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MGT301 - Principles of Marketing - Lecture Handout 12

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Lesson overview and learning objectives:

In last Lesson we discussed the marketing information system. Today’s Lesson Outlines the marketing research process, including defining the problem and research objectives and developing the research plan. We will also discuss the key issues of planning primary data collection, implementing the research plan and interpreting and reporting the findings.

So our today’s topics are:

A. THE MARKETING RESEARCH PROCESS:

a. Marketing Research an Introduction:

Every marketer needs marketing research, and most large companies have their own marketing research departments. Marketing research involves a four-step process. The first step consists of the manager and researcher carefully defining the problem and setting the research objectives. The objective may be exploratory, descriptive, or causal. The second step consists of developing the research plan for collecting data from primary and secondary sources. Primary data collection calls for choosing a research approach (observation, survey, experiment); choosing a contact method
(mail, telephone, personal); designing a sampling plan (whom to survey, how many to survey, and how to choose them); and developing research instruments (questionnaire, mechanical). The third step consists of implementing the marketing research plan by collecting, processing, and analyzing the information. The fourth step consists of interpreting and reporting the findings. Further information analysis helps marketing managers to apply the information and provides advanced statistical procedures and models to develop more rigorous findings from the information.

Some marketers face special marketing research considerations, such as conducting research in small-business, non-profit, or international situations. Marketing research can be conducted effectively by small organizations with small budgets. International marketing researchers follow the same steps as domestic researchers but often face more challenging problems. All organizations need to understand the major public policy and ethics issues surrounding marketing research.

b. Uses & Application of Research in Marketing:

Decision-making is crucial process in all types of the organization. This decision-making requires then information that is collected and acquired through the marketing research process this information can be regarding customers companies or competitor or the other environmental factors. Major uses of the marketing research in the organizations are as following:

  • Measurement of market potential.
  • Analysis of market share.
  • Determination of market characteristics
  • Sales analysis.
  • Product testing.
  • Forecasting.
  • Studies of business trends
  • Studies of competitors' products.

c. THE MARKETING RESEARCH PROCESS

THE MARKETING RESEARCH PROCESS

Before researcher can provide managers with information, they must know what kind of problem the manager wishes to solve. Marketing research process has following steps

  1. Defining the problem and research objectives
  2. Developing the research plan,
  3. Implementing the research plan, and
  4. Interpreting and reporting the findings.

Now we will discuss these steps in detail:

Step 1 Defining the Problem and Research Objectives

The marketing manager and the researcher must work closely together to define the problem carefully and agree on the research objectives. Marketing managers must know enough about marketing research to help in the planning and to interpret research results. Defining the problem and research objectives is often the hardest step in the process. After the problem has been defined carefully, the manager and researcher must set the research objectives. The three general types of objectives are:

  1. Exploratory research where the objective is to gather preliminary information that will help to better define problems and suggest hypotheses for their solution.
  2. Descriptive research is where the intent is to describe things such as the market potential for a product or the demographics and attitudes of customers who buy the product.
  3. Casual research is research to test hypotheses about cause-and-effect relationships.

The statement of the problem and research objectives will guide the entire research process. It is always best to put the problem and research objectives statements in writing so agreement can be reached and everyone knows the direction of the research effort.

Step 2 Developing the Research Plan

In developing the research plan, the attempt is to determine the information needed (outline sources of secondary data), develop a plan for gathering it efficiently, and presenting the plan to marketing management. The plan spells out specific research approaches, contact methods, sampling plans, and instruments that researchers will use to gather new data. The firm should know what data already exists before the process of collecting new data begins. The steps that
should be followed are. Developing the research plan involves all of the following

  1. Determining Specific Information Needs
  2. Gathering Secondary Information
  3. Planning Primary Data Collection

1). Determine specific information needs. In this step research objectives are translated into specific information needs. For example, determine the demographic, economic, and lifestyle characteristics of a target audience

2). Gathering secondary information.

a). Secondary data is information that already exists somewhere, having been collected for another purpose. Sources of secondary data include both internal and external sources. Companies can buy secondary data reports from outside suppliers (i.e., commercial data sources).

Information can be obtained by using commercial online databases. Examples include CompuServe, Dialog, and Lexis-Nexus. Many of these sources are free. Advantages of secondary data include

  1. It can usually be obtained more quickly and at a lower cost than primary data.
  2. Sometimes data can be provided that an individual company could not collect on its own.

Some problems with collecting secondary data include:

  1. The needed information might not exist.
  2. Even if the data is found, it might not be useable.
  3. The researcher must evaluate secondary information to make certain it is relevant, accurate, current, and impartial. Secondary data is a good starting point; however, the company will often have to collect primary data.

b). Primary data is information collected for the specific purpose at hand. Planning Primary Data Collection. A plan for primary data collection calls for a number of decisions on research approaches, contact methods, sampling plans, and research instruments.

Research Approaches:

a). Research approaches can be listed as:

  1. Observational research where information is gained by observing relevant people, actions, and situations. However, some things such as feelings, attitudes, motives, and private behavior cannot be observed. Mechanical observation can be obtained through single source data systems. This is where electronic monitoring systems link consumers’ exposure to television advertising and promotion (measured using television meters) with what they buy in stores (measured using store checkout scanners). Observational research can be used to obtain information that people are unwilling or unable to provide.
  2. Survey research is the gathering of primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior. Survey research is best suited for gathering descriptive information. Survey research is the most widely used form of primary data collection The major advantage of this approach is flexibility while the disadvantages include the respondent being unwilling to respond, giving inaccurate answers, or unwilling to spend the time to answer.
  3. Experimental research involves the gathering of primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in-group responses. This form of research tries to explain cause-andeffect relationships. Observation and surveys may be used to collect information in experimental research. This form is best used for causal information.

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