Consumer Behavior - 03

STUDY OF MARKETING RESEARCH (MR)
Investigating Customer involves Marketing research, (often referred to as Market Research, Consumer Research, or Buyer Behaviour Research) and the Study of Marketing Research (MR). Marketing managers often commission formal marketing studies for specific problems and opportunities. It's the job of marketing researchers to produce customer insight into the problem.

Market Research or Marketing Research (MR) has been developing since "Marketing" which brings together all customer elements, grew out of the concept of "Sales" in the early fifties. The theory of consumer behaviour draws heavily upon the famous psychologist Sigmund Freud, particularly with respect to the emotional, psychological, mental, subjective or non-utilitarian aspects of buying decision or behaviour of a consumer. The theory represents the hidden order in this very complex activity, which we call consumer behaviour. On the surface, this highly complex and varied display of behaviour by consumers seems essentially unexplained. But slowly as the theory develops, the hidden pattern emerges, describing the order we suddenly see, and explaining why the behaviour pattern takes place.

Consumer research as a systematic area of behavioural science inquiry in the form in which we know it today began to come into its own in the late 1950s and early 1960s. This is far more than an historic anecdote, however, because it emerged in response to major shifts in the economy of the western world and in the broader environment at that time. Of even greater importance, these underlying factors continue to shift in ways that intensify the challenge of consumer research and marketing strategy.

MR plays a vital role in preparation of a marketing plan or programme which involves marketing mix elements. Marketers need exact information to make good marketing decisions, and can't afford to have an approach based on guesses. Today, marketers must continually ask themselves : What is the problem? What is the objective? Will it work for us? Did it work for anyone else? And that's why market research has become essential.

Market research helps the company to understand its image in the market place, to find out the small problems before they grow large, lets the company see how it positions itself up against the competition, provide feedback, chart new directions and estimate how fast the company is getting closer to achieving its goals.

Definition :
Marketing Research is defined as the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.

Meaning and Scope :
The above definition brings out the following key factors regarding marketing research :
1.Marketing Research is a research study on the manifold problems of marketing,
2.In achieving the mission it systematically gathers and analyses the information,
3.It typically helps to introduce a new fact or idea, correct an existing misconception, reinforce a favourable opinion or stimulate action,
4.Its purpose is to aid decision making in marketing.

With increasing complexity of business activities MR (Marketing Research) too has been growing in complexity and it has emerged as a highly specialised function of Marketing Management. Today, carrying out MR relating to customers, products and markets necessitates specialised skills and sophisticated techniques.

Classification of MR :
1.Routine Problem Analysis and research on Non-routine Problems,
2.Research on Short term and Long term Problems,
3.Classification based on actual subject of study and research on - Consumers, Market / Demand, Product / Brand, Competition, Distribution, Price, Advertising and Promotion, Sales methods etc.,
4.More often the "Four Ps" constitute the bases of classification of MR subjects.

Importance and Benefits of MR :
Following are the importance and benefits of focused, well-planned market research. The MR :
1.Helps to know the details about the Consumers- marketers, especially B2B and service marketers normally try to know their customers individually. They develop a list of their prospects / customers with all essential details about them - their profiles, lifestyle, needs and buying habits.
2.Helps discover and analyse customer habits, attitudes, involvement, perceptions and preferences.
3.It also helps to focus the target group and individuals. Helps pick and choose and make focused offer on the basis of consumers' detailed info, the marketers can decide on which consumers to focus / concentrate on and which ones to shift focus from.
4.Helps determine who persuades crucial buying/contributing decisions.
5.Helps know which products move in market and why - in the product related research, the marketers get to know about which products move (sell) in the market and for what reasons. Then the researchers come up with the possible areas to search for solutions or remedial actions to be taken.
6.Helps classify the characteristics of the market place.
7.Helps discover problems and / or opportunities.
8.Helps to make better decisions for Marketing Strategy - on the basis of the research findings the marketing strategies can be changed, modified, renewed, tested or experimented,
9.Helps provide data for forecasting sales, funds raising.
10.Helps new entrants plan their distribution channel by studying existing ones - often new entrants entering the market conduct some research on existing distribution channels for products and collect useful information regarding channel practices existing in that industry.
11.Helps evaluate the value and measure the effectiveness of current communications programmes.
12.Helps protect the firm from costly errors - money spent and wasted on off-target efforts.
13.And above all, helps keep the company profitable.

