28 Marketing Research

Kulbhushan Chandel

Learning Objectives

After completing this module, the students will be able to:

Describe the concept of marketing research.
Explain the relationship between marketing research and marketing decisions.
Explain the nature and objectives of marketing research.
Explain the importance of marketing research.
Explain the main limitations of marketing research.

2. Introduction

The fundamental objective of business entity is to achieve its goal by satisfying the needs and wants of the society. In this context marketing attains the core position in the business management, operations and activities. According to Drucker, marketing is the distinguishing feature of businesses. Marketing is also important from national point of view as it is only through the marketing that individual and societal needs are satisfied, it improves the standard of living of the people by offering the variety of goods and services generate employment and helps in the exports.

There are five major management functions in a well organized and economically managed organization such as; marketing, production finance, human resource and research and development. Every organization has different philosophy, policy and style which influence the importance of these functions. Some organizations assign the equal importance to all major function, in some organizations production dominates whereas in other organization marketing oriented function will be given maximum importance. But with changes in the corporate governance laws some organizations are not only customer-oriented but believe in the green marketing. The observance to corporate social responsibility (CSR) norms will become the important parameter in measuring the performance and orientation of an organization.

Traditionally marketing in narrow sense is defined as the performance of business activities which direct the flow of goods and services from producer to consumer or users. But with the changes in the domain of marketing, the American Marketing Association has defined the marketing in the broad sense as, “the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives”. Paul Mazur defined marketing as “the creation and delivery of a standard of living to society”. This definition signifies the real spirit of marketing process. From the era of the industrial revolution, business management has undergone six distinct concepts of marketing namely; the exchange orientation, the product orientation, the production orientation, the sales orientation, the market orientation and the societal orientation. The societal concept is also called as human concept and ecological concept. According to this concept the management is expected to maintain balance between three factors such as; profitability, consumer demand or public interest and environment considerations.

3. Evolution of marketing research

The successful entrepreneurs always make an effort to search for information and identify newer ways to create, communicate and deliver value to their markets. So far the history of marketing research is apprehensive, the role and impact of industrial revolution is ineradicable. Consequently, the paradigm shift in the ways of production and management had shown the seeds of market research of modern days. Though before the beginning of industrial revolution some cases of marketing research were reported, yet the beginning of marketing research as an organized business activity began between 1910 and 1920. It is believed that in 1911, the appointment of Charles Collidge Parlin as the manager of the Commercial research division of the advertising department of the Curtis Publishing Company marked the beginning of organized marketing research.

After the World War II, there seems to be a dramatic rise in the area of marketing research. Though by the 1950s and 1960s, television became the part of life and with came the era of television advertisement. Further, the revolution in the area of Information and Communication Technology and the process of globalization has intensely influenced the marketing research activities.

The marketing research activities in India also got thrust in the post economic liberalization scenario. Till the 1990s, marketing research was given much importance and used to be carried out as a custom activity and not on a challenging basis. The real changes in marketing research activities started taking place with the large scale entry of many Multinational Companies to India. These MNCs used the market research for making better business and strategic decisions. This led the many Indian companies to realize the significance of marketing research, which resulted in the growth of marketing research industry in India. The following factors are responsible for the development of marketing research:-

Shift in philosophy of business: Till 1930 the emphasis of business was on production and development of quality goods only. After the great depression an oversupply of goods and services led to the steadily shift in the emphasis from production to market. Today market is accepted as managerial philosophy and businesses are more attuned to satisfy the consumers need.
Change in cost structure: The fixed cost component of organization has increased with the process of computerization. To justify the huge capital investment high and quality production are needed.
Shift from price to non-price competition: The non-price competition such as advertising, product differentiation, branding and packaging etc. are playing significant role in the realm of marketing.
Expansion of production processes: The specialization in the area of labour has led to a lengthening the production process. The production process that was expected to be controlled by one manufacturer is now split among various manufacturers; each specialized in the part of the process.
Increase in the discretionary buying power: With the increase in the income and standard of living of consumer’s spending on unnecessary and luxury goods has increased as well. As competition is high, the organization needed to be well notified about market and other factors affecting industry.
High cost of marketing: Marketing activities are not limited to the local or domestic area rather it has crossed the national boundaries. This requires the huge investment as marketing operations has to cover wide geographical area. So marketing research provides the information about the market and assist in the reduction of cost.
Emergence of professional manager: The development in the speciality of professional management also led to the development of marketing research.

