Project on Marketing Research

The set of all actual and potential buyers of a product or a service.

The buyers share a particular need or want that can be satisfied through exchange relationships. The size of market depends on the number of people who exhibit need, have resources to engage in exchange, and are willing to exchange these resources fro what they want.

Marketers are keenly interested in markets. They work to understand the needs and wants of specific markets and to select the markets that they can serve best. In tern, they develop products and services that create value and satisfaction for customers in these markets. The Result is profitable long term customer relationships.

Marketing more than any other business deals with Customers.

The simplest definition of marketing is;

“Marketing is managing profitable customers.”

The twofold goal of marketing is to attract new customers by promising superior value and to keep and grow current customers by delivering Satisfaction.

Customers are the Essence of all marketing activities,

it is necessary for any organization to better understand the Needs and Wants of its customers. In this age of competition Companies are focusing all of their efforts on marketing.

Marketing is based on the importance of customers to a business and has two important principles:

1. All company policies and activities should be directed toward satisfying customer needs.
2. Profitable sales volume is more important than maximum sales volume.
To best use these principles, a small business should:

Successful marketing requires timely and relevant market information. An inexpensive research program, based on questionnaires given to current or prospective customers, can often uncover dissatisfaction or possible new products or services.

We can take different examples from the market that how intensely companies are doing marketing activities, like Haleeb (the Giant in Packed milk category) introducing new products each and every day by understanding customer Needs.

Dell makes it easy for customers to custom-design their own computers and have they delivered quickly to their doorsteps or desktops. These and other highly successful companies know that if they take care of their customers, Market Share and profits will follow.

Sound Marketing is critical to the success of every organization. Large for-profit firms such as Procter&Gamble, Sony, IBM, and Marriot use Marketing.

Wal-Mart has become the world’s largest retailer and world’s largest company by delivering on its Promise, “Always low Prices”.

Wal-Mart is now making intense profit from the Market and contains hundreds of Thousands customers in the world , how they get all these customers, by understanding their needs and managing them through Marketing activities.

In proper words we can define marketing as.

Broadly defined, Marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others.

Marketing is a social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with them.(Kotler, Principles of Marketing)

Marketing is managing profitable customer relationships.

To explain the definition, we will examine the following important core marketing concepts.

Most people think that marketing is only about the advertising and/or personal selling of goods and services. Advertising and selling, however, are just two of the many marketing activities.

In general, marketing activities are all those associated with identifying the particular wants and needs of a target market of customers, and then going about satisfying those customers better than the competitors. This involves doing market research on customers, analyzing their needs, and then making strategic decisions about product design, pricing, promotion and distribution.

The systematic design, collection, analysis and reporting of data relevant of data relevant to specific marketing situation facing an organization. (Kotler)

Marketing Research is defined as “The systematic and objective process of gathering, recording, and analyzing data for aid in making marketing decisions”.

Marketing research is a formalized means of acquiring information to assist in the making of marketing decisions. It can be defined as the function that 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 for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.

Marketing research can help marketers to assess market potential and market share; understand customer satisfaction and purchase behaviour; and measure the effectiveness of pricing, product, distribution and promotion activities. The marketing research process includes the systematic identification, collection, analysis and distribution of information for the purpose of knowledge development and decision making. The reasons and times at which your company or organization might consider performing marketing research varies, but the general purpose of gaining intelligence for decision making remains constant throughout. As a company or organization, the overwhelming majority of research you are currently considering likely revolves around your customers:

The marketing research process includes the systematic identification, collection, analysis and distribution of information for the purpose of knowledge development and decision making. The reasons and times at which your company or organization might consider performing marketing research varies, but the general purpose of gaining intelligence for decision making remains constant throughout. As a company or organization, the overwhelming majority of research you are currently considering likely revolves around your customers:

Step 1. Identifying and defining your problem

Step 2. Developing your approach

Step 3. Research design

Step 4. Collecting the data

Step 5. Performing data analysis

Step 6. Reporting and presentation

Marketing managers and researchers must work closely together to define the problem and agree on research objectives. Defining the problem and research objectives is often the hardest step in the research process. The manager may know that something is wrong without knowing the specific causes.

Now we see that how these steps help for conducting a successful Marketing Research. We study these steps one by one in detail.

If you are considering conducting marketing research, chances are you have already identified a problem and an information need. This step is always the start of the marketing research process. At this point, the problem will have been recognized by at least one level of management, and internal discussions will have taken place. Sometimes, further definition of the issue or problem is needed, and for that there are several tools you can use.

The most common tools are internal and external secondary research. Secondary research intelligence consists of information that was collected for another purpose, but can be useful for other purposes. Examples of internal secondary research are sales revenues, sales forecasts, customer demographics, purchase patterns, and other information that has been collected about the customer. Often referred to as data mining, this information can be critical in diagnosing the problem for further exploration and should be leveraged when available and appropriate. The amount of internal secondary information that can be applied is typically limited.

