In this article we will discuss about marketing research of products & services! Learn about:- 1. Definition of Marketing Research 2. Scope of Marketing Research 3. Features 4. Objectives 5. Functions 6. Importance 7. Types 8. Process 9. Areas 10. Activities 11. Suppliers 12. Instruments 13. Organising Research Function 14. Classification Research Tasks (Problems) 15. Benefits 16. Limitation 17. Ethical Issues.
Everything you need to know about Marketing Research
1. Definition of Marketing Research:
Marketing research is the systematic collection and analysis of data relating to sale and distribution of financial products and services. Market research is an early step in the marketing process, and includes an analysis of market demand for a new product, or for existing products, as well as appropriate methods of distributing those products.
Techniques in market research include telephone polling and focus group interviews to determine customer attitudes, pricing sensitivity, and willingness to use delivery alternatives. Most large banks have their own market research departments that evaluate not only products, but their Brick and Mortar branch banking networks through which most banking products are sold.
Marketing research refers to gathering and analysis of information about the moving of goods or services from producer to consumer. Marketing research covers three wide areas: market analysis, which yields information about the marketplace; product research, which yields information about the characteristics and desires for the product; and consumer research, which yields information about the needs and motivations of the consumer.
Marketing research is nothing but gathering and analysis of information about the moving of goods or services from producer to consumer. Marketing research covers three wide areas: market analysis, which yields information about the marketplace; product research, which yields information about the characteristics and desires for the product; and consumer research, which yields information about the needs and motivations of the consumer.
The results of marketing research will supply facts needed to make marketing decisions and will determine the extent and location of the market for a product or service.
Accelerating product cycles, easy access to information on products and services, highly discerning consumers, and fierce competition among companies are all a reality in the world of business. Too many companies are chasing too few consumers. In his book Kotler on Marketing- “How to Create, Win, and Dominate Markets,” Philip Kotler, marketing guru and a professor at Northwestern University’s Kellogg Graduate School of Management, discusses what a business has to do to be successful. He wrote, “The premium will go to those companies that invent new ways to create, communicate and deliver value to their target markets”.
Knowing, understanding, and responding to your target market is more important than ever. And this requires information good information. Good information can lead to successful products and services. Good information is the result of market research.
According to the Marketing Research Association (2000), Marketing’ Research is defined as follows- “Marketing Research is the function which 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 method of collecting information; manages and implements the data collection process; analyzes the results; and communicates the findings, recommendations and their implications.”
Marketing research is a $1.3-billion-dollar-a-year industry. The industry is growing at over 10 percent a year, with profits running at a similar level. Marketing Research provides, analyzes, and interprets information for manufacturers on how consumers view their products and services and on how they can better meet consumer needs. The ultimate goal is to please the consumer in order to get, or keep, the consumer’s business.
Marketing Research evolved as the U.S. economy shifted from a production-driven one to a market-driven one. As the American production of goods and services, plus imports, was beginning to satiate American demand, marketers needed to learn how to tailor their products to the needs and likes of an increasingly discerning public.
This tailoring resulted in increased market demand and, for successful companies, increased market share.
Marketing research is the systematic gathering, recording, and analysis of data about issues relating to marketing products and services. The term is commonly interchanged with market research; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while marketing research is concerned specifically about marketing processes.
To Sum:
Market research is different from marketing research. Market research is a systematic study if facts about market only – who, what, where, when, why and how of actual and potential buyers.
On the other hand the scope of marketing research is so wide that it includes all functional areas of marketing including market.
2. Scope of Marketing Research:
The scope of marketing research stretches from the identification of consumer wants and needs to the evaluation of consumer satisfaction. It comprises of research relating to consumers, products, sales, distribution, advertising, pricing and sales forecasting. A clear view of the scope marketing research may be obtained by the following classification of marketing research activity.
The whole approach of marketing pivots around the tenet of meeting the consumer wants. It is essential to understand what the consumer wants, how he/she perceives the product (service), what exactly (ideally) does he/she wants to derive out of the product (service), how does he/she make the brand choice decision, what are the sources of information and influence processes, etc.
In order to take decisions any marketer would constantly monitor such information and obtain a continuous feedback of the trends in the market. As such, marketing research is an effective tool for measuring the consumers’ aspirations, trade channel behaviour, competitive actions etc.
It provides a linkage between the corporate environment and the marketing organization. Marketing research, thus, may be viewed as an important tool used as an aid for tackling problems in marketing.
3. Features of Marketing Research:
(1) Intensive Study- It involves systematic and intensive study of a marketing problem.
(a) Planned Process- We have planned procedure of investigation and analysis.
(b) Orderly Investigation- The procedure of marketing research has clearly-defined steps in proper sequence or order.
(c) Intensive Investigation- All the relevant factors involved in a marketing problem are observed closely.
(2) Scientific Approach- Marketing research adopts scientific method and objectivity in the solution of a marketing problem.
(a) Rational Outlook- Researcher or analyst has an objective attitude — rational outlook based on reason and logic.
(b) Defined Purpose- The purpose of inquiry and the problem under investigation are clearly defined.
(c) Accuracy- Accuracy (exactness) in calculation, in observation and in reporting is strictly ensured.
(d) Standardised Process- Marketing research process is standardised and can be repeated exactly in solving all problems.
(e) Scientific Attitude- The researcher has an open mind, critical attitude, creativity, absolute honesty and integrity — the hallmarks of scientific attitude and approach.
(3) Decision Tool- Marketing research is a tool for decision-making and control in the marketing of goods.
Marketing managers face numerous pressing problems from time to time during the conduct of marketing activities. They need information upon which they may take proper decisions. Manager is by profession a decision-maker. Decision-making involves a perpetual choice-making activity.
From the given alternatives one alternative is selected as the most promising course of action or behaviour. In a sense, decision-making is the essence of management. Manager needs information in planning as well as evaluating the plans in action.
Marketing manager calls upon a skilled analyst to examine the problem or question, break it up into its elements, get the needed data, analyse it and work out desirable conclusions based on facts and figures.
With the emergence of the marketing concept, marketing research has recorded fast growth and development. We should remember that marketing concept emphasises customer orientation. We have integrated plans built up around customer need and desires and designed to produce customer satisfaction.
4. Objectives of Marketing Research:
Marketing research helps the marketing executive in the formulation of all marketing plans, policies, programmes and procedures, to attain the marketing goals. When the above said plans, policies and programmes are translated into action, marketing research is used for evaluation purposes.
Since the main thrust of marketing research is on selling, promotion, advertising and distribution, it is used in minimizing all wasteful and unnecessary marketing cost. Further, the function of marketing research acts as an insurance cover for the survival and growth of the firm. Marketing research finds out for the produces.
