Ch1.pdf
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Market Research book - Ayansola.pdf
1
Chapter 1
AN INTRODUCTION TO MARKETING RESEARCH
Marketing is a restless, changing, and dynamic business activity. The role of marketing itself has
changed dramatically due to various crises—material and energy shortages, inflation, economic
ecessions, high unemployment, dying industries, dying companies, te
orism and war, and
effects due to rapid technological changes in certain industries. Such changes, including the
Internet, have forced today’s marketing executive to becoming more market driven in their
strategic decision-making, requiring a formalized means of acquiring accurate and timely
information about customers, products and the marketplace and the overall environment. The
means to help them do this is marketing research.
WHAT IS RESEARCH?
Research is a systematic and objective investigation of a subject or problem in order to
discover relevant information or principles. It can be considered to be either primarily
fundamental or applied in nature. Fundamental research, frequently called basic or pure
esearch, seeks to extend the boundaries of knowledge in a given area with no necessary
immediate application to existing problems, for example, the development of a research method
that would be able to predict what people will be like x years in the future. In contrast, applied
esearch, also known as decisional research, attempts to use existing knowledge to aid in the
solution of some given problem or set of problems.
Marketing research assists in the overall management of the marketing function. A
marketing manager must prioritize the more important and pressing problems selected for
solution, reach the best possible solution based on the information available, implement the
solution, modify the solution when additional information so dictates, and establish policy to act
as a ready-made solution for any recu
ence of the problem.
Marketing research often focuses on understanding the “Customer” (purchasers,
consumers, influencers), the “Company” (product design, promotion, pricing, placement, service,
sales), and can also be expanded toward the environment to include “Competitors” (and how
their market offerings interact in the market environment).
Figure 1.1 Marketing Environment (Source: Modified from Pe
ault and McCarthy, )
2
Within this “Company-Customer-Competition” environment, many types of marketing
esearch can be conducted, much of which is focused on using surveys for
Monitoring customers and markets
Measuring awareness, attitudes, and image
Tracking product usage behavior
Diagnosing immediate business problems
Supporting strategy development
More specific examples are found in the Qualtrics.com Survey University. This provider
of professional survey software identifies twenty different kinds of surveys that are of use to
marketing researchers. Each focuses on a different aspect of the “Company” and it’s interaction
with the “Customer” and “Competition” in the market environment:
Exhibit 1.1 Twenty Different Types of Marketing Surveys
3
Each of the above surveys focuses on a specific area of research and involves the
development of conceptual models directed at predicting or explaining a specific type of
ehavior that is being measured. This level of specificity is desirable for several reasons. Within
the research process, this specificity
ings:
1. Clarification. Explication usually results in the clarification of relationships and interactions.
The need for more rigorous definitions of key variables often becomes apparent.
2. Objectivity. The process of explicating the modeled behavior often discloses rationalizations
and unfounded opinions that had not been recognized as such before.
3. Communication. Discussion helps to identify problems and common points of reference
when different people hold alternative implicit models of the same problem situation.
4. Improvement of models. Explicit models can be tested in differing situations to see if the
esults are reproducible. The degree and range of adaptability can thus be extended.
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5. Guide to research needs. Formulating models explicitly can better pinpoint information gaps
and, thus, aid in determining the nature of research needs.
While varying information is required for the different types of marketing research
projects, the key to conducting a successful research project lies with the researcher and the
client. They must come to a common understanding of the nature of the exact research problem,
and then agree on the information required to answer this problem. This requires identifying the
appropriate questions, respondents, methodology, analysis and reporting. All studies must
address these same basic issues (see Exhibit 1.2).
EXHIBIT 1.2 Basic Research Issues
Ask the right questions.
Ask the right people.
Ask questions the right way.
Obtain answers to questions.
Relate answers to the needs of the research use
client.
Communicate effectively and in a way that the client understands.
Having considered these general topic-situation issues in conducting research, let’s now
turn to the basic process of conducting a research process.
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THE BASIC RESEARCH PROCESS
How is marketing research actually conducted? What are the general steps in completing
a research project? These questions are answered in the steps of the research process. While the
steps are shown as a linear process, some of the steps may be performed simultaneously, such as
selecting data collection techniques and sample design. There are other times when “later”
decisions influence decisions that are made early in the research planning process. For example,
desired analysis techniques often influence the selection of data collection techniques (e.g.,
measurement) and sample design.
