Market research refers to systematic collection, recording and analysis of data, aimed towards solving a marketing problem. It is the process of collecting information or facts relevant to the market and analysing and interpreting that information to strategize business decisions.
According to Philip Kotler, “Market Research is the systematic design, collection, Analysis, and reporting of data relevant to a specific marketing situation an organization is facing”
Market Research involves systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in the marketing of goods and services.
Objectives of Market Research
- Discovering new markets for products
- Increasing the market share for existing products
- Forecasting the future demand for products
- Analysing the tastes and preferences of consumers
- Reducing the cost of marketing activities
- Improving the quality of products
- Formulating effective marketing policies
- Determining competitors strategy
- Studying the internal and external marketing environment
Types of Market Research
- Market / Customer Research
- Product, Price, Promotion Research
- Channel Research
- Sales Research
- Advertising Research
- Policy Research
Information collected through Market Research
- Total size of current market
- Total size of potential market
- Growth rate
- Consumer demographics
- Consumer taste & preferences
- Consumer satisfaction
- Consumer expectations
- Consumer buying behaviour
- Price sensitivity analysis
- Internal and external marketing environment
- SWOT of the firm and its competitors
- Market Demand
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Developing Information for Market Research / Techniques of Market Research
Market Research involves collection of primary and secondary data through various methods of data collection. They are:
Primary Data
- Surveys
- Questionnaire
- Interviews
- Observation
- Experiments
- Schedules
Secondary Data
- Government publications
- Trade journals
- Internal records
- Yearly reports of banks and businesses
- Public records
- National 5 year plans
- Historical documents
- Unpublished documentaries, biographies, letters, diaries etc.
Other methods of Data collection
- Warranty cards
- Store audits
- Pantry audits
- Consumer Panels
- Mechanical devices
- Content analysis
- Quiz, test, assignments
- In-depth interviews
- Projective techniques – Word association test, Sentence completion test, Story completion test, Verbal projection test, Pictorial techniques
Process of Market Research
(1) Identification and definition of Research Problem – It involves –
- Identification of Research problem
- Laying down objectives of the study, and
- Determining the extent of information required.
(2) Conducting situational analysis and informal investigation – Situational Analysis involves collecting information regarding business environment, market situation, competitions and industry surrounding the problem in general. An informal investigation includes an investigation with the people outside the organisation like suppliers, wholesalers, consumers, advertising agencies etc. This is done to determine whether a detailed study in necessary and feasible or not.
(3) Planning and conducting formal investigation – It involves the following –
- Preparing a research design – exploratory, descriptive, casual
- Selecting the sources of information – Primary source or Secondary source
- Deciding methods of data collection – Survey, Observation, Experimentation etc.
- Planning the Sample Frames, Sample size and Questionnaire
- Collecting the data – Survey, Observation or Experimentation
(4) Analysing and Interpreting data – It involves classification, tabulation and interpretation of the data collected. Statistical techniques are used to draw conclusions and make recommendations. Efforts are made to generalize all the findings.
(5) Summarizing the findings and preparing a research report – The last step involves preparation of a written report that helps the management to make effective decisions based on the finding and recommendations of the report.
Guidelines for effective report –
- There must be objectivity and clarity in presentation of data
- It must be concise and precise
- Charts and illustrations must be only used if necessary
- The layout of the report must be – Preliminary pages, Main Body and End Matter
- It must contain the following:
- Title of Report
- Date, Acknowledgement and Foreword
- Table of Contents
- Objectives of Study
- Introduction
- Summary of Findings
- Main Report/Body
- Suggestions and Recommendations
- Conclusion, Appendices, Bibliography
Importance of Marketing Research
- It helps in formulation of marketing plans, policies and strategy
- It helps in Problem solving and Decision making
- It acts as a controlling technique for marketing activities
- It helps to understand market complications and opportunities
- It aids in understanding consumer behaviour and consumption patterns
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