(i) Where are his consumers?
(ii) What they want?
(iii) When they want it and?
(iv) Where and how much they are willing to pay for it?
Hence, through marketing research, marketing management can sell the right product through right channels of distribution to right consumers at right places and at right price by formulating right plans, policies and programmes with the help of right personnel.
In short, marketing research helps producers, distributors and advertisers to avoid mistakes either in manufacturing or marketing or to that extent, it can minimize business failures.
5. Functions of Marketing Research:
The basic task of marketing management is that of preparing plans, executing them and controlling operations to achieve the most profitable allocation of company resources to current and future market opportunities. Market research aids the management in these efforts.
The need for such assistance in decision making stems mainly from the constant changes characteristic of markets. If they were static or changed very slowly the marketing of product lines and marketing methods to market opportunities would not pose difficult problems.
Executives could learn from past experiences and avoid repeating past errors. But markets are constantly thus have impact on the market. As a result, the marketing executive are frequently faced with marketing problems, unknown in their previous experience, that pose major uncertainties, marketers are well aware of these risks, and many of them have organized marketing research departments together and analyse information that enables them to reduce the reliance they must place on institution- based decision.
i. The emergence of buyer’s market requires continuous need of marketing research to identify consumers’ need and ensure their satisfaction.
ii. The ever expanding markets require large number of middlemen and intensive distribution. Marketing research could help identify and solve the problems of middlemen and distribution.
iii. There is always a change in the market conditions and the requirements of consumers. Marketing research enables to anticipate and meet any such changes.
iv. Marketing research can help bring about prompt adjustments in product design and packaging.
v. It can help find out effectiveness of pricing.
vi. It can help find out the effectiveness of sales promotion and advertisement.
vii. It can help identify the strength and weakness of sales force.
viii. The impact of economic and taxation policies on marketing could also know through marketing research.
In short, marketing research enables the management to identify and solve any problem in the area of marketing and help better marketing decisions.
6. Importance of Marketing Research:
Marketing research has become so important in nowadays competitive context that today almost all the companies are either having their independent research and development departments or they are outsourcing this function to professionals in the said field.
The increasing importance of marketing research is based on the below mentioned three trends:
1. Expansion of Business from National to Global Market:
Nowadays in order to sustain in the market place, it is impossible for companies to continue their operations in the same manner as they were earlier doing, they have to improve their products and services as per the expectations of global market. For expansion either in new market place or in case of launch of new products, the required information can be gathered by marketing research.
2. Transition from Consumer Needs to Consumer Wants:
Now customers are expecting value with the purchase of products. Products and services should be modified according to the change in economic environment. For customer retentions and development of high brand loyalty, it is essential to obtain information related to changing behaviour of customers with the help of marketing research.
3. Shift from Price Competition to Non-Price Competition:
Purchasing power of customers is increasing with the increase in the income level therefore they want high quality products at right price. Sales promotion tools are very much helpful to attract customers for particular brand but it need information about product attributes and buying behaviour of customers. The marketer can collect the required information relating to these tools with the help of marketing research.
7. Types of Market Research:
1. Audience Research:
Research on who is listening, watching, and reading is important to marketers of television and radio programs and print publications—as well as to advertisers who wish to reach a certain target audience with their message.
Television and radio ratings demonstrate the popularity of shows and determine how much stations can charge for advertising spots during broadcasts. Publication subscription lists, which are audited by tabulating companies to ensure their veracity, are important in determining the per page rate for advertising.
This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop.
Product research includes simple, in-person research such as taste tests conducted in malls and in the aisles of grocery stores, as well as elaborate, long-term “beta testing” of high-tech products by selected, experienced users. The objective of product research can be simple; For example- a company may tweak the taste of an existing product, then measure consumers’ reactions to see if there is room in the market for a variation. It can also be more extensive, as when a company develops prototypes of proposed new products that may be intended for market introduction months down the road.
In product research, as in all market research, there is a danger to paying too much attention to the wrong things. For instance, the introduction of New Coke was based on the outcome of taste tests that showed the public wanted a sweeter product.
But later an angry public, outraged that Coca-Cola was planning to change the familiar formula, forced the company to ignore its taste tests and leave the original Coke on the market. The company had put too much stock in the results of the taste test studies, and had failed to factor in research that showed consumers were happy with the product as it was.
The purpose of this research is to find out all aspects of product which include:
i. Reviewing product line, product quality, product features, product design etc.
ii. Study on new uses of an existing product
iii. Testing of new products
iv. Study of related products
v. Study of packaging design
vi. Study of brand name/brand mark/its impact.
Brands, the named products that advertising pushes and for which manufacturers can charge consumers the most money, are always being studied. Advertisers want to know if consumers have strong brand loyalty (“I’d never buy another brand, even if they gave me a coupon”); if the brand has any emotional appeal (“My dear mother used only that brand”); and what the consumer thinks could be improved about the brand (“If only it came in a refillable container”).
Brand research, too, has its perils. Campbell’s Soup once convened a focus group comprised of its best soup customers. One of the findings was that those customers saw no need for a low-salt alternative soup Campbell’s wanted to market.
Concerned that the general public seemed to want low-sodium products, Campbell’s retested groups other than their best customers. This research found a market interested in a low-sodium soup. The loyal Campbell’s customers loved the saltier product, while a larger group of potential customers preferred the low-salt alternative.
Perhaps the most controversial type of market research is psychological research. This type of research tries to determine why people buy certain products based on a profile of the way the consumers live their lives. One company has divided all Americans into more than 60 psychological profiles.
This company contends the lifestyles these people have established, based upon their past buying habits and their cultural upbringing, influences their buying decisions so strongly that individual differences can sometimes be negated.
Psychological research is controversial because it measures attitudes about buying rather than the buying itself. Critics point to conflicting information uncovered through other market research studies.
In one series of research projects, researchers asked people what they were planning to buy before they entered a store. After the people surveyed left the store, the same researcher examined what was actually in their shopping carts. Only 30 percent of the people bought what they had said they planned to buy just a half hour earlier.
Insurance market research of reviewing an agent’s sales trends, and individual sales analysis of performance is a remarkable time and data evaluation to accomplish. Only an insurance list compiler with prior marketing and sales management can perform this market research. The resulting correct list of brokers is gold to an insurance marketing sales company.
In contrast, there is no fooling the checkout scanner at the supermarket or the department store: it records what was actually purchased. This is valuable information an advertiser can use to help plan an ongoing marketing strategy.
