Market Research

For write-ups on other topics of marketing and sales management, refer:

(Marketing Management Overview), http://marketing-management-overview.blogspot.com/(Marketing Orientation) http://marketing-orientation.blogspot.com/, (Marketing Management Tasks) http://marketing-management-tasks.blogspot.com/, (Market Segmentation) http://market-segment.blogspot.com/, (Advertising) http://advertising-mass-communication.blogspot.com/, (Sales Promotion) http://sales-promotion.blogspot.com/, (Sales/Selling Process) http://selling-process.blogspot.com/, (Negotiation Skills) http://negotiating-skills.blogspot.com/, (Negotiation Tactics) http://negotiation-tactics.blogspot.com/, (Objection Handling) http://objection-handling.blogspot.com/

Background and Definition of Market Research (Marketing Research)

• Customers’ buying attitudes and behaviors are studied by market research.
• Market research, therefore, is a systematic way of collecting, analyzing and reporting of information and findings pertaining specific marketing situations facing the organizations.
• One of the major reasons for carrying out market research is to identify and estimate the market opportunities.
• Organizations spend around 1% to 2% of company’s sales on doing the market research. Globally, the expenditure on market research is in the region of $20 to $25 billion.

Organization for Carrying Out Market Research

1. Internal departments: Many organizations create the market research departments under marketing function of the organization to design and implement market research studies.
2. External Agencies: there are many types of external agencies. Some organizations continually keep gathering marketing and customer related data which they sell to whosoever requires it. Also, there are market research firms that can be hired to carry out customized market research studies as per the brief given by the hiring organization. At times, the organizations may ask these market research firms to even develop the study brief.

Market Research Process

Definition of Research Objectives

There are two parts to it:

1. Why is the market research study being undertaken? What decisions are aimed to be taken from market research findings?
2. What will be the scope and contents of the market research study?

Development of Market Research Plan

The market research plan consists of selection of data sources, research approaches, research instruments, sampling plans and contact methods.

1. Data sources: Secondary data (already available from some other studies and so, economical to use) or primary data (freshly collected data for this particular study) or both.
2. Research approaches: Among various research approaches the more used are:
- Surveys using survey instruments (i.e. questionnaires)
- observations on customers (including ethnographic research)
- Discussions with focus groups of customers
- Study of actual purchases made by customers and
- Experimental research (studying cause and effect relationships).
3. Research instruments: These include:
- Specifically designed closed end and open end questionnaires or combination of both, given to the target respondents
- Qualitative methods: relatively unstructured or loosely structured approaches permitting large range of responses
- Technological gadgets to measure customer responses
4. Sampling plan: Since covering 100% population is not feasibly, a statistically correct sampling plan needs to be selected. Prior to taking this decision, one should be clear on who are to be selected for the survey?
5. Contact methods: The market research professionals can contact the people to be surveyed by
- Mail
- email
- Telephone
- Face to face interview
- Online interview

Data/Information Collection

• Computers, Internet and telecommunication are a big help in collecting the data and information from the respondents.
• This step of the market research process is quite time consuming.
• It is also quite expensive.
• Since, the interviewers and respondents can always bring in their bias in the information, while planning and designing the survey, this aspect should be well taken care of to minimize it.

Analysis of Information

• The collected data is classified and tabulated.
• Then, it is analyzed by using various statistical measures like averages, mean, mode, standard deviations and some more advanced statistical techniques and decision models.
• Interpretations, inferences, cause and effect relationships, trends and findings are drawn.
• Different hypotheses may be tested using these.

Presentations of Findings

• Market research professional makes presentation of findings of the survey to the members of the client organization.
• He should present the findings in understandable language without jargon.
• He should also give his suggestions and recommendations.

Decision Making

• The concerned managers in marketing department and in the organization take further decisions regarding various aspects of business and marketing.
• Many companies are now using marketing support decision system (MDSS) using systems, software and hardware to collect business and environment related data and information as the basis for business and marketing decisions and tasks.

For More Guidance, Assistance, Training and Consultation

Contact: prodcons@prodcons.com

Originally posted at http://market-research-function.blogspot.com/ Monday, March 9, 2009