Mr Notes- Kombrabail

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================

MEANING OF MARKETING RESEARCH

The term "Marketing Research" is composed of two words - "Marketing" and "Research".

Marketing Marketing basically consists of spotting the needs of customers and meeting them in the best possible manner through appropriate production and distribution activities.

The term marketing refers to buying and selling activities. Exchange/transfer of ownership is theessence of marketing.

ResearchResearch means detailed/systematic/comprehensive study of a problem. .

Research is a process involving a series of steps to collect and analyze the information needed for decision-making in the desired / specific field of inquiry. The term research can be applied to anyfield of human activity.

Research means “studious enquiry" or "thorough, honest and impartial study conducted by trainedmen using scientific methods". It means detailed study relating to a particular subject.

The term MR is used extensively in modern marketing management. It acts as a tool for accuratedecision making in marketing of goods and services. It is also useful for studying and solvingdifferent marketing problems faced by business units. . Here, the details (information and data) of the marketing problem are collected and studied, conclusions are drawn and

suggestions/recommendations are made to solve the problem quickly, correctly andsystematically. In MR/ marketing problem is studied in depth by collecting and analyzing allrelevant information and solutions are suggested to solve the problem relating to consumers,

product, market competition, sales promotion and so on.

MR is a special branch of marketing management. It is comparatively of recent in origin. MR actsas an investigative arm of a marketing manager. It suggests possible solutions on marketing

problems for the consideration and selection by a marketing manager. It also acts as an importanttool to study buyer behavior, changes in consumer life-styles and consumption patterns, brandloyalty and forecast market changes.

MR techniques are used by manufacturers/exporters/distributors and service organizations tocollect information on various aspects of marketing. The information collected is analyzed andused for decision-making in the marketing management. MR facilitates accurate marketingdecisions for consumer satisfaction on the one hand and sales promotion on the other hand. It isrightly treated as the SOUL of modern marketing management. MR suggests possible solutionson marketing problems to marketing manager for his consideration and final selection/decision. Itis rightly said that the beginning and end of marketing management is marketing research.Decisions on each element of the marketing mix-product, price, distribution and promotion-needmarketing research support. Marketing research is primarily used to provide information needed

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================to guide marketing decision viz., market mix. It acts as a support system to marketingmanagement.

DEFINITIONS OF MARKETING RESEARCH:

Let us now, consider some definitions of MR:

(1) The most widely accepted definition of marketing research is given by American MarketingAssociation (AMA). The AMA has defined marketing research as "the systematic gathering,recording and analyzing of data about problems relating to the marketing of goods and

services”

(2) According to Richard D. Crisp: "Marketing research is the systematic, objective and exhaustive search for and study of the facts relevant to any problem in the field of marketing."

(3) According to Philip Kotler: "Marketing research is systematic problem analysis, model building and fact-finding for the purpose of improved decision-making and control in the

marketing of goods and services." (4) Luck, Wales and Taylor have defined marketing research as "the application of scientific

method to the solution of marketing problems"

(5) Green and Tull have defined marketing research as "the systematic and objective search for and analysis of information relevant to the identification and solution of any problem in the

field of marketing."

(6) British Institute of Management: In 1962, the British Institute of Management definedmarketing research as/ "The objective gathering, recording and analyzing of all facts about

problems relating to the transfer and sales of goods and services from producer toconsumer."

FEATURES OF MARKETING RESEARCH:

(a) Marketing research is concerned with systematic gathering, recording and analyzing of information: In MR, information that is relevant to the marketing problem is collected in asystematic manner from all available sources. Thereafter, the same is tabulated and recorded for systematic scrutiny. Such scrutiny will offer certain specific conclusions useful for solving themarketing problem.

(b) In MR, information is to be collected objectively and accurately: This feature of MR suggests that the required information needs to be collected objectively. In brief, the informationcollected should be accurate, precise, relevant and properly verified. The conclusions drawn andthe remedial measures introduced will be ineffective if the information collected is not reliable.

(c) Marketing research is a tool for solving marketing problems: MR is a means and not the endin itself. It is a tool in the hands of management for identifying and analyzing marketing

problems. The purpose is to solve them correctly.

CHARACTERISTICS OF MARKETING RESEARCH:

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(1) Systematic and continuous process: MR is a continuous process. This is natural as newmarketing problems are bound to come from time to time in the course of marketing of goods and services. One type of research is not adequate to resolve all marketing

problems. Similarly, new research projects will have to be undertaken to solve newmarketing problems and challenges. A marketing company faces new marketing problemsfrom time to time. For facing these problems marketing research activities need to beconducted on a regular basis. A marketing company has to conduct MR regularly for itssurvival & growth in the present dynamic marketing environment.

(2) Wide/comprehensive in scope and application: MR is wide in scope as it deals with allaspects of marketing of goods and services. It is more than just collecting data onmarketing. Introduction of new products, identification of potential markets, selection of appropriate selling techniques, study of market competition and consumer preferences,introduction of suitable advertising strategy and sales promotion measures, are some areascovered by MR. It plays a role in all the three phases of the management process inmarketing: planning, implementation and evaluation.

(3) Emphasizes on accurate data collection and critical analysis: In MR , required datashould be collected objectively and accurately. The data collected must be reliable. Itshould be analyzed in a systematic manner. This will provide comprehensive picture of thesituation and possible solutions.

(4) Offers benefits to sponsoring company and consumers: MR is useful to the sponsoringcompany. It raises the turnover and profit of the company. It also raises the competitivecapacity and creates goodwill in the market. It enables a company to introduce consumer-oriented marketing policies. Consumers also get agreeable goods and more satisfactiondue to MR activities.

(5) Commercial equivalent of military intelligence: MR is the commercial intelligenceactivity. It is similar to military intelligence where systematic study is made before takingany military action. MR acts as the intelligence tool of marketing management.

(6) Tool for managerial decisions: MR acts as a tool in the hands of management for identifying and analyzing marketing problems and finding out solutions to them. It is anaid to decision-making. It suggests possible solutions for the consideration and selection

by managers. MR is an aid to judgment and never a substitute for it.

(7) Applied type of research: MR is applied knowledge. It is also called 'decisional researchas it provides specific alternative solutions to deal with a specific marketing problem. Itstudies specific marketing problem and suggests alternative solutions and possible

outcome of each alternative. In addition, it is both science and an art. MR is also becominghighly professional activity.

(8) Reduces the gap between the producers and consumers: MR is an essential supplementof modern competitive marketing. It is useful for understanding the needs andexpectations of consumers. It reduces the gap between producers and consumers andadjusts the marketing activities to suit the needs of consumers.

(9) Not an exact science: MR is both science and an art. It collects information and studiesmarketing problem in a scientific manner. The information collected is also applied to reallire problem. However, MR is not an exact science. It only suggests possible solutions andnot the exact solution to marketing manager for consideration and selection. At present,

MR is treated as a professional activity. We have professional agencies (MR agencies or

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advertising agencies) dealing with the marketing problems of their clients on commission basis.

(10) Use of different methods: MR can be conducted by using different methods. Data can becollected through survey or by other methods like observation method or experimentation

method. Even computers and internet are used for data collection. The researcher has to decide themethod that is suitable for the conduct of research project. This selection is important as the use of unsuitable methods affect the quality of research work.

(11) Dynamic character: MR is dynamic in nature. Its scope is fast expanding along with thenew developments in the field of marketing. This is natural as MR is essentially for dealing withnew problems and challenges in the field of marketing. In addition, developments in other subjects such as economics, statistics, computer science, sociology, psychology, culturalanthropology and behavioral sciences also bring corresponding changes in the field of MR. Newmethods, new techniques, etc., are used while conducting the research activities. This suggeststhat MR is a dynamic and progressive subject with new developments taking place regularly.

(12) Closely connected with marketing information system: Both the concepts areinterrelated. In fact, MR is one component of MIS. Both are useful for solving marketing

problems and for accurate and quick decision-making in the field of marketing.

(13) Phenomenal growth: MR has made a phenomenal growth since its inception. It has become an important tool in the hands of management (to solve marketing problems) along withthe advent of consumer-oriented philosophy in modern business. The increasing research budgetsof companies are the indicators of its tremendous growth in recent years.

AIMS AND OBJECTIVES OF MARKETING RESEARCH:

The aims of the marketing research and analysis may be stated as follows:(1) To study the needs, wants and expectations of consumers.

(2) To find out reactions of consumers to the products of the company.

(3) To evaluate company's sales promotion measures for suitable adjustment andimprovement.

(4) To study current marketing problems and opportunities for suitable follow-up actions.

(5) To suggest the introduction of new products, modifications of existing products and todiscover new uses of existing products.

(6) To design and test appropriate packages of company's products and make packaging asattractive as possible

(7) To study existing pricing, channels of distribution and market competition for suitablechanges, if necessary.

(8) To find out methods for making the products of the company popular and raising itsgoodwill and market reputation.

(9) To assess competitive strength and policies.

(10) To estimate potential buying-power in various areas

(11) To know the company's expected share of the market.

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(12) To determine the dimensions of the marketing problems, facilitate evaluation of the alternativesolutions of different problems and help in the selection of a right course of action.

(13) To define the probable market for a specialized product and to report on general marketconditions and tendencies, buying habits, etc.

MARKET RESEARCH V/S MARKETING RESEARCH:

The two terms “market research" and "marketing research" are used interchangeably though thereis difference in the meaning and scope of the two terms. "Market research" is used as a popular synonym for "marketing research". Market is a part of marketing and market research is only a

part of marketing research. It covers only a few aspects of marketing. According to Philip Kotler,the term "market research" is accurate for describing research into the market, its size,geographical distribution, income and so on. However, it fails to cover the idea of research intothe effects of marketing efforts on the market for which the term "marketing research" is moreaccurate. MR is increasingly coming into favor as the term that describes both ideas. Marketing

research need not be treated as pure academic research. It is a type of applied research withscientific orientation.

Distinction between market research and marketing research

Dimension Market Research Marketing ResearchMeaning Market research directly relates to

market situation i.e. size, location,market competition and featuresof customers. It provides detailsabout the market for decision-making and policy framing.

Marketing research is a systematicand comprehensive search/study of different aspects of marketing -including the current marketing

problems and challenges for decision-making & policy framing.

Nature Market research is a branch of marketing research.

Marketing research is one branch of Marketing Information System.

Scope The scope o f market research islimited/restricted to the study of market or market situation

The scope of marketing research iscomprehensive & wide as it coversall aspects of marketing.

Type of term Market research is a narrow termas it relates to one aspect of marketing

Marketing research is a wide/broadterm as it covers all aspects of marketing

Objective Market research is undertaken inorder to deal with the problemsand challenges relating to differentaspects of market such ascompetition, market demand andconsumer needs

Marketing research is undertaken inorder to study varied types of marketing problems such as productline, marketing mix, advertising,

packaging, branding and so on.

GROWING IMPORTANCE OF MARKETING RESEARCH:

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Marketing research has received attention and importance along with the growth of highlycompetitive consumer-oriented marketing philosophy. Research activities in different aspects of marketing are necessary and useful in such competitive and flexible marketing environment.Large companies marketing consumer items noted the growing need of MR activities in themarketing decision-making process. They naturally took initiative in conducting researchactivities within the organization itself. This was followed by the formation of specializedmarketing research agencies and advertising agencies for this purpose. This is how professionalorientation was given to MR. Many marketing research departments and agencies wereestablished after World War II.

MR activity (as we understand today) is comparatively new in the field of marketing. This activity probably began around 1950s (Modern era of marketing research) and attracted the attention of companies interested in marketing their products in the national and global markets. However, theconcept of MR got firm roots in the marketing activity after 1910. First time the marketing

research techniques were used by newspapers to predict the election results. However, during thesecond decade of 20th century, marketing research emerged as a valuable management tool tosolve marketing problems. In the developed countries, marketing research activity is conducted onscientific lines. Even in India, large manufacturing companies treat marketing research as anessential supplement of planning and decision-making in the marketing field. It is treated as anindispensable tool for profitable and consumer-oriented marketing. The popularity of MR increased after 1960 due to the introduction of computers in data collection and analysis. In theearly period, marketing research activities were confined to market studies only but in 1950sresearch relating to marketing activities was broadened to include all managerial aspects-price,

produce place and promotion. In late 1950's motivational and psychological techniques wereintroduced to generate more information on consumers.

Several factors have contributed to the growing importance of marketing research. For example,due to large-scale production, producers could not have direct contact with the consumers. Thiscreated many problems before producers. For solving all such problems developed due to the gap

between producers and consumer and marketing research activities prove to be useful.

Secondly, the shifting from sellers’ market to buyers' market made it necessary to have better understanding about consumer net-expectations. For this, marketing research proved to be useful.

Thirdly, the introduction of computers has contributed to the growth of marketing researchactivity.

Fourthly, rapid changes in the business environment, shift to consumer-oriented philosophy in business are also responsible for growing importance of marketing research.

Finally, the scope of marketing has widened due to population growth and development of ruralmarkets. MR proved to be useful for dealing with the problems created by national and globalmarkets. In brief, growing importance of marketing research in the present marketing system isthe net result of various factors and forces available in the present marketing system. At present,MR activities are undertaken by marketing companies on their own. In addition, marketingresearch consultants and agencies provide expert advice to companies on general and specificmarketing problems of their clients.

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Relevance of MR under Globalization:

The business world is fast moving towards globalization in which all countries participate. Everycountry has to face competition in the domestic as well as in export marketing. Survival in theglobal business is possible through quality improvement, cost reduction and by attractingconsumers through various sales promotion techniques. Here, MR offers helping hand tocompanies. It offers suggestions for survival under global competitive environment. In brief, theimportance/relevance of MR is fast growing along with the globalization of business. It is a mustfor survival and growth under globalization. Current marketing scenario is different as comparedto traditional one. There is a new trend towards liberalization and globalization. Markets(domestic as well as foreign) are becoming highly competition. New companies and new products

are entering in the markets. Survival is difficult under the present marketing environment. Here,MR offers various services. It is, now, a professional activity with new developments in regard toscope/coverage and techniques. In brief, MR has great relevance in the current marketing scenarioin India as well as in all countries- developed and developing of the world. MR has enormouscapacity to help and guide marketing companies in regard to their marketing problems andchallenges.

FUNCTIONS OF MARKETING RESEARCH:

MR performs five basic functions. These are: Description, evaluation, explanation, prediction and

finally aid in decision-making. These functions are related to the research project undertaken.Usually, every research study performs all the five functions explained below:

(1) Description: MR provides data and gives information/description of customers who buy the product. This includes information about their age/sex, education, income and the amount of money that they are willing to spend on the product. Description of the customers is useful inorder to draw certain conclusions about the customers and their buying behavior. Evenmarketing strategies can be decided as per the information available.

(2) Evaluation: MR is useful for understanding the views/reactions of the buyers. This includesviews of consumers on packaging/ advertising/sales promotion measures used. Amanufacturer gets these details as well as the information about his product in comparisonwith the products of his competitors. This facilitates evaluation of the marketing policies. For example, how far the packaging of the product is attractive to consumers or superior ascompared to packaging by competitors and so on.

(3) Explanation: MR gives explanation to certain questions of a manufacturer. It may be relatedto decline in sales, retailers negative reaction or resistance of consumers in a particular marketing area. MR enables a manufacturer to understand why sales are reducing (causes) or why the response of the retailers is negative or why consumers in a particular region are notwilling to purchase a specific product. Such explanation is important as it enables a

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manufacturer to adjust his marketing policies in order to rectify the prevailing unfavorablesituation.

(4) Prediction: MR conducts prediction function. Such predictions may be related to consumers,market environment/market competition, possible socio-economic changes and so on. This

prediction function enables a manufacturer to understand how much people will spend on thespecific product in the next year or the fashions that consumers may prefer in the next year.In addition, prediction about the possible turnover in the years to come is also possiblethrough suitable marketing research studies. In brief, marketing research is useful for understanding the marketing environment likely to develop in future. This facilitates proper adjustment in the marketing policies for the future period. In this sense, the predictionfunction is important even when all predictions made through research studies may not proveto be fully correct. However, the trend indicated can be used for appropriate policy decisions.

(5) Aid in Decision-making: One more function of MR is to facilitate the process of decision-

making in the marketing field. MR guides the manufacturer as regards the manner in whichhe can make effective advertising appeal or create incentive among his salesmen/distributors.It also gives him guidance as regards price fixation and sales promotion techniques that will

be useful for the future period. This function of marketing research is closely related to other functions that it performs. These functions facilitate reasonably correct decision-making bymarketing managers.

They also suggest the practical utility of MR activities.

MR functions provide feedback (information and guidance) to marketing managers and improvethe quality of their decision-making. This practice is certainly safer as compared to decision-

making on the basis of past experience or intuition. When reality is complex and many facts arenot detectable, intuition is not adequate for decision-making. Similarly, experience is useful butdecisions on experience alone may not be accurate.

Large companies and professional executives prefer to resort to marketing research thandepending on experience. This is because information available is based on real data and is morereliable/ dependable. This facilitates correct decision-making. Thus, marketing executives should

prefer decisions on the basis of information supplied through marketing research. Such decisionsare likely to be more accurate as they are based on actual market situation.

In brief, the basic function of MR is to support marketing decision-making process. Marketingresearch does not provide ready-made decisions or exact solutions on all marketing problems. Itonly provides the clues or possible solutions that should be taken into consideration in thedecision-making process. It provides support to skills and abilities of marketing managers.

The different functions of marketing research are supplementary in character. These functionsenable a manufacturer to keep close touch with the marketing situation and enable him to makesuitable changes in his marketing policies and programmers. They also suggest the role marketingresearch activity in modern competitive and consumer oriented marketing. Marketing researchfunctions certainly improve the quality of decision-making by marketing managers.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================ADVANTAGES/IMPORTANCE OF MARKETING RESEARCH:

1. Indicates current market trends: Marketing research keeps business unit in touch withthe current market trends and offers guidance for facing market situation with confidence.

2. Pinpoints deficiencies in marketing policies: MR pinpoints the deficiencies as regards products, pricing, promotion, etc. It gives guidance regarding different aspects of marketing.They include product development, branding, packaging and advertising.

3. Explains customer resistance: MR is useful for finding out customer resistance tocompany's products. The researcher also suggests remedial measures to deal with thesituation. This makes the products and marketing policies agreeable to consumers.

4. Suggests sales promotion techniques: MR enables a manufacturer to introduceappropriate sales promotion techniques, select most convenient channel of distribution,suitable pricing policy for the products and provision of discounts and concessions to dealers.Marketing research facilitates sales promotion.

5. Offers guidance to marketing executives : MR offers information and guidance tomarketing executives while framing marketing policies. Continuous research enables acompany to face adverse' marketing situation boldly. It acts as an insurance against possiblechanges in market environment.

6. Facilitates selection and training of sales force: Marketing research is useful for theselection and training of staff in the sales organization. It also suggests the incentives thatshould be offered for motivation of employees concerned with marketing.

7. Promotes business activities: Marketing research enables a business unit to grow/expandits activities. It creates goodwill in the market and also enables a business unit to earn high

profits through consumer-oriented marketing policies and programmers.

8. Facilitates appraisal of marketing policies: Research activities enable businessexecutives to have an appraisal of the present marketing policies in the light of findings of research work. Suitable adjustments in the policies are also possible as per the suggestionsmade by the researchers.

9. Suggests new marketing opportunities: MR suggests new marketing opportunities andthe manner in which they can be exploited fully. It identifies emerging market opportunities.

10. Facilitates inventory study: Marketing research is useful for the evaluation of company’sinventory policies and also for the introduction of more efficient ways of managinginventories including finished goods and raw materials.

11. Provides marketing information: MR provides information on various aspects of marketing. It suggests relative strengths and weaknesses of the company. On the basis of suchinformation, marketing executives find it easy to frame policies for the future period. MR

provides information/ guidance and alternative solutions to current marketing problems.

12. Suggests appropriate distribution channels: MR can be used to study the effectivenessof existing channels of distribution and the need of making suitable changes in the distributionsystem.

13. Provides information on product acceptance: Marketing research helps in knowing the probability of acceptance of the product in its present form. It is also useful for theintroduction of modifications in the existing product line of a firm.

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14. Creates progressive outlook: MR generates a progressive and dynamic outlook throughout the business organization. It promotes systematic thinking and a sense of

professionalization within the company. It also creates enthusiasm among marketingexecutives. This brings success and stability to the whole business unit

15. Has wider social significance: MR is of paramount importance from the social angle. It isthe means by which the ultimate consumer literally becomes king of the market place, with hisdesires/ prejudices and every whim transmitted to the producer and distributor. In brief, MR has wider social significance. It is useful to all parties involved in the process of marketing.

Marketing research need not be treated as a fad. It is one of those fundamental tools that today’smarketing manager needs to keep sharpened all the time so that he might be-m a position tominimize the business or marketing risk.

Limitations of marketing research are as explained below:

(1) Marketing research offers suggestions and not decisions: Marketing research is not asubstitute for decision-making process. It only offers possible suggestions/solutions tomarketing problems. It actually acts as a tool that facilitates decision-making process. Itguides marketing managers in taking balanced, result-oriented and rational decisions. Thesuggestions offered by marketing researchers are usually possible/probable solutions but notthe exact solutions.

MR offers predictions but they are not necessarily accurate or perfect. Such predictions should be taken in the right spirit by the management. It offers information and guidance tomarketing managers but not the final decisions, which are to be taken by managersthemselves.

MR does not provide readymade solutions to marketing problems. It only provides indicators.It may not provide conclusive information on marketing problems. The marketing managershave to use available information properly and take appropriate marketing decisions.

The effectiveness of MR depends on the skill of the decision-maker. For this/ variousmarketing forces need careful consideration. However all such forces are not covered byresearch project undertaken. MR aids managerial decision-making but it cannot replace

judgment and experience of marketing executives/managers.

(2) Marketing research cannot predict accurately: In MR, efforts are being made toestimate or predict the possible future situation. For this/ certain research studies areundertaken. However, the results/ conclusions arrived at may not be complete, perfect or accurate. They predict possible tendencies but not certainties. Future is always uncertain andexact prediction about the future is just not possible through marketing research. This is

because market environment is ever changing consumer behavior is difficult to estimatecorrectly and reliable data for research purpose may not be available. As a result, the decisionstaken and policies framed on the basis of such research studies may not be accurate and usefulfor solving current marketing problems.

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Marketing research gives guidance to marketing managers through information andconclusions drawn but such guidance may not be accurate as it is based on the predictionsabout future situation. The guidance offered through research activities may prove to be out-dated at the time of taking current marketing decisions.

