What is meant by Marketing Research?
According to the American Marketing Association, Marketing Research has defined; “Marketing research is the systematic gathering, recording, and analysing of data about problems relating to the marketing of goods and services”.
Why is Marketing Research Important?
Market research provides considerable information regarding market activities. So, it especially helps to identify market strategies, evaluating the existing market, segmenting and analysing the market and also provide key insight and other relevant information to the businesses as well. In addition to that, this helps to understand the behavior of the customers and competitors too. Further, this significantly provides understanding about new opportunities of the firms as well as possible.
Furthermore, marketers can identify consumer problems and make decisions to resolve those problems and also reduce uncertainty and help to refine their business activities.
Other Needs for continuous Marketing Research:
- It improves the marketer’s ability to make the right decision.
- It changes values and behaviour of customers can be monitored constantly.
- Competitors’ development and their strategies can be identified.
- It can be used to continuously evaluate the current effectiveness of an organization’s strategies and tactics
- Research in the form of environmental scanning can help to identify the changes in social, legal, political and technological advancement.
Types of Marketing Research
- Market research
- Product research
- Price research
- Sales and Promotion research
- Distribution research
- Competitor research
- Consumer research
Market Research
Under this research, these activities are included.
- Analysis of market potential for existing products.
- Sales forecasting for all product
- Study of market trends and factors influencing them.
- Composition of the market(age groups, income groups, size of the company)
- Analysis of market shares.
Product Research
These activities are include,
- Comparative studies between competitive products.
- Studies into packaging and design
- Test marketing
- Research into the development of product lines.
- Customer acceptance of proposed new products.
- Product concept testing.
Price Research
The below activities are include under this,
- Analysis of elasticity of demand.
- Analysis of costs and contribution or profit margins.
- The effect of changes in credit policy on demand.
- Customer perceptions of price. (and quality)
Sales Promotion and Research
These activities are include under this;
- Research the advertising campaigns and sales promotion effectiveness.
- Analysing the effectiveness of individual aspects
- Analysing the effectiveness of other sales promotion tools and methods.
- Brand Tracking studies.
Distribution Research
This research include these activities,
- The location and design of distribution centres.
- The analysis of packaging for transportation and shelving.
- Costs benefit analysis of physical distribution management.
- Effectiveness of each channel partner.
Competitor Research
Under this include these activities,
- Competitor strengths and weaknesses.
- Quality of product lines, packaging, pricing, distribution and advertising.
- Sales force operation and effectiveness.
Consumer Research
This include,
- Consumer habits and attitudes.
- Studies on consumer trends and lifestyles.
- Consumer purchase behaviour.
Marketing Research Techniques
Marketing Research is conducted to understand what are the consumer expectations from different marketers’ products? And also there’s feedback about their products and services. So this helps marketers to know all things related to selling activities that are working as well or not.
Specifically, marketing research can be divided into 02 types.
- Primary Data
- Secondary Data
Primary Data
Primary data is data collected for the first time for the specific purposes of the particular marketing research study being conducted.
Especially, like this primary research is used to get new information from the customers. The collection of primary data is often referred to as ‘field research’. It is often employed after the launch of a new product.
Sources of primary data:
- Observational research – This is the process of observing the purchasing pattern of the consumers and studying the reasons or factors that draw a customer towards a product. This involves providing a range of options to a group of people in need of a product and then noting their reaction and the reason they selected one of them. The best places for such research are shopping malls and supermarkets.
- Experimentation – Is sense, the researchers give efforts to understand the causes, effects and also processes involved in a particular process. Further, experiments can be used to collect different types of primary data.
- Survey research- Surveys are conducted often with the help of a common questionnaire that the people participating in it fill and submit. It is a quick, effective and easy way to get a lot of feedback from numerous sources. One of the biggest reasons behind conducting surveys is that they include a wide range of people and from different demographics.
- Depth interview – This is a qualitative research technique used to conduct individual interviews where the number of respondents are and less and research is focused on a specific product, technique, situation or objective.
Advantages of collecting Primary data:
- Relevance
- Accuracy
- Sufficient
Disadvantages in collecting Primary data:
- Time consuming
- Cost
- Expertise are needed to collect primary data
Secondary Data
Secondary data refers to ‘off the shelf’ information which already exists and which was collected for some other specific purpose. The collection of secondary data is often referred to as ‘desk research’. It is recommended that a marketer collects secondary data before collecting primary data.
Sources of secondary data:
- Internal sources
- External sources
Internal sources of secondary data:
- Accounting records – This is one of the major important sources that provide so much necessary financial information to market researchers.
