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Summary of 70 pages for the course MNM3702 - Marketing Research at Unisa (Class notes, Clear.)
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TOPIC1: Introduction to Marketing ResearchStudy unit 1: THE ROLE OF MARKETING
RESEARCH IN MARKETING DECISION
MAKING
1 Defining ``marketing'' (STUDY GUIDE ONLY)
Marketing maybe defined quite simply as comprising those decisions made in a business
organisation about whom to serve with what product.
This definition refers to the two key decision-making areas of the marketing task:
demarcating the enterprise's potential consumer corps into distinct market segments (if
this is possible), and then deciding which of these segments to choose as a target market
developing a total product consisting of the actual product, its distribution to the target
market via a distribution network, marketing the product to consumers with the aid of
advertising, a sales corps, promotion material and/or publicity, and determining a price that
will be acceptable to the target market (In marketing parlance, these four components of the
total product [product, distribution, promotion and price] are known as the marketing mix.)
These two decisions are taken within the context of the business environment.The business
environment places certain constraints on the organisation, but also provides opportunities that
can be pursued. Although this should be old hat to you by now, figure 1.1 gives a graphic
representation of the components of the business environment.
2 The nature of marketing research (TXTB 5- 13 & 20 – 22)
Definition of marketing research
The systematic collection, analysis and interpretation of information about all marketing problems
by means of recognised scientific methods to provide information that marketing management can
use in the decision-making process.
Basic research versus applied research
Basic marketing research is more general and simply aims to obtain and generate
information about aspects of the marketing system.
, Applied research is aimed at helping management make better decisions about a specific
aspect. The research is conducted to solve a particular problem and is more specific to the
organisation.
Scientific method of marketing research
The scientific method of marketing research refers to the techniques and procedures used to
investigate marketing phenomena in order to understand them ' better. ie. In scientific research,
this risk is reduced through the analysis and interpretation of empirical data
The basic steps followed in the scientific method can be summarised as follows:
Identify a problem and formulate a hypothesis. .
Design a study.
Conduct the research.
Test the hypothesis.
Report the results.
The scientific method is distinguished by two general characteristics: validity and reliability.
Validity describes research that measures what it is supposed to measure.
Reliability describes research that obtains the same results when the same research is
repeated or undertaken by different researchers.
The following three differences between the scientific and non-scientific methods influence
fundamentally the validity and the reliability of marketing research:
Objectivity of the researcher - Scientific research is based on facts and not on intuition or
preconceived notions.
Accuracy of measurement - Measuring must be as accurate as possible.
Continuous and comprehensive research - , all aspects that can influence the results of
the research are taken into consideration. It is not enough merely to guard against
overlooking certain aspects; the search for more information must be undertaken more
aggressively.
Factors contributing to the development of marketing research
Shift from a production-oriented to a marketing-oriented economy and management
philosophy
Change in the cost structure of organisations
Shift in emphasis from price to non-price competition
Expansion of the production process
Increase in discretionary buying power
Increasing differentiation in supply
High cost of marketing
Emergence of the professional manager
The characteristics of good research
The ultimate aim of research is to ensure that the findings are valid and reliable.
Good research should meet the following characteristics:
Clearly defined research problem, which is stated in terms that leave no room for
ambiguity.
Detailed description of the research methodology, so that anyone is able to replicate
the study.
Properly planned procedural design of the research, to ensure that the results of the
research are as objective as possible.
Honest researchers who identify any shortcomings in the research design, and clearly
point out the potential impact of these shortcomings on the findings.
Data analysis methods that are able to reveal the significance of the collected data and
are appropriate for the type of study undertaken.
Research conclusions that are limited to the findings identified in the data analysis.
When is Marketing Research necessary?
Five key factors help the researcher determine whether research should be conducted or not:
Time limits - · Research can therefore only be undertaken if enough time is available before
the information is needed.
, Availability of data - if the information is insufficient for the decision in question, research
will have to be undertaken.
Nature of the decision - Decisions that will have a fundamental effect on the running of
the organisation will receive more attention than less important decisions.
Advantages versus cost - Research should only be conducted if:
o The return on investment in the research project justifies the expenditure.
o The increased quality of the marketing decision justifies the expenditure.
o The cost of the research represents the best use of the funds.
Resources - Important to consider the resources available, not only to conduct the research
~ but also to implement the findings of the research. Sufficient financial and human
resources should be available to carry out the research project properly and to obtain
accurate and reliable results.