(3) MR conclusions are not always dependable: There are many who are skeptics of MR.Their criticism is that MR conclusions are not dependable. There are examples where theresearch failed to deliver desired results or a product failed even when the research had shown

promising market demand and consumer support. The classical example is that of Coke. ItsMR showed that 68% customers in US liked the taste of the new formula developed by theCoca-Cola Corporation. However, the New Coke failed and in less than six months of itslaunch, the Coke management had to re-launch old Coke under the brand name Coke Classic.However, this failure of MR was mainly due to conventional approach of researchers.

(4) Not an exact science: Since marketing research plates to consumers, it cannot be acceptedas an exact science. Both quantifiable and non-quantifiable factors have to be assessed withthe help of various techniques available to formulate marketing policies that will help toachieve maximum sales. The technical part of marketing research comes into operation

particularly while collecting, analyzing, interpreting facts and figures. No amount of sophistication makes the subject an exact science. Because, as stated earlier, it concerns

primarily the consumer as a human being Study of human behavior precludes absolutemathematical accuracy Probable trends, at the most can be indicated within predeterminedlimits. This sets a basic limitation to marketing research. At the same time, it necessitates acreative and skilled approach to the conduct of research. In this way, marketing research cancontribute immensely to decision-making in a dynamic market. For accurate judgment, the

marketer must be fully aware of the nature of limitations of marketing research.

(5) Time lag in presentation and implementation: There are other constraints as well thatmake for qualified utility of marketing research in decision-making. For example, there is thelimitation of time. Collection of data, their checking as to accuracy and analysis and

presentation often involve considerable time. The formulation of policies and their implementation as also their subsequent evaluation, which are a necessary follow-up, also taketime. People's tastes and preferences are subject to frequent changes. It is, therefore necessary,keeping in mind the scope and nature of marketing research, that the projects should becompleted in time to ensure their utility. In this process, at times, as a compromise someaccuracy may have to be sacrificed, but the degree of it can be decided in relation to thespecific circumstances.

(6) Limitations of personnel: Another constraint that is experienced pertains to personneland its quality. Trained, well-equipped and well-directed research personnel can improve thequality and utility of marketing research. In the absence of this, research is likely to be costlyand unreliable. Correct and complete information has to be collected from the respondentstactfully. The interviewer has to be reasonably aware of the psychological make-up of the

persons that are being interviewed and should be able to analyze their thoughts and reactions.Apart from this, interviewers may have their own failings and weaknesses. Hence thetraining interviewers and investigators is a must. These limitations and constraints can be

overcome or at least their impact can be minimized. To the extent a market researcher is

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successful in his task, the value of the findings can be improved. What is most important isthat reliable data should be available on the basis of which production and marketing plansand programmers can be formulated with a fair degree of accuracy. It is better to be certainabout 50 percent reliable information than do a guesswork, which has more chances of goingwrong.

(7) Difficult to ascribe results: It is also difficult to ascribe results as a direct consequence of market research. The rupee value received by a firm from marketing research, therefore,cannot be measured accurately and completely. This has contributed to an element of hesitation on the part of organizations to undertake marketing research in many cases,especially in the developing countries.

(8) A cost-generating operation: Marketing research is expensive. The existence of sellers’market or a sheltered market in many developing countries in particular has also beenresponsible for an apathetic approach to marketing research. However, with the growth and

development of their economies, the marketing conditions are changing in favor of buyers andthe need for and the value of marketing research are being increasingly recognized by theenterprises in these countries also. With the communication between the purchaser and themanufacturer becoming indirect, meagre and unsatisfactory and as a result of competition, themanufacturer is increasingly becoming anxious to know the magnitude of his sales toconsumers, where they are being effected, the kinds of people buying his goods and their reactions and responses. All this information is essential to the manufacturer, as this decidesultimately whether he will survive in the market or not. He can improve his product andmarketing strategy to secure consumer satisfaction and logically profit from these changes.

(9) Marketing research cannot study all marketing problems: Marketing research is rather

very wide in scope. However, it cannot study all marketing problems particularly where it isdifficult to collect relevant data. Similarly, research study is not possible where value

judgments are involved. Even it is not useful for dealing with urgent marketing problemswhere quick decisions and follow-up actions are necessary. Thus, all marketing problems arenot researchable and all research problems are not answerable.

MR cannot provide answer to each and every marketing problem. A problem like ProfitabilityVs. Consumer satisfaction is difficult to answer with complete accuracy. The presentmarketing research techniques have certain limitations. MR fails to offer guidance tomanagers while dealing with specific problems. Thus, marketing research cannot study allmarketing problems and do not offer ready-made solutions to all marketing problems faced bya business unit. It is also argued that very many times, marketing research tends to befragmentary in its approach. As a result, it becomes difficult to have an overall perspective inwhich a marketing problem is to be viewed and studied.

(10) Resistance by marketing executives: Researchers study marketing problems and offer information and guidance to marketing executives in their decision-making process. However,some executives are reluctant to use the solutions suggested by the researchers. They feel thatsuch extensive use will act as a threat to their personal status. Findings of the research work may bring them in difficulties if the policy-decisions taken accordingly prove to be wrong.

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sort of uncertainty in the conclusions drawn from the research activity. The findings of theresearch work (particularly in the case of consumer research) may not prove to be accurate.

(15) Limited practical utility: MR is regarded as an academic exercise. It is often been delinkedfrom the business strategy. As a result many research reports become "academic" in natureand are 'filed'. Researchers take more interest in conducting research work rather than insupplying information and guidance to marketing managers in the decision-making process.Many research reports are rather bulky and unintelligible due to the use of technical languageand unnecessary details. Such reports are rejected or are not used meaningfully b) marketingmanagers. This brings down the practical utility of MR.

(16) Passive nature: MR is passive by its nature. Sometimes, it becomes too superficial and faultyin business management. Man) conclusions drawn from the marketing research activities may

be imaginary or not based on realities. Its use and effectiveness largely depend on the abilityof marketing executives to get the most promising results out of it. Marketing research by

itself may not give any benefit. It only shows the way to executives in the decision-making process.

(17) Fragmentary approach: On many occasions, marketing research tends to be fragmentary inits approach. It suggests solutions that may be difficult to put into operation. This is becauseoverall marketing environment is not given adequate attention while suggesting the solution.Such fragmentary approach is not useful for solving marketing problems in an integratedmanner.

(18) Absence of effective communication: The research activity will be useful and result-orientedonly when there is meaningful dialogue between the marketing management and marketing

research team. However, such dialogue is ineffective in many organizations. This make'research activity ineffective.

Inspite of the limitations noted above, MR is necessary and useful in marketing management.

SCOPE OF MARKETING RESEARCH / BRANCHES OF MR:

Marketing research is a subject with wide scope. Broadly speaking, it is concerned with themarketing activities of an enterprise. All activities of a seller-to market his products to consumersare covered by such research. Marketing research is primarily concerned with "4 Ps" of marketing mix. These are: Product, Price, Place and Promotion. The scope of marketingresearch is comprehensive and is actually widening in recent years. Products research, salesresearch, pricing research, brand and package research, promotion research and customer researcharc the usual areas covered by MR. In addition, specialized research activities such as motivationresearch, consumer satisfaction research, etc. are also undertaken to meet the specific needs of a

business unit. Additional areas and new methods of conducting research activities are regularlyadded within the scope of MR.

In 1973, the American Marketing Association noted that marketing research activities wereundertaken on 36 different topics of 1322 companies interviewed. Even in India, large companiesconduct research activities on many marketing problems. Finally, it may be pointed out that

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================marketing research is essentially for solving the marketing problems of a business unit. Naturally,research activities will be adjusted accordingly. This suggests that there is no limit to the areascovered by marketing research. Everything connected with marketing comes within the scope of MR.. The branches of MR are as explained below:

1. Product Research: Product research relates to products that are to be marketed to consumers. It is useful for introducing new product that will be agreeable to consumers. Product research relates tovarious aspects such as design, development and introduction of new products, testing of existing products, product modification studies and so on.

2. Packaging Research :Packaging research is a part of product research and is important for making the productsattractive and agreeable to consumers. Packaging is now treated as a tool for sales promotion.It attracts the attention of consumers and induces them to purchase products. Constant changes

in the package design are-required for sales promotion. For innovation in the package design/ packaging research is necessary. Packaging research is now treated as an independent branchof marketing research. Such research is conducted in order to know the impact of packaging.Branding and packaging normally go together and hence brand research is treated as a partand parcel of packaging research.

3. Pricing Research: Pricing research relates to pricing of the product It relates to analysis of pricing policies andstrategies, studies market price trends, fixation of market prices, studies relating to pricescharged by competitors, studies relating to future price trends, price incentives for sales

promotion and provision of price discount and other price concessions to dealers and

consumers.

4. Market Research: Market research proper relates to analysis of consumer markets, assessment of market trends ,forecasting of business conditions, setting of sales territories and sales quota, sale potentialsstudies, studies of wholesale marketing, demography descriptions of customers, marketcompetition studies, sale-forecasting, estimating demand for new products, analyzing relative

profitability of sales territories and monitoring competitive-marketing activities.

5. Sales Research: Sales research relates to studies of sales outlets, sales territories and their revision, trends insales, sales forecasting, effectiveness of sales force, sales policies and sales performance andso on.

6. Promotion and Distribution Research: Promotion research related to assessing effectiveness of the sales force and selling efforts,testing of media selected, advertising copy and assessing effectiveness of advertisingcampaigns. The scope of this area of marketing research also includes the study of channelsof distribution for modification, distribution cost analysis of the physical distribution,

problems relating to warehousing, inventory control and handling of goods.

7. Consumer Research:

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It relates to finding out consumers' needs and preference, consumers' purchasing intentions,consumers' choice of brands, trends in consumer preferences and purchasing patterns

8. Policy Research: Policy research activity is connected with the evaluation of effectiveness of marketing

policies, sales policies, distribution policies, pricing policies, inventory policies and so on. Necessary changes in such policies are possible through intensive policy research studies.

9. Advertising Research: It relates to evaluation of advertising effectiveness, analyzing competitive advertising andselection of appropriate advertising media.

10. Media Research: Different media are used for communicating message about the products to prospective

buyers. Media are used for advertising and publicity purpose. Newspapers, radio, TV

magazines, transport vehicles, etc. are the media used for advertising. Media research relatesto detailed study of different media for selection and use.

11. Motivational Research: Motivational research is one aspect of consumer research as it deals with consumer behavior.It studies "Why" aspect of consumer behavior. Consumer research is useful for finding out thesentiments, buying motives, priorities and inner feelings of consumers. It is a type qualitativeresearch.

12. International Marketing Research: International marketing research deals with foreign markets that are attractive and profitable

provided products and marketing activities are adjusted as per the need of foreign markets and buyers. Such research is useful for exploring profitable foreign markets, for export promotionand for making suitable modifications in the exportable items. Data collection about foreignmarkets, market surveys, etc. are undertaken under international MR. Such research is costlyand time consuming as compared to internal research. However, it is a must in the case of exporting companies. International MR is also undertaken by export promotion organizationssuch as Export Promotion Councils and Commodity Boards.

APPLICATION OF MARKETING RESEARCH

A. TRADITIOMAL APPLICATION OF MARKETIMG RESEARCHTraditionally, marketing decisions have been divided into 4P's - product, price, promotion and

place decisions.

I. NEW-PRODUCT RESEARCH New product development is critical to the life of most organizations as they adapt to their changing environment. Since, by definition, new products contain unfamiliar aspects for theorganization, there will be uncertainty associated with new products. New product can be dividedinto four stages

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a. Concept generationThere are two types of concept generation research. They are:

1. Need identification. The emphasis In need research is on identifying unfilled needs in themarket. Marketing research can identify needs in various ways. Some are qualitative and others,such as segmentation studies can be quantitative. Following are some examples:i. Perceptual maps, in which products are positioned along the dimensions by which users

perceive and evaluate, can suggest gaps into which new products might fit.Multidimensional scaling is used to generate these perception gaps.

ii. Social and environment trends can be analyzed.iii. An approach termed benefit structure analysis has product users identify the benefits desired

and the extent to which the product delivers those benefits, for specific applications. Theresult is an identification of benefits sought that current product do not deliver.

iv. Lead user analysis the approach in which instead of just asking users what they have done,their solutions are collected more formally. Lead users are positioned to benefitsignificantly by solving problems associated with these needs. Once a lead user isidentified, the concepts that company or person generates are tested.

2. Concept identification. During the new product development process there is usually a pointwhere a concept is formed but there is no tangible usable product that can be tested. The conceptshould be defined well enough so that it is communicable. There may be simply a verbaldescription, or there may be rough ideas for a name, a package, or an advertisement approach.The role of marketing research at this stage is to determine if the concept warrants further development and to provide guidance on how it might be improved and refined

b. Product Evaluation and Development

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Product evaluation and development, or product testing, is very similar to concept testing, interms of both the objectives and the techniques. The aim is still to predict market response todetermine whether or not the product should be carried forward.1 Use testing - The simplest form of use testing gives users the product and after a reasonableamount of time asks their reactions their intentions to buy it.2. Predicting trial -Trial levels (the percentage of a sample of consumers who had purchased the

product at least once within 12 months after launch) were predicted on the basis of threevariables:

Product class penetration (PCP)Promotional expenditureDistribution of the product

3. Pretest marketing - Two approaches are used to predict the new brand's market share.The first one is based on preference judgments. The preference data are used to

predict the proportion of purchases of the new brand that respondents will make given that thenew brand is in their response set.

The second approach involves estimating trial and repeat purchase levels based onthe respondent's purchase decisions and intentions-to-buy judgments.

c. Test marketingTest marketing allows the researcher to test the impact of the total marketing program, with all itsInterdependencies, in a market context as opposed to the artificial, context associated with theconcept and product tests that have been discussed. Test marketing has two primary functions.

The first is to gain information and experience with the marketing program beforemaking a total commitment to it.

The second is to predict the program's outcome when it is applied to the totalmarket There are really two types of test markets:

1. Sell-in test markets are cities in which the product is sold just as it would be in a nationallaunch. In particular the product has to gain distribution space.

2. Controlled distribution scanner markets are cities for which distribution is prearranged and the purchase of a panel of customers are monitored using scanner data.

Early stages of the product life cycle are sacrificed in the expectation that higher volumes in later periods will generate sufficiently greater prompts to result in overall profit for the product over itslife

III. DISTRIBUTION RESEARCH

Traditionally, the distribution decisions in marketing strategy involve the number and location of sales persons, retail outlets, warehouses and the size of discount to be offered The discount to beoffered to the members in the channel of distribution usually is determined by what is beingoffered by existing or similar products and also whether the firm wants to follow; a "push1 or a"pull” strategy Marketing research, however, plays an important role in the number and locationin decisions about numbers and locations

a. Warehouse and Retail Location ResearchThe essential questions to be answered before a location decision is made are "What costs anddelivery times would result if we choose one location over another?"Simulation of scenarios is used to answer these questions. The simulation can be relatively simple

paper-and-pencil exercise for the location of 3 single warehouse in a limited geographic area. or it

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================can be a complex, computerized simulation of a warehousing system for a regional or nationalmarketi. Center of gravity simulation - The center for gravity method of simulation is used to locate a

single warehouse or retail site In this method, the approximate location that will minimize thedistance to customers, weighted by the quantities purchased is determined The moresymmetry there is in customer locations and weights the more nearly the initial calculationapproximates the optimal location The location indicated by the first calculation can bechecked to be determine if it is optimal (or near optimal) by using a "confirming” procedure.If it is not optimal, successive calculations can be made as necessary to “home in" on the bestlocation

ii. Computerized simulation models - The concept involved m simulations for this purpose isquite simple Data that describes the customer characteristics (location of plants, potentialwarehouse and retail sites) and distribution costs (costs per mile by volume shipped, fixed andvariable costs of operating each warehouse the effect of shipping delays on and variable costsof operating each warehouse, the effect of shipping delays on customer demand) are generated

and input into the computer The computer is programmed to simulate various combinations of numbers and locations of warehouses and to indicate which one(s) gives the lowest totaloperating cost Effective results have been achieved by using computer simulations to designdistribution systems

iii. Trade area analysis - Formal models have been developed that can be used to predict thetrading area of a given shopping center or retail outlet based on relative size travel time andimage A variety of other techniques can be used to establish trading areas. An analysis of theaddresses of the credit card customers or license plates of the cars (by plotting the addresses of the car owners) can provide a useful estimate of the trading area. Check-clearance data can beused to supplement this information. The best, but also the most expensive way of establishingtrading area bound Aries is to conduct surveys to determine them

iv. Outlet location research. - Individual companies and, more commonly, chains, financialinstitutions with multiple outlets, and franchise operations must decide on the physicallocation of their outlets). Three general methods involves plotting the area surrounding the

potential site in terms of residential neighborhood, income levels, and competitive stores.Regression models have been used for location studies for a variety of retail outlets, including

banks, grocery stores, liquor stores, chain stores and hotels. Data for building the model andfor evaluating new potential locations are obtained through secondary data analysis andsurveys.

b. Number and location of Sales RepresentativesHow many sales representatives should be in a given territory? There are three general research

methods for answering this question.The first, the sales effort approach, is applicable when the product line is first introduced andthere is no operating history to provide sales data.The second involves the statistical analysis of sales data and can be used after the sales

program is under way.The third involves a field experiment and is also applicable only after the sales program has

begun.

IV. PROMOTION RESEARCH

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================It focuses on the decision that is commonly made when designing a promotion strategy. Thedecision for the promotion part of a marketing strategy can be divided in to (1) Advertising and(2) Sales promotion. Sales promotion affects the company in the short term, whereas advertisingdecisions have long-term effects. Companies spend more time and resources on advertisingresearch than on sales promotion research because of the greater risk and uncertainty Inadvertising research.

1. Advertising research

Most companies concentrate on advertising because advertising decisions arc more costly andrisky than sales promotion decisions. Advertising research typically, involves generatinginformation for making decisions In the awareness, recognition, preference and purchasing stages.What separates an effective advertisement from a dud? The criteria will depend, on the brandinvolved and its advertising objective. However, following basic categories of responses are usedin advertising research in general and copy testing in particular

a) Advertisement recognition b) Recall of the commercial and its contentsc) The measure of commercial persuasion and the impact on purchase behavior.

• Purchase behavior - Coupon stimulating purchasing- Split-cables tests. Information Resources Inc's (IRI) Behavior Scan is one of several split-cabletesting operations. Behavior Scan monitors the purchases of panel members as well as in-storeinformation such s special prices, features and displays.• Tracking studiesWhen a campaign is running, its impact often is monitored via a tracking study Periodic samplingof the target audience provide a time trend of measures of interest. The purpose is to evaluate andreassess the advertising campaign, and perhaps also to understand why it is or is networking.Among the measures that often are traced are advertisement awareness, awareness of elements of the advertisement, brand awareness, beliefs about brand attributes, brand image, occasions of use,and brand preference. Of particular interest is, knowing how the campaign is affecting the brand,as opposed to how the advertisement is communicating the message.• Diagnostics testing A whole category of advertising research methods is designed primarily not to test the impact of atotal ad but rather to help creative people understand how the parts of the ad contribute to itsimpact. Which are weak and how do they interact? Most of these approaches can be applied tomock-ups of proposed ads as well as finished ads.• Copy test validityThis test refers to the ability to predict advertising response.* Budget decision

Arriving at analytical research-based judgments as to the optima! advertising budget Issurprisingly difficult. However, there are research inputs that can be helpful. Tracking studies thatshow advertising is either surpassing or failing to reach communication objectives can suggestthat the budget should be either reduced or increased.• Media researchIn evaluating a particular media alternative, it is necessary to know how many advertisingexposures it will deliver and what will be the characteristics of the audience. A first cut of the

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================vehicle's value is the cost per thousand (circulation), the advertisement insertion cost divided bythe size of the audience.

2. Sales Promotion ResearchThere are three major types of sales promotion: consumer promotion, retailer promotion and trade

promotions.In consumer promotion, manufacturers offer promotions directly to consumers, whereas retail

promotions involve promotions by retailers to consumers. Trade promotions involvemanufacturers offering promotions to retailers or other trade entities. Trade entities can also

promote to each other. For ex ample, a distributor can offer a steep temporary price cut to retailersin order to sell excess inventory. It is called trade promotions, since the recipient of the promotionis a marketing intermediary.Sometimes several manufacturers or several retailers combine in one promotion. These are calledcooperative promotions or promotion partnerships.

B. CONTEMPORARY APPLICATIONS OF MARKETING RESEARCH

1. Competitive Advantage.The notion that achieving superior performance requires a business to gain and hold an advantageover competitors is central to contemporary strategic thinking. Businesses seeking advantage areexhorted to develop distinctive competencies at the lowest delivered cost or to achievedifferentiation through superior value. The assessing competitive advantage can be done innumber of ways. The methods can be broadly classified as market-based and process-based assessment Market-based assessment is direct comparison with a few target competitors, whereas

process-based assessment is a comparison of the methods employed.

2. Brand Equity.Brand equity is defined as a set of assets and liabilities linked to a brand that add to or subtractfrom the value of a product or service to a company and/ or its customers. The assets or liabilitiesthat underlie brand equity must be linked to the name and/or symbol of the brand. The assets andliabilities on which brand equity is based will differ from context to context. However, they can

be usefully grouped into five categories:a) Brand loyalty

b) Name awarenessc) Perceived qualityd) Brand association

e) Other proprietary brand assets: patents, trademarks, channel relationships etc.

3. Customer satisfaction.The measurement of customer satisfaction and its link to product/service attributes is the vehiclefor developing a market-driven quality approach This approach requires a sequential researchdesign that uses the results from each research phase to build and enhance the value of subsequentefforts. During this process, it is imperative to study customers who were lost, to determine whythey left This issue must be addressed early in the system design The steps involved in customer satisfaction is

a) Define goals and how information will be used b) Discover what is really important to customers and employees

c) Measure critical needs

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d) Act on the informatione) Measure performance overtimef) Issues in questionnaire design and scaling in satisfaction research

4. Total quality managementTQM Is a process of managing complex changes In the organization with the aim of improvingquality.The power of measurements is clearly visible in applications of quality function deployment(QFD), a Japanese import used to make product design better reflect customer requirements. InQFD. a multifunctional team measures and analyzes in great detail boih customers attitudes and

product attributes. Marketing research plays a crucial role atthis stage of the process. Then theteam creates a visual mtrix in order to find ways to modify product attributes (engineeringcharacteristics) so as to improve the product on the customer-based measures of product

performance. Along the way, the team must develop a series of measures of several differenttypes.

C. EMERGING APPLICATION OF MARKETING RESEARCH

1. Database marketingA database is a customer list to which has been added information about the characteristics andthe transactions of these customers. Businesses use it to cultivate customers - as they seek newcustomers.

