marketing research

Marketing is both - an art and a science. Enjoy this point and counter point about the art and science of marketing. Use the strengths of both arguments to better understand and improve your marketing. Marketing Science Marketing is a science because marketing is about understanding and influencing behaviors. Psychology, the science of behaviors, studies how people react to certain stimuli in predictable ways. This is similar to Newton's' third law - cause and effect. For every marketing action there is a reaction. The science is in anticipating the reactions to your actions. Marketing Art Marketing is an art because marketing is about appreciating the nuances of human behaviors. Beauty is in the eye of the beholder. Beauty is art. Data vs information: There is a subtle difference between data and information. Data are the facts or details from which information is derived. Individual pieces of data are rarely useful alone. For data to become information, data needs to be put into context. Data: Data is raw, unorganized facts that need to be processed. Data can be something simple and seemingly random and useless until it is organized. Information: When data is processed, organized, structured or presented in a given context so as to make it useful, it is called information. The following points explain the need for and importance of marketing research: 1. Identifying problem and opportunities in the market: It helps in identifying new market opportunities for existing and new products. It provides information on market share, nature of competition, customer satisfaction levels, sales performances and channel of distribution. This helps the firms is solving problems. 2. Formulating market strategies: Today, markets are no more local. They have become global. Manufactures find it difficult to contact customers and control distribution channels. Competition is equally severe. The consumer needs are difficult to predict. Market segmentation is a compli­cated task in such wide markets. The marketing intelligence provided through marketing research not only helps in framing but also in implementing the market strategies. 3. Determining consumer needs and wants: Marketing has become customer-centric. However, large-scale production needs intermediaries for mass distribution. Due to prevalence of multi channels of distribution, there is an information gap. Marketing research helps in collecting information on consumers from structured distribution research and helps in making marketing customer oriented. 4. For effective communication mix: In an era of micro- rather than mass-marketing, communica­tion plays a vital role. Marketing research uses promotional research to study media mix, adver­tising effectiveness and integrated communication tools. Research on such aspects will help in promoting effectively a company’s product in the market. 5. Improving selling activities: Marketing research is used to analyse and evaluate performances of a company within a market. It also studies effectiveness of a sales force. It helps in identify­ing sales territories. Such information helps the companies in identifying areas of shortcoming in sales. It also examines alternative methods for distribution of goods. 6. For sales forecasting: The most challenging task for any production manager is to keep optimum levels of inventory. However, production is undertaken in anticipation of demand. Therefore, scientific forecast of sales is required. Marketing research helps in sales forecasting by using market share method, sales force estimate method and jury method. This can also help in fixing sales quotas and marketing plans. Qualitative Research Qualitative Research is primarily exploratory research. It is used to gain an understanding of underlying reasons, opinions, and motivations. It provides insights into the problem or helps to develop ideas or hypotheses for potential quantitative research. Qualitative Research is also used to uncover trends in thought and opinions, and dive deeper into the problem. Qualitative data collection methods vary using unstructured or semi-structured techniques. Some common methods include focus groups (group discussions), individual interviews, and participation/observations. The sample size is typically small, and respondents are selected to fulfil a given quota. Quantitative Research Quantitative Research is used to quantify the problem by way of generating numerical data or data that can be transformed into usable statistics. It is used to quantify attitudes, opinions, behaviors, and other defined variables – and generalize results from a larger sample population. Quantitative Research uses measurable data to formulate facts and uncover patterns in research. Quantitative data collection methods are much more structured than Qualitative data collection methods. Quantitative data collection methods include various forms of surveys – online surveys, paper surveys, mobile surveys and kiosk surveys, face-to-face interviews, telephone interviews, longitudinal studies, website interceptors, online polls, and systematic observations. Needs The easiest explanation of the concept “needs” is the basic human requirements like shelter, clothe, food, water, etc. These are essential for human beings to survive. Wants This is quite different from needs. Wants aren’t permanent and it regularly changes. As time passes, people and location change, wants change accordingly. Wants aren’t essential for humans to survive, but it’s associated with needs. The Marketing Research Planning Process: Step 1. Define the Objective & Your “Problem” Perhaps the most important step in the market research process is defining the goals of the project. At the core of this is understanding the root question that needs to be informed by market research. There is typically a key business problem (or opportunity) that needs to be acted upon, but there is a lack of information to make that decision comfortably; the job of a market researcher is to inform that decision with solid data. Examples of “business problems” might be “How should we price this new widget?” or “Which features should we prioritize?” Step 2. Determine Your “Research Design” Now that you know your research object, it is time to plan out the type of research that will best obtain the necessary data. Think of the “research design” as your