These are the reasons why more and more business, professional and institutional leaders are turning to objective marketing research as a primary planning tool.

Limitations of MR :
In spite of many benefits of the Marketing Research, it can't provide all the answers to all the problems. So, it's very important for the MR Group as well as the Marketing Managers to be aware of the various limitations of MR :
1.MR doesn't provide the final solution, but gives an indication of the problem, its source, flow and trend, etc.,
2.Error can creep in at any stage of the MR process, in spite of various safeguards and precautions,
3.MR is expensive, more often than not,
4.MR process is time consuming - parameters or factors influencing marketing environment change very fast during the MR process,
5.If the external influencing factors change substantially, then the MR findings will be irrelevant,
6.Certain parameters of research problems are difficult to quantify to suit the technical / statistical model.

TYPES OF MARKETING RESEARCH
There are basically two types of marketing research : (1) Qualitative Research, and (2) Quantitative Research.

Qualitative Research:
Qualitative research is a set of research techniques, used in marketing, in which data are obtained from a relatively small group of respondents, and not analysed with statistical techniques. This differentiates it from quantitative research in which a large group of respondents provides data that is statistically analysed. In qualitative research a researcher tries to get people to share his/her thoughts without giving them many directions. Qualitative questioning can be a great means for mixing and matching the products, their price, there locational availability, their packaging and their size.

Qualitative research provides the opportunity to develop a descriptive and rich understanding. It allows the marketers to:
1.Explore the products with target audiences,
2.Gain insight into what and how people think and feel about the products,
3.Understand the language individuals use to talk about the products,
4.Observe the implementation of new behaviour within the context of people's daily lives,
5.Discover motivations that inspire the buying behaviour.

Some examples of qualitative methods include pagers, videos, and informal interviewing. Marketers send messages to customers' pagers allowing the customers to fill out what they are doing. Video recordings are made of customers at their homes and then edited down to half hour documentaries. Informal interviewing starts with an interviewer and a customer. The questions are asked randomly and without the customer knowing the purpose of the interview. Some interviewers feel uncomfortable during the interviewing process but inform the customers of the purpose of the interview afterwards.

Information, industry excerpts, and secondary data may not be sufficient to define the research problem. Sometimes a qualitative research must be undertaken to gain a qualitative understanding of the problem and its underlying factors. Qualitative research methods are used primarily to define a problem and generate hypotheses. Qualitative research is unstructured, exploratory in nature, based on small samples, and may utilise popular qualitative techniques such as focus groups (group interviews), word association (asking respondents to indicate their first responses to stimulus words), and depth interviews (one-on-one interviews which probe the respondents' thoughts in detail).

They are often used as the prelude to quantitative research in order to identify the determinants, and develop quantitative research designs. Other exploratory research techniques, such as pilot surveys with small samples of respondents, may also be undertaken. Because of the low number of respondents involved, qualitative research methods cannot be used to generalise to the whole population. They are however, very valuable for exploring an issue and are used by almost all researchers. They can be better than quantitative research at probing below the surface in order to understand what drives and motivates behaviour.

Drawbacks :
1.Interviews also can take a lot of time to put together and conduct.
2.Qualitative research does not give you statistical information.

Quantitative Research:
Quantitative marketing research is a research method that utilises statistical techniques. It typically involves the designing of questionnaires and response scales. Large numbers of people are contacted, usually in a survey. Marketers use the information so obtained to craft strategies and marketing plans. An example of a quantitative research method is a questionnaire. Questionnaires follow a pattern from designing to delivery.

In the process of designing of questionnaires and response scales, first the questions must be in the correct form, wording and sequence. Closed and open ended questions are the two types of questions that are asked. Then the questionnaires can be sent out to people in bulk. People who respond (respondents) are asked to complete the survey. Marketers use the information so obtained to understand the needs of individuals in the market place, and to create strategies and marketing plans.

This is a specific and measurable research in numerical terms. These can be the mail, phone and internet surveys. The questions would be arranged and answers would be numerical, best to worst or yes no type of answers. This seems to be the current trend, gather numerous amounts of data and then use to statistical and mathematical analysis and then develop an action plan from the results.

Quantitative marketing research is the application of quantitative research techniques to the field of marketing. It has roots in both the positivist view of the world, and the modern marketing viewpoint that marketing is an interactive process in which both the buyer and seller reach a satisfying agreement on the "Four Ps" of marketing: Product, Price, Place (Distribution) and Promotion.