- Sales force reports – This is the other important source, this gives sales related information. (eg:- sales of the product)
- Reports from previous marketing research studies – These sources are mostly helpful to identify the past experiences of marketing researches.
- Budgets – Also this source is another important one to the market researchers.
- Profit and loss statements – This provides information regarding when selling a particular product has earned profit or loss.
External sources of secondary data:
- Computerized databases – This provides computer based data information to the market research.
- Trade associations- Sometime, from industry related trade groups, business associations or sector associations also provide necessary information.
- Central bank – Further, central bank reports are helpful for marketers to get some information related to market growth likewise.
- Export development board – This also may be another important source to the market researchers to get some information related to export products.
- Chamber of Commerce – This also provides sufficient information about business people, their goals and other market research relevant information as well.
- Government agencies – Also some government agencies provide some necessary information related to the market research field. (some examples for Sri Lankan government agencies; Sri Lanka Customs, Ministry of Finance, State Intelligence Service, Ministry of Defence, Board of Investment of Sri Lanka, Public Utilities Commission an etc.
- Research agencies – This is another important external source that provides some important information to the marketers. (Eg:- The Tea Research Institute of Sri Lanka, KANTAR LMRB Pvt. Ltd and etc.)
- Other Publishing sources – (Eg:- Magazines, Trade journals etc.)
Advantages/Benefits/ Merits/Pros of Secondary data:
- Relatively cheaper to gather
- Relatively quicker to extract
- Too much expertise is not needed to extract secondary data
- Multiple sources are available to collect secondary data
Disadvantages/Demerits, Cons of secondary data:
- Availability – secondary data may not be available for a specific problem in hand.
- Irrelevance – secondary data may not fit the information needs of the research problem
- Insufficient – sometimes, secondary data may not sufficient
- Invalidity – secondary data may not be valid sometime, so this can be a major problem rather than other cons.
- Inaccuracy- secondary data may be wrong in some situations.
Marketing Information Systems
“A system in which marketing information is formally gathered, stored, analysed and distributed to managers in accord with their informational needs on a regular planned basis”
Customers, competitors etc. It is wider in its focus. It may be conducted to introduce a new product
Market research is narrower in its focus and only considers finding out information about the market under investigation. It is conducted for existing products for existing markets.
Importance/ Benefits of Marketing information systems are as follows;
- Better market segmentation
- Implementation of the marketing concept
- Evaluation of marketing decision variables
- Monitoring the environment
- Upgrades management’s performance
- Helps demand assessment
- Provides up-to-date information
- Anticipation of customers
- Technology development
- Improving the efficiency
Basic Components of Marketing Information System
- Internal records.
- Marketing intelligence.
- Marketing research.
- Marketing decision support system
Internal records
The first component of MIS is ‘Internal Record’. Marketing managers get lots of information from the internal-records of the company. These records provide current information about sales, costs, inventories, cash flows and account receivable and payable. Many companies maintain their computerized internal records. Inside records help marketing managers to gain faster access to reliable information.
Marketing intelligence
- The second component of MIS is ‘Marketing Intelligence’. It collects information from external sources. It provides information about the current marketing-environment and changing conditions in the market. This information can be easily gathered from external sources like; magazines,trade journals, commercial press, and so on. This information cannot be collected from the Annual Reports of the Trade Association and Chambers of commerce, Annual Report of Companies, etc. The salesmen’s report also contains information about market trends.
- The information which is collected from the external sources cannot be used directly. It must be first evaluated and arranged in a proper order. It can be then used by the marketing manager for taking decisions and making policies about marketing. So, marketing intelligence is an important component of MIS.
Marketing research
The third important component of MIS is ‘Marketing Research’. MR is conducted to solve specific marketing problems of the company. It collects data about the problem. This data is tabulated, analyzed and conclusions are drawn. Then the recommendations are given for solving the problem. Marketing research also provides information to the marketing managers. However, this information is specific information. It can be used only for a particular purpose. MIS and MR are not substitutes for each other. The scope of MIS is very wide. It includes ‘MR’. However, the scope of MR is very narrow.
Marketing decision support system
The fourth component of MIS is ‘Marketing Decision Support System’. These are the tools which help the marketing managers to analyze data and to make better marketing decisions. They include hardware, i.e. computer and software programs. Computers help the marketing manager to analyze the marketing information. It also helps them to make better decisions. In fact, today marketing managers cannot work without computers. There are many software programs, which help the marketing manager to do market segmentation, price fixing, advertising budgets, etc.