detailed plan of attack. In this step you will first determine your market research method (will it be a survey, focus group, etc.?). You will also think through specifics about how you will identify and choose your sample (who are we going after? where will we find them? how will we incentivize them?, etc.). This is also the time to plan where you will conduct your research (telephone, in-person, mail, internet, etc.). Once again, remember to keep the end goal in mind–what will your final report look like? Based on that, you’ll be able to identify the types of data analysis you’ll be conducting (simple summaries, advanced regression analysis, etc.), which dictates the structure of questions you’ll be asking. There are three classifications to consider: Exploratory Research – This form of research is used when the topic is not well defined or understood, your hypothesis is not well defined, and your knowledge of a topic is vague. Exploratory research will help you gain broad insights, narrow your focus, and learn the basics necessary to go deeper. Common exploratory market research techniques include secondary research, focus groups and interviews. Exploratory research is a qualitative form of research. Descriptive Research – If your research objective calls for more detailed data on a specific topic, you’ll be conducting quantitative descriptive research. The goal of this form of market research is to measure specific topics of interest, usually in a quantitative way. Surveys are the most common research instrument for descriptive research. Causal Research – The most specific type of research is causal research, which usually comes in the form of a field test or experiment. In this case, you are trying to determine a causal relationship between variables. For example, does the music I play in my restaurant increase dessert sales (i.e. is there a causal relationship between music and sales?). Step 3. Design & Prepare Your “Research Instrument” In this step of the market research process, it’s time to design your research tool. If a survey is the most appropriate tool (as determined in step 2), you’ll begin by writing your questions and designing your questionnaire. If a focus group is your instrument of choice, you’ll start preparing questions and materials for the moderator. You get the idea. This is the part of the process where you start executing your plan. Step 4. Collect Your Data This is the meat and potatoes of your project; the time when you are administering your survey, running your focus groups, conducting your interviews, implementing your field test, etc. The answers, choices, and observations are all being collected and recorded, usually in spreadsheet form. Each nugget of information is precious and will be part of the masterful conclusions you will soon draw. Step 5. Analyze Your Data Step 4 (data collection) has drawn to a close and you have heaps of raw data sitting in your lap. If it’s on scraps of paper, you’ll probably need to get it in spreadsheet form for further analysis. If it’s already in spreadsheet form, it’s time to make sure you’ve got it structured properly. Once that’s all done, the fun begins. Run summaries with the tools provided in your software package (typically Excel, SPSS, Minitab, etc.), build tables and graphs, segment your results by groups that make sense (i.e. age, gender, etc.), and look for the major trends in your data. Start to formulate the story you will tell. Step 6. Visualize Your Data and Communicate Results You’ve spent hours pouring through your raw data, building useful summary tables, charts and graphs. Now is the time to compile the most meaningful take-aways into a digestible report or presentation. A great way to present the data is to start with the research objectives and business problem that were identified in step 1. Restate those business questions, and then present your recommendations based on the data, to address those issues. Types of data: The first level of measurement is nominal level of measurement. In this level of measurement, the numbers in the variable are used only to classify the data. In this level of measurement, words, letters, and alpha-numeric symbols can be used. Suppose there are data about people belonging to three different gender categories. In this case, the person belonging to the female gender could be classified as F, the person belonging to the male gender could be classified as M, and transgendered classified as T. This type of assigning classification is nominal level of measurement. The second level of measurement is the ordinal level of measurement. This level of measurement depicts some ordered relationship among the variable’s observations. Suppose a student scores the highest grade of 100 in the class. In this case, he would be assigned the first rank. Then, another classmate scores the second highest grade of an 92; she would be assigned the second rank. A third student scores a 81 and he would be assigned the third rank, and so on. The ordinal level of measurement indicates an ordering of the measurements. The third level of measurement is the interval level of measurement. The interval level of measurement not only classifies and orders the measurements, but it also specifies that the distances between each interval on the scale are equivalent along the scale from low interval to high interval. For example, an interval level of measurement could be the measurement of anxiety in a student between the score of 10 and 11, this interval is the same as that of a student who scores between 40 and 41. A popular example of this level of measurement is temperature in centigrade, where, for example, the distance between 940C and 960C is the same as the distance between 1000C and 1020C. The fourth level of measurement is the ratio level of measurement. In this level of measurement, the observations, in addition to having equal intervals, can have a value of zero as well. The zero in the scale makes this type of measurement unlike the other types of measurement, although the properties are similar to that of the interval level of measurement. In the ratio level of measurement, the divisions between the points on the scale have an equivalent distance between them. A research proposal is a document proposing a research project, generally in the sciences or academia, and generally constitutes a request for