Following are the benefits of quantitative research:
1.Quantitative research can give planners of communications programmes fairly reliable information about prevalence of certain characteristics among their customers,
2.It can track the effect of the programme on targeted knowledge, attitudes, and other behavioural change objectives
3.It can also determine if the results of qualitative research are valid for the larger population

Drawbacks :
1.A problem with this type of information analysis is that if we do not ask the right questions we may be directed the wrong way.
2.Low response rate to the surveys. Mail responses normally take longer time.
3.Many consumers find telephone calls an intrusion to or an invasion of their privacy.

THE MARKETING RESEARCH PROCESS :
Effective marketing research involves six steps or stages which define the tasks to be accomplished in conducting the marketing research study, as explained bellow :

Problem Definition, the Decision Alternatives, and Research Objectives :
The first step in any marketing research project is to define the problem. Defining the marketing problem and the MR problem involved in the task correctly is the most important part of MR. Marketing managers must be careful not to define the problem too broadly or too narrowly for the MR group. Normally there's nothing as an MR problem as such - it's the marketing problem which the MR tries to find an answer for, and so the MR problem is a derived one from the main marketing problem.

In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making. Often the real issue may not be apparent and the apparent issue may be deceptive. So the problems have to be accurately defined and the MR people must know both "why" and "what" the company wants.

Problem definition involves discussion with the decision makers, interviews with industry experts, analysis of secondary data, and, perhaps, some qualitative research, such as focus groups. Apart from this, it's also essential to the problem in depth so that exact information requirements are ascertained. Once the problem has been precisely defined, the research can be designed and conducted properly. The MR group and the Marketing Manager must work in unison.

Developing the Research Plan (Developing an Approach to the Problem) :
The second step is to develop a suitable and efficient plan for gathering the needed information. The choice of research design depends on the depth and extent of data required, the cost and benefit of the research, the urgency of the job, and the time available for completing it. The MM needs to know the cost of the research plan before approving it.

Development of an approach to the problem includes formulating an objective or theoretical frame-work, analytical models, research questions, hypotheses, and identifying characteristics or factors that can influence the research design. This process is guided by discussions with management and industry experts, case studies and simulations, analysis of secondary data, qualitative research and pragmatic considerations.

Designing a research plan calls for decisions on the data sources, research approaches, research instruments, sampling plan and contact methods, as given below :
1.Data Sources are basically of two types - primary and secondary. For the MR any or both can be used. Secondary data are those which are already collected for another purpose and are readily available for the purpose. Primary data are freshly gathered for a specific purpose or MR project.
Secondary Data - Researchers generally start with investigating by examining secondary data to see whether the problem can be solved partly or wholly without collecting primary data which is comparatively very expensive. Secondary data provide a starting point for research and are of low cost and ready availability.
Primary Data - When the needed data don't exist or not available or are outdated, inaccurate, incomplete or unreliable, then the researcher has to collect primary data which is expensive. Most MR projects involve some primary data collection and with secondary data collection job may be complete.
2.Research Approaches - Primary data can be collected in five methods. They are thro' observation, focus groups, surveys, behavioural data, and experiments.
3.Research Instruments - These are the methods or means employed to collect the primary data, information, responses etc. The main research instruments are questionnaires, psychological tools, mechanical devices, and qualitative measures.
4.Sampling Plan - The MR people cannot reach the whole of any target mass. So they employ a sampling plan which is assumed to be a representative of the whole, and design it effectively. This calls for three basic decisions :
Sampling Unit - Who are the ones to be surveyed
Sampling Size - How many individuals or people are to be surveyed
Sampling Procedure - How should the respondents be chosen
5.Contact Methods (also known as sample media) - this is the method how the people can be contacted from whom the information are to be gathered. It can be thro' mail, telephone, personal interview or on-line interview etc.

Collection of Information :
After the plan is set as above, the relevant Information is collected. The actual data / information collection is the most expensive and critical aspect of MR process. And this is also the weakest link in the chain of MR process. Almost all the MR limitations arise here - expensive, time consuming, error prone, non-quantifiable parameters etc. But fortunately, due to advanced communication methods and computers, and of course the highly trained work force it's getting easier. Often the MR Field staff reward the target sample satisfactorily.