NeedA database provides the means for research to support decisions. It enables profiling of customers

by searching for prospects who are similar to existing customers. It provides the means for implementation of profitable programs of repeat business and cross-selling. It assists in marketing

planning and forecasting. Further a database can:• Match products or services to customers' wants and needs• Help select new lists or use new media that ft the profile of existing customers.• Maximize personalization of all offers to each customer.• Provide for on going interaction with customers and prospects.• Pinpoint ideal timing and frequently for promotions• Measure response and be accountable for results• Help create the offers most likely to elicit responses from customers• Help achieve a unique selling proposition (USP), targeted to appeal to your customers• Integrate direct-response communication with other forms of advertising• Demonstrate that customers are valuable assets.

Types of database1. Active customers2. Inactive customers3. Inquiries

Benefits of database marketinga) Customers are easier to retain than acquire. The first reason is that it takes five times the

energy and budget to get new customer a sit does to keep an existing one. Also, adisproportionately small number of your customers generate a very large proportion of your income.

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b) Determine their "Lifetime Value”. Building a lasting relationship becomes the obvious way to a prosperous and profitable future.

c) Developing relationships with customers. Understanding your customers' tastes and preferenceson an individual basis is the foundation for relationship marketing. Relationship marketingcombines elements of general advertising. sales promotion, public relations and directmarketing to create more effective and more effective ways of reaching consumers. It centerson developing a continuous relation ship with consumers across a family of related productsand services.

2. Relationship marketingThe relationship marketing process incorporates three key elements.1. Identifying and building a database of current and potential consumers, which records and

cross-references a wide range of demographic, lifestyle and purchase information,2. Delivering differential messages to these people through established and new media channels

based on the consumers' characteristics and preferences3. Tracking each relationship to monitor the cost of acquiring the consumer and the lifetime value

of his other purchases.

Reasons for Inaccuracy in Marketing Research

(1) Human behavior is always unpredictable: MR deals with humans who are far morecomplex and unpredictable than the subjects of physical sciences. A human being has abilityto think and react. The responses of human beings are different unda1 different situations.These features of human behavior bring limitations on the findings of MR.. The conclusionsdrawn may not be always identical, accurate and reliable. This makes the conclusions lessscientific.

(2) Human behavior is difficult to measure precisely: MR is not fully scientific as human behavior is difficult to measure accurately Human beings are liable to change in their outlook and behavior during the process of experimentation. Moreover, devices for measuring human

behavior are not available. This affects the conclusions drawn in the research work. Generalconclusions about human behavior can be given. However, such rough estimates are notcompletely scientific. In short, complexity of human behavior puts limitations on MR andmakes it less scientific.

(3) Human beings react differently under test conditions: MR is les^ scientific because human beings react differently under different conditions or while testing. The human tendency is tokeep the real causes/reactions secret when interviewed for a research purpose. This affects thequality of results of research project. Such results are not scientific to the fullest extent. It is

always difficult to collect reliable information from the persons selected for interview. Itequally difficult to verify the correctness of the information collected from them. This makesMR less scientific.

(4) MR cannot be completely objective: MR cannot be completely objective as human beingscannot be studied in complete isolation This is possible in laboratory work by physicalscientists, as they can shut off all outside influences during the period of experimentationHowever an investigator in MR cannot be separated from the society. His attitudes andinterests are bound to affect research findings. This affects the conclusions drawn out of theMR project.

(5) Human beings cannot be studied in isolation: In MR, it is not possible to study the behavior

of a consumer independently. It needs to be studied along with his personal interests, values,

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================etc. are not given due attention. This suggests that neglect of consumers in any type of researchactivity is undesirable and even dangerous. The benefits of marketing research will be availableonly when research activities are conducted after due regard to consumer who acts as the center of all marketing activities. Information available from consumer research can be used as afoundation for many important marketing decisions.

Finally, it may be noted that there is nothing wrong in making MR activities pro-consumer. Infact, this trend exists since the early growth of marketing research activities. Consumer isimportant in all marketing activities and the same rule is applicable to MR activities. Researchactivities without due consideration to consumers may not give expected results. In fact, thepurpose of MR is to find out precisely what the consumer wants and how to makemarketing activities agreeable to consumers in all respects such as product, price, packaging,

promotion j and so on. In brief, MR as a subject has consumer-orientation in all its| aspects.Consumer/Customer is the cause and purpose of all marketing research activities. How to makeconsumers happy and satisfied is the| basic issue before the researchers. At present, all

manufacturing/, marketing companies spend huge money on marketing research. The purpose isto make marketing activities consumer oriented.

NEED OF MARKETING RESEARCH

The following factors suggest increasing need of MR:1. Growth and complexity of markets: Markets are no more local in character. They are now

national and even global in character. The marketing activity is becoming increasinglycomplex and broader in scope as more firms operate in domestic and global marketsManufacturers find it difficult to establish close contact with all mark and consumers directly.Similarly, they have no control on the marketing system once the goods are sold out tomiddlemen. The marketing procedures are now, complicated. The market competition is alsosevere

This situation creates new problems before the manufacturers, which can be faced effectivelythrough MR as it acts as a feedback mechanism to ascertain first hand information, reactions,etc. of consumers and middlemen. Marketing activities can be adjusted accordingly.

2. Wide gap between producers and consumers: Market research is needed as there is a widegap between producers and consumers in the present marketing system. Due to mass sc

production and distribution, direct (personal) contact between product and consumers is practically lost. This creates information gap between producers and consumers. Themiddlemen dominate the market] scene. Producers do not get dependable information asregards nee expectations and reactions of consumers. They are unable to adjust the products,

packaging, prices, etc. as per the needs and requirements consumers.

The problems created due to information gap can be solved Q] through MR as it is possible toestablish contact with consumers a collect first hand information about their needs,expectations, likes & dislikes, preferences and special features of their behavior. Thusmarketing research enables a manufacturer to make his marketing policies pro-consumers.Effective communication with consumers is a possible through MR activities. Thus, MR isneeded for removing wide communication gap between producers and consumers.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================3. Changes in the composition of population and consumption pattern: In India, many

changes are taking place in composition of population. There is a shift of population from ruralurban areas. There have been considerable changes in the consumption and expenditure

patterns of consumers in India. The incomes of people, in general, are rising. This bringscorresponding increase in the purchasing capacity and buying needs and habits. The rising

prices affecting the lower and middle class consumers and their purchasing power and purchasing priorities. Similarly, there are considerable changes in the purchasing pattern of clothing and other consumer items. The demand for consumer durables is fast increasing. Themarkets now flooded with consumer durables like TV sets and so on.

Manufacturers are expected to know such qualitative & quantitative changes in the consumer preferences and their consumption pattern. For achieving this objective, MR activities arenecessary and useful. It is possible to adjust production and marketing operations as per theinformation supplied from consumer surveys and market surveys conducted under various MR

projects. In brief, MR is needed for the study of changes in the pattern of consumption and

corresponding adjustment in the marketing planning, policies and strategies.

4. Growing importance of consumers in marketing: Consumers occupy key position in modernmarketing system. They are now well informed about market trends, goods available,consumer rights and protection available to them through consumer protection acts. Thegrowth of consumerism has created new challenges before manufacturers and traders. Evengrowing customer expectations create situation when manufacturers have to understand suchexpectations and adjust the production and marketing policies accordingly. Indifferencetowards consumer expectations may lead to loss of business. In the present marketing system,consumers cannot be taken for granted. Their expectations need special consideration in allmarketing activities. Production needs to be adjusted as per the expectations of consumers.

Marketing research particularly consumer research gives valuable data relating to consumers. Itis possible to use such data fruitfully while framing marketing policies. Thus, marketingdecisions can be made pro-consumer through marketing research activities.

5. Shift of competition from price to non-price factors: Cutthroat competition is unavoidable inthe present marketing field. Such competition may be due to various factors such as price,quality, packaging, advertising and sales promotion techniques. Entry of new competitorscreates new problems in the marketing of goods and services. In addition, market competitionis no more restricted to price factor alone. There are other non-price factors such as packaging,

branding, after-sale service and advertising which create severe market competition. Every producer has to find out the extent of such non-price competition and the manner in which hecan face it with confidence.

MR is needed as it offers guidance in this regard. A manufacturer can face market competitioneven by using certain non-price factors. The shifting of competition from price to non-pricefactors has made marketing of consumer goods more complicated and challenging. Thischallenge can be faced with confidence by using certain measures suggested through marketingresearch.

6. Need of prompt decision-making: In competitive marketing, marketing executives have totake quick and correct decisions. Companies have to develop and market new products more

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quickly than ever before. However, such decisions are always difficult. Moreover, wrongdecisions may bring loss to the organization. For correct decision-making, marketingexecutives need reliable data and up-to-date market information. Here, MR comes to the rescueof marketing managers. Problems in marketing are located, defined analyzed and solvedthrough MR technique. This suggests its need as tool for decision-making. MR is needed as atool for reasonably accurate decision-making in the present highly competitive marketingsystem.

7. Problems in the distribution system: Modern distribution system is complex and costly. Howto market goods efficiently and economically is a basic issue in the present marketing system.Modern production is now possible because of the use of advanced technology. However efficient distribution is rather difficult. For this, it is necessary to identify new markets, newconsumers, new channels of distribute and new sales promotion techniques. For suchidentification, MR needed.

The cost of marketing is fast increasing in modern marketing. The burden of rising marketingcost is normally passed on to consumers. This creates adverse effects on marketing activities.In brief, obstacles large scale distribution and rising distribution costs are two problems in the

present marketing system. These problems can be studied & solved through MR activitiesrelating to products, distribution channel consumers and so on. This suggests the growing needof MR.

8. Recent developments in science and technology: Science and technology are making rapid progress. In fact, the impact of such progress touches all aspects of commercial and industrialactivities. Me products are manufactured and brought in the market. Articles with gooddemand become old and out-dated within a short period Consumers prefer new/novel articles

in place of old ones. Produce and distributors find it difficult to take decisions due to lack knowledge about future market trends. Here, marketing research useful as it providesinformation about future trends in the markets field and enables marketing managers to takequick and corn marketing decisions. This suggests the need of marketing research.

9. Existence of large size enterprises: Modern manufacturing enterprises are large in size. Suchenterprises can work as viable units and make progress only when their products are made

popular with the consumers. Large-scale enterprises need distribution of their products on amassive scale. Here, MR is useful. It helps the enterprises explore, identify and locate newconsumer markets. It suggests the ways and means for large-scale distribution of goods at thenational/global level. In brief, MR is needed as an essential element of large scalemanufacturing and marketing.

The factors noted above clearly suggest the growing need of MR in | the present consumer-oriented marketing system. It is needed in order to reduce the risks and uncertainties in themarketing activity. It supports 1 marketing managers while dealing with the marketing

problems. Marketing research is needed as it acts as a key factor in successful marketing of goods and services.

ROLE OF MARKETING RESEARCH IN MARKETING MANAGEMENT:

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(i) Close relationship between MR and Marketing Management: Marketing managementcovers different areas of marketing such as production, packaging, branding, pricing, distribution,advertising and sales promotion. Marketing research activity is closely integrated with all thesekey areas of marketing. It is an integral part of scientific marketing management. This is naturalas marketing research deals with the different marketing problems of a company and offersguidelines to marketing managers in solving such problems. In brief, marketing research acts asone useful and reliable tool for framing marketing policies and decision-making in regard todifferent aspects of marketing. It plays an important role in marketing management.MR collects and provides information to marketing managers for decision-making. It studiescertain marketing problems and offers suggestions for solving them. It also acts as the intelligencewing of marketing management.

Marketing management and marketing research are inter-related activities. In fact, marketingresearch cannot exist as a watertight compartment nor has it any existence independent of marketing management. It must be a part and parcel of the problem-solving process of marketing

management. MR activities in any organization must be directly related to the marketing problems faced by that organization. This is natural as MR cannot be effective, if it is assignedsome portions of a marketing problem for exploration in a piecemeal manner. It must be suppliedwith the full background required to study the whole problem in depth. This will enable theresearcher to provide reasonably accurate solution to the problems faced by the marketingmanagers. Similarly, MR will be effective/purposeful, if the research activities are conducted in aregular and continuous manner and also as per the specific needs of the marketing management.

(ii) Need of effective integration between MR and Marketing Management: Marketingresearch needs to be treated as a part and parcel of total marketing management. It has to operateas a problem-solving tool of marketing management or as an intelligence wing/tool of marketing

management. Similarly, MR should not be conducted merel1 as an academic activity but as a toolfor decision making by the marketing managers. It should facilitate quick and reasonably correctdecision-making by the top-level marketing managers. MR should act as an aid to decision-making in the marketing management.

This suggests that there should be effective integration in between marketing management andmarketing research. Both these activities should be effectively co-ordinated. This will ensureefficient management of marketing activities of a company. There is no scope for any conflict in

between the two as such conflict is undesirable to the company itself. However, on manyoccasions, differences of opinion and discord between research department and management arevisible Keane, John G has spelt out the conflicting points of view of the to management andmarketing researchers in the areas of research responsibility, research personnel, budget,assignments, problem definition, research reporting and use of research.

MR will be effective/purposeful only when there is close c ordination between research and actualmanagement. Research activities must be necessarily relevant to the marketing problems. Both(researchers and top-level management) should have a clear understanding and appreciation of each other's position and role. However, in practice, conflicts are noticed between the top-levelmanagement and the researchers. Such conflicts should be avoided.

(iii) Responsibility of top management for effective integration : The top management shouldaccept honestly that the researchers have a capacity to study marketing problems and offer

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================valuable suggestions for solving the marketing problems. In addition, adequate budget provisionand all necessary facilities should be provided to the researcher to investigate marketing problemsminutely and make suitable recommendations. The top management should keep meaningfulcommunication with the marketing researchers in a continuous manner. The bias attitude towardsthem is certainly undesirable. Finally management should avoid too many layers of communication between top management and researchers. It is also desirable to discuss therecommendations of researchers with open mind. Such liberal outlook will make MR activitiesuseful to the marketing management.

The researchers should also adopt open and constructive approach towards the top-levelmanagement. In the research project, attention should be given to the plans and priorities decided

by the top-level management. The researchers should continuously improve the researchmethodology and see that their reports and recommendations are easily acceptable to themanagement. Delay in the research work should be avoided as top-level management canconsider the recommendations if received in time as the nature of marketing problem changes in

the course of time.

0n some occasions, the management is not convinced about the utility of marketing research. Thismay be due to past experience in regard to research activity undertaken. The other reasons for unfavorable opinions about marketing research include delay in the completion of research work,heavy expenditure involved, bulky and confusing report and finally recommendations made arenot convincing and practical. The result is that the management forms negative impression aboutthe very concept of marketing research. The company management fails to understand the

practical utility of research work. It feels that MR is an unnecessary activity and funds should not be spent on the same. It is as good as waste of money as positive benefits may not available. Suchnegative opinion formation is the result of previous experience of the firm. It is a type of criticism

of the researchers who failed to submit promising, result-oriented and practical research report. Itneed not be treated as the criticism of marketing research activity itself. The adverse opinions of companies on marketing research are undesirable and even dangerous to the future growth of MR activity. Here the responsibility lies on the researchers. They have to conduct research work honestly and also by taking keen interest in the proposed research project. As a result, the researchreport and recommendations 11 be promising and easily acceptable by the management. Themarcher should prepare the outline of research project properly and place it before themanagement in a convincing manner. As a result, the management will be convinced about theutility of marketing research project and will be willing to spend money on the same. "Many atimes, management is not convinced about the utility of marketing research and discards it as anunnecessary activity over which no funds should be spent." is possible when the research projectis not prepared and placed properly before the management for consideration and approval.

(iv) Responsibility of researchers for effective integration: The researchers should use their skills, experience and knowledge while conducting the research activities. Finally, they shouldmaintain persuasive communication as inadequate/poor communication creates bias attitude onthe part of top-level management. As a result, the recommendations are rejected or not used inactual practice. In addition, the superiority of the top-level management in the decision-making

process should also be honored. The approach should be to help the management in all possibleways. Such positive/constructive approach on the part of researchers will enable them to make

purposeful contribution in the field of marketing management.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(v) Present Position: MR is now given more creative role as compared to the conventional rolewhere it was used just for studying buyer behavior or for the feasibility studies for new productsto be introduced in the market. MR until the mid-1980s, was considered a luxury, which onlymultinationals could afford. However, all companies now feel the need of MR due to growingcompetition and liberalization. Realizing the contribution that MR makes, more and morecompanies in India are now turning to MR.

INTERACTION BETWEEN MANAGEMENT AND MARKETING RESEARCH

Marketing research is a useful tool available at the disposal of management. At all stages of marketing cycle it can be used. On the other hand in certain quarters misunderstandings havecropped in about each other. Many organizations feel that marketing research is not at all needed.On the other hand, marketing researchers point out the lack of appreciation for their work by theorganization.

Some of the organization’s complaints about marketing researchers are:1. Research is not problem-oriented. It tends to provide a plethora of facts, not actionable results.2. Researchers are too involved with techniques, and they appear to be reluctant to get involved in

management problems.3. Research is slow, vague and of questionable validity.4. Researchers cannot communicate, they do not understand and they do not talk the language of

management.

Marketing researchers have the following complaints:1. Management organizations do not include researchers in discussions of basic problems.

Management tends to ask only for specific information about parts of problems.2. Management pays no more than lip service to research and does not really understand or

appreciate its value.3. Management does not allow enough time for research. They draw preliminary conclusions

based on early or incomplete results.

BENEFITS OF MARKETING RESEARCH

General benefits of marketing research are1. Marketing research has made the job of forecasting and decision making easier by applying

scientific norms.

2. Through this, the changing tastes of the consumers could be identified and the firm can suitablyalter its production pattern or bring a new variety to meet in needs of the consumers.3. By means of marketing research the type of competition that exists and the ability of the other

manufacturers could be identified.4. It helps the sales manager to push activities further thereby to enrich the sales as well as to find

new markets and new customers.5. It tells the management where the company stands in its industry6. It tells management what the industry trends are & likely to be.7. It is an essential tool in appraising and improving sales management effectiveness. Specific

activities in this area include measuring variations in territorial sales yield, market share, saleseffectiveness, measuring the effectiveness of individual salesmen and analysis of salesmen's

activities.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================8. It is an essential tool in the development and introduction of new products.9. Supplies data to be used in salesman's and territorial quotas planning.

10. Supplies the facts for fixing the budget.11. Helps determine the advertising methods that should be used and the angle that should beemployed in the advertising copy.12. Furnishes facts to convince dealers of the selling possibilities of given articles and to helpthem to increase their sales.13. Predicts the trend of business conditions in given industries and furnishes a basis for

promotion programs.14. Ascertains the consumer's likes and dislikes.15. Reports the methods used by the dealers, display, advertising and selling16. Measures the stock in the dealer's hands.17. Finds the dealer's reactions to given policies.18. Furnishes data for fixing dealer's territories and quota.19. Finds out and tabulates statistics in which the concern is particularly interested.

20. Keeps one informed about the developments in other industries, which may affect the business of the firm.21. Measures the purchasing capacity of a given territory.22. Discovers new uses for the product.23. Analyzes the cost data that are available in published form.24. Studies the organization of the concern with a view to suggesting changes or improvements

(A) BENEFITS OF MARKETING RESEARCH TO TOP-LEVEL MANAGEMENT:Top management is concerned with the decision-making and policy framing at the highest level asregards production, marketing and so or it is the highest level planning, policymaking andcontrolling authority in the organization. The top-level management of a business unit includes

Directors, Managing Director and other top-level marketing executives and other executives. Top-level management has to take marketing decisions such as fixing short-term and long-termmarketing objective and sales targets, finalizing marketing policies and strategies, evaluatingmarketing performance, forecasting sales, allocating resources t marketing activities and selectingsuitable marketing channels. For taking decisions on these matters, reliable and updated data arerequires and the same are provided by the MR department. This is one service that MR department provides to top-level management. It facilitates decision-making on marketing issues

by providing necessary information on the marketing and other aspects of business.

The top-level management needs feedback on current marketing environment and the MR department can provide this quickly. The feedback required in this regard can be provided in acontinuous manner by the research department which studies marketing problems of the companyin a regular and continuous manner. The research department is supposed to supply information tothe top-level management on the following aspects of marketing:(1) Current business environment (more particularly marketing environment) faced by thecompany and the changes likely to take place in the near future.(2) Trends in consumer behavior, demographic information and consumer needs/expectations.(3) Changes in consumer purchasing power and data on demand and supply position in themarket.(4) Trends about market competition and marketing policies of major competitors of the companyand their marketing strategies.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(5) Availability of better/cheaper raw materials and technology for manufacturing superior qualitygoods at lower costs.(6) Feedback on the marketing performance of the company and the challenges that it is facing.(7) Sales force requirement, recruitment and development.(8) Marketing opportunities available (domestic and foreign) and the marketing challenges likelyto develop in the near future.(9) Any other information that the top management is expected to know for correct marketingdecision-making and policy framing.

The top-level management can take reasonably correct decisions in the following marketing areaswith the help of updated feedback available from the marketing research department:

1. Deciding the long term marketing objectives and setting marketing plans, policies andstrategies to achieve marketing objectives.2. Designing of product or modifications in the existing products.3. Determining the product line and adjusting the products as per the needs and expectations

of consumers and allocation of resources among various products and marketing activities.4. Improving the brand or package design, color, etc.5. Fixing fair pricing of the product.6. Fixing marketing strategies in order to face the competitors’ ever-changing marketenvironment.7. Selecting suitable channels of distribution for large scale an economical marketing of company's products.8. Estimating sales i.e. sales forecasting for adjusting production and marketing activities of the company.9. Designing internal mechanism to monitor and evaluate performance of marketingdepartment and introduction of remedial measures, if required.

In brief, MR is the crucial analytical tool and provides management with vital strategic andtactical information for decision-making. It guides management in the decision-making process.However, the final decision is to be taken by the top management. The feedback of Marketingdepartment certainly plays a positive role in the correct decision making This suggests theimportance and benefits of marketing research to top level management of the company.

(B) BENEFITS OF MARKETING RESEARCH TO GOVERNMENT:Marketing research at the government level is conducted by various government departmentsconcerned with agriculture, industry, commerce, industrial production, exports and imports,finance, foreign exchange and so on. These departments collect information on various aspects of national economy. In addition, government companies, public corporations, public sector banks,RBI/ etc. also collect information about various aspects of national economy.

In India population census, (census survey) crop surveys, surveys of industrial production,wholesale and retail prices, cost of living index, estimates of imports and exports etc. for thefuture period are conducted regularly. In addition, needs of various sectors of the economy areestimated. Information collected through these sources is used while deciding government

policies, budgets, funds allocation, etc. This suggests how research activities are given adequateimportance attention at the government level. The data collected through census and other surveys

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================are used while framing economic policies, long term development plans, allocation of resourcesand so on.