External secondary research is typically far more available, especially since the Internet age. Most external secondary information is produced via research conducted for other purposes, financial performance data, expert opinions and analysis, corporate executive interviews, legal proceedings, competitive intelligence firms, etc..

Once your problem is better defined, you can move onto developing your approach, which will generally be around a defined set of objectives. Clear objectives developed in Step 1 will lend themselves to better approach development. Developing your approach should consist of honestly assessing you and your team’s market research skills, establishing a budget, understanding your environment and its influencing factors, developing an analysis model, and formulating hypotheses.

Based upon a well-defined approach from Step 2, a framework for the designing your marketing research program should be apparent. This step is the most encompassing of all steps in the research process, requiring the greatest amount of thought, time and expertise — and is the point at which those less experienced with market research will obtain assistance from an internal market research expert or perhaps partner with an external marketing research provider. Since the intelligence eventually gained from the research is so closely related to the selected research design, this is the single most import step in the research process and the step most vulnerable to the typical research errors. Research design includes secondary information analysis, qualitative research, methodology selection, question measurement & scale selection, questionnaire design, sample design & size and determining data analysis to be used.

Often called data collection or survey fielding, this is the point at which the finalized questionnaire (survey instrument) is used in gathering information among the chosen sample segments. There are a variety of data collection methodologies to consider.

Selecting which is the most appropriate data collection methodology for a particular research project takes place during Steps 2 & 3 of the market research process. Data collection typically begins with field testing the final questionnaire with a small portion of the respondent sample to make sure it is gathering information correctly. Then data collection can be fairly automatic throughout the remainder of the data collection process. When quota groups and/or sample subgroups are being screened for, data collection will require more oversight, maintenance time and cost. Regardless of the data collection methodology chosen, the data collection process often takes from 25 percent to 50 percent of the total time needed to complete a research project.

Any questionnaire data analysis will depend on how the questionnaire was constructed. Less complex questionnaire data analysis can be handled with any of a number of office suite tools, while more complex questionnaire data analysis requires dedicated market research analysis programs.

Types of statistical data analysis that might be performed are simple frequency distributions, multiple regression (driver analysis), cluster analysis, factor analysis, perceptual mapping (multidimensional scaling), structural equation modeling and data mining. The more complex the needed level of statistical data analysis is, the more time and cost it will take to execute.

Market research reporting and presentation is easily the second most important step, if not the first. Any business critical information and knowledge that comes from your market research investment will be limited by how it is presented to decision makers.

Selecting which is the most appropriate data collection methodology for a particular research project takes place during Steps 2 & 3 of the market research process. Data collection typically begins with field testing the final questionnaire with a small portion of the respondent sample to make sure it is gathering information correctly. Then data collection can be fairly automatic throughout the remainder of the data collection process. When quota groups and/or sample subgroups are being screened for, data collection will require more oversight, maintenance time and cost. Regardless of the data collection methodology chosen, the data collection process often takes from 25 percent to 50 percent of the total time needed to complete a research project.

Organizations develop and maintain products through a continuous process of market research, follow-up with previous customers and interaction with current customers. Marketers utilize research to improve product value to current customers and to find new customers.  For example, marketers receive feedback from customers through purchase behavior that is tracked in a database as well as through survey responses, product registration, warranty cards, etc.  Thus, market research completes a communication “loop” between the seller and the market. Understanding how buyers relate to products can help organizations make better products and promote them better across the world.

(1.) State the Problem.  It has been said, “a problem well defined is half-solved.”  The problem must be clearly defined and the objectives precisely stated to properly guide the rest of the research process.  Yet, defining the problem can be one of the most difficult parts of the research. An incorrectly defined problem can lead to incorrect research objectives and consequently a poor decision.  Not only is it important for the right problem to be identified, but the definition should be specific.  Many people define symptoms of the problem as the problem (for example, declining sales) instead of the defining the real problem (for example, declining quality). 

A research design is the specification of methods and procedures for acquiring the information needed to solve problems.  Designs may be identified as exploratory, descriptive and causal. 

Exploratory research is used to gain ideas and insight to define the problem and suggest hypotheses.  It is particularly helpful in breaking broad, vague problem statements into smaller, more precise problem statements. 

Descriptive research, in contrast to exploratory research, is concerned with describing the characteristics of certain groups, to estimate the proportion of people who behave in a certain way, or to make predictions.  The researcher already knows a substantial amount about the research problem, perhaps as a result of an exploratory study, before the project begins.  Descriptive information is often useful for predictive purposes, but the causes (reasons why) of what is being predicted improves understanding. 