4. Marketing Research

Marketing research has wider meaning and scope. It refers to the methods of defining the marketing problems and consequently, collecting, analysing and interpreting the facts to help marketing manager in making rational marketing decisions, implementation of decisions and reconsider of marketing decision. In this way marketing research is continuous business process. It is disturbed with all those factors which have a direct impact upon the marketing of goods and services. Marketing research deliberate on various aspects of product planning and development, pricing policies, effectiveness of personal selling, advertisement and sales promotion, distribution structure and channels, marketing strategies, competition, and the entire domain of buyer’s behaviour and attitudes in the market. To recognize the concept of marketing research, the viewpoints of various thinkers have been discussed as under:-

In the words of Hasty, Ronald, W. and Till R. Ted,

“Marketing research may be defined as the systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services under essentially non-recurring conditions.”

In the words of Seibert, Joseph C.,

“Marketing research has to do with the gathering, processing, analysis, storage and dissemination of information to facilitate and improve decision-making.”

In the words of Green and Tull,

“The marketing research is the systematic and objective research for analysis of information relevant to the identification and solution of any problem in the field of marketing.”

In the words of Philip Kotler,

“Marketing research is systematic problem analysis, model building, and fact finding for the purpose of important decision making and control in the marketing of goods and services”.

The American Marketing Association (AMA) defined marketing as the “function which links the consumer, customer, and public to the market 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”.

On the basis of all these definitions, it can be concluded that marketing research is the systematic, scientific and objective identification, collection, analysis, dissemination and use of information for the rationale of improving decision-making related to the identification and solution of problems and connecting the opportunities and facing the threats in marketing. The process of Marketing research has following steps:-

Defining the marketing problem.
Collection of required information systematically and scientifically.
Collection of data which involves the process of editing, coding, classification and tabulation.
Analysis of data by applying the various statistical techniques.
Interpretation of results in the light of prevailing circumstances and problem of the business.
Findings of the research are communicated to the management of organization, who will take ultimate decision in the light of these findings.

5. Relationship between marketing research and marketing decisions:

Marketing research is a set of techniques and principles for defining the marketing problem and for systematically collecting, editing, coding, tabulating, classifying, analyzing and interpreting data that can help marketing decision-makers, involved in marketing of goods, services and ideas. Marketing research is a predictable link between business organization-marketing management and the markets in which they operate. It plays significant roles in three stages of planning and decision making, which are explained as follows:-

Identifying marketing opportunities and threats by analyzing the internal and external business environment.
Developing and implementing the marketing plan, policy, strategy and decision on the basis of marketing research.
Evaluation and review of effectiveness of marketing plan, policy, strategy and decision. This feedback will help the marketing researcher in the future research relating to the marketing issues and concerns.

6. Nature of marketing research:

After the analysis of above mentioned viewpoints of various thinkers on the meaning of the marketing research, the following points have been developed to understand the nature and characteristics of research:-

It is a systematic study: Marketing research is a rational and organised activity. There is definite procedure in which research is conducted. Right from defining the marketing problem to possible solution, there is a succession of operation with logical arrangement.
It is a scientific study: Marketing research establishes the cause and effect relationship between two or more variables. The various statistical tools and techniques are employed to study the association between variables. The researcher should have the scientific attitude and also follow the scientific methodology of research.
It is a managerial tool: Management of a company has to take many decisions to solve the problems with minimum cost and time. The hallmark of effective decision is to select the best substitute. It is marketing research that can help the management to take sound decision based on scientific methodology.
Purpose: The first step in the marketing research is to define the problem. In formulating the research problem, the researcher should methodically understand the problem and reshaping the same into meaningful terms from study point of view.
Solution: Marketing research is solution oriented. All steps and actions are directed towards finding the solution of the problem. For this purpose appropriate data is collected, analysed and interpreted to arrive at right conclusion.
Generalization: Marketing research is particular and general. General principles are applied to arrive at the particular theory and particular theory is applied in the general situation to develop the right viewpoint towards defining the research problem. Hence, research highlights to the development of theories, concept, principles and generalization.
Empirical: Marketing research is a orderly and scientific enquiry of facts to reach at the truth. In this way research is always based on apparent experiences, discernible evidences and empirical proofs.
Patience: Patience and equanimity are the core qualities of the research. Researcher must have these two qualities to think over the problem and find out the right solutions than jumping into conclusions.
Description: Marketing research involves concrete observation from the reliable and authentic sources. The data is accurately analysed and presented with the use of various statistical and mathematical measures.
Knowledge: Researcher should be experienced and properly trained person. He must have full knowledge of problem under study. He also must be thoroughly convergent with the various statistical methods for analyzing the collected information.
Replication: The design, procedures and conclusions of the research should be used by any person other than researcher, who can appraise the validity of research. Thus, the conclusions of one research can be used by other researchers.
Skill: Marketing research requires proper training and careful skill in collecting, analyzing, interpreting and reporting the data.