Data collection involves a field force or staff that operates either in the field, as in the case of personal interviewing (in-home, mall intercept, or computer-assisted personal interviewing), from an office by telephone (telephone or computer-assisted telephone interviewing), or through mail (traditional mail and mail panel surveys with pre recruited households). Here, the automated billing system programme of a selling point can be slightly modified to give automatic information regarding several pre-set attributes. MR people are finding new ways to do the complex procedure. Proper selection, training, supervision, and evaluation of the field force helps minimise data-collection errors.

Preparation of Data and Analysis of the Information :
The pen-ultimate step is to analyse the data / info to arrive at a meaningful finding. Data preparation includes editing, coding, transcription, and verification of data. Each questionnaire or observation form is inspected, or edited, and, if necessary, corrected. Verification ensures that the data from the original questionnaires have been accurately transcribed, while data analysis, guided by the plan of data analysis, gives meaning to the data that have been collected. This is done by tabulation, classification, frequency distribution, standard deviation and other methods of statistical analysis.

Measures of dependent and independent variables are found out. The relevant steps are :
1.To calculate the relevant measures of central tendency as well as dispersion highlighting the major aspects of data.
2.To cross tabulate the data to ascertain some useful relationships.
3.To calculate the correlation coefficient and undertake regression analysis between variables.
4.Univariate techniques are used for analysing data when there is a single measurement of each element or unit in the sample. And if there are several measurements of each element, each variable is analysed in isolation.
5.Multivariate techniques are used for analysing data when there are two or more measurements on each element and the variables are analysed simultaneously. To undertake a multi-variate analysis this uses a verity of techniques to determine the important relationships amongst several variables.

Presenting the Findings or Preparing the Research Report :
As the last step of MR the researcher presents the findings that are relevant to the major marketing decisions facing the management. The presentation of findings as a report is very important and the researcher must give sufficient thought and care to its preparation. The entire project should be documented in a written report which addresses the specific research questions identified, describes the approach, the research design, data collection, and data analysis procedures adopted, and presents the results and the major findings.

Some of the principles of writing a report are objectivity, coherence, clarity in the presentation of ideas, use of charts and diagrams. The findings should be presented in a comprehensible format so that they can be readily used in the decision making process. The essence of good research report is that it effectively communicates its research findings. In addition, an oral presentation of an executive summary should be made to management using tables, figures, and graphs to enhance clarity and impact.

Making the decision :
Now it's the turn of marketing managers to make a decision on the basis of the MR report. Sometimes the marketing manager is not satisfied and orders for some changes or more detailed research or in some other cases he ignores the report.

SAMPLES AND SAMPLING
What are Samples and Sampling :
In MR projects, studying the entire target population is neither practical nor cost effective. Hence a representative set from the whole set is chosen for study. This is known as a sample and the method as sampling. Thus sampling is the process of choosing the best representative set of the target population of consumers from the total universe (whole set), whose characteristics are the closest to the whole set. The object of sampling is to get the maximum information about the parent population with the minimum effort.

Definition of certain relevant terms :
Let's define a few terms related to sampling :
1.Population / Universe / Aggregate - are any finite or infinite collection of individuals, or the entire / whole set.
2.Census - complete enumeration of the entire population at a pre-defined point of time.
3.Sample - a part of population or a sub-set which is usually selected on the basis of representative characteristics.
4.Sampling unit - is the smallest division of a sample that can be regarded as individual and on some basis they are indivisible.
5.Frame - is a list, map, locality, physical boundary or any other specification relating to a population that constitute the sampling scheme.
6.Sampling error - this is the difference of the actual value of a parameter between a population and an estimated value of population based on a sample.
7.Bias - is an effect which deprives a statistical result of representativeness by systematical or deliberate distortion. This is distinct from random error.
8.Random Error - is where the error is random or unintentional and occasional and can be prevented by a larger sample.