sponsorship of that research. Proposals are evaluated on the cost and potential impact of the proposed research, and on the soundness of the proposed plan for carrying it out. A request for proposal (RFP) is a document that solicits proposal, often made through a bidding process, by an agency or company interested in procurement of a commodity, service, or valuable asset, to potential suppliers to submit business proposals Correlation is a statistical measure that indicates the extent to which two or more variables fluctuate together. A positive correlation indicates the extent to which those variables increase or decrease in parallel; a negative correlation indicates the extent to which one variable increases as the other decreases Regression is a statistical measure used in finance, investing and other disciplines that attempts to determine the strength of the relationship between one dependent variable (usually denoted by Y) and a series of other changing variables (known as independent variables). Simple linear regression is a statistical method that allows us to summarize and study relationships between two continuous (quantitative) variables: One variable, denoted x, is regarded as the predictor, explanatory, or independent variable. Sources of data: 1)Primary data- First hand information. secondary data- data already exist.already established.research vendors who sell secondary data.databases. 2)Evaluating secondary data- ex:soap manufacturing company a specific data related to.When data is not similar;disparity in the data,which should be selected,&how a)Credibility b)Recency c)Objective behind the data collection d)How was the data collected. 3)Traditional sources of secondary data-Newspapers,articles,journals.Syndicated data sources. 4)Qualitative data- small studies sample size-small.give directions.indicate.these may be posibility for larger studies.not generalized.not empherical. 5)Quantitative data- Large studies samples one large.attribute generalized results.emperical data. sometimes exploratory research. Qualitative Research 1)Focus groups- Expert research.before design the product;focus group was conducted.need for product;customer beheviour. analyse why anyone did not produced the product.min-6;max-12.Group must be homogenous. Modiratar able to control the groups(obj) & everyone should participate in group.should extend beyond 1 hour. 2)Depth interviews- Conducted when indepth information is required. these are often conducted at their convience (home,office) in home interviews response is always noted; DI are structured;& there are variations & Laddering. 3)projective techniques- by showing pictures and ask the what do you think,& how you approach. they are unbiased.why qualitative- sample size-small.Qualitative market research is often aimed at increasing understanding of consumers’ thoughts and feelings toward brands, products, concepts, advertising, social issues and other important topics. Projective techniques are indirect methods used in qualitative research. These techniques allow researchers to tap into consumers’ deep motivations, beliefs, attitudes and values. This is important because psychology has told us for a long time that much of what drives behavior can be emotional and irrational in nature. To some extent, these emotional drivers of behavior lie below conscious awareness. Some common projective techniques include word associations, imagery associations, grouping and choice ordering techniques, imagery associations with consumer personalities, and personification activities. Qualitative research (Observational research) is particularly prevalent in the social sciences and in marketing. It is a social research technique that involves the direct observation of phenomena in their natural setting controlled observations (usually a structured observation) are likely to be carried out in a psychology laboratory. The researcher decides where the observation will take place, at what time, with which participants, in what circumstances and uses a standardised procedure. Participants are randomly allocated to each independent variable group. Naturalistic Observation Naturalistic observation (i.e. unstructured observation) involves studying the spontaneous behavior of participants in natural surroundings. The researcher simply records what they see in whatever way they can Participant Observation Participant observation is a variant of the above (natural observations) but here the researcher joins in and becomes part of the group they are studying to get a deeper insight into their lives. If it were research on animals we would now not only be studying them in their natural habitat but be living alongside them as well Quantitative Research survey methods: Telephone interviews Face?to?face interviews Computer Assisted Personal Interviewing (CAPI) QUESTIONNAIRES Factors determining choice of a method Versatility Quantity of data Sample control Quality of data Response rate Speed Cost Experimental method of Research. ... The experimental method is a systematic and scientific approach to research in which the researcher manipulates one or more variables, and controls and measures any change in other variables Internal validity refers to how well an experiment is done, especially whether it avoids confounding (more than one possible independent variable [cause] acting at the same time). The less chance for confounding in a study, the higher its internal validity is. External validity is the validity of generalized (causal) inferences in scientific research, usually based on experiments as experimental validity. In other words, it is the extent to which the results of a study can be generalized to other situations and to other people. Threats to validity: The controlled or experimental design enables the investigator to control for threats to internal and external validity. ? Threats to internal validity compromise our confidence in saying that a relationship exists between the independent and dependent variables. ? Threats to external validity compromise our confidence in stating whether the study’s results are applicable to other groups ? Is the investigator’s conclusion correct? ? Are the changes in the independent variable indeed responsible for the observed variation in the dependent variable? ? Might the variation in the dependent variable be attributable to other causes?