Marketing Research can be defined as the process of assessing the viability of a product or service through various methods such as focus groups, surveys etc. It enables the company to identify their target market and gain insights into what the consumers think of their product or service before they make it available to the public. (Investopedia, n. d) . It is the function that links the consumers to the marketer through information and can be summed up as the systematic gathering, recording and analysis of qualitative and quantitative data about issues relating to marketing products and services.
For example, an organization going into business would conduct a market research to test their product or service. If the market research matches the company’s prediction, they can proceed with the business plan. If not, they can use the results of the research to make adjustments and further improve their product. There are 4 steps to Marketing Research Process: Step 1?Defining the problem and Research Objectives The first step in the marketing research process is to identify and define the opportunities and problems that exist for the business.
Simply put, this step involves taking your product or service to the market to find out whether or not this product will fit into the current market place. As a part of this process, the product can be taken to a test market to see if the target audience responds favorably. This process can further be divided into 2 steps. The first step is setting objectives or the goals you would want the new product to achieve. For example, if Pepsi decides to launch a new product, it would set an estimated amount of revenue it wishes to generate from this product.
This amount would be the ‘objective’ of Pepsi’s new product. The second step is to set up specific measures of success or criteria used to find a solution to the problem. The main purpose of this step is to help decide whether the company should move forward with sales of the item or not. For example, when Pepsi decided to launch it’s product, it may first like to test is product in only one geographical area to see how customers respond to the product before expanding sales nationwide Step2 Developing the Research Plan
This step enables the company to make a reasonable marketing decision, using the information collected. However, while collecting research material, the company will also collect irrelevant data which might flaw the final report if not omitted. (4 Steps to Marketing Research, n. d). Research can broadly be classified into 2 types of research i. e. primary and secondary research. Primary research is the information collected first hand. This information did not exist in the past and his developed by the researcher.
Primary research is of three kinds, exploratory (customer interviews), descriptive (cross sectional) and casual research (laboratory research). The second type is known as secondary research. It is second hand information gathered and is research done on already existing research There are two types of secondary research; internal (company reports) and external sources (published research). Step 3 Implementing Research -?Collecting and Analyzing Data After research process is complete, the data now needs to be collected and analyzed.
However, the company might face difficulties while collecting data for eg from a foreign country. They may require the help of professionals or consultancies. For the analysis of data it needs to be summarized and put in a tabular form in order to get an overview of all the responses collected. Preparing the data also involves editing, coding, transcription and verification of data. ( Market Research Process, n. d) This not only gives meaning to the data collected, but also ensures that the new product can survive in the market.
For example, if Pepsi decided to launch a new product, they may analyze their research to see how different sections of the society (eg different age groups) respond to their product. Analyzing data further goes on to compare trends over time and also compare results with other similar products. For example. If Pepsi’s new product were to be Diet Pepsi, they would like to see how customers have reacted to such a product in the past. Step 4 Interpreting and reporting the findings After the managers have analyzed the data and picked out the relevant information they can develop the final report.
The marketers must present their finding and also support them with suitable recommendations. It must also contain the key finding, research objectives and the executive summary. The marketers would then include a conclusion which would decide whether or not they should pursue marketing for the product. For Example If Pepsi were to launch a new product, on completion of the above mentioned steps, they would not draw a report concluding whether or not marketing for the product is a viable option. Types of Marketing Research Primary Research
Primary research is original research conducted from scratch. An original research plan must be devised in order to conduct primary research, This would include data collection, data input and then the collection and analysis of data. Since primary research is original, the results gathered would be more relevant to the needs of the company (What is Primary Research, n. d) (a) Exploratory Research (Qualitative) Qualitative research focuses not only on what people think but also why they think it. It enables a company to understand the customers opinions and also know what motivates them.
It generates ideas for new strategies and opportunities. These include consumer interview, focus groups case studies etc. (Marketing Donut, n. d) Advantages-Allows to build for new theoriesI-t is not confined to definable variables and this enables companies to get a broader over view-Qualitative research focuses on smaller groups of people, it is less expensive and time consuming | Disadvantages-Qualitative research poses a problem of data overload. Open ended questions often lead to an accumulation of data which may be difficult to analyze|
Example If Pepsi were to launch a new product, they might use a focus group and may include questions like the price they would be willing to pay, how they could better their already existing products etc (b) Descriptive Research (Quantitative) Quantitative research is one which bases its conclusion on a large sample of population (slide), It involves asking people about their opinion in a structured way so that the company may produce hard facts and statistics to guide them. However,it is important to survey a large group of people and that they represent a sample of the target market (Marketing Donut, n. ) Advantages-It enables the researcher to analyze and measure the data-
The results of the research can be projected to the public and can also be used to testify| Disadvantages-It does not discuss the different meaning different people have for things as qualitative research does as it does not study things in their natural settings. -Quantitative research involves more number of respondents and is hence more costly| Example, Before launching their new product, Pepsi may like to undertake a large scale survey which would help them estimate how customers would react to their product.
It could include questions regarding their views on health factors, taste etc. (c) Casual Research (Experimental) Casual research is the testing of a hypothesis on the cause and effect in a given market. It looks into the effect of one variable on another. It can be used to measure the effect of a change on an existing market and enables companies to predict hypothetical scenarios on which they could base future plans. (What is Casual Research, n. d) Advantages-Casual research provides versatility and a wide ranged approach to the primary research. It can draw on observations, case histories, interviews etc. It gives the managers a platform on which the business plan can be developed-It gives them a rough estimate of how the market will respond. | Disadvantages-The manipulator should be concise in his experiment. An additional variable may affect the research negatively. -There is a risk involved in relying on this kind of data as the manager are building business plans on hypothetical scenarios. | Example If Pepsi currently sells aerated drinks and would now like to expand to non aerated drinks as well, casual research will enable them to decide whether this market venture would be profitable.
It tells the company how a decision taken in the present would affect it in the future Secondary Research Secondary research (also known as desk research) involves the usage and collation of existing research rather than primary research (Housden, 2003). For example if Pepsi conducted primary research but the product did not meet their expectations, the research they would do on that data to rectify the error would be secondary research. There are two types of secondary research: a. Internal research
Information for this report can be gathered from within the company for eg from company reports or customer feedback forms etc. Advantages -Internal resources cost the company no or very little expenses as they are generated from within the company-Easily accessible | Disadvantages- Relying on internal information may cause survey questions bias and result in inadequate customer satisfaction -Internal research has access to limited resources| b. External research Information for this research can be found from published research, government sources or any other source available from outside the company Advantages Access to wider information| Disadvantage-Time consuming process as only relevant information needs to be picked from a pool of data| c. Data mining, another form of secondary research involves browsing of data by analysts. To find unique patters on behavior among different customer groups Although market research is an expensive and time consuming process, it is less expensive that fully developing and bringing to market a new product that would bring little or no interest to the firm. It thus holds great importance in every business’ working