Scanner technology has changed the way advertisers track the sale of consumer products. Before scanners, advertisers received sales information only when retailers reordered stock, generally every two weeks.
This meant that the advertisers had no way to quickly measure the effect of national advertising, in-store sales promotions, or the couponing of similar products by their competitors. Now, computer technology can send scanner information to advertisers within days or even hours.
The researcher can gather secondary data, primary data, or both. Secondary data are data that were collected for another purpose and already exist somewhere. Primary data are data gathered for a specific purpose or for a specific research project.
Researchers usually start their investigation by examining secondary data to see whether their problem can be partly or wholly solved without collecting costly primary data. Secondary data provide a starting point for research and offer the advantages of low cost and ready availability.
The Internet, or more particularly, the World Wide Web, is now the greatest repository of information the world has seen. In an incredibly short span of time, the Web has become a key tool for sales and marketing professionals to access competitive information or conduct demographic, industry, or customer research.
When the needed data do not exist or are dated, inaccurate, incomplete, or unreliable, the researcher will have to collect primary data. Most marketing research projects involve some primary data collection.
The normal procedure is to interview some people individually or in groups to get a sense of how people feel about the topic in question and then develop a formal instrument, debug it, and carry it into the field.
When stored and used properly, the data collected in the field can form the back bone of later marketing campaigns. Direct marketers such as record clubs, credit-card companies, and catalog houses have long understood the power of database marketing.
A customer or prospect database is an organized collection of comprehensive data about individual customers, prospects, or suspects that is current, accessible, and actionable for marketing purposes such as lead generation, lead qualification, sale of a product or service, or maintenance of customer relationships.
Some techniques that are becoming increasingly popular are data warehousing and data mining – but they are not without risks.
Approaches:
Primary data can be collected in five ways: observation, focus groups, surveys, behavioural data, and experiments.
i. Observational Research:
Fresh data can be gathered by observing the relevant actors settings. The American Airlines researchers might meander around airports, airline offices and travel agencies to hear how travelers talk about the different carriers.
The researchers can fly on American and competitors planes to observe the quality of in-flight service. This exploratory research might yield some useful hypothesis about how travelers choose air carriers.
ii. Focus Research:
A focus group is a gathering of six to ten people who are invited to spend a few hours with a skilled moderator to discuss a product, service, organization, or other marketing entity.
The moderator needs to be objective, knowledgeable on the issue, and skilled in group dynamics. Participants are normally paid a small sum for attending. The meeting is typically held in pleasant surroundings and refreshments are served.
In the American Airlines research, the moderator might start with a broad question, such as “How do you feel about air travel?” Questions then move to how people regard the different airlines, different services, and in-flight telephone service.
The moderator encourages free and easy discussion, hoping that the group dynamics will reveal deep feelings and thoughts. At the same time, the moderator “focuses” the discussion”. The discussion recorded through note taking or on audiotape or videotape, is subsequently studied to understand consumer beliefs, attitudes and behaviour.
Focus Group research is a useful exploratory step. Consumer-goods companies have been using focus groups for many years, and an increasing number of newspapers, law firms, hospitals and public-service organization are discovering their value.
However, researchers must a avoid generalization the reported feelings of the focus- group participants to the whole market, because the sample size is too small and the sample is not drawn randomly.
With the development of the World Wide Web. Many companies are not conducting on-line focus groups.
iii. Survey Research:
Surveys are best suited for descriptive research. Companies undertake surveys to learn about people’s knowledge, beliefs, preferences, and satisfaction, and to measure these magnitudes in the general population. American Airlines researches might want to survey how many people know American, have flown it, and would like telephone availability.
iv. Behavioural Data:
Customers leave traces of their purchasing behaviour in store scanning data, catalog purchase records and customer databases. Much can be learned analyzing this data. Customer’s actual purchase reflect revealed preferences and often are more reliable than statements they offer to market researchers.
People often report preferences for people popular brands and yet the data show that high-income people do not necessarily buy the more expensive brands, contrary to what they might state in interview; and many low-income people buy some expensive brands. Clearly American Airlines can learn many useful things about its passengers by analyzing ticket purchase records.
v. Experimental Research:
The most scientifically valid research is experimental research. The purpose of experimental research is to capture cause and effect relationships by eliminating competing explanations of the observed findings.
To the extent that the design ad execution of the experiment eliminate alternative hypotheses that might explain the results, the research and marketing managers can have confidence in the conclusions.
It calls for selecting matched groups of subjects, subjecting them to different treatments, controlling extraneous variables, and checking whether observed response differences are statistically significant. To the extent that extraneous factors are eliminated or controlled, the observed effects can be related to the variations in the treatments.
American Airlines might introduce in-flight phone service on one of its regular flights from New York to Los Angeles at a price of $25 a phone call. On the same flight the following day, it announces the availability of this service at $15 a phone call.
If the plane carried the same number and type of passengers on each flight, and the day of the week made no difference, any significant difference in the number of calls made could be related to the price charged.
The experimental design could be elaborated further by trying other prices, replicating the same prices on a number of flights and including other air routes in the experiment.
Virtually every type of consumer- credit card holders, smokers, drinkers, car buyers, video buyers- shows up on thousands of lists and databases that are regularly cross- referenced to mine nuggets of marketing research.
Database research is growing in popularity among marketers because the raw data has already been contributed by the purchaser. All the marketer has to do is develop a computer program to look for common buying patterns.
Database research can be thought of as the ultimate tool in market segmentation research. For example- from zip code lists, marketers may determine where the wealthy people live in a city. That list can be merged with a list of licensed drivers.
The resulting list can be merged with another list of owners of cars of a certain make older than a certain year. The resulting list can be merged with another list of subscribers to car enthusiast magazines.
The final list will deliver a potential market for a new luxury car soon to be introduced and profiled in the car magazines. The people on the potential buyers’ list could then be mailed an invitation to come see the new car.
Database research also allows companies to build personal relationships with people who have proven from past purchases that they are potential customers. For example- a motorcycle manufacturer such as Harley Davidson may discover from database research that a family with a motorcycle has a teenage son.
That son is a potential new customer for everything from clothes to a new motorcycle of his own. Maintaining a personal relationship with customers also provides businesses with a basis for more detailed and economical market research than might be possible through random sampling.
Survey research a research method involving the use of questionnaires and/or statistical surveys to gather data about people and their thoughts and behaviours. This method was pioneered in the 1930s and 1940s by sociologist Paul Lazarsfeld.
The initial use of the method was to examine the effects of the radio on political opinion formation of the United States. One of its early successes was the development of the theory of two- step flow of communication. The method was foundational for the inception of the Quantitative research tradition in sociology.
