What is Marketing Research?
Marketing research can be defined as the process of gathering recording and analyzing the data related to certain products and services. This need for market research is derived from the concept that only by understanding the needs and wants of the target audience and by effectively meeting them, you will be able to achieve the organizational goals and surpass the competition in the specific market.
The process of gathering, analyzing and interpreting information about a market and about the past, present, and potential customers for the product or service.
Market Research is any organized effort to gather information about target markets or customers. It is a very important component of business strategy. The term is commonly interchanged with marketing research, however, expert practitioners may wish to draw a distinction in that marketing research is concerned especially with marketing processes while market research is concerned specifically with markets.
Marketing research does not make decisions and it does not guarantee success”. Marketing managers may seek advice from marketing research specialists, and indeed it is important that research reports should specify alternative courses of action and the probability of success, where possible, of these alternatives.
However, it is the marketing manager who makes the final marketing decision and not the researcher. The second observation, that marketing research does not guarantee success, is simply a recognition of the environment within which marketing takes place.
Definition of Marketing Research
These are the following simple and understandable definitions of marketing research given by the authors:
Marketing research is a systematic objective and exhaustive search for and study of the facts relevant to any problem in the field of marketing. Marketing research is a part of the marketing information system and a key to the implementation of the marketing concept. It is usually designed to aid planning and often involves the evaluation of previous marketing efforts.
Components of Marketing Research
The objective of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. The competitive marketing environment and the ever-increasing costs attributed to poor decision-making require that marketing research provide sound information.
Sound decisions are not based on gut feeling, intuition, or even pure judgment. The following are the major components of marketing research explained below:
Market research is any organized effort to gather information about markets or customers. It is a very important component of business strategy. The term is commonly interchanged with marketing research; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically with marketing processes, while market research is concerned specifically with markets.
Market Research is the key factor to getting an advantage over competitors. Market research provides important information to identify and analyze the market need, market size, and competition.
This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop (see new product development). Developing and designing great products are keys to success in business.
Anything less than an excellent product strategy can be destructive to a firm. Top companies focus on a few products and concentrate on maintaining a high level of quality for those products to maximize the potential for success.
Advertising research is a specialized type of marketing research conducted to improve the efficiency of advertising. According to MarketConscious.com, “It may focus on a specific ad or campaign or may be directed at a more general understanding of how advertising works or how consumers use the information in advertising. It can entail a variety of research approaches, including psychological, sociological, economic, and other perspectives.”
It is a specialized type of marketing research conducted to improve the efficacy of advertising. Copy testing, also known as “pre-testing,” is a form of customized research that predicts the in-market performance of an ad before it airs, by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ad’s flow of attention and flow of emotion. Pre-testing is also used on ads still in rough type.
The research is used to investigate the psychological reasons why individuals buy specific types of merchandise, or why they respond to specific advertising appeals, to determine the base of brand choices and product preferences. Motivation research is Qualitative research designed to probe the consumer’s subconscious and discover deeply rooted motives for purchasing a product.
Motives: Something that compels or drives a consumer to take a particular action. Motivation research is also used to investigate the psychological reasons why individuals buy specific types of merchandise, or why they respond to specific advertising appeals, to determine the base of brand choices and product preferences.
Sales research is geared toward discovering certain data which is required to make additional sales to a company’s existing customers. A Sales Research Specialist is someone who has the expertise to find, evaluate, analyze, organize and package suspect, prospect, and customer data into useful intelligence a sales force can act on immediately.
Sales research enables salespeople to do what they do best, which is selling, instead of spending their time trying to find who is looking to buy. The process of sales research can also have other benefits over and above generating sales such as reducing costs.
For example, the identification of contact name and address changes reduces a company’s sales and marketing communications costs by eliminating phone calls and mailings to contacts who are no longer employed or who have changed positions.
Scope of Marketing Research
Marketing Research includes all the activities that enable organizations to obtain market information. Market researcher needs to make a decision about their environment, marketing mix, and present or potential customer. Marketing research plays an important role in the planning, implementing, and evaluation of the marketing management process. The Marketing Manager makes use of four main sources of decision making.
Following is the scope of marketing research:
- Syndicate Service
- Marketing Information System (MKIS)
- Decision Support System
- Market Research Projects
A marketing research firms produce and sell these scheduled reports. The report contains valuable information. E.g. Survey of Indian Industry, Chambers of Commerce and Industry.
Marketing Information System (MKIS)
This is an internal activity where standardized reports are generated on regular basis or it is generated on demand also. E.g. Sales Reports, inventory amounts, production schedules, and also purchased information. We can track the sales performance and the changing taste of consumers also through MKIS.