Sampling Methods :
Different methods can be used to select the sampling methods and the samples as envisaged in the "Sample design" step of MR procedure. The two types of sampling methods are :
1.Probability / Random sampling method - is where the samples are selected at random i.e., without any bias, but not haphazardly or arbitrarily. In other words it means that every member has equal chance of being selected as a sample. The following are the commonly used methods of Probability sampling :
Simple Random Sampling - also known as the "lottery method" is where any member has equal chances of being selected as a sample. While selecting a sample lottery is drawn or a random number chart can be used.
Stratified Random Sampling - is same as the above with the whole population divided into several strata according to certain characteristics common to all members within the strata. It is necessary that the criteria for stratification is directly related to the requirements of the MR
Systematic Random Sampling - is where the first member is selected as a simple random sample and thereafter every "nth" member till the sample size is covered.
Cluster Sampling - is similar to stratified random sampling but here the samples are selected from different clusters in the population which are naturally formed. One or several clusters can be selected as per requirement.
Area Sampling - is a special case of stratified random sampling where the division is on the basis of geographical locality or area.
2.Non-Probability / Non-Random sampling method - is where the samples are chosen as per certain norms and not in a random manner. The following are the commonly used methods of Non-Probability sampling :
Convenience Sampling - is the selection of samples as per the convenience of the researcher, say the samples that are coincidentally available at the time and place of survey. But this is not a very reliable method.
Quota Sampling - certain quota of samples on the basis of pre-defined parameters are allotted to different field staff for enumeration. This process is not very accurate but it saves time.
Judgement Sampling - is where the researcher selects deliberately or purposefully some samples based on his judgement and understanding of the members' ability. (ex. some experts as samples)
Panel Sampling - is where a panel of members are selected for the purpose of survey and their opinion is used repeatedly for several MR studies and surveys. The panel members are recruited continuously but not in a random manner. Hence though this is not very accurate, but has great convenience and is economical, and can be used for an ongoing study of trends and change in opinions.

Key Words :
Market Research, Marketing Research (MR), Consumer Research, Customer Research, Behaviour Research, Buyer Research, MR Plan, MR Process, Samples, Sampling, Sampling Plan, Data Source, Primary Data, Secondary Data, Probability Sampling, Non-Probability Sampling, Random Sampling, Panel Sampling, Quota Sampling, Judgement Sampling, Convenience Sampling, Area Sampling, Cluster Sampling, Systematic Sampling, Stratified Sampling, Bias, Frame, Sampling Unit, Census, Sampling Error, Universe, Population, Aggregate.

[ Continued in the Consumer Behaviour Chapter-04 : Secondary Data and Primary Data ]

References / Resources :
1.Consumer Behaviour and Marketing Action, Thomson India Edition, 6th Edition, 2006.
2.Consumer Behaviour and Marketing Research, Suja R Nair, Himalay Publishing House, 1st. Edition, 2004.
3.Consumer Behaviour and Marketing Strategy, J Paul Peter, Jerry C Olson, 2nd. Edition, IRWIN, 1990.
4.Consumer Behaviour : Basic Findings and Management Implications, G Zaltman and M Wallendorf, John Wiley and Sons, 1983.
5.Consumer Behaviour in Marketing Strategy, John A Howard, Prentice Hall, 1989.
6.Consumer Behaviour, David L Loudon and Albert J Della Bitta, TMGH, 4th. Edition, 2006.
7.Consumer Behaviour, ICFAI University, May - 2005.
8.Consumer Behaviour, James F Engel, Roger D Blackwell, Paul W Miniard, 8th. Edition, The Dryden Press, 1995.
9.Consumer Behaviour, Leon G. Schiffman and Leslie Lazar Kanuk, PHI - EEE, 9th. Edition, 2006.
10.Consumer Behaviour, Roger D Blackwell, Paul W Miniard, and James F Engel, Thomson India Edition, 10th Edition, 2007.
11.Marketing Management - Planning, Implementation and Control, Global Perspective, Indian Context, V S Ramaswamy and S Namakumari, MacMillan India Ltd., 3rd. Edition, 2003.
12.Marketing Management, 12th. Edition, by Philip Kotler and Kevin Lane Keller.
13.Marketing Management, Philip Kotler, PHI - EEE, 11th. Edition, 2003.
14.Marketing Research, G C Beri, TMGH, 3rd. Edition, 2000.
15.Wikipedia.org

Please refer to the Author's earlier Articles :
1. Holistic Marketing -
http://www.associatedcontent.com/article/1061316/holistic_marketing.html?cat=35
2. Consumer Behaviour -(Preface and Intro)
http://www.associatedcontent.com/article/1064450/consumer_behaviour.html?cat=35
3. Consumer Behaviour (Chapter-01) -
http://www.associatedcontent.com/article/1293948/consumer_behaviour.html
4. Consumer Behaviour (Chapter-02) -
http://www.associatedcontent.com/article/1327795/consumer_behaviour02.html

© Himansu S M / Written : 02-Dec-2008
Suggestions for improvements and enhancements are welcome. Please write to : hisema@gmail.com or hisema@yahoo.co.in