7. Post-Sales or Customer Satisfaction Research:
Most companies no longer believe that a sale ends their relationship with a customer. Nearly one-third of the research revenues generated by the leading American market research firms concern customer satisfaction.
Many companies now wait a few days or weeks, then contact customers with survey questionnaires or telephone calls. Companies want reassurance that the customer enjoyed the buying experience and that the product or service has met the buyer’s expectations.
The reason behind post-sales research is to ensure that current customers are happy, will consider themselves future customers, and will spread positive word-of-mouth messages about the product and company.
One study found that 70 percent of customers believed it was important for companies to stay in contact with them, but less than one- third of those same customers reported that they had heard from companies whose products they purchased.
Nearly 90 percent of those surveyed said they would be more likely to choose a company’s products if it stayed in touch with them and sought their satisfaction.
The aim of this research is to develop an understanding about present and potential consumers and the level of satisfaction expected and derived by them from company’s products.
The broad areas of consumer research are:
i. Study of consumer profile.
ii. Study of consumer brand preferences, tastes and reactions
iii. Study of consumer satisfaction/dissatisfaction, reasons, etc.
iv. Study of shifts in consumption patterns.
Is a specialized form of marketing research conducted to improve the efficacy of advertising. Copy testing, also known as “pre-testing,” is a form of customized research that predicts in-market performance of an ad before it airs, by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. Pre-testing is also used on ads still in rough (ripomatic or animatic) form.
9. Business to Business (B2B) Market Research:
Business to Business (B2B) research is inevitably more complicated than consumer research. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to find the answers using just one method.
Finding the right respondents is crucial in B2B research since they are often busy, and may not want to participate. Encouraging them to “open up” is yet another skill required of the B2B researcher.
Last, but not least, most business research leads to strategic decisions and this means that the business researcher must have expertise in developing strategies that are strongly rooted in the research findings and acceptable to the client.
There are four key factors that make B2B market research special and different to consumer markets:
i. The decision making unit is far more complex in B2B markets than in consumer markets.
ii. B2B products and their applications are more complex than consumer products.
iii. B2B marketers address a much smaller number of customers who are very much larger in their consumption of products than is the case in consumer markets.
iv. Personal relationships are of critical importance in B2B markets.
The purpose of this research is to identify the appropriate distribution channels for intermediaries, storage, transport problems etc.
The broad areas include:
i. Measuring relative effectiveness of different types of distribution intermediaries
ii. Measuring dealer reaction to company and its products
iii. Measuring warehouse efficiency
iv. Distribution cost analysis
v. Determining optimum inventory levels
vi. Determining the location of distribution centers.
The purpose of this research is to find out the price expectations of consumers and their reactions to them.
The broad areas include:
i. Assessing the general pattern of pricing followed by the industry
ii. Measuring price elasticity of demand
iii. Evaluating the price strategy of the firm.
12. Advertising and Promotion Research:
The purpose of this research is to develop most appropriate advertisement and promotion schemes and evaluate their effectiveness.
The broad areas include:
i. Advertising copy research
ii. Media research
iii. Assessing the effectiveness of advertising
iv. Assessing the efficacy of sales promotional measures.
i. Testing new sales techniques
ii. Analyzing of salesmen’s training
iii. Measuring salesman’s effectiveness
iv. Study of sales compensation
v. Analyzing methods of setting sales quota and sales territories.
14. Research on Competition:
The purpose of this research is to find out the intensity and effect of competition to the firm.
The broad areas include:
i. Study on competitive structure of the industry and individual competitors.
ii. Study of competitors marketing strategies.
The scope of marketing research describes above is only indicative and not exhaustive. Further, the above research areas are not watertight compartments. They are closely interrelated. The actual scope depends on the needs of a company and the marketing situations.
8. Marketing Research Process:
Marketing research helps in arriving at the decision or solutions for various marketing problems.
The research process involves different stages which are:
1. Problem Formulation:
Formulation of the problem is the first step in the marketing research process. Unless and until the problem is well defined, there is no use of the research work. Well defined and formulated problems can be solved very easily and appropriately. The problem should be defined neither too broadly nor too narrowly. Problems may be of different type i.e. operating (recurring) problem or non-operating (nonrecurring) problem.
Recurring problems includes problems relating to sales expenses, sales forecasting, sales volume, product quality, product line, price policy etc. Non-recurring or non-operating problems relate to problems such as change in consumption pattern, price changes, product innovation, changes in competitive forces etc.
2. Research Design:
A research design is the framework or blue print for conducting the market research project. Once the specific research objective has been defined, it is essential to arrive at the correct hypothesis, data collection method, sampling plan and research design instrument.
Formulating a research design involves following steps:
i. Define the information which is required.
ii. Analysis of the secondary data.
iii. Qualitative research.
iv. Method of collecting data.
v. Measurement and scaling procedure.
vi. Questionnaire design.
vii. Sampling process and sample size.
viii. Plan of data analysis.
3. Data Collection:
Data can be collected from both primary and secondary sources. Primary data is the data which is collected for the first time with research purpose in mind. It is the first hand information. Secondary data is the data already collected by some other person for some other research problem. Primary data can be collected through different method – observation method or communication method. Interviews may be conducted either personal or through telephone or any other method to collect the required information.
4. Data Analysis:
Analysis of the raw data is very essential to arrive at the conclusion.
This analysis involves three phases, they are:
i. Classifying the data
ii. Data summarization
iii. Advanced data analysis tools and techniques to highlight interrelationship and quantitative significance.
i. Classifying the Data:
Classification of data includes editing, coding, transcription and verification of data. The most commonly used techniques here are quantitative, qualitative, geographical and chronological.
Quantitative classification are for quantitative data like number of units, number of respondents. Qualitative classification is for qualitative data like occupation, types of family etc. Geographical classification is the one where geographical location is used to classify the data. Chronological classification is on the basis of the time period when event took place.
ii. Data Summarization:
For summarization of data various techniques are there like mean, median, mode, range, variance, standard deviation, mean deviation.
iii. Advanced Data Analysis Tools and Techniques:
This includes advanced method for analysing the data like factor analysis, discriminate analysis, correlation, regression, multiple regression.
5. Report Presentation and Recommendations:
A normal report includes the following:
(1) Title of the report
(2) Summary of conclusion
(3) Sample and characteristics
(4) Findings and observations
(5) Questionnaire
(6) Appendices
(7) Recommendation made may be accepted or rejected.
9. Main Areas of Marketing Research:
The main areas of marketing research can be summarized as given below:
1. Research in Product Planning and Development.
2. Market Research to get information on-
(a) Market segmentations
(b) Market demand
(c) Market competition
(d) Market share.