Decision Support System
DSS is the interactive system in the company. It permits the decision maker to interact directly with data through a PC to answer specific questions. The difference between MKIS and DSS is that while the former only provides information on the basis of which decision is taken, the latter provides answers or decisions appropriate to a situation.
Market Research Projects
It is done to find out specific problems in the market. It is done by the employee of the company or outsourced to external agencies.
Features of Marketing Research
These are the main features of marketing research:
- Systematic and Continuous Process
- Wide in Scope Application
- Emphasizes Accurate Data Collection and Critical Analysis
- Offers Benefits to Sponsoring Company and Consumer
- Commercial Equivalent of Military Intelligence
- Device for Managerial Decisions
- Applied Type of Research
- Reduces the Gap between the Producers and Consumer
- Not an Accurate Science
- Apply Different Methods
- Dynamic Character
Systematic and Continuous Process
Marketing research is a continuous process. One type of research is not adequate to resolve all marketing problems. Similarly, new research projects will have to be undertaken to solve new marketing problems and challenges.
A marketing company faces new marketing problems from time to time and for facing them marketing research activities need to be conducted on regular basis. A marketing company has to conduct marketing research regularly for its survival and growth in the present dynamic marketing environment.
Wide in Scope Application
Marketing research is wide in scope as it deals with all aspects of marketing of goods and services. Introduction of new products, identification of potential markets, selection of appropriate selling techniques, study of market competition, the introduction of suitable advertising strategy, and sales promotion measures are some areas covered by Marketing research.
Emphasizes Accurate Data Collection and Critical Analysis
In marketing research, required data should be collected objectively and accurately. The data collected must be reliable. It should be analyzed in a systematic manner. This will provide a comprehensive picture of the situation and possible solutions.
Offers Benefits to Sponsoring Company and Consumer
Marketing research is useful to the sponsoring company. It raises the turnover and profit of the company. It also raises the competitive capacity and creates goodwill in the market. It enables a company to introduce consumer-oriented marketing policies. The consumer also gets agreeable goods and more satisfaction due to marketing research activities.
Commercial Equivalent of Military Intelligence
Marketing research is a commercial intelligence activity. It is similar to military intelligence where a systematic study is made before taking any military action marketing research acts as the intelligence tool of marketing management.
Device for Managerial Decisions
Marketing research acts as a tool in the hands of management for identifying and analyzing marketing problems and finding out solutions to them. It is an aid to decision-making. It suggests possible solutions for the consideration and selection by managers. Marketing research is an aid to Judgement and never a substitute for it.
Applied Type of Research
Marketing research is applied knowledge. It is also called ‘decisional’ research as it provides specific alternative solutions to deal with a specific marketing problem. It studies specific marketing problems and suggests alternative solutions and possible ones.
Reduces the Gap between the Producers and Consumer
Marketing research is an essential supplement to modern competitive marketing. It is useful for understanding the needs and expectations of consumers. It reduces the gap between producers and consumers and adjusts the marketing activities to suit the needs of consumers.
Not an Accurate Science
Marketing research is both science and art. It collects information and studies marketing problems in a scientific manner. The information collected is also applied to real-life problems. However, marketing research is not an exact science.
It only suggests possible solutions and not the exact solution to the marketing manager for consideration and selection. At present, Marketing research is treated as a professional activity. We have professional research agencies dealing with the marketing problem of their clients on a commission basis.
Apply Different Methods
Marketing research can be conducted by using different methods. Data can be collected through surveys or by other methods like observation methods or experimentation methods. Even computers and the internet are used for data collection. The researcher has to decide the method suitable for his research project.
Marketing research is dynamic in nature. Its scope is fast expanding along with the new developments in the field of marketing.
In addition, development in other subjects such as economics, statistics, computer science, sociology, psychology, cultural anthropology, and behavioral sciences also bring corresponding changes in the field of marketing research. This suggests that marketing research is a dynamic and progressive subject.
Importance of Marketing Research
Marketing research is fast growing in its importance due to increasing competition, fast-moving technological developments, and changing consumer needs, expectations and attitudes. The importance of marketing research is universally accepted. The status of marketing research in business management is identical to the position of the brain in the human body.
The following points suggest the importance of marketing research:
- Planning and Execution of Marketing Plan
- Quick and Correct Decision-Making
- Effective Solutions to Marketing Problems
- Huge Spending on MR
Planning and Execution of Marketing Plan
A business unit can plan and execute all activities right from manufacturing to marketing with reasonable accuracy and confidence due to the guidelines available through marketing research.
Quick and Correct Decision-Making
Marketing research facilitates quick and correct decision-making by marketing managers. It enables management to take quick and correct marketing decisions.