Figure 1.2 The Research Process
It is important to carefully plan the research process and formally recognize the
elationship between the stages. The researcher should write a formal plan for the project,
including the background information and statement of objectives, which then becomes the
master guide for implementing and controlling the research project. Each step in this research
process will now be introduced.
STAGE 1: PROBLEM FORMULATION
In a very real sense, problem formulation is the heart of the research process. As such, it
epresents the single most important step to be performed. From the researcher’s point of view,
problem formulation means translating the management problem into a research problem.
As previously discussed, in order to formulate an appropriate research problem, the
esearcher must understand the origin and nature of management’s problem and then be able to
ephrase it into meaningful terms from an analytical point of view. This involves timely and clear
communication between manager and researcher.
The end result of problem formulation is a statement of the management problem that is
analytically meaningful and that often points the way to alternative solutions. An accurate
problem formulation specifies the types of information needed to help solve the management
problem. In short, quality thinking about a problem prior to data collection largely determines the
quality of data collection, analysis and problem solving.
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Exhibit 1.2 Examples of Management Problems and Related Research Problems
Management Problems Research Problems
Closely related to problem formulation is the development of a working hypothesis, or an
assertion about a state of nature. While hypotheses are crucial for basic research because they tell
the researcher what to do, the concept of a hypothesis can also be useful in decisional research to
direct the development of the research problem statement. In most cases, the marketing
esearcher will not explicitly state hypotheses for the research. Kerlinger and Lee (2000, Chapter
2) suggest that research problems and hypotheses meet the following criteria:
1. The problem statement expresses a relationship between two or more variables.
2. The problem is stated clearly and unambiguously in question form.
3. The problem statement implies possibilities of empirical testing.
Where properties of good hypotheses include the following:
1. The hypothesis is a statement about the relationship between two or more variables in
declarative statement form.
2. The hypothesis ca
ies clear implications for testing the stated relationship
(i.e., variables must be measurable or potentially measurable).
How to Formulate the Research Problem
Problem formulation is much easier when specific components of the research problem
are defined:
1. Specify the Research Objectives
Objectives guide the researcher in developing good, useful research, and they help the
client evaluate the completed project. Objectives range from the very general, such as profit
maximization, to the highly specific, such as measuring market interest in a new product. It is
are that the objectives are well explained to the researcher. However, the researcher needs to
take the initiative to develop a clear statement of objectives.
Each study should have a very limited and manageable set of objectives that focus on the
problem being solved. Two or three well targeted objectives is preferable to many that are ill-
conceived. Fewer the objectives make it easier to keep track of progress toward the objectives,
to ensure that each is properly addressed, and to determine the best methodology. If there are too
many objectives separate studies may be appropriate.
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2. The Environment or Context of the Problem
Consider the problem of deciding whether to introduce a new consumer product. The
marketing researcher must work closely with the client in transforming the client’s problem into
a workable research problem.
The researcher’s efforts should be oriented toward helping the manager decide whether
any investigation is justified based on the potential value of the research findings versus their
cost. The researcher must be aware of, and assist in, the identification of objectives, courses of
action, and environmental variables, insofar as they affect the design of the research
investigation.
If the research is undertaken and if the resulting findings are to be utilized (i.e., have an
influence on the user’s decision making), the manager and researcher must have a productive and
trusting relationship that is based on the researcher’s ability to perform and deliver the research
as promised.
3. The Nature of the Problem
Every research problem may be evaluated on a scale that ranges from very simple to very
complex. The degree of complexity depends on the number of variables that influence the
problem. Understanding the nature of the problem helps a researcher ensure that the right
problem is being investigated and that a marketing plan can be developed to solve the problem.
A thorough preliminary investigation using focus groups of consumers, salespeople, managers,
or others close to the problem may produce much needed insight.
4. Alternative Courses of Action
A course of action specifies a behavioral sequence that occurs over time, such as the
adoption of a new package design, or the introduction of a new product. Such a program of
action becomes a commitment, made in the present, to follow some behavioral pattern in the
future.
It is usually desirable to generate as many alternatives as possible during the problem
formulation stage and state them in the form of research hypotheses to be examined. A
hypothesis often implies a possible course of action with a prediction of the outcome if that
course of action is followed.
Once the nature of the problem has been agreed upon, the course of action must be
specified. This involves:
1. Determining which variables affect the solution to the problem
2. Determining the degree to which each variable can be controlled
3. Determining the functional relationships between the variables and which variables are critical
to the solution of the problem.
The following example shows the results of a failure to follow through with these aspects
of the problem situation model.
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EXHIBIT 1.3 “New Coke” Versus Original Coke
5. The Consequences of Alternative