3. Consumer Research on:
(a) Consumer needs, wants and preferences
(b) Buying motives and buying behaviour
(c) Change in demand
(d) Customer response to sales promotion and advertising
(e) Linking need and brand name.
4. Pricing Research – Policies Regarding:
(a) Prices
(b) Discounts
(c) Allowances.
5. Research in Brand and Package Design – Brand image surveys.
6. Research in channel choice.
7. Research in physical distribution and distribution cost-transport stages and insurance.
8. Planning and evaluation of various promotion devices.
9. Planning and evaluation of advertising-copy and media research.
10. Sales Analysis and Research sales forecast, sales quotas and sales territories.
11. Policy Research – Planning and Evaluation of:
(a) Sales policy;
(b) Advertising policy;
(c) Sales promotional policy;
(d) Inventory policy;
(e) Distribution policy;
(f) Credit policy;
(g) Sales force policy; and
(h) After sales, service policy etc.
12. Dealer’s Research to gather information on the wants, attitudes and preferences of dealers.
In U.S.A., Marketing research departments have been steadily expanding their activities and techniques. The following list gives out the various types of marketing research undertaken by firms in U.S.A., as quoted in Philip Kotler’s book on “Marketing Management”.
10. Marketing Research Activities:
1. Advertising Research:
(a) Motivation research;
(b) Copy research;
(c) Media research; and
(d) Studies on Advertising effectiveness.
2. Business Economic and Corporate Research:
(a) Short-range forecasting (up to one year);
(b) Long-range forecasting (over one year);
(c) Studies of business trends;
(d) Pricing studies;
(e) Plant and warehouse location studies;
(f) Product mix studies;
(g) Acquisition studies;
(h) Export and international studies; and
(i) Internal company employees studies.
3. Corporate Responsibility Research:
(a) Consumers “right to know” studies;
(b) Ecological impact studies;
(c) Studies on legal constraints on advertising and promotion; and
(d) Social values and policies studies.
4. Product Research:
(a) New product acceptance and potential;
(b) Competitive product studies;
(c) Testing of existing products; and
(d) Packaging research-design or physical characteristics.
5. Sales and Market Research:
(a) Measurement of market potentials;
(b) Market-share analysis;
(c) Determination of market characteristics;
(d) Sales analysis;
(e) Establishment of sales quotas, territories;
(f) Distribution channel studies;
(g) Test markets, store audits;
(h) Consumer-Panel operations;
(i) Sales compensation studies; and
(j) Promotional studies of premiums, coupons sampling etc.
Some of the Special Problems Faced by Corporate Organisations in India:
As long as marketers in India did not face much difficulty in selling their products (services) they did not find much value in marketing research. Formal use of marketing research in the India Corporate sector began sometime in mid-1970’s.
In recent times there is further momentum in the practice as the business environment in the country is now characterized by many diversities like:
i. High degree of competition – The memories of long waiting time to get delivery of a product, limited choice and sometimes shabby products and unusually high prices have dimmed a great deal. The heat of competition is not restricted to the upper echelons of urban markets. Even the rural markets have begun to benefit from the impact of these changes.
ii. Large number of consumers with wide variations of requirements, tastes and preferences for different products and services.
iii. Change in the socio-economic conditions of the market. Specially the consumer goods manufactures today encounter a sizeable middle income population, and moreover, rise in the number of working women and educational level have significantly affected consumer behaviour.
iv. Growth in the communication facilities has led to greater awareness and more choice option to advertise through.
v. Consumers, by and large, are found to have more discretionary income. But they have at the same time much concern about their value for money.
vi. Since 1985 liberal licensing and import policy of the Indian Government has brought about many changes in the corporate environment. Changes have taken place both, in the scale and in the nature of problems which the management must tackle.
Recent development in the Indian market bear a similarity to traditional free market, where primary determinant of success is keeping the customers happy. Managing product (service) in tune with such market forces assumes a critical role.
Historically, in the shortage prone economy, marketing was found to be a luxury that did not seem relevant to the needs of the Indian consumer. This view is now rapidly changing.
Expenditure on unsuccessful product launches, wrong product positioning, improper distribution system etc., can whittle away the vitals of an organization in the absence of a sound, professional marketing management and high quality marketing research.
Thus corporate world in India has now realized the utility of data based marketing decision making rather than only intuition and hunch. So to derive an edge over the competition in today’s dynamic business environment, any marketer finds it essential to evolve marketing programmes based on proper marketing research.
11. Suppliers of Marketing Research:
A company can obtain marketing research in a number of ways.
Most large companies:
i. Procter & Gamble P & G assigns marketing researchers to each product operating division to conduct research for existing brands. There are two separate in-house research groups, one in charge of overall company advertising research and other in charge of marketing testing.
Each group’s staff consists of marketing research managers, supporting specialists (survey designers, statisticians, behavioral scientists) and in-house field representatives to conduct and supervise interviewing. Each year, Proctor & Gamble calls or visits over 1 million people in connection with about 1,000 research projects.
ii. Hewlett-Packard at HP, marketing research is handled by the Market Research and Information Center (MRIC), located at HP headquarters. The MRIC is a shared resource for all HP divisions worldwide and is divided into three groups.
The market Information Center provides background information on industries, markets and competitors using syndicated and other information services. Decision support teams provide research consulting services. Regional satellites in specific locales worldwide support regional HP initiatives.
Small companies can hire the services of a marketing research firm or conduct research in creative and affordable ways, such as:
i. Engaging Students or Professors to Design and Carry Out Projects:
One Boston University MBA project helped American Express develop a successful advertising campaign geared toward young professionals.
ii. Using the Internet:
A company can collect considerable information at very little cost by examining competitors’ Web sites, monitoring chat rooms, and accessing published data.
iii. Checking Out Rivals:
Many small companies routinely visit their competitors. Tom Coolhill, a chef who owns Atlanta restaurants, gives managers a food allowance to dine out and bring back ideas. Atlanta jeweler Frank Maier Jr. Who often visits out-of-town rivals, spotted and copied a dramatic way of lighting displays.
iv. Syndicated-Service Firms:
These firms gather consumer and trade information, which they sell for a fee. Examples- Nielsen Media Research, SAMI/ Burke.
v. Custom Marketing Research Firms:
These firms are hired to carry out specific projects. They design the study and report the findings.
vi. Specialty-Time Marketing Research Firms:
These firms provide specialized research services. The best example is the field-service firm, which sells field interviewing services to other firms.