Effective Solutions to Marketing Problems
Marketing research provides effective solutions to marketing problems. Marketing research is the radiology and pathology of marketing operations of the business. It diagnoses the business ailments and suggests measures to remove them. Marketing researcher acts like business doctor and prescribes treatment for business elements.
Huge Spending on MR
Large companies spend crores (1 Crore = 10 million) of rupees on marketing research activities. New techniques and methods are used in the conduct of research activities in an accurate manner. This suggests the growing importance of marketing research.
Advantages of Marketing Research
These are the advantages of marketing research explained below:
- Indicates Current Market Trends
- Pinpoints Deficiencies in Marketing Policies
- Explains Customer Resistance
- Suggests Sales Promotion Techniques
- Guidance to Marketing Executives
- Selection and Training of Sales Force
- Facilitates Business Expansion
- Facilitates Appraisal of Marketing Policies
- Suggests Marketing Opportunities
- Facilitates Inventory Study
- Provides Marketing Information
- Suggests Distribution Channels
- Creates Progressive Outlook
- Social Significance
Indicates Current Market Trends
Marketing research keeps the business unit in touch with the latest market trends and offers guidance for facing a market situation with confidence. It facilitates production as per consumer demand and preferences.
Pinpoints Deficiencies in Marketing Policies
Marketing research pinpoints the deficiencies as regards products, pricing, promotion, etc. It gives proper guidance regarding different aspects of marketing. They include product development, branding, packaging, and advertising.
Explains Customer Resistance
Marketing research is useful for finding out customer resistance to the company’s products. Suitable remedial measures are also suggested by the researcher to deal with the situation. This makes the products agreeable to the consumers.
Suggests Sales Promotion Techniques
Marketing research enables a manufacturer to introduce appropriate sales promotion techniques, select the most convenient channel of distribution, suitable pricing policy for the products, and provision of discounts and concessions to dealers. It facilitates sales promotion.
Guidance to Marketing Executives
Marketing research offers information and guidance to marketing executives while framing marketing policies. Continuous research enables a company to face adverse marketing situations boldly. It acts as insurance against possible changes in the market environment.
Selection and Training of Sales Force
Marketing research is useful for the selection and training of staff in the sales Organisation. It suggests the incentives which should be offered for motivation of employees concerned with marketing.
Facilitates Business Expansion
Marketing research enables a business unit to grow and expand its activities. It creates goodwill in the market and also enables a business unit to earn high profits through consumer-oriented marketing policies and programs.
Facilitates Appraisal of Marketing Policies
Research activities enable marketing executives to appraise the present marketing policies in the fight for research findings. Suitable adjustments in the policies are also possible as per the suggestions made.
Suggests Marketing Opportunities
Marketing research suggests new marketing opportunities and the manner in which they can be exploited fully. It identifies existing and emerging market opportunities.
Facilitates Inventory Study
Marketing research is useful for the evaluation of a company’s inventory policies and also for the introduction of more efficient ways of managing inventories including finished goods and raw materials.
Provides Marketing Information
Marketing research provides information on various aspects of marketing. It suggests the relative strengths and weaknesses of the company. On the basis of such information, marketing executives find it easy to frame policies for the future period. Marketing research provides information, guidance, and alternative solutions to marketing problems.
Suggests Distribution Channels
Marketing research can be used to study the effectiveness of existing channels of distribution and the need of making suitable changes in the distribution system.
Creates Progressive Outlook
Marketing research generates a progressive and dynamic outlook throughout the business Organisation. It promotes systematic thinking and a sense of professionalization within the company. It also creates enthusiasm among executives concerned with marketing. This brings success and stability to the whole business unit.
Marketing research is of paramount importance from a social angle. It acts as a means by which the ultimate consumer literally becomes king of the marketplace.
Limitations of Marketing Research
These are some points of limitations of marketing research:
- Offers Suggestions and not Decisions
- Fails to Predict Accurately
- Cannot Study all Marketing Problems
- Resistance to Research by Marketing Executives
- Time-Consuming Activity
- Costly/Expensive Activity
- Dearth of Qualified Staff
- Complexity of Subject
- Uncertainty of Conclusions
- Limitations of Data Used
- Limited Practical Utility
- Miscellaneous Limitations
Offers Suggestions and not Decisions
Marketing research is not a substitute for the decision-making process. Ready-made decisions on marketing problems are not provided by the researcher. Marketing research does not solve any marketing problems directly. It only aids management in the decision-making and problem-solving process.
Fails to Predict Accurately
In marketing research, efforts are made to predict the possible future situation. For this, certain research studies are undertaken. However, the predictions arrived at may not be perfect. The future is always uncertain and an exact prediction about the future is just not possible through marketing research.