MR at the government level is useful in the following areas:(1) Planning and controlling national economy: For planned economic development,

available resources must be allocated in different sectors of the economy in a rationalmanner. Nation priorities must be decided clearly. The future needs of the economy must

be estimated properly and arrangements need to be made meet them properly.Misdirection of resources must be controlled effectively. For such planned economicdevelopment, data on important aspects of the economy need to be collected. For this,research activities should be undertaken at different levels.

(2) Control on production, distribution and other marketing activities: Governmentconducts various marketing activities on a large scale. It conducts production, looks after distribution and even restricts consumption of certain commodities through its marketingoperations. The government has to bring equitable distribution of goods particularly

essential commodities. Reasonable prices need to be maintained for social good.Production needs to be adjusted as per the needs of the entire economy. All suchobjectives can be achieved through appropriate policies. For the introduction of such

policies, marketing research activities in the form of surveys, estimates and collection of data are useful. Research studies are also useful for the calculation of needs of the people,

production required, consumption patterns of people and so on.(3) Control on exports and imports: Exports and imports are usually regulated by the

government through suitable Exim policy. Exports must be adjusted as per the needs of the economy and also as per the surplus production available. Imports must be allowed tosupplement the internal production. Large-scale imports are also necessary for export

promotion. Proper policy decisions in this regard are necessary and are also visible in the

Exim policy of the government. For framing such policy, adequate data must be available.This is possible through research activities. Surveys conducted are useful for estimatingsurplus production for exports, domestic consumption and imports required to be made. In

brief, appropriate decisions as regards exports and imports can be taken with the help of data available through MR activities conducted at the government level.

(4) Use of MR in Miscellaneous areas: Marketing research is useful to the government inmany other areas of national economy. Such areas are: production plans (targets) in regardto consumer goods and industrial goods, foreign exchange requirement for the future

period, regulation of production and prices, equitable distribution of goods and services,resource allocation and allocation of funds to social service at reasonable prices and so on.Census reports arc useful to the government for policy framing and decision-making onvarious social services such as facilities of primary education, and allotment of funds for

primary education, provision for sports and recreation facilities, provision for medicalfacilities and provision for family planning and welfare facilities.

In brief, marketing research is useful to the government in bringing economic stability andeconomic growth. The government can take correct decisions about various aspects of nationaleconomy with the help of the feedback provided by marketing research activities. Finally, it cansolve economic problems and difficulties with the help research activities undertaken at thegovernment level. This suggests the importance of marketing research at the government level.

(C) BENEFITS OF MR TO ADVERTISING AGENCIES:

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Advertising agencies are specialized professional service agencies that offer different services totheir clients as regards advertising and publicity through different media including press, TV andradio. Such agency performs various functions and offers varied services to its clients by chargingnecessary fees. Such services include booking space and time for advertising, preparation of advertising copy, organizing advertising campaigns of clients, offering guidance to the clients asregards packaging, branding, product modification and so on. Selection of suitable media for advertising, copy writing, testing effectiveness of advertising, advertising planning of the clientsare some more functions/services offered by advertising agencies. Some agencies even conductmarketing research activities on behalf of their clients.

In order to conduct its activities efficiently, an advertising agency needs adequate information andlatest trends as regards advertising and marketing. Such information includes product details,readership details, details of different advertising media, media rates and so on. Such informationis available from different sources such as data published by newspapers, TV, radio, advertising

magazines and so on.

An advertising agency also needs information as regards new trends and techniques used inadvertising, legal and other restrictions on advertising and publicity in India, details of differentadvertising media (i.e./ rates, coverage, audience, popularity of the media, etc.). Information aboutmarket competition, new products available in the markets, advertising campaigns of competitorsof its clients, etc. is also required by an advertising agency. For this, the agency has to conductresearch activities in the field of advertising and marketing.

An advertising agency has to collect and maintain all such information in an orderly manner for quick reference. It has to collect all useful data from different sources. Data already published on

advertising and allied subjects need to be stored by the agency for ready reference. In addition, theagency has to conduct research activities in order to collect necessary information useful for theconduct of its functions. A well-maintained reference library is also necessary in the case of anadvertising agency. Such activities will provide suitable feedback to the agency and the agencywill be able to offer efficient services to its clients. This suggests the importance of MR and MISin the case of advertising agencies.

MR supports advertising agencies in regard to advertising activities. It provides reliable andupdated information for correct decision-making on advertising budgeting, media planning,selection of advertising media for the clients and checking advertising effectiveness. Anadvertising agency can arrange advertising campaigns of its clients with the support of dataavailable through MR. Finally, an advertising agency can give proper guidance to its clients onadvertising matters with the help of information available through research activities on press,media, and so on.

(D) BENEFITS OF MARKETING RESEARCH TO WHOLESALERS:

MR is beneficial to wholesalers in the following areas of their business:(1) Location of business establishment: Every wholesaler has to locate his businessestablishment at a convenient place. Location includes location of main office, branches,warehouses and so on. The cost of marketing will be low if the location is optimum. Here,

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================researchers undertake a survey of available convenient places and suggest the convenient placesfor locating business establishments. Thus, for selection of convenient location, locational surveyis useful.

(2) Selection of sales territory: Every wholesaler has to select promising area for his business.This selection is important as turnover and profit are related to the sales territory selected. For such selection, the features of product to be distributed, market demand of different areas,

purchasing capacity of customers, possible increase in demand in future, possible benefits of sales promotion measures, etc. need to be taken into consideration. Researchers undertake surveys of different trading areas and suggest the best trading area to the wholesaler.

(3) Reduction of distribution/marketing cost: Every wholesaler will like to reduce the cost of distribution as his net profit is closely linked with the cost of distribution. This cost includesexpenditure on advertising, services to retailers, discount and credit facilities offered, arrangementfor delivery of goods to retailers and so on. Such distribution cost needs periodical review in order

to check wastage and liberal expenditure on distribution. Reducing distribution cost is difficultdue to market competition but efforts should be made in this regard with the help of experts i.e.researchers. They suggest ways and means to bring down the cost of distribution without anyadverse effect on total sales.

(4) Decision on number of commodities for distribution: Every wholesaler has to decide thenumber of product lines he can handle efficiently. He has to decide the number of items that hecan distribute effectively. Sometimes, marketing of limited items with good demand may be

profitable. Similarly, stocking of different items may prove to be costly. In addition, everywholesaler has to consider his financial position, manpower available and storage facilitiesavailable while deciding the number of items for the business. Marketing researcher can study all

relevant facts and offer suitable guidance to the wholesaler in this regard.

(5) Storage and handling of goods: Every wholesaler has to maintain adequate stocks for smooth and regular supply of goods to retailers. Naturally, he has to give attention to storage,handling and transportation of goods. He has to conduct these activities economically. Thewholesaler can undertake studies in these areas in order to find out ways and means for handlingthese activities speedily and economically. For this, research studies are useful.

(6) Miscellaneous benefits to wholesalers: Marketing research is also useful to wholesalerswhile dealing with other aspects of marketing. They include cost-profit analysis, stock handlingand delivery procedure, credit recoveries, incentives to retailers for their loyalty, sales promotionmeasures and so on.In short, MR offers guidance to wholesalers while dealing with their problems and difficulties. Itis useful for the expansion of business and also for raising the margin of profit in the business.Wholesalers can undertake such research directly by making suitable internal arrangements. Theycan even study the published material and use it for the benefit of their business operations. Manywholesalers do not conduct their own research studies but take advantage of research studiesconducted by others.

(E) BENEFITS OF MARKETING RESEARCH TO CONSUMERS:

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Consumers do not conduct MR activities on their own. However, the benefits to all researchactivities are available to consumers. In fact, the purpose of MR is to study/understand the needs,expectations, problems, etc. of consumers and to give maximum possible convenience andsatisfaction to them. This suggests that consumers secure the maximum benefits of researchactivities indirectly as all research activities are basically for the benefit and convenience of consumers.

The benefits of MR to consumers are as noted below:1. Supply of goods and services as per the needs and expectations of consumers. MR provides

wide choice to consumers. Consumers get wide variety of goods at fair prices due to MR activities.

2. Suitable adjustments in the products (as per the requirements of consumers) through product planning, product innovation and product modification.

3. Supply of goods at right place, time and also at the right price.4. Better return (in terms of convenience, satisfaction and welfare) of the price paid for goods

and services.

5. Protection of the rights of consumers and prompt redressal of complaints relating to price/quality, use, etc.6. Availability of new / innovative products as per current socio-economic-cultural needs.7. Provision of wide variety of goods for the convenience of consumers.8. Better quality after-sales services.9. Fair treatment and prevention of exploitation of consumers.10. Production as per the expectations of consumers.11. Provision of wide choice to consumers.

(F) BENEFITS OF MR TO SMALL BUSINESSMEN:

In general, MR is useful to all categories of businessmen - small or big. Small businessmeninclude small-scale manufacturers, small-scale dealers, retailers and so on. They can adjust their

business policies and \ activities as per the information available from the research activities. Theycan take decisions regarding location of business/ sales territory, commodities for manufacturingor marketing, sales promotion policies, storage of goods, credit policies, pricing policies and so onwith the help of information available through research activities.

A small businessman may not be able to maintain separate research department for the conduct of research activities. However, he can collect necessary information from census reports, other financial and marketing reports, etc. published by different agencies. He can even refer to marketreports and other reports on current economic issues and adjust his business policies accordingly.This is how marketing research is useful to small businessmen in the conduct of all their businessactivities properly and with foresight, imagination and vision.

Small businessmen have to adjust their business policies and activities as per the need of thesituation. Here, they use the research techniques (knowingly or unknowingly). This suggests thatmarketing research is useful to large business houses as well as small businessmen. In the case of small businessmen, the use of MR may not be extensive as in the case of large business houses.However, small businessmen study market situation as per their business needs, use availableinformation on market competition, consumer needs, etc. and adjust their business plans, policiesand operations according. This is precisely the manner in which they use marketing research for their benefit.

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Reasons for the Failure of Marketing Research:1. There is resistance on the part of the business executives to use research, because they think

that research is a threat to their personal status. They also think that marketing research mayexpose them adversely.

2. Sometimes, the executives develop their own objectives, which are in conflict with theorganization, and they want research to support their views rather than the views of theorganization.

3. The executives are unable to use specialists effectively. Marketing research presently draws ona variety of specialists from such disciplines as mathematics, statistics, economics, psychology,sociology, general semantics, anthropology, etc.

4. Marketing research department is often isolated from key departments.

CHARACTERISTICS OF GOOD MARKETING RESEARCH

The duty of marketing research is to solve the problems of the organization relating to its salesand related marketing issues. As such it is considered to be a primary tool by severalmanagements and as a secondary tool by many managements. In spite of its drawback of arrivingat exact results with complete accuracy, corporate world has accepted its relevance. One suchdrawback posed against marketing research is its cost-effectiveness. If the tools used are crisp andless costlier its service could be welcomed by all. For such recognition marketing research must

possess certain characteristics, which are mentioned by Philip Kotler as follows:

1. Scientific method: Competent marketing research is characterized by an attempt to follow thescientific method, careful observation, formulation of hypotheses, prediction and testing.

2. Research creativity: At its best, marketing research develops innovative ways to solve a

problem.3. Multiple methods: Competent marketing researchers keep away from over reliance on any one

method, preferring to adopt the method to the problem rather than the other way round. Theyalso recognize the desirability of the simultaneous gathering of information in different ways togive greater confidence than any one method would provide.

4. Interdependence of models and data: Competent marketing researchers recognize that thefacts do not speak for themselves but rather derive their meaning from models of the problem.They attempt to guide their search for information on the basis of causal decision model to helpthe executive.

5. Value and cost of information: Competent marketing researchers show concern for measuringthe value of information against its cost. Value/cost is a consideration when the MarketingResearch Department chooses which research projects to conduct, which research designs touse and whether to gather more information.

BASIC VS. APPLIED MARKETING RESEARCH:

Research can be divided into two classes viz., basic research and applied research.(1) Basic Research

Often basic research is called 'theoretical’ 'pure' or 'fundamental' research. It is not directlyconcerned with solving marketing problems. Primarily it aims at improving academic knowledge

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================about the subject matter. Basic research does not deal with commercial problems but it relates tofundamental questions concerning the business and allied subjects. Basic research may addressitself to issues like economic and political changes in a country or reasons for changes in lifestylesin youth.(2) Applied ResearchApplied research directly deals with commercial problems. It tackles the business problems and

attempts to find alternative solutions to the problems. Applied research may relate to locatingreasons for fall in sales or to introduce a new brand of product.Applied research can be of two types (a) problem-solving research and (b) problem-orientedresearch. As the name indicates problem-solving research relates to a specific problem. Thisresearch can be conducted either by the marketing research department of the firm or by anoutside research agency. By contrast problem-oriented research deals with problems that may beof interest to many firms. This type of research puts into practice the knowledge obtained through

basic research.

METHODS OF CONDUCTING MARKETING RESEARCH

The methods of conducting marketing research are broadly classified into the following four categories:

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(1) Desk Research: In desk research, the required information for research work is collected from

published and other written sources of information available. Desk research is useful for thecollection of secondary data. Secondary data are already collected for some other purpose butcan be used conveniently by borrowing the same. Desk research is a type of in-houseresearch.

(2) Field Research/Investigation: In field investigation/survey method, the required informationis collected from the consumers, dealers and others connected with marketing. In addition,consumers surveys are also conducted for this purpose. The data collected from such fieldinvestigation are called primary data.

(3) Observation Method: In observation method, the required information is collected throughactual physical observation of one or more phenomena under study. This method is alsouseful for the collection of primary data.

(4) Experimentation Method: In experimentation method/ the required information is collectedthrough a small scale experiment under controlled conditions. This method is used for

primary data collection.

The methods of data collection noted above have their special features, advantages andlimitations. The researcher has to select any method convenient to him. Collection of reliable andauthentic data is more important than the specific method used for data collection.

DESK RESEARCH

MEANING AND FEATURES OF DESK RESEARCH:Desk research means research activity conducted with the help of established information (data)

by different agencies and also by using the information available from the internal sources of thecompany. The information published in trade journals, commercial press and data internally

generated by the company are used for the desk research. Thus it is a critical study of publishedinformation (data). Such research is usually conducted within the marketing research departmentof the company by the research staff appointed.Desk research is simple and economical in nature. It saves time and money on research work to aconsiderable extent as field investigation for data collection is avoided. However, companiesgenerally do not depend fully on desk research. They prefer to supplement desk research withfield investigation. Desk research does not involve field work/survey work of any type. Naturally,desk research is rather easy and quick. It is actually finding out the required information from

published journals, etc. and using it for the study of marketing research problem.

ADVANTAGES/MERITS OF DESK RESEARCH:

(1) Easy and quick: Desk research is easy and quick as required information is available fromdifferent agencies and sources -internal and external. Time in data collection is reduced indesk research as available data are used for research purpose.

(2) Economical: Desk research is economical as information can be collected easily throughlibraries or by paying subscriptions. This reduces the expenditure on research activity.

(3) Reliable data available: The data available in published form are generally reliable as theyare collected by responsible agencies and institutions. This brings accuracy to the conclusionsdrawn through desk research.

(4) Absence of interviewee’s bias : The published data are factual and away from interviewee's bias. Naturally, the information available is more reliable/dependable.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(5) Convenience: Desk research is convenient as it relieves from the botheration of field

investigation, tabulation, analysis and so on.(6) Suitable to small firms: Desk research is convenient in the case of small firms and non-profit

organisations.

DISADVANTAGES/LIMITATIONS OF DESK RESEARCH:

(1) May not be exactly as per needs: The published data may not be always reliable and exactlyas per the needs of survey work undertaken. The researcher has to make proper scrutiny

before using published data.(2) Needs modification : Secondary data need suitable modification before actual use for research

purpose. This is necessary in order to adjust data as per the need of the research work undertaken.

(3) Testing required: Published data need proper testing through field investigation for verification of validity and reliability.

(4) Too much dependence undesirable : Too much dependence on published data is undesirableand even dangerous. The conclusions drawn from such data may not be dependable. Desk research is not always dependable.

(5) Secondary method: Desk research is a secondary method of MR. The data used in the desk research are secondary and may not be exactly as per the need of research study.

(6) Lacks practical-orientation: Desk research is like library research work and lacks practical-orientation.

SOURCES OF PUBLISHED INFORMATION (SECONDARY DATA):In the desk research, published information is used extensively. Such information isavailable from internal and external sources. Normally, information (secondary data) for

desk research is available from the following sources:(A) External Sources:External sources are the reports and publications of various agencies including commercial press.External sources are used when internal records are not adequate or do not provide the requiredinformation readily.

(1) Trade Journals: Trade journals are published regularly for the information and guidance of business community. They collect and publish commercial information regularly. Some journals even conduct surveys and publish- the data collected. Companies can subscribe tosuitable journals and use the information published therein. A researcher can even refer to

back issues of known journals for reference purpose. In India, large number of trade journals

are published. They include, "Business Today", "Business India" and so on. Even businessnewspapers (e.g.. Economic Times) publish varied information on industrial, financial andeconomic matters. Such information can be used for research purpose.

(2) Directories: Trade directories are published by different agencies like chambers of commerceand trade associations. They supply information in a compact form to researchers for different

purposes.(3) Subscription Services / Syndicated Services: Some commercial organisations collect and

supply information on specific subject/subjects regularly to its subscribers. Interestedcompanies should pay the subscription fees periodically and in return they get requiredinformation in a compact form which can be used for research purpose.

(4) Publications of Trade Associations and Chambers of Commerce: These associations

collect and supply trade information to their members through journals, special reports, annual

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reports, booklets and other publications. Sometimes, surveys and special studies are conductedand the reports are given wide publicity through such publications. These associationsmaintain reference libraries for the benefit of their members and researchers where Indian aswell as foreign journals are made available for reference purpose.

(5) Publications of Management and Economic Consultants: Management consultancycompanies collect information on business matters and give publicity to the same. Thisinformation is useful for research purposes. Even the research reports prepared by MR organisations can be used in the desk research

(6) Publications of Banks and Financial Institutions: Banks, financial institutions, investmenttrusts and stock exchanges publish information on financial matters through their annualreports and other publications. In India, RBI publishes information on all aspects of Indianeconomy regularly. Such publications provide reliable statistical information to researchers.

(7) Company Reports: Public limited companies publish their annual reports and financialstatements which contain information about their activities and also about general economicsituation in the country. Such reports can be used for desk research purpose

(8) Specialised Libraries: In cities like Mumbai and Delhi, specialised libraries are available.They provide whatever information is required by researchers. Even the libraries of foreignembassies are useful for data collection on commercial matters

(9) Government Publications and Publications of International Organisations: Governmentdepartments, public corporations and other government agencies publish information of variednature through their publications. Census reports are also published by the government. Suchreports provide valuable information to researchers. Along with this, international agencieslike IMF, WTO, FAO and other agencies of United Nations publish useful information ontrade, finance and other economic matters. Such information can be used for desk research.

(B) Internal Sources:

Along with external sources of secondary data, internal sources also supply sufficient informationfor research purpose. Internal sources are the documents, registers, and records (accounting andsales force) available within different departments of the organisation itself. Huge internal dataare available within the organisation but in an unorganised manner. Such data need to becollected and arranged properly before actual use in the research project. Researchers go toexternal sources when they are unable to get required data within the organisation itself. Variousdepartments of the company can provide information in the form of

(1) periodical statements, reports and statistical data.(2) Past research reports, files, documents and correspondence of the company are also useful for

reference purpose.(3) sales orders, customer's complaints and sales reports of different areas are useful for

marketing research.(4) salesmen’s reports are useful for securing information about market situation.

INTERNAL V/S EXTERNAL SOURCES OF DATA COLLECTION

Internal Sources External SourcesMeaning Internal sources of data

collection means dataExternal sources of datacollection means the use of

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collected from the documentsavailable with the company

data published by externalagencies.

Use of information Information available frominternal sources can be useddirectly for research purpose.Modifications are not required

Information available fromexternal sources cannot beused directly as it is.Modifications as per thenature of research work arerequired.

Examples Purchase records, salesrecords, periodical salesreports and annual reports arethe examples of internalsources of data collection

Trade journals, annualreports of companies,surveys conducted by press,census reports etc. areexamples of external sourcesof data collection.

Coverage Limited coverage as they

relate to company only.

Wide coverage as they are

varied in character Reliability Internal sources are morereliable as they supplyaccurate data. Verification of data is not required

External sources may notsupply accurate data.

Naturally, a verification of data before actual use isnecessary

Availability Internal sources are easilyavailable and that too withoutany extra cost.

External sources are noteasily available Money isrequired to be spent onthem.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Evaluation of Secondary Data

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================ADVANTAGES/MERITS OF PUBLISHED DATA:

(1) Easy and economical availability: Published data are available easily, quickly andeconomically.(2) Extensive availability: Published data are available extensively on all aspects of marketing and can be used by referring to different sources This enables the researcher tomake his primary data collection more specific and relevant to his study.(3) Supplementary role: Published data can be used as a good supplement to data collectedthrough field investigation It supports and fill in the gaps in the primary data used Moreover,the researcher gets additional information about the problem under study His understanding of the marketing problem improves.(4) Facilitates completion of research work : Completion of research project without using

published data is difficult as such data are needed when adequate primary data are notavailable Published data bring completeness to the research project.(5) Facilitates comparison: Secondary data can be used as a basis for comparison with the

primary data collected by the researcher

DISADVANTAGES/LIMITATIONS OF PUBLISHED DATA:

(1) Old and outdated nature: Published data available may be old and outdated. The use of such data is irrelevant for research purpose. In fact, the utility of secondary data declines

progressively as the period goes.(2) May not be complete and reliable: Such data may or may not be complete, accurate andreliable. It is rather difficult to find out the reliability of published data. Moreover, use of unreliable published data is dangerous for research purpose.(3) Too much dependence undesirable: It is not desirable to depend too much on the

published data for research purpose as there is always a time gap in between the collection and publication of such data. Moreover, the deficiencies of published data will be carried forwardin the research project undertaken.(4) May be of bias nature: The bias of the collecting agencies may be reflected in theresearch work or research report when published data are used extensively.(5) May not be directly adjustable (relevant) to research project undertaken: Secondarydata rarely fit perfectly into the framework of marketing research problem under investigation.Such data are not exactly as per the need of research project undertaken. The data may not fitinfo the needs of investigation.

PRECAUTIONS TO BE TAKEN WHILE USING PUBLISHED DATA:

(1) Published data has certain limitations and should be used in the research work only whenabsolutely essential or when available as per the requirement of the research project.