12. Marketing Research Instruments:
Marketing researchers have a choice of two main research instruments in collecting primary data- questionnaires and mechanical devices.
1. Questionnaires:
A questionnaire consists of asset of questions presented to respondents for their answers. Because of its flexibility, the questionnaire is by far the most common instrument used to collect primary data. Questionnaires need to be carefully developed, tested and debugged before they are administrated on a large scale.
In preparing a questionnaire, the professional marketing researcher carefully chooses the questions and their form, wording, and sequence. The form of the question asked can influence the response.
Marketing researchers distinguish between closed-end and open-end questions. Closed-end questions specify all the possible answers. Open-end questions allow respondents to answer in their own words. Closed-end questions provide answers that are easier to interpret and tabulate.
Open-end questions often reveal more because they do not constrain respondents answers Open-end questions are especially useful in exploratory research, where the researcher is looking for insight into how people think rather than in measuring how many people think a certain way
Finally the questionnaire designer should exercise care in the wording and sequencing of questions. The questionnaire should use simple, direct, unbiased wording and should be pretested with a sample of respondents before it is used.
The lead question should attempt to create interest. Difficult or personal questions should be asked toward the end so that respondents do not become defensive early. Finally, the questions should flow in a logical order.
2. Mechanical Instruments:
Mechanical devices are occasionally used in marketing research. Galvanometers measure the interest or emotions aroused by exposure to a specific ad or picture.
The tachistoscope flashes an ad to a subject with an exposure interval that may range from less than one hundredth of a second to several seconds. After each exposure, the respondents eye movements to see whether their eyes land first, how long they linger on a given item, and so on. A sudiometer is attached to television sets in participating homes to record when the set is on and to which channel it is tuned.
After deciding on the research approach and instruments the marketing researcher must design a sampling plan.
This plan calls for these decisions:
I. Sampling Unit:
Unit who is to be surveyed? The marketing researcher must define the target population that will be sampled. In the American Airlines survey, should the sampling unit be business travelers, vacation travelers, or both? Should travelers under age 21 be interviewed? Should both husbands and wives be interviewed?
Once the sampling unit is determined, a sampling frame must be developed so that everyone in the target population has an equal or known chance of being sampled.
II. Sample Size:
How many people should surveyed? Large samples give more reliable results than small samples. However it is not necessary to sample the entire target population or even a substantial portion to achieve reliable results. Samples of less than 1 percent of a population can often provide good reliability, given a credible sampling procedure.
III. Sampling Procedure:
How should the respondents be chosen? To obtain a representative sample, a probability sample of the population should be drawn. Probability sampling allows the calculation of confidence limits for sampling error. Thus one could conclude after the sample id taken that “the interval 5 to 7 trips per year has 95 chances in 100 of containing the true number of trips taken annually by air trailers in the South west”.
The types of probability sampling are described. When the cost of time involved in probability sampling is too high. Marketing researchers will take non-probability samples. Some marketing researchers feel that non-probability samples are very useful in many circumstances, even though they do not allow sampling error to be measured.
Once the sampling plan has been determined, the marketing researcher must decide how the subject should be contacted- mail, telephone, personal, or on-line interviews.
The mail questionnaire is the best way to reach people who would not give personal interviews or whose responses might be biased or distorted by the interviewers. Mail questionnaires require simple and clearly worded questions.
Unfortunately the response rate is usually low or slow. Telephone interviewing is the best method for gathering information quickly, the interviewer is also able to clarify questions if respondents do not understand them.
The response rate is typically higher than in the case of mailed questionnaires. The main drawback is that the interviews have to be short and not too personal. Telephone interviewing is getting more difficult because of answering machines and people becoming suspicious of telemarketing.
It is the most versatile method. The interviewer can ask more questions and record additional observations about the respondent, such as dress and body language. Personal interviewing is the most expensive method and requires more administrative planning and supervision than the other three.
It is also subject to interviewer bias or distortion. Personal interviewing takes two forms. In arranged interviews, respondents are contacted for an appointment. Often a small payment or views, respondents are contacted for an appointment. Often a small payment or incentive is offered.
Intercept interviews involves stopping people at a shopping mall or busy street corner and requesting an interview. Intercept interviews have the drawback of being non-probability samples, and the interviews must not require too much time.
There is increased use of online interviewing. A company must not require too much time.
There is increased use of on-line interviewing. A company can include a questionnaire at its web page and offer an incentive to answer the questions.
13. Organising Marketing Research Function:
Several options are open to company for organizing its marketing research activity. For example- in some companies like Hindustan Lever, ITC there is a separate marketing research department who undertakes research on its own.
Alternatively, there are many organization who assign the responsibility of conducting marketing research to an outside specialist, individual, or an organization. Medium and small sized companies usually prefer second option, whereas the large firms set up a marketing research department consisting of full specialists.
Also many a time, companies in India subscribe to a syndicate research work, done by some marketing research on consultancy firm. The latter arrangement would involve paying some subscription fee for obtaining the findings of some research studies at a regular interval.
Such services are particularly available in the spheres or readership survey, the movement of consumer or pharmaceutical goods through retail outlet, TV viewing etc. As syndicated research services are normally designed to meet the requirements of many companies, they do not provide any tailor made information. Its major advantage lies in cost effectiveness.
Marketing Manager and Researcher Interaction:
In India, research based decision making has just made a beginning. There are still a lot of gaps in understanding between the two sets of people involved in these activities. It should be reiterated that marketing research is an aid to decision making, not a substitute for it. Unfortunately, sometimes marketing managers view marketing research reports as the final answer to their problems.
Marketing managers usually complain that:
1. Research is not problem oriented, it provides a number of facts, but not actionable results.
2. Researchers are too pre-occupied with techniques and they are often reluctant to get involved in solving the management’s problems.
3. Research is not executed with the proper sense of urgency. It is sometimes vague, and of questionable validity.
4. Researchers are generally poor communicators. They do not talk the language of the management. They lack the sense of accountability.
Likewise, researchers have complaints about marketing managers that:
1. Marketing managers do not include research in the overall problem or total decision context. They tend to ask for only specific information about partial issues.
2. Marketing managers pay lip service to research and do not really appreciate its value/problems.
3. Marketing managers do not allow adequate time and budget for research. They tend to draw conclusion based on early or incomplete results. Good research requires sufficient lead time for thorough reporting documentation.
4. Marketing managers rely more on intuition and judgment rather than on formal research. Research is used to confirm or excuse past actions or as a fire fighting device, not as an aid in decision making.
The key factor underlying the mutual distrust between marketing managers and researchers, seems to be the understanding of the mutual role and responsibility of both parties.