Contributions of marketing research to the decision-making process:
Identification and definition of a problem.
Identification of possible explanations.
Investigation into the various alternatives with a view to eliminating some of them.
Prediction of the result of possible alternative policy directions.
Final decision about the policy to be adopted.
Implementation of the decision.
Internal and external research
Internal research is when an organisation conducts its own research. .
When choosing between internal or external research the following advantages and disadvantages
should be kept in mind.
Advantage Disadvantages
External Organisations are independent and External researchers are not always familiar with
impartial all aspects of the organisation commissioning
the research.
External research is the only solution if internal External research may take longer than internal
expertise about the research project is lacking. research (because of not being familiar with the
enterprise).
External research is more expensive than
internal research.
When deciding whether to use external research suppliers, the following factors should be
considered:
Credibility. The issue of credibility arises when there is a potential conflict of interest.
Competence. The organisation needs to consider whether the necessary expertise exists in-house
to conduct a particular research project.
Capacity. The internal research department may simply be stretched to the limit and therefore not
have the time or capacity to conduct a particular research project.
Cost. Maintaining a multidisciplinary research department can be very expensive and is not
necessary for many organisations.
When using an external provider, it is very important to build a strong relationship to ensure that
they fully understand what is expected and respects the rules of confidentiality with regard to the
research findings. Trust is essential.
Ethics and marketing research
Definition of ethics - the norms or standards of behaviour that guide moral choices about the
behaviour of an individual in a given situation and the relationship with others.
Ethical treatment of respondents
Respondents will be more willing to provide honest and accurate answers to the questions asked if
you treat them in an ethical manner and they feel that they are being treated in an ethical manner.
Four general guidelines should guide the ethical treatment of respondents:
, Do not harm the respondent - Respondents should not be physically or mentally harmed. Every
effort should be made to ensure that the respondent is not embarrassed, mocked, or generally
made to feel uncomfortable during the interviewing process.
Do not deceive the respondent - The interview should be for research purposes only and not an
elaborate scheme to convince consumers to buy your particular product. Give the respondent an
accurate estimation of the amount of time it will take to complete the interview.
Respondents should be willing and informed - It is essential to obtain the respondent's
permission to conduct the interview. The · respondent must be provided with sufficient information
to make an informed decision on whether they want to take part in the research or not.
Data should be held in confidence - All data collected from respondents should be held in
confidence. Some research projects collect extremely sensitive information, which could be a
source of embarrassment or discomfort if made available to other sources.
3 The role of marketing research in the marketing management process (STUDY GUIDE ONLY)
In the second phase of marketing planning, the marketing strategy is formulated by addressing
these two decisions, namely by defining served market segments and establishing the competitive
advantages of the product. Extensive information about the different segments in the market is
required by answering questions such as the following:
Who are the consumers of our product and of competitive products?
What are their general characteristics (geographic, demographic and psychographic traits)?
What are their product-specific needs and buying and usage behaviour?
An analysis of the organisation's product and of those of competitors also needs to be conducted,
based on the consumer analysis mentioned above.
Questions such as the following need to be answered:
What are the main features of our product and of those of competitors (ie appearance,
performance levels, quality, service provided, guarantees and brand equity)?
How are the products in this industry marketed in terms of promotion activities and retail
support?
How does our price compare with competitors 'prices in relation to the features being offered?
To answer these questions on consumers in the marketplace and on the products being offered to
them, marketing research should be conducted on an on-going basis.
The third phase in the marketing management process is the development of the marketing mix
programmes, namely the product, channel (distribution), promotion and price
programmes .Marketing research must again
be conducted in order to provide answers to questions emanating from the formation and
implementation of these programmes. For instance, the organisation must monitor its promotion
campaign, and those of competitors, to ensure that customer awareness and loyalty are enhanced.
What competitors say to the consumers in the market would influence what our organisation
should say.
The final phase of the marketing planning process is the control phase during which the results of
the marketing programmes are evaluated against the objectives that were set for them. For
instance, did we realize the brand awareness that we aimed for with our promotional campaign, or,
did we improve our market coverage as planned by enlisting 200 new retailers to carry our
product? Again marketing research plays an important role in this phase of the marketing
management process. The findings of the control phase then serve as input for conducting a new
round of the marketing management process.
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