(2) Data published by a reputed and reliable agency should be used for research purpose.(3) Too much dependence on published data for research purpose should be avoided.(4) Old and outdated published data should not be used.(5) To the extent possible verification of published data should be made before actual use in the

research project. Such evaluation avoids the use of unsuitable/unreliable data in the researchwork.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================FIELD INVESTIGATION/SURVEY METHOD

MEANING OF FIELD INVESTIGATION/FIELD SURVEY:In addition to desk research, marketing research can be conducted through field investigation. For this, field surveys are conducted. They are used for primary data collection in MR. Survey means

a planned attempt to collect required information from a representative sample of the relevant population. Field investigation means collecting first hand information by actually visitingmarkets or meeting consumers and dealers who are directly connected with the marketingactivities. Data collected for the first time through field survey are called primary data. Here, thedata are collected through suitable questionnaire and interviewing a limited number of people (asample) selected from a/large group. Customers, traders and suppliers are the major sourcessupplying primary data.

The primary data collected are superior to secondary data. Researchers turn to the primary data inorder to overcome the limitations of secondary data which include incompatibility, obsolescenceand bias. Primary data are also necessary when the secondary data are incomplete. Researchers

prefer to use both primary and secondary data for research purpose as depending fully onsecondary data is not fair. Primary data need to be collected from different sources such assurveys, observation and experimentation.

The primary data are reliable. However, the problem in primary data is its cost, both in terms of money and time required for collection. In addition, researcher's bias also creeps in. Even withsuch limitations, the primary data are important and useful in MR.Primary data are of two types: (a) Census, and (b) Sample, Census refers to collection of datafrom the entire population. In India, population census is taken after every ten years, (the latestcensus was taken in 2001). It is a lengthy and costly method. As a substitute to census, samplingmethod of data collection is used.

Sample refers to a pie taken from the population. Sample is a small representative of the wholeuniverse. If the sample size is fair, the conclusions drawn are applicable to the entire universe.Random sampling is a popular method used for data collection.Sampling is an integral part of data collected through surveys. Sampling is used to collect primarydata when the sources of data are too many to be exhaustively handled. A sample is only arepresentative portion of the universe/population. The sample needs to be decided clearly beforestarting the survey work.

Field surveys are conducted extensively for the collection of primary data. Personal interview and

telephone interviews are arranged for field surveys. A survey consists of gathering data byinterviewing limited people. Such survey relates to consumers and other marketing activities.

In survey method, direct communication with consumers/dealers is established and information iscollected from them through questionnaire. Survey method is more effective and reliable ascompared to desk research. According to Tull and Hawkins, "Survey is the systematic gatheringof information from respondents for the purpose of understanding and for predicating some aspectof the behaviour of the population of interest."

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================DESK RESEARCH V/S FIELD RESEARCH:

Desk Research FieldResearch/Investigation

Meaning Desk research is the researchconducted within themarketing researchdepartment of a company. Itis like library research work

Field research is theresearch conducted outsidethe research department.The information is collectedstraight from theconsumers, dealers or markets

Sources used The sources of desk researchare like trade journals,government reports, censusreports and subscriptionservice

The sources include personal interviews,telephone surveys andconsumer panels. Inaddition, observational andexperimentation methodsare also used

Time and Cost involved Desk research is an easy,quick and less expensive.

Field research is a time-consuming and costlymethod of conductingmarketing work

Type of data that iscollected/used

The data collected are basedon published data (secondarydata) available. The testing

by field investigation isabsent.

The data collected are primary data andconclusions drawn are

based on actual fieldinvestigation and areaccurate and reliable.Testing is also possible

Position of investigators bias

The data collected are freefrom investigator's bias

The data collected andconclusions drawn mayhave interviewer's bias

Nature of method Secondary method of MR.Used to supplement fieldinvestigation and other methods of data collection

Field research is the oldestand primary method of marketing research and isused extensively even at

presentData used Desk research uses secondarydata for research

Field research uses primarydata for research work

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================METHODS OF FIELD INVESTIGATION/MARKET SURVEY:Survey methods are useful for the collection of primary data through interviewing. Field work calls for a lot of managerial and administrative skills on the part of the research agency. It should

be properly planned and also supervised. The time schedule of field work must be strictlyfollowed and the responses must be recorded accurately and honestly. Every survey method hasits special features, advantages and limitations. A researcher should select suitable survey methodfor his research project and use it in a systematic manner. It is not possible to treat specific surveymethod as the best. The researcher has to consider the nature of research project, the type of information required, funds and time available, etc. and select one or two suitable surveymethods. The use of survey method is essential for the collection of primary data on a marketing

problem under investigation.

Field investigation is one of the most widely used MR methods. Field investigation methods areimportant, as they are more accurate and reliable. Here, direct communication is established withthe consumers and information is collected by asking relevant questions. Naturally, the

information collected is accurate, first hand and factual. The conclusions drawn from such dataare more accurate/ reliable.

The rate of response to field investigation is generally positive. Investigators can even collectadditional information through personal interviews. It is not possible to study market situation andconsumer needs by reading published information. In this sense, field research is superior to desk research.

All companies give special importance to field investigation and use it as a good supplement todesk research. Market survey/field investigation is normally used if the required data are notavailable from the company's internal records or from external published sources. MR will not be

comprehensive, complete and reliable unless field investigation is conducted extensively. In fact,the quality of research work and its practical utility in decision-making depend on the extent towhich field investigation is carried out. This clearly suggests the importance of field investigationin MR.

There are four important methods used in field investigation/survey. These survey methods are:(a) Mail surveys(b) Telephone surveys(c) Personal interviews(d) Panel Research.

(a) MAIL SURVEY

MEANING AND FEATURES OF MAIL SURVEY:Mail survey (also called mail interview) is one method of data collection through fieldinvestigation. Here, questionnaire is prepared for the collection of specific information requiredfor research purpose. The questionnaire is sent by post (mail) to potential respondents with arequest to complete the same and return by post to the mailing company/research agency. Thecompleted questionnaires received are checked and arranged properly. The information giventherein is tabulated and analysed in an impartial manner. Finally, conclusions are drawn for framing policies and decision-making.In mail survey, interviewer is not available for asking questions, for guiding respondent and for

noting the information. On some occasions, the questionnaire is published in the newspapers and

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================readers are asked to supply information. In addition, copies of questionnaire are supplied toretailers with a request to collect completed questionnaires from the customers. Even thequestionnaire may be supplied to consumers along with product's package with a request tosupply information. These methods are not used extensively due to poor response from theconsumers. Normally, the questionnaire is posted to the address of the consumer and he isrequested to supply information by answering the questions asked.

Mail/post office is used as a medium for the conduct of survey and hence it is rightly called mailsurvey. This method of survey is a complete antithesis of the personal interview. Here, theinterviewers are not involved and naturally away from interviewer's bias. Wide area can becovered as postal facility exists in the whole country.

National surveys can be conducted through mail survey as contact with large number of respondents is possible with the medium of post office. Mail survey needs to be planned properlyfor positive response from the respondents. Similarly, questionnaire prepared for the collection of

information should be ideal/promising.

Mail survey is economical as compared to personal interview. The respondents are given fullexplanation of the purpose of the survey with a request to give necessary co-operation bysupplying required information in the space provided in the questionnaire itself. Stampedenvelopes (reply paid envelopes) are also sent along with the questionnaire for quick responsefrom the respondents. Care is also taken to see that the respondent remains anonymous. In thequestionnaire, alternate replies are suggested and the respondent has to make tick marks on thequestionnaire itself. This gives convenience in the tabulation work as the use of computers for tabulation is possible.

Sometimes, small gift is also offered to respondents in order to have positive response from them.The respondent can study the questionnaire leisurely and give replies independently as per hisdesire. Naturally, the replies are given carefully and without pressure/tension. It is possible tocontact respondents from different parts of the country by preparing a comprehensive mailing list.Mail survey method is now extensively used for marketing research.

ROLE OF QUESTIONNAIRE IN MAIL SURVEY:In mail survey, questionnaire plays an important role. Naturally, it should be prepared with proper care. The questions asked should be clear and worded in a simple and clear language. Thequestions should be relevant precise and logically arranged.

Lengthy questionnaire should also be avoided in mail survey as respondents may not like toanswer a long questionnaire. Questionnaire should contain "control" questions which indicate thereliability of the respondent. Finally, questions of personal nature should be avoided. In mailsurvey, the response from the respondents largely depends on the quality of questionnaire

prepared and hence special attention should be given to this aspect. In fact, the success of mailsurvey mainly depends on the manner in which the questionnaire is drafted.

MERITS OF MAIL SURVEY:

(1) Economical: Mail survey is economical as only postage and printed questionnaire arerequired. The cost of survey is limited as interviewers, supervisors, etc. are not required in

mail surveys.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(2) Wide coverage: In mail survey, wide geographical area can be covered by survey as postal

facilities are available all over the country. Information can be collected from large number of respondents spread over the whole country by preparing a comprehensive mailing list.Information can also be collected from those with whom face to face interview is not possible.

(3) Speed in data collection: Mail survey method has a speed. Large number of respondents can be contacted within a short period and information can be collected from them within areasonable time. It is possible to send hundreds of questionnaire within a week andinformation will be available from many of them.

(4) Avoids interviewee’s bias : In mail survey method, interviewees bias and errors areeliminated. Guidance/hints are not given to the respondents. As a result, first hand reliableinformation is available for survey purpose. This improves the quality of research work andthe conclusions drawn.

(5) Convenience to respondents: Respondents can answer the questionnaire at their ownconvenience. They can supply information even while remaining anonymous. Respondentsare likely to be more thoughtful as they have not to give answers on the spur of the moment.Thus convenience to respondents is one major advantage of mail survey technique.

(6) More information available: It is possible to collect more information by using both openended and close ended questions in the mail survey questionnaire.

(7) Investigators not required: The services of investigators can be dispensed with as personalcontact with the respondents is not required in the case of mail surveys. Expenditure on staff training and supervision on survey work is also eliminated.

(8) Simple and direct method: Mail survey method of data collection is extremely simple, clear and direct as only questionnaires are to be sent as per the mailing list prepared. If necessary,reminder may be sent to the respondents but this expenditure will be limited.

(9) Centralized control: Mail surveys are often conducted from a single office and this bringscentralized control on the whole survey work.

(10) Convenient to medium/small companies: Mail survey method is convenient to small andmedium sized companies. It can be used conveniently for collecting information fromconsumers spread over a wide geographical area.

(11) Views of family members available: In mail survey, views of respondents as well as of their family members are collected as they participate while giving replies. Moreover, asrespondents remain anonymous, they are likely to give honest replies.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================LIMITATIONS OF MAIL SURVEY:

(1) Problem of "No replies": "No replies" is one major disadvantage of mail survey.Respondents do not take interest in the survey work and do not send the replies. Very few give

positive response to the questionnaire. Others send replies only when reminder is sent. Many

others do not send replies at all. Some others give incomplete response by not answering allquestions asked. Thus, poor response to mail questionnaire (High non-response rate) is oneimportant disadvantage of mail survey.

(2) Updated mailing list required: For mail survey, up-to-date and comprehensive mailing listcovering cross section of the society is necessary. The researcher may not have such accuratelist of respondents at the state or national level. This affects the area covered by the survey.

(3) Poor response, if questionnaire is defective: Questionnaire acts as a base of mail survey.The response will be limited if the questionnaire is too lengthy or if it contains difficult andconfusing questions. Sometimes, busy persons ask their assistants to give replies. This affects

the quality of mail survey conducted.

(4) Lacks accuracy of information : In mail survey method the researcher cannot verify theaccuracy of the information given by the respondents as he has no control on the respondents.There may be inconsistency/ambiguity in the answers given. The researcher has to accept or reject the information supplied.

(5) Limited use: Mail survey method is of limited use in qualitative study or in causativeresearch.. For probing psychological motivation, mail survey method is not suitable.

(6) Effects of ambiguous questions: There is a possibility that some questions may not beunderstand by large majority of respondents. This may be due to ambiguity in the questionsasked. As a result, the respondents may not give answer or may give answer which may not becorrect or relevant. This affects the final outcome of the survey.

(7) Changes in questions not possible: It is rather impossible to amend the approach or questions or their wordings once the questionnaire is issued to the respondents. This bringsrigidity in the survey work. Required information about certain aspects of the survey may not

be available if the questions asked are confusing.

(8) Not suitable when quick information is required: Mail survey is not convenient when theresearcher needs information quickly i.e. within two or three days. Mail survey is normally atime consuming activity. In addition, postal delays are quite common.

(9) Non-verbal responses are not noted: It is not possible to gather non-verbal responses in thecase of mail survey. The benefit of personal observation by the interviewer is also notavailable.

(10) Not suitable for spontaneous answers: Mail survey is not suitable when the researcher isinterested in the spontaneous answers from the respondents.

50





Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================LIMITATIONS OF TELEPHONE SURVEY:

(1) Brief questionnaire required: In telephone interview, the questionnaire must be brief because lengthy interview with the respondent is not possible. As a result, telephone interviewis useful for collecting limited information on specific points as the length of telephone

interview is always very short. A respondent can close the conversation quickly as per hisdesire.(2) Limited / Brief information available: In telephone interview, the replies given by

respondents are always brief and limited information is given. The communication with therespondents is oral/verbal. Detailed discussion is not possible. Interview length is limited.This narrows down the scope of survey. There is time limit for telephone interview. Evenvisual aids cannot be used in telephone survey.

(3) Difficult to contact large number of respondents: It is difficult to contact large number of respondents, as many persons do not have telephone facility. As a result, the coverage of survey is limited. Similarly, many people may not be willing to talk over telephone. Thisrestricts the scope of telephone survey.

(4) Non-verbal responses are not available: In this method, observation of respondents is not possible. As a result, non-verbal responses cannot be seen and noted.

(5) Non-availability of proper sample: In telephone survey, it is difficult to get a representativesample. It is only the list of telephone subscribers which can used for selecting samples.

(6) Limited coverage of sample: Respondents from remote places cannot be contacted by thismethod. Even poorer sections of the society are not covered by telephone survey.

(7) Limited questions: Questions of very personal nature or questions requiring lengthy answerscannot be asked in telephone interview. This makes the interview incomplete. Bias on the partof respondent is also possible.

(8) Interviewer’s bias: There is a possibility of interviewer's bias in this survey method.(9) Difficulty in checking validity of information: It is difficult to check the validity of

information supplied on phone. Even the person on telephone may not be the real respondent.

(c) PERSONAL INTERVIEWMEANING AND FEATURES OF PERSONAL INTERVIEW:Personal/face-to-face interview is one popular and extensively used method of primary datacollection for MR. It is probably the oldest method/technique of MR. It consists of a two-wayconversation initiated by the interviewer for obtaining information on specific issues.Interviewing, in fact, is a social process; it involves an interaction between the two for specific

purpose. It is a purposeful conversation between the interviewer and respondent for specific purpose. According to C. William Emory, "Personal interviewing is a two-way purposeconversation initiated by an interviewer to obtain information that is relevant to some research

purpose".

The backbone of personal interview is the questionnaire prepared for specific survey. Theinterviewer uses this questionnaire as a base and collects the required information from therespondents.

For effective and purposeful personal interview, the interviewer needs proper education andtraining. He must ask the questions properly and encourage the respondent to supply maximum

possible information. He should also note the additional information, if any, supplied by therespondent. The interviewer should be aware of the purpose for which the survey is being

conducted.

52



Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================The outcome of personal interview largely depends on the ability, maturity and sincerity of theinterviewer. The response from the respondent largely depends on the interest and initiative of theinterviewer and the manner in which the interview is being conducted by the interviewer.

The interviewers general responsibilities are as noted below:(a) To locate informants.(b) To translate these contacts into purposeful interviews.(c) To collect valid and reliable responses.(d) To record all such responses accurately.

Personal interview method is certainly superior as compared to mail / telephone survey methodsof data collection. There is direct communication in personal interview and the interviewer is in a

position to collect additional information about the subject matter of research project and alsoabout the respondent. This method is costly and time-consuming but is treated as an ideal methodas it provides maximum possible information from the respondents. As a result, personal

interviewing retains its long held dominance across a wide spectrum of surveys - market, social, political.

TYPES OF PERSONAL INTERVIEW:

(A) Individual interviewing involves talking with individual persons intheir homes or offices or even on the street. (1) Structured Interview: In the structured interview, detailed questionnaire is prepared for the purpose of interview This questionnaire is similar to the questionnaire prepared for mailsurvey The interview is taken as per the questionnaire prepared This method brings uniformityin the survey work Limited choice/freedom is given to respondents while answering questionsPossible answers are given and they have to select one of them(2) Semi-structured Interview: In the semi-structured interview, the interviewer notes downthe key questions which are to be asked to each respondent He uses these questions supported

by other supplementary questions which he puts forward while interviewing the respondentThe interviewer has to use his skill and knowledge while conducting semi-structuredinterviewSemi-structured interview is useful for collecting additional information from the respondentsFreedom is given to the interviewer and interviewee Respondents are encouraged to expressfreely(3) Unstructured Interview: In an unstructured interview, detailed questionnaire is not used

for reference The interviewer believes that the respondent has adequate useful information andit is his duty to collect that information through conversation This interview is useful onlywhen the interviewer is properly trained with full knowledge of the nature and purpose of survey work and has adequate knowledge of human psychology Here, the interviewer and therespondents are given adequate freedom The interviewer can ask additional questions or canchange the order of questions given for reference(4) Depth Interview: Depth interview uses techniques of psycho analysis to study in depththe behaviour of respondent. This method allows the interviewer to collect different views andopinions of respondent through personal interview. Such interviews are useful for the study of human behaviour.The depth interview method relates to behavioural sciences such as sociology and psychology.

It is a clinical psychology method wherein the investigator attempts to get the respondent talk

53




freely about certain topics in an informal manner. The term depth interview is used as theinterviewer desires to discover underlying motives/desires of the respondents. Such interviewsare usually undirected and require maturity, skill and experience on the part of the interviewer.In addition, it is a time consuming interview. Depth interviews are costly and are used for thegroup interviews rather than for individual interviews.

In depth interview, the respondent is allowed to say what he knows or feels about the productor subject matter of discussion. The respondent is assessed (his behaviour or thinking process)through supplementary questions. Prepared questionnaire is not used by the interviewer but heis given a list of issues to be covered in the interview.The questions asked in the depth interview are not identical. Here/ the data collected isqualitative and not the quantitative one. In depth interview, the respondent is encouraged totalk freely and the interviewer takes the position of a good listener. He has to find out inner motives and feelings of the respondents.

(B) Group interviewing consists of inviting a group people together for interview purpose. Group interview is also called group discussion. Information is collected jointly from them by a trained moderator. Group interview is a faster technique of interviewing as compared to individual interview In group interview, a group of 8 to 12respondents is formed and information is collected collectively from the whole group It is anon-structured and informal type of group interviewing and is useful for data collection onhuman behaviour and motivation Here, the assumption is that people talk more freely/openlywhen in groups

Focused Group Interview/Discussion: In the focus group interview the attention of groupmembers is focused/concentrated on some particular problem/ product/topic and the group

discussion is directly and closely related to the topic/product/problem The group leader (moderator) has to use his skills etc and see that the discussion do not move away from themain problem and that necessary information is available from the group The groupdiscussion is tape recorded or video-taped The required information is collected from the tapesand conclusions are drawn The group selected for interview/discussion is called focus groupand information is collected from the group as a whole. Though the term focus groupinterview is used here, the interviews of group members are not taken as per the usual style.The whole group is treated as one unit and a specific problem/topic is discussed by the groupas a whole. In this sense, the terms focus group interview and focus group discussion need to

be treated as identical.

Focused interview (discussion) is a type of free interview in which a greater degree of controlis applied to the course of the interview. Here, the interviewer puts a number of relatedquestions to the respondents and tries to get information on all points at one time. Theattention of the respondent is focused on limited number of inter-related questions. Therespondent is given an opportunity to express his views freely but on limited number of questions/points. Unnecessary and unwanted discussion during the interview is avoided. Theinformation and views expressed by the respondent are noted clearly and correctly by theinterviewer. Focused interview is more precise, clear-cut and to the point. It reduces the timeof interview but the information on important points is collected from the respondent.

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Focused interview is superior to free interview as unnecessary questions, conversation andirrelevant information are avoided. Along with this, adequate scope is provided for discussionon important matters on which the attention of the respondent is to be diverted.

ADVANTAGES/MERITS OF PERSONAL INTERVIEW:

(1) Flexibility: In personal interview, the interviewer can bring flexibility in his data collection process. There is closer interaction between the respondent and the interviewer. Questionscan be adjusted as per his need and maximum possible information can be collected. Thismakes the survey work purposeful.

(2) Better co-operation from respondents: In personal interview, the interviewer gets better co-operation from the respondent due to face-to-face communication. Additional questions can

be asked for securing more information. The respondent also speaks freely about hisopinions/views.

(3) Benefit of longer duration interview: Personal interview is usually of a longer duration. The purpose of survey can be explained and detailed questions are asked thereafter. In the case of

very positive response, supplementary questions can be asked. The information collected isalso reliable as it is first hand information. Even the interviewer can note the familyinformation such as home atmosphere, education and age of the respondent, through personalobservation during the course of personal interview.

(4) Availability of reliable and detailed information: In personal interview, the informationcollected is usually detailed and reliable . Detailed information is also collected through

personal interview as the respondent has enough time to supply the necessary information. Itis possible to seek clarifications on any point on the spot.

(5) Better quality response: In personal interview, the quality of response is always high ascompared to mail survey. Meeting with the respondent is possible on a holiday or with

previous appointment. Once the interview starts, the respondent takes interest and gives

answers to questions placed before him.(6) Personal questions can be asked: In personal interview, personal questions can be asked

tactfully. Similarly, questions of lengthy answers can also be asked during the interview. Thisfacilitates collection of adequate information.

(7) Products can be shown/demonstrated before recording response: In personal interview, products, advertisements, etc. can be shown or demonstrated to the respondents in order tocollect required information. Even visuals aids can be used during the interview.

(8) Suitable when information from limited respondents is to be collected: Personal interviewmethod is convenient when detailed data need to be collected from a relatively small number of people. The respondents can be selected properly.

(9) Improves quality of research work: The conclusions drawn from the1 data collected through personal interview are more accurate. The delta collected can be checked properly.Moreover, the reactions and attitude of the respondents can also be noted correctly.

(10) Non-verbal responses are observed: Personal interview serves as an opportunity available tothe interviewer to observe respondents non-verbal responses. Facial expressions, bodymovements, gestures and voice modulation are clearly visible in personal interview and can

be noted on the interview sheets. Even the spontaneous reactions of respondents can benoted.