To be effective, researchers must understand the decision contexts and views of the marketing managers, likewise marketing managers must recognise that decisions should be evolved in the light of their own experience, and knowledge and other factors that are not explicitly considered in the research project.
Thus, it is most essential that both marketing managers and researchers must be equally involved and interact with each other as much as possible.
14. Classification of Marketing Research Tasks (Problems) Based on the Subject of Research:
Research on Product:
i. Reviewing product line, product quality, product features, product design and rationalisation of product lines.
ii. Study on the actual uses of a given product.
iii. Study on new uses of an existing product.
iv. Testing of new products.
v. Study of the competitive position of a product/brand.
vi. Study on related products and the nature of the relationship.
vii. Study of packaging/packing design, packing material, package size, etc.
viii. Study on servicing requirements.
Marketing Research in Small Businesses and Non-Profit Organizations:
Marketing research does not only occur in huge corporations with many employees and a large budget. Marketing information can be derived by observing the environment of their location and the competitions location. Small scale surveys and focus groups are low cost ways to gather information from potential and existing customers.
Most secondary data (statistics, demographics, etc.) is available to the public in libraries or on the internet and can be easily accessed by a small business owner.
Below some steps that could do by SME (Small Medium Enterprise) to analyze the market:
1. Provide secondary and or primary data (if necessary);
2. Analyze Macro and Micro Economic data (e.g., Supply and Demand, GDP, Price change, Economic growth, Sales by sector/industries, interest rate, number of investment/ divestment, I/O, CPI, Social analysis, etc.);
3. Implement the marketing mix concept, which is consist of: Place, Price, Product, Promotion, People, Process, Physical Evidence and also Political and social situation to analyze global market situation;
4. Analyze market trends, growth, market size, market share, market competition (e.g., SWOT analysis, B/C Analysis, channel mapping identities of key channels, drivers of customers loyalty and satisfaction, brand perception, satisfaction levels, current competitor-channel relationship analysis, etc.)
5. Determine market segment, market target, market forecast and market position;
6. Formulating market strategy and also investigating the possibility of partnership/ collaboration (e.g., Profiling and SWOT analysis of potential partners, evaluating business partnership);
7. Combine those analysis with the SME’s business plan/ business model analysis, e.g., Business description, Business process, Business strategy, Revenue model, Business expansion, Return of Investment, Financial analysis, Company History, Financial assumption, Cost/Benefit Analysis, Projected Profit and Loss, Cash-flow, Balance sheet and business Ratio, etc.
Note as important:
Overall analysis is should be based on 6W+1H (What, When, Where, Which, Who, Why and How) questions.
Based on Observations:
1. Ethnographic Studies:
By nature qualitative, the researcher observes social phenomena in their natural setting observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) – examples include product-use analysis and computer cookie traces.
2. Experimental Techniques:
By nature quantitative, the researcher creates a quasi- artificial environment to try to control spurious factors, then manipulates at least one of the variables – examples include purchase laboratories and test markets.
Marketing research involves conducting research to support marketing activities, and the statistical interpretation of data into information. This information is then used by managers to plan marketing activities, gauge the nature of a firm’s marketing environment and attain information from suppliers.
Marketing researchers use statistical methods such as quantitative research, qualitative research, hypothesis tests, Chi-squared tests, linear regression, correlations, frequency distributions, poisson distributions, binomial distributions, etc. to interpret their findings and convert data into information.
The marketing research process spans a number of stages including the definition of a problem, development of a research plan, collecting and interpretation of data and disseminating information formally in form of a report. The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information.
A distinction should be made between marketing research and market research. Market research pertains to research in a given market. As an example, a firm may conduct research in a target market, after selecting a suitable market segment. In contrast, marketing research relates to all research conducted within marketing. Thus, market research is a subset of marketing research.
i. Study on competitive structure of the industry and individual competitors.
ii. Study of competitor’s products, prices, promotion programmes, channel policies and sales methods.
Marketing research serves two main functions viz. – (i) it provides information for decisions making and (ii) it develops new knowledge. It is concerned with all those factors which have a direct bearing upon the marketing of products.
It focuses on the study of:
(a) Market characteristics;
(b) Measurement of market potentials;
(c) Market share analysis;
(d) Sales analysis;
(e) Competitive-product studies;
(f) New-product acceptance;
(g) Short-range forecasting;
(h) Low-range forecasting; and
(i) Business trends.
Marketing research is aimed in offering sound alternative solution to all marketing problems relating, to exchange of goods. In fact, marketing research is the beginning of marketing management.
But the term ‘marketing research’ is always used as a synonym to marketing research. In fact, market research is only one branch of the marketing research. Market research is primarily concerned with the investigation, analysis and measurement of market demand.
Market research answers the following question- “Who, what, where, when, why and how of actual and potential buyers?” But marketing research has wider meaning and scope.
15. Benefits of Marketing Research:
It is apparent that the scope of marketing research activity is very wide. It covers almost all aspects of marketing. The major contribution of marketing research is that it augments the effectiveness of marketing decisions.
Marketing research uncovers facts from both outside and within the company relevant to marketing decisions and provides a sustainable and logical base for making decisions.
The specific contributions of marketing research to the effectiveness of the marketing programme of a firm are as follows:
1. With the guidance of research, products should be better suited to the demand and priced reasonably.
2. Specific markets having the greatest sales potentialities could be identified.
3. Research can help to identify the best sales appeal of the products, the best way of reaching the potential buyers and the most suitable timing promotion etc.
4. Research can also help minimize marketing costs by making marketing efforts more efficient and effective.
5. Research can also help find out the effectiveness of sales force management such as right selection procedure, effective training programmes, scientific compensation schemes and effectives control mechanisms.
The contribution of marketing research are considerable. It facilitates both the decision-making and the operational tasks of marketing management effective and efficient and thereby contributes to consumer’s satisfaction and organization’s efficiency.
16. Limitations of Marketing Research:
Despite the proven value of MR, it must be borne in mind that it cannot provide a complete answer to any marketing problem. MR consists of systematic collection of data for predicting the future. It is a tool which helps the marketing executive in avoiding guess work, but they cannot predict with certainty.
Moreover to yield satisfactory results following shortcomings should be recognised and accepted:
1. MR projects may require a considerable time lag between their inception, completion and implementation. Collection of data, their checking, presentation, formulation of policy and execution involves considerable time. In that interval period customer’s tastes and preferences are subject to frequent change. Marketing is a very dynamic affair so its problems must be treated with quick solutions. Otherwise, if MR involves time delays then suggested solutions by MR may be irrelevant to the changed conditions. So it is essential that MR projects should be completed in time and executed promptly in terms of time element.