Causal research tests relationships of causal factors to the effects predicted. “Does X cause Y?”  For example, does a lower price cause an increase in sales?

(2.) Form a Hypothesis (possible solution to a problem).   Also, this step is known as “research.”  In marketing this step is known as developing the research plan and involves outlining sources of existing data, specifying research approaches, contact methods, sampling plans, and instruments to be used to gather new data.  Data about the problem must be gathered before a possible solution to the problem can be formed. 

Secondary data is pre-existing, collected for another purpose. Since the information was collected for some other purpose, it may not satisfy the current needs of the researcher, either because the data needed by the researcher do not exist, or the data are not relevant to the current.  Ideally, secondary data should be available inside the organization from its MkIS.  Also, secondary data is available outside the organization from the Internet, libraries, trade associations, universities, private research organizations, and government agencies.

Primary data is collected to solve a current problem. Far too often, researchers gather primary data when much relevant secondary information is already available – at little or no cost! Sources of primary data include observation, surveys, and experiments.  Observation means that the situation of interest is checked and a person or some mechanical device records the relevant facts, actions, or behaviors.  A survey involves using a questionnaire (data collection instrument) to ask respondents questions to secure the desired information.  Questionnaires may be administered by mail, over the telephone, by computer, or in person.  In an experiment, a researcher selects matched groups, gives them different experimental treatments controlling for other related factors, and checks for differences in the responses of the experimental group and the control group. A common experiment is test marketing where the researcher duplicates real market conditions in a small geographical area to measure consumers’ responses to a strategy before committing to a major marketing effort.

Data is gathered through sampling techniques since it is usually not economically feasible for researchers to gather information from everyone (census or population). Researchers select a sample (subset or portion) of the population of interest to represent the larger group.  A properly selected sample will have the same characteristics as the population from which it was selected.  Population can refer to people, manufacturing firms, retail or wholesale institutions, or inanimate objects such as parts produced in a manufacturing plant.  Selecting the sample involves determining: 

(1) the sampling unit (Who should be surveyed?)

(2) the sample size (How many people should be surveyed?)

(3) The sampling design (How should the sample be chosen?)

(3.) Test the Hypothesis.  Marketers refer to this step as “implementing the research plan.” Research is implemented to determine if the hypothesis solves the problem or not. The data must be collected, processed, analyzed, and interpreted.  Observation is often used for exploratory research while questionnaires are best suited to descriptive research.  For causal research, the best approach is experimental research.

(4.) Draw Conclusions.  Marketers refer to this step as “interpreting and reporting the findings.”  After analyzing the data from the research, conclusions can be drawn.  Relationships, trends and patterns can be identified.  In it's simplest form, the conclusion will be "yes" the hypothesis was correct, or "no" the hypothesis was not correct.  A formal report is prepared and presented.

Before Entrepreneurs actually commit themselves to opening a business the most important to answer is “Will it Sell”? A mistake that many Entrepreneurs make is to merely assume that their product or service will sell. Inventors become infatuated with their products and assume that everyone else should be equally infatuated. Professionals will assume that their credentials will assure them of clients and retailers assume that shoppers will flock of their stores, if only out of curiosity. Only rare entrepreneurs will find themselves in such favorable situations.

Consequently, they should question whether it will sell and good market research will help to provide the answer.

Developing a clear profile of potential customers is a basic element of marketing research. In Marketing Language a customer profile is called as Customer scenario.

Customers may be young or old , students or teachers , married or single , homeowners or renters, poor or wealthy or some combination of these or thousand other characteristics .

A customer Scenario is also reflects categories of companies or businesses like general constructors. Classifications of consumers and organizations help Entrepreneurs to define their market Segments.

While Conducting Marketing Research the following characteristics must be analyzed

In most instances , existing competitors can be accurately identified . for example , almost anyone in business will be listed in commercial telephone books. If the new venture is in retailing , a tremendous amount of advertising will be done by competitors ; getting answers about them requires the Entrepreneur to become an avid shopper. Professional firms often have local and regional societies with membership listing that can be obtained.

Researching products is usually more difficult because inventors are unlikely to discover their ideas until they are ready to go to market , still a preliminary patent search will reveal products or processes that have reached a formal filling stage. To identify manufacturers who may already be making a similar products.

The question of what products or substitutes exist now is an adjacent to find out what competitors exist. Research can also reveal lucrative market niches untouched by even the most sophisticated corporations. For example IBM does not own the computer market , and even with Apple and many others in the field , Dell was able to rapidly fill a 200 million dollar niche with a PC limited personal computer. Find out what is available and classify that information according to customer scenarios and location specific potential. Determine what is offered in cities and suburbs, and whether a certain area is untapped.