DISADVANTAGES/LIMITATIONS OF PERSONAL INTERVIEW:

(1) Costly: Personal interview is a costly method of survey as the interviewer is required to be

paid travelling and daily allowances. In addition, limited number of interviews are possible

55




within one day by an interviewer. Supervisors are required to be appointed on the interviewersfor effective control. Thus, it is a costly method.

(2) Time consuming: Personal interview method of data collection is time-consuming. Theinterview time may be of 15 to 30 minutes but the interviewer has to spend time on travelling,etc. Naturally the survey work takes a longer duration.

(3) Information supplied may not be accurate: The information supplied by the respondentsmay not necessarily be accurate as they have to supply information on the spot. The answersgiven by the respondents may not be fully supported by facts. The respondent may giveinadequate information due to personal reasons. This is likely to affect the final outcome of the survey.

(4) Long-term planning required: Personal interview needs long term planning and fixing of prior appointments with the respondents. The complicated scheduling must be followedstrictly.

(5) Effective supervision on interviewers required: Effective supervision on large number of interviewers appointed may not be possible due to large geographical area covered by the

survey work. The investigators may not work sincerely if supervision on them isinadequate/ineffective. Insincere interviewers can produce high level of spoiled work.(6) Danger of personal bias: There is a danger of personal bias when the interview is conducted

personally. This may be due to wrong selection of samples. It may also arise if theinvestigators are dishonest and try to suggest possible answers to the respondents. In brief,there is a possibility of interviewer bias or respondent bias in the personal interview method.

(7) Possibility of rush interviews: There is a possibility of rush interviews by the interviewers.This is possible when they are given heavy interview target per day. This is also possible if theinterviewers are paid in proportion to the interviews completed per day. Finally, rushinterviews are possible if the questionnaire is too lengthy. However, this affects the quality of survey work.

(8) Respondents from cross section of the society may not be available: For personalinterview/people from all sections may not be available. Busy executives, industrialists and

professionals are not easily available as samples for the survey work.(9) Information supplied may not be recorded properly: Sometimes, information supplied by

the respondents is not recorded properly. The interviewers may record the information after completing the interview. Mistakes in recording actual replies is possible. This leads to wrongconclusions in the final research report.

ADVANTAGES/MERITS OF DEPTH INTERVIEW:

(1) Depth interview is useful for finding out consumer motivations, attitudes, feelings and desiresrelating to product etc.(2) The respondents get an opportunity to express freely their desires, motives and feelings.(3) The interviewer gets deeper insight into the problem under investigation.(4) Depth interview method do not give factual data but data which relates to human (consumer)

behaviour and human psychology.(5) Depth interview is convenient when the respondents to be interviewed are few but the

information to be collected is detailed.

DISADVANTAGES/DEMERITS OF DEPTH INTERVIEW:(1) Depth interview method is costly and time-consuming.

56



Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(2) Depth interviews can be conducted properly only by skilled, experienced and matured

interviewers.(3) Findings of depth interviews cannot be quantified.(4) The attitudes, motives and desires expressed under research conditions may change in actual

buying situations. Thus, depth interviews may not give correct answers to all MR problems.(5) The art of depth interviewing is difficult/complicated and needs proper background of

knowledge and training.

ADVANTAGES OF FOCUS GROUP INTERVIEW / DISCUSSION:(1) There is saving of time and money as 8 to 12 persons are interviewed at one time.(2) Focused group interview provides detailed and accurate information from a small group easily

and quickly.(3) Each member of the group is given an opportunity to participate in the discussion. This gives

different views on one subject to the researcher.

(4) There is stimulation to participants in group interview/discussion. Participants are free toexpress their view without fear/pressure.(5) New ideas are generated in the group discussion and the researcher can use them in his

report/recommendations.(6) The information available through focus group interview/ discussion relates to one specific

subject and is useful to researcher in his research work undertaken.(7) Focus groups are now used extensively in MR as they give a direct “feel” of individual

consumers.

DISADVANTAGES OF FOCUS GROUP INTERVIEW / DISCUSSION:(1) How to encourage participants for free discussion and how to secure their cooperation in the

research work is a big problem in focus group interview technique of data collection.(2) The views/information available may not be of representative character due to non-

participation of some members.(3) The benefit of this technique will be available only if the group leader is matured, experienced

and effective communicator.(4) Members may express views on irrelevant matters or unrelated topics. This leads to wastage of

time and money.(5) There may be one sided discussion in the group. The benefit of such discussion is limited for

research purpose.

GUIDELINES FOR EFFECTIVE PERSONAL INTERVIEW:

(1) Proper procedure: Personal interview should be arranged by following proper procedure. For this, the nature and purpose of research project should be finalised first. The information to becollected from the respondents should be decided clearly. This should be followed by

preparation of suitable questionnaire and selection of samples for the survey.(2) Prior communication with respondent: The interview should be fixed on telephone

followed by the letter of confirmation in which the purpose of the interview should be madeclear to the respondent.

(3) Proper atmosphere for interview: At the time of interview, the questionnaire should be keptready and the interview should be initiated in the straight-forward manner. The questions

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which are easy should be asked first. This creates proper atmosphere for the interview andencourages the respondent to give positive response to the questions asked. The respondentshould be encouraged to speak freely and frankly.

(4) Proper recording of replies: The information supplied by the respondent should be recordedin full. Additional information supplied should also be recorded properly. The remarks basedon the observations by the interviewer should also be noted by the interviewer at suitable

places.(5) Trained interviewers should be appointed: The interviewer should be properly educated

and well trained in the art of interviewing. Adequate and reliable information is available onlywhen the interview is conducted in an orderly manner.

QUALITIES AND QUALIFICATIONS OF A GOOD FIELD INVESTIGATOR (INTERVIEWER):(1) Sound general education: An interviewer needs sound educational background. He should

possess « better than average education. He also needs working knowledge of someimportant language spoken in the area in which research work is to be conducted. Educationmakes him impressive in his work, approach and outlook.

(2) Pleasing appearance and manners: An interviewer needs impressive personality, pleasingmanners and decent behaviour. He should be well dressed and also needs impressiveappearance. Respondents are strangers. Their co-operation is possible only if an interviewer creates good impression on them.

(3) Social outlook: An interviewer should be social by nature i.e., adjustable and accommodativein his approach and outlook. He should be at ease with all types of respondents. Aninvestigator should not be hot tempered and indecent in his manners and behaviour asrespondents will not be co-operative to such interviewers. He is supposed to show interest in

the attitudes, problems and opinions of respondents. An investigator should be an extrovert.(4) Sound health and stamina: The job of an interviewer is hard. He has to move from place to

place and speak with different types of respondents. Naturally, he needs sound health andstamina. He should be able to work hard for many hours and also should be able to doextensive travelling for survey work In addition, he needs capacity to accept uncertainties of interviewing life

(5) Inquiring mind: An interviewer needs inquiring mind He needs desire to collect whatever information required for the survey He should not be satisfied with mere facts or minimuminformation He has to probe behind the facts and try to collect maximum possibleinformation from his respondents For this, he needs inquiring mind

(6) Sharp memory: An interviewer needs sharp memory for recording the information and factsaccurately and completely He has to prepare various statements and reports and for this heneeds sharp memory This brings speed and accuracy in his work

(7) Integrity: An interviewer should be absolutely honest and reliable He should complete hiswork regularly as per the schedule decided His integrity plays an important role in the datacollection work He is supposed to collect information by meeting respondents and not on the

basis of guess work He should record the responses correctly and also immediately Heshould not do cheating in his field work as this affects the quality of research work

(8) Minute observation: An interviewer should observe even minor points, events and remarksof his respondents He has to collect data even by accurate observation and for this he needsthe faculty of accurate observation and a conscientious regard for details

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(9) Ability to record: An interviewer has to record the information supplied by respondents

precisely, correctly, fully, promptly and without colour or bias Thus, he needs ability torecord information supplied with precision

(10) Ability to communicate: An interviewer should be a good communicator He needs oralcommunication skills so that the respondent can easily understand what he (interviewer)wants Ability to communicate properly brings positive response from the respondent Thissuggests that an interviewer needs the ability to communicate the right information in theright manner He also needs knowledge of local/regional language for easy communicationwith the respondents

(11) Knowledge of business world: An interviewer needs atleast working knowledge of business,sales, advertising, market competition and so on He should be clear in his mind as regards thenature and purpose of his survey Marketing research relates to marketing and allied problemsand an interviewer certainly needs adequate knowledge of such problems.

Female interviewers are preferred as compared to male when required information is to be

collected from housewives and female consumers. As a general rule also, women are preferred tomen as interviewers particularly when the research work relates to consumer items. The possiblereasons are:(1) Women are easily available for interviewing work as the timing is convenient to them.(2) They are generally honest and sincere in their work. Naturally, errors and cheating in the

fieldwork are limited.(3) Women interviewers are systematic and decent in their work. This improves the quality of

research work.(4) The response from the respondents is always encouraging in the case of women interviewers

as compared to male interviewers.(5) Women interviewers are willing to accept part time job of interviewing. This gives

convenience to them and also to the appointing agency.

(d) PANEL RESEARCHPanel research is a technique similar to the survey, but with one major difference. In surveymethod a fresh sample is selected for every survey work, while in the panel research the same

panel is used again and again for the collection of information. The panel acts as a permanentsample of respondents and information is collected from them at appropriate intervals throughinterviews.

A panel means a sample of respondents who may be individuals, consumers, housewives,households or firms from whom information about purchasing, buying behaviour, etc. is collectedat regular intervals. The panel members are given diaries. They note details of purchases,shopping patterns, etc. in which the researcher is interested. Panel members provide feedback tothe researcher for detailed study of the marketing problem under consideration.

Panel research offers certain benefits. For example the buying behaviour of selected consumerscan be studied through panel. The changes in the behaviour can be analysed through panelresearch. However, panel research will be effective only when the panel members are co-operative and provide reliable information when requested. Members of the panel may not find itconvenient to give information again and again. They may treat this as botheration and may not

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================supply timely and reliable feedback.In spite or such limitations, panel research method is used inmany marketing research projects

MEANING AND FEATURES OF CONSUMER PANELS:

Consumer panel/profile is one more method of consumer research, a technique of primary datacollection which is similar to survey work. Here, a group of consumers (a permanent sample of respondents collectively called panel) is selected and their opinions/views/reactions collected. For this, personal interview or telephone inquiry is made, or the panel members may be asked torecord regularly in the diaries provided their purchases or listening or viewing habits in the caseof radio or TV. The information is collected often and again for the purpose of scrutiny In duecourse, it is tabulated for drawing conclusions

The selection of panel members is usually made on the basis of age/ economic status, likes anddislikes, etc, of consumers and is used for data collection regularly over a long period. It is a

permanent sample of respondents for research work and may include individuals, housewives,households, dealers or firms from whom information is collected periodically. The panel membersalso agree to co-operate by providing their views on different topics from time to time

The other term used for consumer panel is Omnibus Panel It means a fixed sample of respondentswho are interviewed (for information collection) on different variables over a period of time Theinformation is collected from the respondents on certain matters such as purchases made, price

paid, reactions on the products purchased, shopping behaviour, etc Suitable conclusions are drawn

on the basis of information collectedAccording to Ronald M. Weiers, "Panels consist of persons, households or business firms whoreport their purchasing activities at periodic intervals over time and who are typically selected based on a combination of their willingness and representativeness". A consumer panel may bedefined as "a group of consumers who voluntarily agreed to be interviewed on the same topic or on different topics from time to time for data collection regularly and continuously".

Panel method can be used effectively in order to study consumer behaviour under differentsituations. It also facilitates continuous study of behaviour of consumers over a particular periodThe reactions of consumers to the product, its quality, packaging, advertising, pricing, etc can be

studied continuously through consumer panel method Consumer expectations can be studied withreasonable accuracy through such panels

Consumer panel method gives reliable information for policy decisions on marketing There isclose communication with the respondents This facilitates a continuous check on the record of consumer behaviour over a specific period The reactions of consumers are regularly recorded for

policy decisions Some manufacturers supply samples of new products to panel members for testing. The reactions of members are collected through personal interviews Sometimes, cash

prizes/gifts are given to panel members as incentive and thereby they are induced to give better co-operation in the survey work For better results, the panel members should be selected with

proper care.

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TYPES OF CONSUMER PANELSThe classification of consumer panels is made on the basis of the type of research being carriedout. The following chart shows the types of consumer panels.

Types of Consumer Panels

Purchase Audience Attitude Dealer Product Testing RetailPanel Panel Panel Panel Panel Panel Panel

(1) Purchase Panel:Purchase panel is useful to study the purchasing habits and trends of consumers Such pane] is agroup of selected consumers who are asked to record purchases made by them regularly in thediaries provided to them Information is collected from the panel members continuously for detailed analysis

Panel members are expected to keep correct record of their purchases in the diaries specially provided to them The diaries of consumers are collected periodically for review and for studyinginformation regarding the items purchased with details like prices, quantities, preferences and soon This provides information regarding the pattern of purchases and expenditure incurred ondifferent items In addition to the study of diaries, personal contact is also kept with the panelmembers for the collection of additional information from them

The consumers selected for purchase panel are usually housewives and they are asked to writedown every day what they actually buy and to send the diaries periodically for review purposeThe diaries provided are carefully designed for the convenience of panel members

Purchase panels are used by manufacturers, marketing research firms and governmentdepartments Such panels may be formed in the case of consumer items which consumers purchasefrequently and also in large quantities

(2) Audience Panel:Audience panels are panels designed to provide information regarding media audiences Audience

panels are of listeners/viewers of programmes on radio and TV The panel members are asked tolisten the programmes on TV and radio regularly Their opinions on the programmes are collectedfor research purpose

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================The popularity of programmes or the reactions of viewers can be judged with the help of such

panels Even the effectiveness of radio and TV advertising can be judged through such audience panels The most famous media audience panel is one which is operated by the A. C. NielsonCompany (USA). In European countries, such audience panels are used extensively to study theexpectations of radio and TV audiences

In India, advertising agencies are using the technique of audience panels for the benefit of their clients Such panels are used in the case of radio and TV advertising

(3) Attitude Panel:Attitude panel is useful for the study of attitude of consumers towards a product/marketing

practice Attitudes are usually studied along with the purchase behaviour of consumers Panelmembers are interviewed after a period of three or six months and their attitudes are studiedFindings of such studies are given wide publicity for the benefit of all manufacturers

(4) Dealer Panel:Dealer panels are useful for collecting information from the dealers in a continuous manner. Theygive data on dealer activities including total sales, prices charged, promotional efforts made,services offered and so on. Data are collected from selected dealers of important commoditieswith different brands. Information regarding the popularity of different products, market tends,sale of goods of specific brand, etc. is easily available from such research study. The relative salesmade by dealers over a period of time indicate the strategic outlets to promote sales.

Dealer panels are also useful for collecting data regarding retail sales, inventories and prices. Thetotal sales of products and the share of a particular brand, etc., are also available from such dealer

panels. Dealer panels offer valuable guidelines for the selection of suitable outlets for efficient

marketing of products. Dealer panels are formed by manufacturers and information is collectedfrom the dealers through diaries and also through personal interview. Dealer panels are useful for framing marketing policies for large-scale distribution of goods/services.

(5) Product Testing Panel:Product testing panel is useful for testing the utility and other features of the product before

bringing it in the market for large-scale marketing. The panel includes consumers from crosssection of the society. They are given new product to test its use and other features. Their viewsare collected through personal interviews after regular intervals. This enables a manufacturer to

judge the extent to which his product is agreeable to consumers. If necessary, certainmodifications are introduced in the product before it is brought in the market on commercial

basis.Product testing panels are used particularly for pre-testing consumer durables which are costlyand need to be manufactured as per the current needs and expectations of consumers.

(6) Retail Panel:Retail panel is a panel of retail traders who are willing to give information about their stocks atregular intervals purely for research purpose Panel members are required to note informationabout the sales and stock position and provide the record for study purpose. This enables theresearcher to draw useful conclusions about marketing activities Information is also collectedfrom panel members through personal interview, In India, the Operations Research Group

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(ORG), Baroda conducts retail audit on an extensive scale. It is useful to producers of food items,drugs, pharmaceuticals and confectionery.

ADVANTAGES OF CONSUMER PANELS:(1) Supply useful information: Consumer panel gives valuable information to researchers about

the research activity undertaken. The information is supplied regularly and continuously.Periodical changes in buyer behaviour can be monitored through such panels. Theinformation collected enables researchers to forecast future behaviour of consumers withreasonable accuracy.

(2) Longer interviews are possible: Longer interviews can be held with panel members andmore detailed information can be collected from them.

(3) Reliable data available: The data collected through diaries is more accurate and reliable. It isrecorded by the respondents and the possibility of errors of lapses of memory are reducedconsiderably. Panel research is useful for noting behavioural changes of consumers.

(4) Economical method: Consumer panel is an economical method for collecting continuous

information and data. Data on the same subject are collected periodically. This facilitatessuitable changes in the marketing policies of the firm.(5) Positive response from panel members: The response from the panel members is always

better as they voluntarily agree to participate in the survey work and offer necessary co-operation.

(6) Facilitates introduction of remedial measures: Consumer panels are useful for productdevelopment, product modification, selection of best channel of distribution and introductionof suitable packaging which will be attractive and agreeable to consumers.

(7) Continuous supply of information: Consumer panel provides information in a continuousmanner. The information is collected from the same group of persons. This gives idea aboutgradual changes in the behaviour of consumers The conclusions drawn through consumer

panels are also accurate and dependable.(8) Real motives are visible: Consumer panel is useful for finding out the real motives behind the

actions of consumers. Consumer behaviour can be studied more accurately through consumer panels.

(9) Facilitates product testing: Consumer panels are used to judge different products at onetime. Members are asked to state which products they like most and why. This facilitates

product testing.

DISADVANTAGES/LIMITATIONS OF CONSUMER PANELS:(1) Biased outlook of panel members: Panel members show biased outlook after they

become members over a long period. This defeats the very purpose of research work as thedata supplied may not be accurate, reliable and factual.(2) Limited co-operation from panel members : Panel members are cooperative and takeinterest in the initial period of survey. Thereafter, their interest goes on reducing and theysupply data indifferently. This is because they do not want to be bothered again and again. Asa result the degree of co-operation between the panel members reduces.(3) Absence of representative character: A small panel is always unrepresentative incharacter. The conclusions drawn with the help of such panel may not be applicable to thewhole class of consumers. Thus, the panel as a sample may not represent the true picture of the whole population.(4) Panel members drop gradually: Panel members drop out from time-to-time. Every panelis subject to a certain amount of mortality. However, selecting new members with the same

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characteristics is not easy. The new members selected may be different and this affects thequality and accuracy of the whole project.(5) Panel members behave like experts: The members of the panel become sophisticatedand also consider themselves as experts or professional testers. This harms the quality of research work.(6) Costly/expensive: Consumer panel research is rather expensive. It requires continuousefforts to build up and maintain the panel. Giving product for testing or a small gift to largenumber of panel members is costly. In India, only large companies like Hindustan Lever Limited do have consumer panels.

(f) AUDITSAudits involve the physical inspection of inventories, sales receipts, shelf facings, prices, andother aspects of the marketing mix to determine sales market share, relative price, distribution, or other relevant information

Store AuditsThe simple accounting arithmetic of

Opening Inventory + Net Purchases (receipts - transfers out / “returned inventory”) - ClosingInventory_______________ _____________________________________

Salesis the basis for the audit of retail store sales. The most widely used store audit service is the

Nielsen Retail Index, it is based on audits every 30 or 60 days of a large national sample of food,drug, and mass merchandise stores. The index provides sales data on all the major packagedgoods product lines carried by these stores-foods, pharmaceuticals, drug sundries, tobacco,

beverages, and the like (but not soft goods or durables). Nielsen contracts with the stores to allow

their auditors to conduct the audits and pays for that right by providing them with their own data plus cash

The clients receive reports on the sales of their own brand and of competitors' brands, theresulting market shares, prices, shelf facings, in-store promotional activity, stock outs, retailer inventory and stock turn-around, and local advertising These data are provided for the entirenation - by region, by size classes of stores, and by chains-versus independents. The data areavailable to subscribers on-line via computer as well as in printed reports

1. Product AuditsProduct audits, such as Audits and Surveys' National Total Market Index, are similar to store

audits but focus on products rather than store samples. Whereas product audits provideinformation similar to that provided by store audits, product audits attempt to cover all the typesof retail outlets that handle a product category. Thus, a product audit for automotive wax wouldinclude grocery stores, mass merchandisers, and drugstores (in this way it is similar to the Nielsenstore audits) In addition, it would include automotive supply houses, filling stations, hardwarestores, and other potential outlets for automotive wax.

2. Retail Distribution AuditsSimilar to store audits are retail distribution audits or surveys. These surveys do not measureinventory or sales; instead, they are observational studies at the retail level. Field agents enter stores unannounced and without permission They observe and record the brands present, price,

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================shelf facings, and other relevant data for selected product categories. NRTI (Erhandt-Babic) andBOS (Burgoyne Inc.) are the suppliers of this type of data..OBSERVATION METHOD

MEANING OF OBSERVATION METHOD:Observation method (observational research) is one extensively used method of primary datacollection. Observation research means gathering of primary data by observing relevant people,actions and situations. According to Oxford Dictionary, observation means "accurate watching and noting of phenomena as they occur in nature with regard to cause and effect or mutual relation". It is the classical method of investigation widely practiced by scientists and socialinvestigators. Here, consumer behaviour is observed directly and conclusions are drawn. As aresult, the defects inherent in direct questioning are avoided.

Observation method is more objective as it is based on accurate watching and noting the details of

behaviour of consumers. It eliminates subjective element encountered with questionnaire method.Observation means "an act of recognizing and noting/acts a/occurrences." Personal behaviour of respondents can be observed with the help of observation. A consumer packaged goods marketer for example, may send his representative to supermarkets and observe shoppers as they look at the

product, examine the packages and make actual buying decisions.

Observation involves recording of events/actions as they take place in the environment. Here, dataare collected by observing consumers involved in an activity in their natural environment.Consumers are not aware that they are being observed / watched by the observer stationed in theshop for this purpose. He records his observations about the behaviour of customers without their knowledge. Naturally, the data collected are accurate and dependable. A consumer may beobserved while purchasing soap or toothpaste at a retail shop.

Observation is also possible while selecting a specific product or brand. Here, the behaviour of theconsumer at a market place is studied in detail. Naturally, co-operation of respondents is notnecessary. It is the observer who takes the notes of things as they happen. In the observationmethod, the researcher records "what is happening rather than what has happened or what is

going to happen."

