One of the main components of business research is marketing research. Marketing research is concerned with applying theories, problem-solving methods, and techniques to identify and solve problems in marketing. Marketing research is the function that links the consumer, producer, and public to the marketer through information.
This information is used to identify and define marketing opportunities and problems; to generate, refine, and evaluate marketing actions; to monitor marketing performance, and improve understanding of the marketing process.
Marketing research specifies the information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. To offset unpredictable consumer behavior, companies invest in marketing research.
Increased customer focus, demands resource productivity, and increased domestic and international competition have prompted an increased emphasis on marketing research.
Managers cannot always wait for information to arrive in bits and pieces from marketing departments. They often require formal studies of specific situations. This official study, whether performed internally or externally, is called marketing research.
Meaning of Marketing Research
It was stated earlier that marketing research is generally considered to be a part of an MIS. Marketing research is the systematic and scientifically unbiased collection and analysis of data and the preparation of information relevant to a particular problem or opportunity.
It may also be defined as the systematic collection of information for decision making. A firm gets and tests ideas through marketing research.
You should know that marketing research is not a part of the marketing mix but rather an aid to management in making decisions about the company’s marketing mix and the target market.
It is a process, not an institution, and as such, it is a part of virtually all aspects of the research process from data collection through information transmission.
Marketing research processes are almost always used to collect data for recurring and unique decision making.
For data evaluation, research methods are commonly used to determine the error factors in collected data when certain sampling techniques ( e.g., purposive samples) are used.
Similarly, data transformation most often occurs through statistical testing methods normally used in marketing research.
We first define and discuss what marketing research refers to.
Marketing Research Definition
Marketing research is the systematic and objective identification, collection, analysis, and dissemination of information about issues relating to marketing products and services for the sole purpose of assisting management in decision making related to the identification and solution of problems and opportunities in marketing.
Marketing research aims to identify and assess how changing elements of the marketing mix impacts customer behavior.
The term is commonly interchanged with market research; however, expert practitioners sometimes draw a distinction. Market research is concerned specifically with markets, while marketing research is concerned specifically with marketing processes.
Marketing research is often partitioned into two sets of categorical pairs:
- Consumer marketing research
- Business-to-business (B2B) marketing research
Consumer marketing research is a form of applied sociology that concentrates on understanding consumers’ preferences, attitudes, and behaviors in a market-based economy. It aims to understand the effects and relative success of marketing campaigns.
Arthur Nielsen pioneered consumer marketing research as a statistical science with the founding of the ACNielsen Company in 1923.
Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs.
They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control.
Traditionally, marketing researchers were responsible for providing relevant information, and the managers made marketing decisions.
However, the roles are changing, and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research.
The role of marketing research in managerial decision making is explained further using the framework of what is known as the DECIDE model. The structure of the model is as follows:
- D: Define the marketing problem;
- E: Enumerate the decision factors;
- C: Collect relevant information;
- I: Identify the best alternative;
- D: Develop (and implement) a marketing plan;
- E: Evaluate the decision and the decision-making process.
The DECIDE model conceptualizes managerial decision making as a set of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints.
Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes are collected. The next step is to select the best option based on chosen criteria or measures of success.
Then a detailed plan to implement the alternative selected is developed and put into effect. Lastly, the outcome of the decision and the decision process itself is evaluated.
A specialized form of marketing research is the so-called advertising research. The sole purpose of conducting this research is to improve the efficacy of advertising.
It may focus on a specific ad or campaign or directed at a more general understanding of how advertising works or how consumers use the information in advertising. It can entail various research approaches, including psychological, sociological, economic, and other perspectives.
Another component of marketing research is product research. Product research looks at what products can be produced with available technology and what new product innovations near-future technology can develop.
How Can a Company Obtain Marketing Research?
There are several ways in which a company can obtain marketing research. The company may have a marketing research department. The person in charge of this department plays a multidimensional role such as a study director, administrator, company consultant, and advocate who usually reports to the company’s marketing head.
If the company cannot afford to maintain a separate marketing research department or the services of marketing research firms, it has other affordable options.
They are as follows:
- It can engage students and professors to design and carry out marketing research projects in their favor. This is the most cost-effective way of carrying out marketing research activities, and even small companies may afford it.
- The other option is to use online information services where business information may be collected at a meager cost. There are many online services available nowadays on the internet. Browsing the internet may help a company to get much-needed information very quickly and economically.
- Checking out competitors is another option that small companies may nicely exploit. A regular visit to competitors’ business premises may help the company getting many important tips which may be utilized later.
- Taking help from Syndicated Service Research firms is another good option. This type of firm gathers different information on trade and consumers and offers them for sale to interested companies. Information may be gathered at a relatively low cost from syndicated research firms.
- Custom marketing research firms may be hired for some specific projects. This type of firm, if given responsibility, designs the study, conduct it, and reports to the clients on findings. But, it is interesting to note that the study results become the property of the appointing firm.
- Specialty-line marketing research firms may also be hired to get some specialized research services. One of the examples of such firms is a field interviewing service firm. This type of firm only provides field interviewers.
Types of Marketing Research
All marketing research activities are not the same and different in many respects. They may differ in objectives, research design, and the area covered, depth, data analysis method, presentation, etc.
Research activities may be classified as exploratory in nature, aimed at a specific problem, or used to provide routine feedback. Now let us look at each of them in the following section.
Exploratory research is conducted when the problem is generally known, but its nature and causes are not known at all or known partially.
For example, if a company experiences no change in sales even after aggressive promotion, it may conduct exploratory research in this situation.
Because the problem is known here, but its nature and causes are unidentified. What is the problem here?
The problem is sales have not increased despite aggressive sales promotion activities that were undertaken.
This is another type of research. When a problem has been defined, a different type of information input is needed to enable management to make decisions concerning alternative ways of solving the problem.
Specific questions that might be posed include:
- What changes should be made in the marketing mix?
- Is the product positioned properly?
Questions such as these lead to specific research. Specific research generally involves the use of larger samples and is more costly than exploratory research.
While exploratory research aims to suggest hypotheses, specific research is used to enable management to accept or reject hypotheses with a predetermined level of confidence.
It attempts to continuously monitor certain development variables such as sales, market share, or consumer sentiment.
Firms with well-operating marketing information systems would be receiving such information through the marketing intelligence subsystem. Firms without such sophisticated means of conducting routine feedback research have two options.
The first is to utilize the marketing research department to engage in gathering and assessing routine feedback. Companies without the necessary internal resources may avail themselves of commercial services offered by the different outside research organizations.
From time to time, marketers may require to undertake marketing research for collecting information on the market. Knowledge of the types of research, how research should be conducted, steps involved in the marketing research process is essential for a marketer. He must also know what makes good and appropriate research.