7. Objectives of research:

The following are the main objectives of the marketing research:-

Formulation of marketing plans: Marketing Research is used in the formulation of all marketing plans, policies, programmes and procedure.
Control of plans: It is working for control and evaluation of business plans and policies etc.
Reduction of costs: It is used in curtailing all marketing costs, like, selling, advertising, promotion and distribution costs.
Solution of marketing problems: Marketing problems demanding the best solution through market research system and it can be classified under the major heads: (a) problems relating to o the product itself; product include branding, packaging and labelling and services. (b) Problem relating to consumer markets. (c) Problem relating to each phase of the entire marketing process.
Essential for the growth of business: Programmes of marketing research incidentally provide insurance cover for the survival and growth of the business in a dynamic economy.
Right selection of Marketing mix: Marketing management through marketing research can bring about the sale of right product throughout right channels to right customers at right places and at right prices by developing right plans, policies and programmes with the help of right employees.
Right decision of production: The main objective of marketing research is to enable entrepreneurs to produce goods satisfactory and saleable and to ensure that they reach the market easily, quickly, cheaply and profitably without sacrificing the consumer’s interest.
Management of risk and uncertainty: Marketing research helps in the minimization of risk and uncertainly and maximization of sales revenue.
Expansion of Market: Helpful in the expansion of market with improved product and will augment revenue and profit of business.
Research knowledge helpful in many ways: With adequate knowledge obtained by marketing research help the business in many ways such as: producers need not make unwanted goods, need not offer those through wrong passages to persons who are not interested; traders need not stack unwanted goods, offer them at the wrong season in the wrong quantities or at wrong pieces; advertisers need not make mistake in what they say, to whom they appeal, and how they appeal to audience.
Understating of economic environment: Marketing research help in understanding the dynamic economic environment i.e., understanding the nature of business cycles. This will make companies capable to face the challenges of market by making its SWOT analysis.
Helpful in sales forecasting: It helps in attaining information that could help to formulate short -range and long range forecasts.
Evaluation of Market: Companies can use marketing research to evaluate new product opportunities and acceptance, and to test existing product relative to competitors’ products.
Evaluation of Marketing Efforts: It is also helpful to evaluate the effectiveness of marketing activities and to call attention to the presence of a potential problem.

On the basis of this discussion it can be concluded that marketing research facilitates producers, merchants, distributors and advertisers to avoid mistakes either in manufacturing or in marketing. To that extent it can minimize business failures and maximize profitability.

8. Importance of marketing research:

Mass production by power-driven machinery in anticipation of demand for ever-widening market created special problems of distribution.

Knowledge of Market and consumers: Market is the group of present and potential consumers. Growing market required numerous middlemen between producer and consumer. Each middleman erected a variety of wall which blocked the backward flow of communication regarding consumer needs and dealer needs to the manufacturer. Size and specialisation within the business unit and interference of abundant middlemen between producers and consumers created a gap of communication. The broadening of communication gap is the chief single factor for increasing importance of marketing research to fill up the communication gap between the consumer and producer. Marketing research alone can provide first-hand knowledge of consumers and changes in the outline of the market.
Formulation of marketing strategy: Emergence of buyer’s market and increasing competition demanded unremitting need of marketing research to ensure maximum consumer satisfaction and repeated purchases. Marketing research is helpful in invent the appropriate marketing strategies to meet competition, to survive and grow in a competitive market.
Valuable management tool: Marketing research has become the corner-stone of the marketing concept. No business firm can be market- oriented or customer-centered without the effective use of marketing research. The moment customer become the centre of the marketing activities, the marketing research imagine unique importance and it become an invaluable management tool in the formulation of accurate and realistic marketing plans and programmes, advertising and sales promotion based on pragmatic information of consumer demand-changing tastes preferences, whims, fancies etc.
Helpful in coping with change: Changing is a perpetual phenomenon. Change is the common denominator in planning, organising, motivating and controlling marketing activity. Marketing research enables management to predict, meet and adapt change and creativity and accelerate conditions of change, particularly in consumer demand. The real challenge to marketing management is to firmly believe that change in business-finding its new role, new customer, new product, new market is even more important than efficient operations of the business.
Helpful in understanding the economic environment: In a dynamic environment, marketing information and research helps forward looking marketer to manages all challenges and problems fashioned by environment forces.
Solution of marketing problems: Marketing research can solve the problem brought about by unparalleled growth of science and technology. It helps management to bring about prompt alteration and innovations in product design, packaging, advertising, sales promotion and distribution policies so that the business can keep itself up-to-date in the marketplace.