2. Some MRs deal with a wide variety of condition which are highly dynamic and since it involves numerous variables, it is extremely difficult to assemble accurate data or to interpret them with absolute exactness. The findings of MR has no universal acceptance. In fact the subject of study for marketing researcher is consumer behaviour, so MR cannot be accepted as exact science.
Study of human behaviour precludes absolute mathematical accuracy. Due to errors in sampling procedure, field study, analysis etc., MR cannot always be accurate and purely authentic. It cannot measure as chemical experiments. MR is far from perfect.
3. MR does not solve any problem. It is simply a tool in hands of management for efficient decision making. It provides necessary inputs such as data, and vital information which may be helpful for intelligent decision. MR may point out several possible solutions for any problem, but it can never be used by management as a substitute for good decisions.
Decision making is ultimately done by marketing executive, using his mind with the support of MR findings. Research is only a vital ‘arm’ in the hands of management. It can only suggest various alternatives and appropriate solutions.
4. One serious point has been raised by Stanton. According to him possibly the fundamental reason for the modest status of MR has been the failure of researchers to communicate adequately with management. Admittedly, there are poor researchers and poor research.
Moreover, sometimes the mentality of the quick acting, programmatic, decision making executive may be at odds with the conditions, complex hedging all bets mentality of a marketing researcher. However researchers, like manufacturers, are often product oriented when they should be market oriented.
They concentrate on research methods and techniques rather than on showing management how these methods can aid in making better marketing decisions. Executives are willing to invest heavily in technical research because they are convinced there is a payoff in this activity.
5. It is difficult to appraise the actual rupee value of MR results. In most instances it is impossible to translate the rupee value received from MR. Many business houses hesitate to make expenditure, when the results are so intangible. The management does not meet MR as a continuous process. It is treated as a medicine of some diseases.
Management realises the need of MR when it has a marketing problem. So management must put attention on current flow of information through Mr. Newman observed, “Reflecting Executives” lack of understanding of research and its potential contribution to decision making is the fact that research departments have tended to be technical job shops to which operating people could bring results if they chose to do so.
The weakness of this system is that it depends on the initiative of executives who are unfamiliar with research and who typically are unable to identify their problems well enough to ask for the help they need. Thus MR cannot be effective unless it is viewed as a continuous process and not as a onetime activity.
6. Another constraint that is lack of trained, well equipped and well directed research personnel who may improve the quality and utility of MR. The successful performance of MR requires that it must be carried out by qualified individuals. Many research projects have pre-occupied techniques which fail to grasp the complete picture. Many research project are carried out by operating executives. These men frequently have little time to devote in MR.
7. MR may be too expansive in some cases. MR is treated as luxury to small units. Its expense can be afford only by large business organisations. In seller’s market the management has apathetic approach towards MR. However with the growth of buyers’ market and increasing competition the value of MR are being increasing competition the value of MR are being increasingly recognised by marketing management.
Marketing research is an integral part of scientific marketing management, but the marketing research findings can only provide indications and not conclusions to any problem. These research projects are based on certain assumptions, so findings are made with reference to a certain marketing environment and the validity of MR is affected to that extent.
17. Ethical Issues in Marketing Research:
Ethics in Latin language is called Ethicus and in Greek it is called Ethicos. The word has origin from the Greek Ethos meaning character or manners. Another term that is considered synonym of ethics is morality. However, they are different. The word morality means behaviour and therefore Ethico-moral actions pertains to actions initiated by the character and expressed through behaviours.
Ethics focuses on Standards, rules and codes of conduct that govern the behaviour of individuals or groups. It is the science of morals, which is concerned with human character and conduct. It also refers to the code of conduct that guides an individual while dealing with a situation.
The way marketing research is conducted and the reasons for conducting research could raise many ethical issues.
Privacy:
Data collection could become an invasion of privacy. People are observed using hidden cameras, purchase behaviour studied using scanner data and credit card use data, and Internet activity is tracked using ‘cookies’. There is always strong temptation for some managers to misuse access to private information. Similarly, customer databases provide lots of personal information about customers. This information will be very valuable to other businesses and could be sold for a profit.
Intrusion:
Collection of information could be annoying and inconvenient for the respondents. Often, interviews, both personal and over telephone, become intrusive.
Deception:
Occasionally, researchers use deception to collect data. Acting as a potential customer falsely, some persons collect data from businesses. Other researchers pretend to be shoppers and ask fellow shoppers their opinions of products or brands.
False Representation:
Practices called “sugging”, i.e., selling under the guise of research and “frugging”, i.e., fund-raising under the guise of research are very common, which tarnish the image of legitimate researchers.
We can look at ethical issues in marketing research from the point of view of- (a) Respondents (b) Clients, and (c) Researchers.
(1) Ethics in the Treatment of Respondents:
Respondents include individuals, organizations or group of persons whom the agency approaches to collect information for research studies. The respondents should have the right to privacy, i.e., no telephone calls, e-mail or personal visit without the consent of the respondent. The consumer has a right to choose. That is whether he wants to participate or not in the studies.
The consumer has to be protected against physical and psychological harm. He may be uncomfortable to answer questions regarding income, health, business, relationship with members of the family, etc. The consumer has the right to be informed, i.e., the consumers must be informed regarding the objective of the research and the benefits if any to the consumers arising out the research findings.
(2) Ethics in the Treatment of Clients:
Client refers to any individual organization, private or public institution or department of such organization which has agreed to subscribe to a marketing research project.
The obligations of researchers are:
(a) The method of research and the results should be accurately presented in the report.
(b) The information obtained must be held in confidence and should not be shared with other clients and competitors.
(c) The researcher should not undertake unethical research.
(d) The limitations of the study should be informed to the client.
(e) Should not collect data in a biased manner to support the client’s views.
(f) The researcher is obliged to inform the client the unbiased results of the research irrespective of whether it is liked by the management or not.
(3) Ethics in the Treatment of Researchers:
Researchers include any individual, organization, private or public institution that is acting as consultant on marketing research project.
The obligations of clients towards researchers are:
(a) If the research project requires some information on company sales, profitability, etc., the client has to be provide same to the researchers. Otherwise the report will not be complete.
(b) After finalizing the terms and conditions for undertaking the project, the company should not ask for additional information at original project cost. The client has to pay for collecting extra information over and above the original proposal.
(c) If the firm has already decided to assign the project to a particular researcher, it should not invite proposals from other parties also. It goes against the interest of competing researchers.
(d) After finalizing a large project, the firm should not change the scope of the project to reduce the cost.