The crucial question is one of availability. Are products or services available to target customer groups ? An associated question whether these customers buy substitutes

, If research shows that people in a certain area prefer good beef but could not often get it , ask what they eat instead of beef . Is it chicken ? or Seafood . If seafood is a viable Substitute for beef and no one is addressing that market , then a seafood outlet could succeed.

Research suggests that companies have always found it difficult to identify new competitors. This is unfortunate, New entrants often have the potential to be quite threatening to incumbents. One reason New entrants pose such a threat is that they bring additional production capacity . Unless a demand for a Good or service is increasing additional capacity holds consumers cost down, ,resulting is less revenue and lower returns for an industry.

Often new entrants have substantial Resources and a keen interest to have large market share . As a result New Competitors may force existing firms to be more effective and efficient and to learn how to compete on new dimensions.

The likelihood that Firms will enter an industry is a function of two factors: Barriers to Entry and the retaliation expected from current industry participants. When Firms find entry difficult in to industry or when firms are at competitive disadvantage entering a new industry , entry barriers exist.

Facing limited entry barriers and apparently convinced that it has the resources and capabilities to cope successfully with potential actions.

Existing competitors try to develop barriers to market entry. In contrast, potential entrants seek markets in which the entry barriers are relatively significant. The absence of entry barriers increases the probability that a new entrant can operate profitability

.

There are several kinds of potentially significant entry barriers.

A distribution channel is the physical process of getting products to market.

We can define distribution channels as;

A company’s channel decisions directly affect any other marketing decision. The firm’s sales force and communications decisions depend on how much motivation, training, persuasion, and support its channel partners need. Whether a company develops or acquire certain new products may depend on how well those products fit the capabilities of its channel members. Companies often pay too little attention to their distribution channels, sometimes with damaging results. In contrast many companies use imaginative systems of distribution to, gain a competitive advantage. FedEx has a creative distribution system which makes FedEx a leader in the express delivery industry.

Distribution channel decisions often involve long-term commitment to other firms. For example, companies such as IBM, FORD, and McDonald’s can easily change their advertising, pricing, promotion programs. They can scrap old products and introduce new ones as market tastes demands. But when they set up distribution through with Franchisees, independent dealers or large retailers, they can not readily replace with companies owned stores or websites if conditions change.

Therefore Management must design its distribution channels carefully with an eye on tomorrow’s likely selling environment as well as today’s.

Companies can define their distribution channels to make product and services available to customers in different ways. Each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to final buyer is a channel level. Because the producer and the final consumer both perform some work, they are part of every Channel.

There are two types’ distribution channels;

“A marketing channel that has no intermediary levels” .

“A Channel containing one or more intermediary level”.

Marketing Research is the most important part for an Entrepreneur while starting new Business. If an Entrepreneur will conduct the proper Research there are opportunities for its business to get success in the market.

We take a recent example of a Packed Milk OLPER’S recently introduced in the market and getting progress day by day, Why;

Before launching OLPER’S in the market, the Engro Chemicals Group did the intensive market research and after conducting a long research they find that there is an opportunity in market for Packed Milk category. After finding out opportunity in the market they comprehend the nature of customer, what customer actually demand in Packed Milk. Then they introduced it and we can see OLPER’S increasing its sales every day.

On the other hand we can take the example of flopped Milk in Bottled Category,

CANDIA. It introduced its bottled milk almost six or seven years ago but they flop poorly. Why? Because they didn’t conduct the proper research and couldn’t understand the nature of the customer, what the customer actually demands.

It contains tactical guidelines for the marketing programs and financial allocations over the planning period. it is the most important outputs of the Marketing process.

Marketing plans are becoming more customer and competitor oriented and better reasoned and more realistic as in the past. The plans draw more inputs from all the functions .A good marketing plan requires a great deal of information from different sources. Your job in developing the marketing plan is to pull all of this information to gather in an efficient and timely manner. Marketing Planning procedures and content vary considerably among companies. Most marketing plans cover one(1) year . The plans vary in length from under 5 to 50 pages.

Every Marketing Plan should be well organized to ensure that all relevant information is considered and included. A good marketing plan should meet the following three goals;

Poorly thought-out objectives will cause problems. For example, you might set a target for the number of new enquiries. But if none of these enquiries turn into sales, you will have increased costs without any benefits.

Assess the business environment to identify the opportunities and threats that you face. Look for where you can capitalize on your strengths or where you need to overcome a weakness.

Every part of your business must work together. For example, if you have limited cash flow you should avoid seeking large orders from customers who demand extended credit or that will involve you in heavy up-front costs.

Remember to focus on your long-term strategy. Reducing customer service might boost short-term profits, but next year you might not have any customers left.

A plan will not happen by itself. You need to make someone responsible for monitoring progress and chasing up overdue activities. Reviewing progress will also help you learn from your mistakes so that you can improve your plans for the future.