9. Limitations of marketing research

Marketing research suffers from some limitations which are illustrated as below:-

Qualification staff: Lack of qualified and experienced staff affect the marketing research process.
Funds: Scarcity of funds hinders the marketing research activities in the business.
Time: Insufficient time for conducting marketing research and procrastination in implementing the marketing research findings.
Information: Inadequacy of the information needed is one the significant tentative block in the marketing research process.
Sample size: Determining the proper sample size is also a difficult task.
Analysis of data: Analysing objectively the data collected and drafting the marketing research report requires a technical skill.
Identification of problem: Identifying the problem and their possible solutions is a difficult task.
Not exact science: Although marketing research uses the techniques of science but itself is not an exact science. The results obtained are not accurate as compared to physical and chemical sciences.
Un-controllable variables: Legal, technological and societal variables are uncontrollable and they affect the result of marketing research.

10. Summary

From the era of the industrial revolution, business management has undergone six distinct concepts of marketing namely; the exchange orientation, the product orientation, the production orientation, the sales orientation, the market orientation and the societal orientation. The societal concept is also called as human concept and ecological concept. According to this concept the management is expected to maintain balance between three factors such as; profitability, consumer demand or public interest and environment considerations. The successful entrepreneurs always make an attempt to seek information and identify newer ways to create, communicate and deliver value to their markets. The marketing research activities in India also got momentum in the post economic liberalization scenario. Till the 1990s, marketing research was given much importance and used to be carried out as a routine activity and not on a challenging basis. The real changes in marketing research activities started taking place with the large scale entry of many Multinational Companies to India. These MNCs used the market research for making better business and strategic decisions. This led the many Indian companies to realize the significance of marketing research, which resulted in the growth of marketing research industry in India. marketing research refers to the methods of defining the marketing problems and consequently, collecting, analysing and interpreting the facts to assist marketing manager in making rational marketing decisions, implementation of decisions and review of marketing decision. In this way marketing research is continuous business process. It is concerned with all those factors which have a direct impact upon the marketing of goods and services. Marketing research concentrate on various aspects of product planning and development, pricing policies, effectiveness of personal selling, advertisement and sales promotion, distribution structure and channels, marketing strategies, competition, and the entire domain of buyer’s behaviour and attitudes in the market. Thus, marketing research is the systematic, scientific 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 harnessing the opportunities and facing the threats in marketing. Marketing research is a set of techniques and principles for defining the marketing problem and for systematically collecting, editing, coding, tabulating, classifying, analyzing and interpreting data that can help marketing decision-makers, involved in marketing of goods, services and ideas. Marketing research is an inevitable link between business organization-marketing management and the markets in which they operate. Marketing Research is used in the formulation of all marketing plans, policies, programmes and procedure. It is employed for control and evaluation of business plans and policies etc. Marketing problems demands the best solution through market research system. Marketing management through marketing research can bring about the sale of right product through right channels to right customers at right places and at right prices by developing right plans, policies and programmes with the help of right employees. Marketing research enables producers, merchants, distributors and advertisers to avoid mistakes either in manufacturing or in marketing. To that extent it can minimize business failures and maximize profitability.

Suggested Readings (Books and Websites)

Ghosh PK, Sales Management- Text and Cases, Himalaya Publishing House, 2010.
Jobber David and Lancester Geoff, Selling and Sales Management, Pearson Education, Sixth Edition.
McCarthy, Jerome E. (1964). Basic Marketing. A Managerial Approach. Homewood, IL: Irwin.
Needham, Dave (1996). Business for Higher Awards. Oxford, England: Heinemann.
Kotler, Philip (2012). Marketing Management. Pearson Education. Kotler, P. and Keller, K. (2006), Marketing and Management, Pearson Prentice Hall, Upper Saddle River, NJ, USA
McCarthy, Jerome E. (1975)”Basic Marketing: A Managerial Approach,” fifth edition, Richard D. Irwin