


External SourcesGovernment Statistics Trade publicationsCommercial Data IMRB, Gallup, Mintel, etc.Household Expenditure SurveyMagazine surveysOther firms researchResearch documents publications, journals, etc.


Sampling Methods


Sampling Methods - ProbabilitySampling Methods:Random Samples equal chance of anyone being pickedMay select those not in the target group indiscriminateSample sizes may need to be large to be representativeCan be very expensive


Sampling Methods - ProbabilityStratified or Segment Random SamplingSamples on the basis of a representative strata or segmentStill random but more focussedMay give more relevant informationMay be more cost effective


Sampling Methods - ProbabilityCluster SamplingPrimarily based on geographical areas or clusters that can be seen as being representative of the whole population


Sampling Methods Non ProbabilityQuota SamplingAgain by segmentNot randomly selectedSpecific number on each segment are interviewed, etc.May not be fully representativeCheaper method


Sampling Methods Non ProbabilityMulti-Stage SamplingSample selected from multi stage sub-groupsSnowball SamplingSamples developed from contacts of existing customers word of mouth type approach!


Primary Research


Primary ResearchPrimary ResearchFirst hand informationExpensive to collect, analyse and evaluateCan be highly focussed and relevantCare needs to be taken with the approach and methodology to ensure accuracyTypes of question Closed limited information gained; Open useful information but difficult to analyse


Qualitative & QuantitativeQuantitative and Qualitative Information:Quantitative based on numbers 56% of eighteen year olds drink cold drink at least four times a week.Doesnt tell you why, when, how.Qualitative more detail tells you why, when and how!


Purpose of Marketing Research


Marketing ResearchAdvantages of Marketing ResearchHelps focus attention on objectivesAids forecasting, planning and strategic developmentMay help to reduce risk of new product developmentCommunicates image, vision, etc. Globalisation makes market information valuable (HSBC adverts!!)


Marketing ResearchDisadvantages of Marketing ResearchInformation only as good as the methodology usedCan be inaccurate or unreliableResults may not be what the business wants to hear!May stifle initiative and gut feelingAlways a problem that we may never know enough to be sure!


Documents

1_Marketingresearch