Observation method can be used to study customer movement, customer responses in retail shops,stock audit in retail stores and sales technique. However, interview may be used as a follow-up toget additional information. In fact, observation acts as a good supplement to other methods usedfor data collection. For instance, customers are observed buying toothpaste or soap in small

packets instead of large packages. They may be asked why they prefer small packages rather thanlarge packages.

Observation is a process of noting people, objects and occurrences rather than directly asking for information. For example, instead of asking consumers what brand they buy, the researcher arranges to observe their behaviour at the sales counter and the way in which they select a

particular brand. In addition, hidden video cameras, one-way mirrors, assessment of wear and tear of flooring in display areas are some more methods used in mechanical observation. Closed videomonitoring is a common technique used in the observation method of primary data collection.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Scientific observation is always purposeful, economical and immensely useful to researcher. Theobservers appointed should be skilled, properly trained and instructed. Such observation of consumers is possible in the retail shops, co-operative stores and also in the departmental storeswhere large number of consumers come frequently.

In the observation method, more stress is on noting, watching and understanding and not onasking questions. Observation is possible through individual observers (live observation) or through mechanical devices like audiometer. In personal observation, the researcher poses as acustomer and observes others. In mechanical observation, eye cameras or scanners are used.

FEATURES OF OBSERVATION METHOD:

(1) Observation means accurate watching and noting. It can be conducted by watching acustomer or by using mechanical devices like eye camera(2) Observation method is reliable, accurate and scientific. It is useful for the collection of

primary data(3) Observation is always selective as consumer behaviour relating to specific aspects(relating to research project) will be studied.(4) Observation may be physical or mental or both in character.

METHODS OF OBSERVATION:Methods/Types of observation (as per techniques used, place and purpose) are as explained

below:(1) Simple Direct Observation: Here, the observer looks and acts like a shopper. The other

regular shoppers do not realise that they are being observed. Thus, the observer studies the purchase procedure and the behaviour of the customers while they purchase goods. It is asimple, easy and direct method of observation. The behaviour of a person/customer isobserved as it occurs.

(2) Indirect Observation: Indirect observation is meant to study the past behaviour. This is possible with the help of past records, films, photographs, etc. Films are frequently used tostudy past behaviour of shoppers, etc. In indirect observation, some record of past behaviour is observed. Here, the behaviour itself is not observed, but its effects are observed. In indirectobservation, the observer looks for physical traces of behaviour or occurrence of an event.For example, in order to find out liquor consumption in a household, an observer would likestudy the empty liquor bottles in the garbage. The success of indirect observation depends on

how best the observer is able to identify physical traces of the problem under study. Directobservation is very common than indirect observation.(3) Structured Observation: Here, the purpose of observation is clearly defined and the observer

knows what to observe as regards the consumers who are busy in their shopping work. Theobservations to be made are clear to the observer and the observations will be completedaccordingly.

(4) Unstructured Observation: Here, the observer observes whatever he thinks pertinent It issimilar to unstructured questioning The observer is clear about his objectives and he conductsobservation activity accordingly

(5) Mechanical Observation: Here, observation is made with the aid of electro-mechanicaldevices. Such observation may be recorded or live A number of mechanical devices for

making observation have been developed Audiometer, eye camera, pupilometric camera,

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tape-recorder, VCR, psycho-galvanometer are some such devices used in mechanicalobservation Mechanical observation is economical and more accurate as compared to humanobservation

(6) Manual / Human Observation: Human observation is done manually Here, human beingsare appointed to observe and record the data It is a simple type of observation by a speciallyappointed observer He does observation without the use of electromechanical devices Thehuman observations are carried out as per the guidelines provided to the investigator Mechanical observation provides more accuracy However, some special/extra informationcan be provided only by a human observer and not by a mechanical device

(7) Disguised Observation (also called Covert Observation): In disguised observation, thesubjects do not know that they are being observed by some specially appointed observer For example, disguised observation may be made by the observer by posing himself as one of theshoppers who are being observed This type of observation is preferred as people (shoppers)may behave differently when they know that they are being observed Here, the purpose of observation is not disclosed to the respondents They are also not aware of the fact that they

are being observed for some specific purpose Disguised observation method may be used bythe researcher when he feels that his presence may affect consumer behaviour or may spoilthe whole data collection process An observer, for example, may enter the shop as a regular customer and may interact with fellow consumers without disclosing ins identity and purposeof interaction In undisguised observation, the purpose of observation is brought to the noticeof respondents before the commencement of observation

ADVANTAGES/MERITS OF OBSERVATIONAL TECHNIQUE:(1) Accuracy: Observational techniques are highly accurate They reduce interviewer's bias. A

trained field worker is not likely to exert a bias in any direction of research The informationavailable from observation is more objective and reliable than available through survey

method.(2) Factual information available: It provides factual information into new areas of research.(3) Records events as they occur: In observational method, the events are recorded as they

occur. The researcher is not dependent on the respondent for the supply of correctinformation.

(4) Economical: Observational method is economical as preparation of a questionnaire, etc., arenot required.

(5) Objective data available: The data collected by observation method are more objective andaccurate. Here, an attempt is made to avoid biases through memory, lapses, halo effects or other sources by observing respondents behaviour.

(6) More accuracy in mechanical devices: Mechanical devices can be used to collect factswhich will reduce the cost of data collection and the information collected is also accurate.

(7) Effective method: Observational method is found to be quite effective and useful inresearches related to marketing problems.

LIMITATIONS OF OBSERVATIONAL TECHNIQUE:(1) Certain elements are missed: Observational method has no capacity to observe attitudes,

motivations and intentions of customers. These elements can be observed only when they areconverted into action. It is also difficult to pinpoint them as human behaviour is the net resultof many drives and urges.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(2) Human errors possible: Observational methods are used by observers who are human beings

and are subject to errors and mistakes. Even highly experienced observers are likely to makemistakes while observing their respondents.

(3) Purpose is defeated, if secrecy is not maintained: In some observational studies, therespondent gets the idea that he is participating in a test. He knows that he is being observed.Such situation will defeat the every purpose of observation.

(4) Costly method under certain situations: Observational method is economical when used for observing events occurring rapidly. It proves to be costly when the events to be observed donot occur at rapid intervals. In addition, properly trained observers are required to beappointed. This makes survey work expensive.

(5) Observer's bias: Field observers bias may creep in and thereby making the observationsfaulty. Even faulty observation by the observer may prove to be dangerous.

(6) Limited application: Observation method has limited application. It tells about what actuallyhappened but it cannot tell as to why it so happened

(7) Needs support of personal interview: Observation method needs the support of personal

interview in order to understand the motives, attitudes and opinions of individuals/consumersIt is useful as a supplement of personal interview method

EXPERIMENTATION METHOD

MEANING AND FEATURES OF EXPERIMENTATION METHOD:In scientific inquiry, research is primarily centered on controlled experiments. Experiments are aspecial form of survey and/or observation method where respondents are asked questions aboutsome controlled conditions or their reactions to some controlled conditions are observed Inexperiments, the researcher alters the environment and measures the effect of thesealterations/manipulations Experimentation may be defined as "a process where events occur in a

setting at the discretion/option of the researcher and controls are used to identify the sources of variation in respondent's response " Experimental research is best suited for gathering casual information It tries to explain cause-and-effect relationships Experimentation method is usedextensively in scientific research and also used in marketing research It is now used in order toremove one primary weakness of observational method which relates to the influence of uncontrolled factors Experimentation method is useful for the collection of data which cannot becollected by survey method or observation method The scope for experimentation is limited inMR as the ideal experimental conditions of laboratory testing are virtually impossible in the fieldof marketing. Marketing relates to human behaviour which is difficult to predict precisely

Experimentation can be undertaken under two types of setting(a) Field setting

Field experiments are conducted at the market place but the purposes are not known to the participants in the experiment The investigator sets up the experiment before the subjects begin to participate There is more realism in this type of experimental method Field experiments are usedrarely due to higher costs and longer time involved Field experiments arc usually conducted intest marketing in order to find out the acceptability of the new product by consumers For example, a company may test its new product in the local market before it is produced on a large-scale for the national market Similarly, a company can find out colour of its new product (e gsoap) which is likely to be most popular after its introduction. In addition, experimentation isextensively used in the following areas of marketing

i. Product design

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ii. Package designiii. Pricing policiesiv. Distribution policiesv. Promotion policies.

(b) Laboratory setting Experimentation is also possible under laboratory setting. The laboratory experimentation methodis accurate but laboratory experiments are more artificial due to controlled conditions. Suchexperiments may be in the form of calling limited persons, offering them an article (e.g. softdrink) and asking them about their reactions. The purpose of experiment is made known to the

participants and this makes them conscious. Such laboratory experiments are less costly andshorter in duration. They also give reasonably accurate results.

ADVANTAGES OF EXPERIMENTATION METHOD:(1) Experimentation method of data collection is useful when the problem to be solved is clearly

defined and the dependent or independent variables are clearly marked.(2) Experimentation method enables the marketers to take quick decision in the marketing field as

the marketing problems are better understood and an insight is available due toexperimentation.

(3) One major benefit of experimentation method is its realism. It enables actual market test andsimulates actual market situation. It suggests remedies which are extremely useful andeffective.

(4) Experimentation method provides unbiased feedback on how the product and marketingstrategy will help the firm penetrate the market.

Experimentation method of MR can be applied most suitably to certain problems like training andremuneration of salesmen, shelf display arrangements, package designs and advertising copy.Experimental marketing (test marketing) can be used to study the effect of certain sales promotiontechniques such as premium, brand, package design and colour combination. The use of lengthyexperimental methods is limited in India . This is due to heavy cost involved in them. Manycompanies now select smaller towns like Pune or Indore for test marketing. Certain techniques,such as split-run for evaluating alternative advertising copy are also used to a considerable extentin India.

LIMITATIONS OF EXPERIMENTATION METHOD:(1) Experimentation method is costly and time consuming.(2) It requires the services of trained staff for the conduct of experiments.(3) Experimental methods suffer from many administration problems.

(4) Controlling the variables in the market selected for experiments (as they may upset the result)is one major difficulty

(5) The competitors may weaken the test market results through their marketing activities(6) There is lack of theoretical base to experimentation methods

EXPERIMENTATION AND EXPERIMENTAL DESIGN:

Experimentation

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================As regards experimentation there is an attempt to measure the effect of one or more variables bychanging the level of some variables and measuring the effects e g / post-testing effectiveness of an advertising campaign In order to know how well brand of the product is recorded in the mindof consumers, it is possible to measure brand awareness among a sample of target respondentsThis effort would be called experimentation

Experimental DesignExperimental design involves obtaining the proper information within an acceptable accuracyrange for a cost that does not exceed the value of the information. It ensures that eachexperimental treatment is used within each classification of test units and each classification of extraneous forces is applied equally to all test units

Experimental design originated in the field of agricultural research R. A. Fisher made significantcontribution by stating that the practices prevalent for the measurement of output from plots of land could not provide unbiased and unambiguous findings Now experimental design is used in

all areas of business

FACTORS AFFECTING EXPERIMENTAL DESIGN:(1) Element of time: Experimental design is time consuming Planning experimental design takes

lot of time because the researcher has to consider pros and cons of various design available tohim

(2) Commitment of management: Experimental design needs high level of managementcommitment If management becomes disheartened with any experiment and it is allowed tolapse without running its full course or is handled half-heartedly, all efforts will be wasted

(3) Range of variation: Under proper condition, experimental design can indicate the effects of

specific variations in one or more elements of the marketing mix The experiment can be donewith only one variable like price or with multiple variables like colour of packaging, channelof distribution and sales promotion

(4) Cost and accuracy: Experimental design must balance cost constraints with accuracy.Accuracy is related to the amount of error We should not assume that the possibility of anexperimental error means that the error will occur The cost of running experimental designshould be less and benefits obtained should be more

(5) Identification of variables: Experimental design uses one or more variables in such a waythat its effect on one or more variables can be measured Hence it becomes necessary toidentify the variables correctly

REQUIREMENTS FOR A GOOD EXPERIMENT

1. Absence of Systematic ErrorA good experiment should be free from any systematic error. This is possible if experimentalunits receiving one treatment do not differ in a systematic manner from other experimental unitsgiven another treatment. This is achieved by randomization.

2. Precision

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================A good experiment should have maximum precision. The indicator of precision is the magnitudeof standard error, which should be sufficiently small.

3. Range of ValidityTo the extent possible, an experiment should be valid in a wide range of conditions so that theresearcher can have a high degree of confidence in its results. An experimental technique thatgives encouraging results in a certain setting may not give favourable results when conditions aredifferent.

4. SimplicityIf an experiment is a complicated one, it will be difficult to carry it out properly without the helpof trained and qualified personnel. It is, therefore, desirable for the experiment to have a simpledesign, particularly when it is to be performed by relatively unskilled people. Also. it is desirableto use relatively simple methods in the analysis of data.

5. The Calculation of UncertaintyA good experiment should enable the researcher to calculate the uncertainty in the estimates of treatment differences. This would mean that he should be able to ascertain the statisticalsignificance of the differences between the treatments.

FACTORS AFFECTING THE SELECTION OF SUITABLE METHOD FOR MARKETING RESEARCH:The factors to be considered while selecting the method for marketing research (data collection)are as explained below:

(1) Nature and objectives of research project: The research project may be local or national incharacter It may be related to product, package or consumer behaviour A local survey coversa small area like one town or one district while a national survey covers wide area and

population Similarly/ the objective of the study and the degree of accuracy required needspecial consideration while selecting one or the other method For example, mail survey isconvenient for collecting information from large number of people while personal interviewwill be convenient when information is to be collected from limited number of respondents

(2) Type of primary data required: One important factor influencing the selection of method isthe type of primary data required for example, qualitative interview is very convenientmethod for collecting information on personal motives while telephone survey is convenientfor collecting facts about radio or TV listening by people. Published data can be used if

population data at the national level are required for research purpose.

(3) Cost consideration of research project: MR is always subject to financial support availableto the project. The method which is suitable to the funds available needs to be selected. For example, desk research is least expensive, but field investigation is expensive. Similarly,observation methods are more expensive then the experimental methods. In short, the budget

provision need special consideration while selecting the method of research work.

(4) Time consideration of the project: Some methods of MR or data collection are quick whileothers are time-consuming. This factor needs attention while selecting a research method.

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RESEARCH DESIGNS

The next step after stating the management problem, research purpose, and research hypothesesand questions, is to formulate a research design. The starting point for the research design is, infact, the research questions and hypotheses that have been so carefully developed. In essence, theresearch design answers the question: How are we going to get answers to these researchquestions and test these hypotheses? The research design is a plan of action indicating the specificsteps that are necessary to provide answers to those questions, test the hypotheses, and therebyachieve the research purpose that helps choose among the decision alternatives to solve themanagement problem or capitalize on the market opportunity

DEFINITIONS OF RESEARCH DESIGN:(1) According to David J. Luck and Ronald S. Rubin, "A research design is the determination

and statement of the general research approach or strategy adopted/or the particular project. It is the heart of planning. If the design adheres to the research objective, it will ensure that the client's needs will be served."

(2) According to Kerlinger "Research design in the plan, structure and strategy of investigationconceived so as to obtain answers to research questions and to control variance."

(3) According to Green and Tull "A research design is the specification of methods and

procedures for acquiring the information needed. It is the over-all operational pattern or framework of the project that stipulates what information is to be collected from which sourceby what procedures."

The second definition includes three important terms - plan, structure and strategy. The plan is theoutline of the research scheme on which the researcher is to work. The structure of the researchwork is a more specific scheme and the strategy suggests how the research will be carried out i.e.methods to be used for the collection and analysis of data. In brief, research design is the blueprintof research. It is the specification of methods and procedures for acquiring the information neededfor solving the problem. Questionnaires, forms and samples for investigation are decided whileframing research design. Finally, the research design enables the researcher to arrive at certain

meaningful conclusions at the end of proposed study.

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STEPS IN PLANNING THE RESEARCH DESIGN:There are four broad steps involved in planning the research design as explained below:

(1) Determining work involved in the project: The first step in planning research design is determining the work involved in the project-anddesigning a workable plan to carry out the research work within specific time limit. The work involved includes the following:

(a) To formulate the marketing problem(b) To determine information requirement(c) To identify information sources(d) To prepare detailed plan for the execution of research project.

This preliminary step indicates the nature and volume of work involved in the research work.Various forms require for research work will be decided and finalised. The sample to be selectedfor the survey work will also be decided. Staff requirement will also be estimated. Details will beworked out about their training and supervision on field investigators, etc.

In addition, the questionnaire will be prepared and tested. This is how the researcher will preparea blue-print of the research project. According to this blueprint the whole research project will beimplemented. The researcher gets clear idea of the work involved in the project through suchinitial planning of the project. Such planning avoids confusion, misdirection and wastage of time,money and efforts at later stages of research work. The whole research project moves smoothlydue to initial planning of the research project.

(2) Estimating costs involved: The second step in planning research design is estimating the costs involved in the research

project. MR projects are costly as the questionnaire is to be prepared in large number of copies,interviewers are to be appointed for data collection and staff will be required for tabulation and

analysis of data collected. Finally, experts will be required for drawing conclusions and for writing the research report. The researcher has to estimate the expenditure required for theexecution of the project. The sponsoring organisation will approve the research project and makesuitable budget provision accordingly.

The cost calculation is a complicated job as expenditure on different heads will have to beestimated accurately. The cost of the project also needs to be viewed from the viewpoint of itsutility in solving the marketing problem. A comprehensive research study for solvingcomparatively minor marketing problem will be uneconomical.

(3) Preparing time schedule: Time factor is important in the execution of the research project. Planning of time schedule isessential at the initial stage. Time calculation relates to the preparation of questionnaire and its

pre-testing, training of interviewers, actual survey work, tabulation and analysis of data andfinally reports writing. Time requirement of each stage needs to be worked out systematically.Such study will indicate the time requirement of the whole project. Too long period for thecompletion of research work is undesirable as the conclusions and recommendations may becomeoutdated when actually available. Similarly, time-consuming research projects are not useful for solving urgent marketing problems faced by a company.

Preparing time schedule is not adequate in research design. In addition, all operations involved inthe research work should be carried out strictly as per time schedule already prepared. If

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================necessary remedial measures should be adopted in order to avoid any deviation in the timeschedule. This brings certainty as regards the completion of the whole research project in time.

(4) Verifying results: MR findings need to be dependable to the sponsoring organisation. Researcher may create new

problems before the sponsoring organisation if the research work is conducted in a faulty manner.Such unreliable study is dangerous as it may create new problems. It is therefore, necessary tokeep effective check on the whole research work during the implementing stage. For this suitable

provisions need to be made in the research design.

After deciding the details of the steps noted above, the background for research design will beready. Thereafter, the researcher has to prepare the research design of the whole project. He has to

present the project design to the sponsoring agency or higher authorities for detailed considerationand approval. The researcher can start the research project (as per design) after securing thenecessary approval to the research design prepared.

TYPES OF RESEARCH DESIGNSA research design is like a roadmap—you can see where you currently are, where you want to beat the completion of your journey, and can determine the best (most efficient and effective) routeto take to get to your destination. We may have to take unforeseen detours along the way, but bykeeping our ultimate objective constantly in mind and using our map we can arrive at our destination. Our research purpose and objectives suggest which route (design) might be best to getus where we want to go. but there is more than one way to "get there from here." Choice of research design is not like solving a problem in algebra where there is only one correct answer and an infinite number of wrong ones. Choice of research design is more like selecting acheesecake recipe—some are better than others but there is no one which is universally acceptedas "best." Successfully completing a research project consists of making those choices that willfulfill the research purpose and obtain answers to the research questions in an efficient and effec-tive manner.

Choice of design type is not determined by the nature of the strategic decision faced by themanager such that we would use research design A whenever we need to evaluate the extent of anew product opportunity, or design B when deciding on which of two advertising programs torun. Rather, choice of research design is influenced by a number of variables such as the decisionmaker's attitude toward risk, the types of decisions being faced, the size of the research budget,

the decision-making time frame, the nature of the research objectives, and other subtle and not-so-subtle factors. Much of the choice, however, will depend upon the fundamental objective implied by the research question:

• To conduct a general exploration of the issue, gain some broad insights into the phenomenon,and achieve a better "feel" for the subject under investigation (e.g.. What do customers mean by"good value"?).• To describe a population, event, or phenomenon in a precise manner where we can attachnumbers to represent the extent to which something occurs or determine the degree two or morevariables covary (e.g., determine the relationship between age and consumption rate).

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================• To attribute cause and effect relationships among two or more variables so that we can better understand and predict the outcome of one variable (e.g., sales) when varying another (e.g.,advertising).

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RESEARCH DESIGN

CAUSAL RESEARCH

EXPLORATORYRESEARCH DESIGN

CONCLUSIVERESEARCH DESIGN

DESCRIPTIVERESEARCH

LONGITUDINALDESIGN

CROSS-SECTIONALDESIGN

SINGLE CROSS-SECTIONALDESIGN

MULTIPLE CROSS-SECTIONALDESIGN



Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================This classification is frequently used and is quite popular. Before we discuss each of these designtypes, a cautionary note is in order. Some might think that the research design decision suggests achoice among the design types. Although there are research situations in which all the researchquestions might be answered by doing only one of these types (e.g., a causal research experimentto determine which of three prices results in the greatest profits), it is more often the case that theresearch design might involve more than one of these types performed in some sequence. Theoverall research design is intended to indicate exactly how the different design types will beutilized to get answers to the research questions or test the hypothesis.

A further cautionary note is needed to warn the reader that while it may appear that if sequencingis done the sequence would be exploratory, descriptive, then causal, that is not always the case.For example, some companies may do an annual survey of consumers to determine the frequencywith which certain behaviors are performed (e.g., washing dishes by hand) followed byexploratory research that probes to gain an in-depth understanding of the circumstancessurrounding that behavior (i.e., descriptive then exploratory rather than exploratory then

descriptive). It is not hard to imagine a research design that might sequence as exploratory, thendescriptive, then exploratory again; or causal, then descriptive. It is important to remember that because a research design is a plan of action to obtain answers to the research questions, it is thosequestions that suggest which design types are necessary and the sequence of conducting thosedesign types, if a sequence is needed. An example later in this chapter will be used to illustratethis point. With these cautions in mind we will now discuss the design types in greater detail.

1. Exploratory Research:

A marketing research study may be either exploratory or full scale. Exploratory research isconducted when the researcher does not know how and why certain phenomenon occurs. Here,the hypothetical solutions or actions are explored and evaluated by the decision-maker, e.g.evaluation of quality of service of a bank/hotel/airline. Here, the quality cannot be assesseddirectly as tangible features are not available.

