Definition of marketing research

Marketing research is the function that links the consumer, customer, and public to the marketing through information-information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process.

Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.

Marketing research is the systematic and objective identification, collection, analysis, dissemination, and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.

Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing products and services.


Marketing research are often confused. 'Market' research is simply research into a specific market. It is a very narrow concept. 'Marketing' research is much broader. It not only includes 'market' research, but also areas such as research into new products, or modes of distribution such as via the Internet. 


Marketing research is the function that links the consumer, customer, and public to the marketer through information - information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the methods for collecting information, manages and implements the data collection process, analyzes, and communicates the findings and their implications.

The Marketing research proces

We conceptualize the marketing research process as consisting of six steps. Each of these steps is discussed in great details in the subsequent chapters; thus the discussion here is brief.

Step 1: Problem Definition

The first step in any marketing research project is to define the problem. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, the information needed, and how it will be used in decision makers, interviews with industry experts, analysis of second data, and perhaps, some qualitative research, such as focus groups. Once the problem has been precisely defined, the research can be designed and conducted properly.

Step 2: Development of an Approach to the problem

Development of an approach to the problem includes formulating an objective or theoretical framework, analytical models, research questions, and hypotheses and identifying the information needed. This process is guided by discussions with management and industry experts, analysis of secondary data, qualitative research, and pragmatic considerations.

Step 3: Research Design Formulation

A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the required information, and its purpose is to design a study that will test the hypotheses of interest, determine possible answers to the research questions, and provide the information needed for decision making. Conducting exploratory research, precisely defining the variables, and designing appropriate scales to measure them are also a part of the research design. The issue of how the data should be obtained from the respondents (for example, by conducting a survey or an experiment) must be addressed. It is also necessary to design a questionnaire and a sampling plan to select respondents for the study. More formerly, formulating the research design involves the following steps:

-Definition of the information needed

-Secondary data analysis

-Qualitative research

-Methods of collecting quantitative data

-Measurement and scaling procedures

-Questionnaire design

-Sampling process and sample size

-Plan of data analysis

Step 4: Fieldwork or Data Collection

Data collection involves a field force of staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing) , from an office by telephone (telephone or computer-assisted telephone interviewing), or electronically (e-mail or Internet). Proper selection, training, supervision, and evaluation of the field force help minimize data-collection errors.

Step 5: Data Preparation and Analysis

Data preparation includes the editing, coding, transcription, and verification of data. Each questionnaire or observation form id inspected or edited and, if necessary, corrected. Number or letter codes are assigned to represent each response to each question in the questionnaire. The data from the questionnaires are transcribed or keypunched onto magnetic tape or disks, or input directly into the computer. The data are analyzed to derive information related to the components of the marketing research problem and, thus, to provide input into the management decision problem.

Step 6: Report Preparation and Presentation

The entire project should be documented in a written report that addresses the specific research questions identified; describes the approach, the research design, data collection, and data analysis procedures adopted; and present the results and the major findings. The findings should be presented in a comprehensible format so that management can readily use them in the decision-making process. In addition, an oral presentation should be made to management using tables, figures and graphs to enhance clarity and impact. The internet is also being used to disseminate marketing research results and reports which can be posted on the Web and made available to managers on a worldwide basis.

The Limits to Global Marketing

There are four important limits on the degree to which a company should pursue global marketing.

-Negative industry drivers. Not all industries have the right characteristics for a global strategy. That is, the five “globalization drivers” (market, competition, cost, technology, and government) may not be conducive to a global approach. In particular, lack of homogeneous markets and persistent differences in customer preferences across countries may prohibit globalization of marketing.

-Lack of resources. Not all companies have the required resources (managerial, financial) to implement global marketing effectively. Instituting a global marketing strategy requires some financial resources up front for the necessary investment in advertising prototypes, platform designs, and global communication capabilities. Even more important, a global effort requires managers with international experience and the necessary temperament and administrative skills to deal with the unavoidable managerial conflicts and threats against morale at local units.

-Localized mix requirements. Not all marketing mix elements lend themselves to a global treatment. For example, while product design can often be uniform across several countries, language and cultural barriers make it difficult to standardize salesmanship.

-Antiglobalization threats. Close coordination of strategies across countries can make the firm more vulnerable to antiglobalization actions. As an extreme example, a firm that is not sensitive to local conditions will be a more likely target for terrorist activities.

Advantages and disadvantages of online marketing

Advantages:

Global reach of the business: Internet advertising ensures that your business is marketed globally and is not confined to any specific region. Local reach of the business means lesser exposure, while global reach means global exposure. From an entrepreneur’s perspective, this is a golden opportunity to showcase his/her products and services to the world.

Internet marketing is great from the perspective of customers too, who can lay their hands on indigenous products from another continent, for example.

Cheaper investments: Internet marketing ventures are cheaper than conventional forms of business. This form of business is not really capital-intensive in nature and does not require huge investment as such. Thus, this provides just about every aspiring entrepreneur the opportunity to take a plunge without really worrying too much about losing capital. There are plenty of examples of entrepreneurs starting out humbly and making it big with Internet marketing.

Easy access to training: Aspiring entrepreneurs have an easy access to training on how to conduct business on Internet. The worldwide web is awash with training materials that are really helpful for aspiring entrepreneurs.

Disadvantages:

Attracting customers may not be easy: Making it big on the Internet becomes a lot easier when an entrepreneur has an access to techniques like article directory subscription and pay per click inclusions. An access to these techniques requires financial investments in varying degrees, which not every entrepreneur may be able to make. Until then, the entrepreneur may have to rely solely on cheaper options like SEO marketing. Obviously, the results will pour in slowly.

Possibility of fraud: The Internet is a place where it may be difficult at times to ascertain the identity and credentials of a potential customer. This could prove to be a big problem if not handled well. There are multiple instances of financial fraud where the victim was really unable to take any step purely because the identity of the fraudster could not be ascertained. Obviously, the entrepreneur needs to take every step very carefully.

The disadvantages must not deter any aspiring entrepreneur from taking to Internet marketing. The disadvantages can be worked out, and the positives in fact outweigh the negatives. Long term vision and well thought out strategies and their execution will be a sure-shot recipe for success in Internet marketing.

The Product Life Cycle

A new product progresses through a sequence of stages from introduction to growth, maturity, and decline. This sequence is known as the product life cycle and is associated with changes in the marketing situation, thus impacting the marketing strategy and the marketing mix.

The product revenue and profits can be plotted as a function of the life-cycle stages as shown in the graph below:

      Product Life Cycle Diagram    

Introduction Stage

In the introduction stage, the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows:

-Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained.

-Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs.

-Distribution is selective until consumers show acceptance of the product. Promotion is aimed at innovators and early adopters.

-Marketing communications seeks to build product awareness and to educate potential consumers about the product.

Growth Stage

In the growth stage, the firm seeks to build brand preference and increase market share.

-Product quality is maintained and additional features and support services may be added.

-Pricing is maintained as the firm enjoys increasing demand with little competition.

-Distribution channels are added as demand increases and customers accept the product.

-Promotion is aimed at a broader audience.

Maturity Stage

At maturity, the strong growth in sales diminishes. Competition may appear with similar products. The primary objective at this point is to defend market share while maximizing profit.

-Product features may be enhanced to differentiate the product from that of competitors.

-Pricing may be lower because of the new competition.

-Distribution becomes more intensive and incentives may be offered to encourage preference over competing products.

-Promotion emphasizes product differentiation.

Decline Stage

As sales decline, the firm has several options:

-Maintain the product, possibly rejuvenating it by adding new features and finding new uses.

-Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment.

-Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product.