Cannot Study all Marketing Problems
Marketing research cannot study all marketing problems, particularly where it is difficult to collect relevant data. Similarly, the research study is not possible where value judgments are involved. Thus, all marketing problems are not researchable and all research problems are not answerable. Marketing research is not a ‘panacea’.
Resistance to Research by Marketing Executives
Researchers study marketing problems and offer guidance to marketing executives in their decision-making process. However, some executives are reluctant to use the solutions suggested by the researchers. They feel that such use will act as a threat to their personal status. Marketing executives also feel that researchers give solutions that are academic in character and lack practical utility.
Marketing research is a time-consuming activity. The research work takes a longer period for completion and the findings when available may prove to be outdated. Even data collected very soon become old due to the fast-changing market environment.
Marketing research activity is costly as research work requires the services of experts. Advanced training in economics, computer technology, sociology, etc. is also necessary on the part of the research staff. Even giving the responsibility for research work to an advertising agency or to a management consultant is costly.
Dearth of Qualified Staff
For a scientific marketing research, professional marketing researchers with proper qualifications, experience, and maturity are required. Research work is likely to be incomplete /unreliable in the absence of such expert staff.
Complexity of Subject
Marketing research fails to give complete and correct guidance to the management on marketing issues. This is because Marketing research is not an exact science. It is concerned with the study of human behavior which is always difficult to predict. As a result, the conclusions drawn and recommendations made are not cent percent correct.
Uncertainty of Conclusions
The consumer is the focal point in marketing research. However, consumers’ buying motives are difficult to judge precisely and accurately. This brings some sort of uncertainty to the conclusions drawn from the marketing research.
Limitations of Data Used
The marketing research process solely depends on the data collected and used for analyzing the marketing problem, drawing conclusions, and making recommendations. However, the whole process will come in danger if the data collected are inadequate and unreliable.
Limited Practical Utility
Marketing research is mainly an academic exercise. Researchers take more interest in research work rather than in supplying information and guidance to marketing managers in the decision-making process. Many research reports are rather bulky and unintelligible. This brings down the practical utility of marketing research.
Problems developed due to changing marketing environment cannot be solved quickly through MR. A research report may be bulky, technically worded, and difficult. Its execution is difficult at lower levels.
The limitations of marketing research (noted above) do not suggest that it is a redundant activity. It only suggests that the marketing research activity should be conducted with proper care and caution. This will make research activity meaningful and result-oriented.
FAQ Related to Marketing Research
What is the meaning of marketing research?
Marketing research is the process or set of processes that links the producers, customers, and end users to the marketer through 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.
What is the definition of marketing research?
MR is the systematic and objective search for and analysis of information relevant to the identification and solution of any problem in the field of marketing. By Green and Tull
What are the components of marketing research?
These are the major components of marketing research explained below:
1. Market Research
2. Product Research
3. Advertising Research
4. Motivation Research
5. Sales Research.
What are the scopes of marketing research?
Scope of marketing research are given below:
1. Syndicate Service
2. Marketing Information System (MKIS)
3. Decision Support System
4. Market Research Projects.
What are the features of marketing research?
Features of Marketing Research:
1. Systematic and Continuous Process
2. Wide in Scope Application
3. Emphasizes Accurate Data Collection and Critical Analysis
4. Offers Benefits to Sponsoring Company and Consumer
5. Commercial Equivalent of Military Intelligence
6. Device for Managerial Decisions
7. Applied Type of Research
8. Reduces the Gap between the Producers and Consumer
9. Not an Accurate Science
10. Apply Different Methods
11. Dynamic Character.
What is the importance of marketing research?
The following points of the importance of marketing research:
1. Planning and Execution of Marketing Plan
2. Quick and Correct Decision-Making
3. Effective Solutions to Marketing Problems
4. Huge Spending on MR.
What are the advantages of marketing research?
Advantages of marketing research are given below:
1. Indicates Current Market Trends
2. Pinpoints Deficiencies in Marketing Policies
3. Explains Customer Resistance
4. Suggests Sales Promotion Techniques
5. Guidance to Marketing Executives
6. Selection and Training of Sales Force
7. Facilitates Business Expansion
8. Facilitates Appraisal of Marketing Policies
9. Suggests Marketing Opportunities
10. Facilitates Inventory Study.
What are the limitations of marketing research?
Limitations of Marketing research:
1. Offers Suggestions and not Decisions
2. Fails to Predict Accurately
3. Cannot Study all Marketing Problems
4. Resistance to Research by Marketing Executives
5. Time-Consuming Activity
6. Costly/Expensive Activity
7. Dearth of Qualified Staff
8. Complexity of Subject
9. Uncertainty of Conclusions
10. Limitations of Data Used
11. Limited Practical Utility
12. Miscellaneous Limitations.