The purpose of exploratory research is to know the unknown. Exploratory research determinesfruitful alternatives that the executive would not have perceived. This also narrows down thescope of the investigation. Exploratory research is undertaken to get the answer to the followingquestion. "What alternative courses of action might solve the problem and thereby reach the finalobjective?" This research is unstructured in character. Exploratory studies are important. Theymay provide adequate information on a decision situation or may greatly facilitate the design of formal research studies.

To explore means to find out or discover. Exploratory research is conducted in order to find outcauses/reasons behind a specific marketing problem. It is the starting point in all types of research

projects. The purpose of exploratory research is to define the marketing problem precisely, collectrequired information/data relating to the problem and identify alternative courses of action inorder to deal with the marketing problem. For example, advertising campaign of a company maynot give positive results in terms of sales. The failure of campaign may be due to many possiblecauses relating to advertising copy, media selected, faulty pre-testing, faulty illustration give,wrong timing of ad. campaign or finally inadequate follow-up measures to the ad. campaign. Inthe exploratory research, the possible causes will be identified, the most appropriate causes will

be selected, hypothesis will be developed and research activity will be conducted accordingly.

Survey of consumers, retailers, sales executives and sales-force will be useful for exploratory

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================research. On some occasions, small scale sales survey may provide useful data for exploratoryresearch.

In exploratory research, the stress/focus is on the discovery of ideas/causes. For example, salesmay be declining for the last six months. Quick study may be conducted to find out thecauses/factors responsible. Such causes will be listed. Here, an exploratory study/research may beconducted in order to find out the most likely cause so as to introduce suitable remedial measures.

The objective of exploratory research is to generate/discover new ideas. The secondary/publisheddata can be used for exploratory research as such data are easily available. If the services of respondents are used (for survey purpose), they should be given full freedom to expressthemselves. The same rule should be made applicable to focus groups. Exploratory research isuseful for the study of marketing problems about which sufficient information/details are notavailable. Exploratory study needs to be flexible in its approach.

Exploratory Research is used:To define the problem more precisely.To identify relevant courses of action i.e. find the most likely alternatives, which are thenturned into hypotheses.Isolate key variables and relationships for further examinations.Gain insights for developing an approach to a problem.Establish priorities for further research.

Once a hypothesis is formulated, research is used to determine if the hypothesis was correct.Hypothesis is tentative answers to questions that serve as guides for most research projects

Exploratory research may also be involved when the perceived problem is much less general; it isused to develop the most promising hypotheses. The findings of exploratory research should beregarded as tentative or as an input to further research. Typically, such research is followed byfurther exploratory or conclusive research. The analysis of primary data is qualitative.

In general, exploratory research is meaningful in any situation in which the researcher does nothave enough understanding to proceed with the research project.

2. Conclusive Research DesignConclusive Research Design is typically more formal and structured than exploratory research. Itis based on large representative samples, and the data obtained are subjected to quantitative

analysis. Conclusive Research is designed to assist (he decision maker in determining, evaluatingand selecting the best course of action to take in a given situation. As shown in the figureconclusive research designs may be either descriptive or causal and descriptive designs may beeither cross-sectional or longitudinal.

(A) Descriptive Research:

Descriptive research is undertaken when the researcher desires to know the characteristics of certain groups such as age, sex, occupation, income or education. The objective of descriptiveresearch is to answer the "who, what, when, where and how" of the subject under study/investigation.

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Casual research is useful to show the impact of one variable on the other. For example, price andmarket demand relationship or relationship between market competition and sales performance.Even the positive/negative effect of advertising on sales can be studied through casual research.The relationship between the casual factors can be studied through casual research. In addition,the variables which create effect on other variables can be studied in depth through casualresearch.

Data for casual research can be collected through field survey with the help of a questionnaire or by conducting laboratory experiments / controlled experiments. Laboratory experiments are possible in the case of testing of new products or package design.

The casual research design is based on reasoning. The designs for casual research can be dividedinto three categories:

(a) Historical

(b) Survey(c) Experimental.

IMPORTANCE / UTILITY OF RESEARCH DESIGN

Research design is important as it prepares proper framework within which the researchwork/activity will be actually carried out Research design acts as a blue print for the conduct of the whole research project. It introduces efficiency in investigation and generates confidence inthe final outcome of the study. Research design gives proper direction and time-table to researchactivity. It keeps adequate check on the research work and ensures its completion within certaintime limit. It keeps the whole research project on the right track.

Research design avoids possible errors as regards research problem, information requirement andso on. It gives practical orientation to the whole research work and make it relevant to themarketing problems faced by the sponsoring organisation. Finally, it makes the whole research

process compact and result-oriented. A researcher should not go ahead with his research projectunless the research design is planned properly.

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TESTING OF HYPOTHESES(Parametric or Standard Tests of Hypotheses)

Hypothesis is usually considered as the principal instrument in research. Its main function is tosuggest new experiments and observations. In fact, many experiments arc carried out with thedeliberate object of testing hypotheses. Decision-makers often face situations wherein they areinterested in testing hypotheses on the basis of available information and then take decisions on

the basis of such testing. In social science, where direct knowledge of population parameter(s) israre, hypothesis testing is the often-used strategy for deciding whether a sample data offer suchsupport for a hypothesis that generalization can be made. Thus, hypothesis testing enables us tomake probability statements about population parameters). The hypothesis may not be provedabsolutely, but in practice it is accepted if it has withstood a critical testing. Before we explainhow hypotheses arc tested through different tests meant for the purpose, it will be appropriate toexplain clearly the meaning of a hypothesis and the related concepts for better understanding of the hypothesis testing techniques.

MEANING OF HYPOTHESISOrdinarily, when one talks about hypothesis, one simply means a mere assumption or somesupposition to be proved or disproved. But for a researcher hypothesis is a formal question that heintends to resolve. Thus a hypothesis may be defined as “a proposition or a set of propositions setforth as an explanation for the occurrence of some specified group of phenomena either assertedmerely as a provisional conjecture to guide some investigation or accepted as highly probable inthe light of established facts”. Quite often a research hypothesis is a predictive statement, capableof being tested by scientific methods, that relates an independent variable to some dependentvariable. For example, consider statements like the following ones:"Students who receive counseling will show a greater increase in creativity than students notreceiving counseling" or "the automobile A is performing as well as automobile B”.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================These are hypotheses capable of being objectively verified and tested. Thus, we may concludethat a hypothesis states what we are looking for and it is a proposition that can be put to a test todetermine its validity.

CHARACTERISTICS OF HYPOTHESIS A hypothesis must possess the following characteristics:(i) Hypothesis should be clear and precise. If the hypothesis is not clear and precise, the

inferences drawn on its basis cannot be taken as reliable.(ii) Hypothesis should be capable of being tested. In a swamp of un-testable hypotheses,

many a time the research programs have bogged down. Researcher may do some prior studyin order to make hypothesis a testable one. A hypothesis "is testable if other deductions can

be made from it which, in turn, can be confirmed or disproved by observation."(iii) Hypothesis should state relationship between variables, if it happens to be a relational

hypothesis

(iv) Hypothesis should be limited in scope and must be specific. A researcher mustremember that narrower hypotheses are generally more testable and he should develop suchhypotheses.

(v) Researchers should state hypothesis as far as possible in most simple terms so that thesame is easily understandable by all concerned. But one must remember that simplicity of hypothesis has nothing to do with its significance

(vi) Hypothesis should be consistent with most known facts i e., it must be consistent witha substantial body of established facts. In other words, it should be one which judges acceptas being the most likely

(vii) Hypothesis should be amenable to testing within a reasonable time. One should not useeven an excellent hypothesis, if the same cannot be tested in reasonable time for one cannot

spend a life-time collecting data to test it(viii) Hypothesis must explain the facts that gave rise to the need for explanation. This

means that by using the hypothesis plus other known and accepted generalizations, oneshould be able to deduce the original problem condition. Thus hypothesis must actuallyexplain what it claims to explain; it should have empirical reference.

BASIC CONCEPTS CONCERNING TESTING OF HYPOTHESES

Basic concepts in the context of testing of hypotheses need to be explained.

(a) Null hypothesis and alternative hypothesis : In the context of statistical analysis, we oftentalk about null hypothesis and alternative hypothesis. If we are to compare method A with method B about its superiority and if we proceed on the assumption that both methods are equally good,then this assumption is termed as the null hypothesis. As against this, we may think that themethod A is superior or the method B is inferior, we are then stating what is termed as alternativehypothesis. The null hypothesis is generally symbolized as H 0 and the alternative hypothesis asHa. Suppose we want to test the hypothesis that the population mean ( µ .) is equal to the hypo-thesized mean ( µ H0) = 100. Then we would say that the null hypothesis is that the populationmean is equal to the hypothesized mean 100 and symbolically we can express as:

H0: µ =µ H0 = 100

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================If our sample results do not support this null hypothesis, we should conclude that something elseis true. What we conclude rejecting the null hypothesis is known as alternative hypothesis. Inother words, the set of alternatives to the null hypothesis is referred to as the alternativehypothesis. If we accept H 0, then we are rejecting H a and if we reject H 0 , then we are accepting

Ha. For H 0: µ =µ H0 =100, we may consider three possible alternative hypotheses as follows:

The null hypothesis and the alternative hypothesis are chosen before the sample is drawn (theresearcher must avoid the error of deriving hypotheses from the data that he collects and then

testing the hypotheses from the same data).

In the choice of null hypothesis, the following considerations are usually kept in view:(1) Alternative hypothesis is usually the one which one wishes to prove and the null hypothesis is

the one which one wishes to disprove. Thus, a null hypothesis represents the hypothesis weare trying to reject, and 'alternative hypothesis represents all other possibilities.

(2) If the rejection of a certain hypothesis when it is actually true involves great risk, it is taken asnull hypothesis because then the probability of rejecting it when it is true is α (the level of significance) which is chosen very small.

(3) Null hypothesis should always be specific hypothesis i.e., it should not state about or approximately a certain value.

Generally, in hypothesis testing we proceed on the basis of null hypothesis, keeping thealternative hypothesis in view. Why so? The answer is that on the assumption that null hypothesisis true, one can assign the probabilities to different possible sample results, but this cannot bedone if we proceed with the alternative hypothesis. Hence the use of null hypothesis (at times alsoknown as statistical hypothesis) is quite frequent.

(b) The level of significance : This is a very important concept in the context of hypothesistesting. It’s always some percentage (usually 5%), which should be chosen, with great care,thought and reason. In case we take the significance level at 5 per cent, then this implies that H 0

will be rejected when the sampling result (i.e., observed evidence) has a less than 0.05 probability

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================of occurring if H 0 is true. In other words, the 5 per cent level of significance means that researcher is willing to take as much as a 5 per cent risk of rejecting the null hypothesis when it ( Ho ) happensto be true. Thus the significance level is the maximum value of the probability of rejecting H 0

when it is true and is usually determined in advance before testing the hypothesis.

(c) Decision rule or test of hypothesis : Given a hypothesis H o and an alternative hypothesis H a,we make a rule which is known as decision rule according to which we accept H 0 (i.e., reject H a )or reject H o (i.e., accept H a). For instance, if H 0 is that a certain lot is good (there are very fewdefective items in it) against H a that the lot is not good (there are too many defective items in it);then we must decide the number of items to be tested and the criterion for accepting or rejectingthe hypothesis. We might test 10 items in the lot and plan our decision saying that if there arenone or only 1 defective item among the 10, we will accept H o otherwise we will reject H o (or accept H a ). This sort of basis is known as decision rule.

(d) Type I and Type II errors : In the context of testing of hypotheses, there are basically two

types of errors we can make. We may reject H 0 when H 0 is true and we may accept H 0 when infact H 0 is not true. The former is known as Type I error and the latter as Type II error. In other words, Type I error means rejection of hypothesis that should have been accepted and Type IIerror means accepting the hypothesis, which should have been rejected. Type I error is denoted byα (alpha) known as a error, also called the level of significance of test; and Type II error-isdenoted by β (beta) known as β -error. In a tabular form the said two errors can be presented asfollows:

The probability of Type I error is usually determined in advance and is understood as the level of significance of testing the hypothesis. If type I error is fixed at 5 percent, it means that there areabout 5 chances in 100 that we will reject H 0 when H 0 is true. We can control Type I error just byfixing it at a lower level. For instance, if we fix it at 1 per cent, we will say that the maximum

probability of committing Type I error would only be 0.01.But with a fixed sample size, n, when we try to reduce Type I error, the probability of committingType II error increases. Both types of errors cannot be reduced simultaneously. There is a trade-off between these two types of errors, which means that the probability of making one type of

error can only be reduced if we are willing to increase the probability of making the other type of

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================error. To deal with this trade-off in business situations, decision-makers decide the appropriatelevel of Type I error by examining the costs or penalties attached to both types of errors. If Type Ierror involves the time and trouble of reworking a batch of chemicals that should have beenaccepted, whereas Type II error means taking a chance that an entire group of users of thischemical compound will be poisoned, then in such a situation one should prefer a Type I error toa Type II error. As a result one must set very high level for Type I error in one's testing techniqueof a given hypothesis. Hence, in the testing of hypothesis, one must make all possible effort tostrike an adequate balance between Type I and Type II errors.

(e) Two tailed and One-tailed tests : In the context of hypothesis testing, these two terms arequite important and must be clearly understood. A two-tailed test rejects the null hypothesis if,say, the sample mean is significantly higher or lower than the hypothesized value of the mean of the population. Such a test is appropriate when the null hypothesis is some specified value and thealternative hypothesis is a value not equal to the specified value of the null hypothesis.Symbolically, the two-tailed test is appropriate when we have H 0: µ = µ H0 and H a: µ ≠ µ H0

which may mean µ < µ H0 or µ > µ H0. Thus, in a two-tailed test, there are two rejectionregions (also known as critical regions), one on each tail of the curve which can be illustrated inFigure a:

If the significance level is 5 per cent and the two-tailed test is to be applied, the probability of therejection area will be 0.05 (equally split on both tails of the curve as 0.025) and that of the accept-ance region will be 0.95 as shown in the curve in Fig. a. If we take µ = 100 and if our samplemean deviates significantly from 100 in either direction, then we shall reject the null hypothesis;

but if the sample mean does not deviate significantly from µ , in that case we shall accept the nullhypothesis.

But there are situations when only one-tailed test is considered appropriate. A one-tailed testwould be used when we are to test, say, whether the population mean is cither lower than or higher than some hypothesized value. For instance, if our H 0: µ = µ H0 and H a: µ < µ H0 , Thenwe are interested in what is known as left-tailed test (wherein there is one rejection region only onthe left tail) which can be illustrated as in Figure b:Figure a

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Mathematically we can state:Acceptance Region A: | Z | < 1.96Rejection Region R: | Z | ≥ 1.96

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Figure b

Mathematically we can state:Acceptance Region A: Z > -1.645Rejection Region R: Z ≤ - 1.645

If our µ = 100 and if our sample mean deviates significantly from 100 in the lower direction, weshall reject H 0, otherwise we shall accept H 0 at a certain level of significance. If the significancelevel in the given case is kept at 5%, then the rejection region will be equal to 0.05 of area in theleft tail as has been shown in the above curve.In case our H0: µ = µ H0 and H a: µ > µ H0 we are then interested in what is known as one-tailedtest (right tail) and the rejection region will be on the right tail of the curve as shown below:

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Mathematically we can state:Acceptance Region A: Z < 1.645Rejection Region R: Z ≥ 1.645

If our µ = 100 and if our sample mean deviates significantly from 100 in the upward direction,we shall reject H 0 otherwise we shall accept the same If in the given case the significance level iskept at 5% then the rejection region will be equal to 0 05 of area in the right-tail as has beenshown in the above curve

It should always be remembered that accepting H 0 on the basis of sample information does notconstitute the proof that H0 is true. We only mean that there is no statistical evidence to reject it,

but we are certainly not saying that H 0 is true (although we behave as if H0 is true)

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================PROCEDURE FOR HYPOTHESIS TESTINGTo test a hypothesis means to tell (on the basis of the data the researcher has collected) whether or not the hypothesis seems to be valid. In hypothesis testing the main question is: whether to acceptthe null hypothesis or not to accept the null hypothesis? Procedure for hypothesis testing refers toall those steps that we undertake for making a choice between the two actions i.e., rejection andacceptance of a null hypothesis

The various steps involved in hypothesis testing are stated below:(i) Making a formal statement: The step consists in making a formal statement of the null

hypothesis (H 0) and also of the alternative hypothesis (H a) This means that hypotheses should be clearly stated, considering the nature of the research problem For instance, Mr. Mohan of the Civil Engineering Department wants to test the load bearing capacity of an old bridgewhich must be more than 10 tons In that case he can state his hypotheses as under:

Null Hypothesis H 0: µ = 10 tonsAlternative Hypothesis H a: µ > 10 tons

Take another example The average score in an aptitude test administered at the national levelis 80 To evaluate a state's education system, the average score of 100 of the state's studentsselected on random basis was 75. The state wants to know if there is a significant difference

between the local scores and the national scores. In such a situation the hypotheses may bestated as under

Null Hypothesis H 0: µ = 80Alternative Hypothesis Ha: µ ≠ 80The formulation of hypotheses is an important step, which must be accomplished with duecare in accordance with the object and nature of the problem under consideration It alsoindicates whether we should use a one-tailed test or a two-tailed test. If H a is of the typegreater than (or of the type lesser than), we use a one-tailed test, but when H a is of the type"whether greater or smaller", then we use a two-tailed test

(ii) Selecting a significance level: The hypotheses are tested on a pre-determined level of significance and as such the same should be specified Generally, in practice, either 5% levelor 1% level is adopted for the purpose The factors that affect the level of significance are

(a) the magnitude of the difference between sample means(b) the size of the samples(c) the variability of measurements within samples(d) whether the hypothesis is directional or non-directional (A directional hypothesis is

one which predicts the direction of the difference between, say, means). In brief, the levelof significance must be adequate in the context of the purpose and nature of enquiry.

(iii) Deciding the distribution to use: After deciding the level of significance, the next step inhypothesis testing is to determine the appropriate sampling distribution The choice generallyremains between normal distribution and the t-distribution. The rules for selecting the correctdistribution are similar to those that we have stated earlier in the context of estimation.

(iv) Selecting a random sample and computing an appropriate value: Another step is to selecta random sample(s) and compute an appropriate value from the sample data concerning thetest statistic utilizing the relevant distribution. In other words, draw a sample to furnish

empirical data.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(v) Calculation of the probability: One has then to calculate the probability that the sample

result would diverge as widely as it has from expectations, if the null hypothesis were in facttrue

(vi) Comparing the Probability: Yet another step consists in comparing the probability thuscalculated with the specified value for α , the significance level If the calculated probabilityis equal to or smaller than the α value in case of one-tailed test (and α /2 in case of two-tailed test), then reject the null hypothesis (i e, accept the alternative hypothesis), but if thecalculated probability is greater, then accept the null hypothesis. In case we reject H 0 , We runa risk of (at most the level of significance) committing an error of Type I, but if we acceptH0 , then we run some risk (the size of which cannot be specified as long as the H 0 happens to

be vague rather than specific) of committing an error of Type II.

FLOW DIAGRAM FOR HYPOTHESIS TESTINGThe above stated general procedure for hypothesis testing can also be depicted in the form of aflow-chart for better understanding as shown below:

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Tests of HypothesesHypothesis testing helps to decide on the basis of a sample data, whether a hypothesis about the

population is likely to be true or false. Statisticians have developed several tests of hypotheses(also known as the tests of significance) for the purpose of testing of hypotheses which can beclassified as:

(a) Parametric tests or standard tests of hypotheses(b) Non-parametric tests or distribution-free test of hypotheses.

Parametric tests usually assume certain properties of the parent population from which we drawsamples. Assumptions like observations come from a normal population, sample size is large,assumptions about the population parameters like mean, variance, etc., must hold good before

parametric tests can be used. But there are situations when the researcher cannot or does not wantto make such assumptions. In such situations we use statistical methods for testing hypotheses,which are called non-parametric tests because such tests do not depend on any assumption aboutthe parameters of the parent population. Besides, most non-parametric tests assume only nominal

or ordinal data, whereas parametric tests require measurement equivalent to at least an intervalscale. As a result, non-parametric tests need more observations than parametric tests to achievethe same size of Type I and Type II errors.

Important Parametric TestsThe important parametric tests are:

(1) z-testz-test is based on the normal probability distribution and is used for judging the significance of several statistical measures, particularly the mean. The relevant test statistic, z, is worked out andcompared with its probable value (to be read from table showing area under normal curve) at aspecified level of significance for judging the significance of the measure concerned. This is amost frequently used test in research studies. This test is used even when binomial distribution or t-distribution is applicable on the presumption that such a distribution tends to approximatenormal distribution as ‘n’ becomes larger z-test is generally used for comparing the mean of asample to some hypothesized mean for the population in case of large sample, or when populationvariance is known. z-test is also used for judging the significance of difference between means of two-independent samples in case of large samples, or when population variance is known. z-test isalso used for comparing the sample proportion to a theoretical value of population proportion or for judging the difference in proportions of two independent samples when ‘n’ happens to belarge. Besides, this test may be used for judging the significance of median, mode, coefficient of correlation and several other measures.

(2) t-testt-test is based on t-distribution and is considered an appropriate test for judging the significance of a sample mean or for judging the significance of difference between the means of two samples incase of small sample(s) when population variance is not known (in which case we use variance of the sample as an estimate of the population variance) In case two samples are related, we use

paired t-test (or what is known as difference test) for judging the significance of the mean of difference between the two related samples. It can also be used for judging the significance of thecoefficients of simple and partial correlations The relevant test statistic, t, is calculated from thesample data and then compared with its probable value based on t-distribution (to be read fromthe table that gives probable values of t for different levels of significance for different degrees of

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================freedom) at a specified level of significance for concerning degrees of freedom for accepting or rejecting the null hypothesis. It may be noted that t-test applies only in case of small sample(s)when population variance is unknown.

(3) χ2

-test or Chi-square testχ 2 - test is based on chi-square distribution and as a parametric test is used for comparing asample variance to a theoretical population variance. As a non-parametric test, it "can be used todetermine if categorical data shows dependency or if two classifications are independent. It canalso be used to make comparisons between theoretical populations and actual data whencategories arc used." Thus, the chi-square test is applicable in large number of problems. The testis, in fact, a technique through the use of which it is possible for all researchers to (i) test thegoodness of fit (ii) test the significance of association between two attributes, and (iii) test thehomogeneity or the significance of population variance.

(4) F-test.F-test is based on F-distribution and is used to compare the variance of the two independentsamples. This test is also used in the context of analysis of variance (ANOVA) for judging thesignificance of more than two sample means at one and the same time. It is also used for judgingthe significance of multiple correlation coefficients. Test statistic, F, is calculated and comparedwith its probable value (to be seen in the F-ratio tables for different degrees of freedom for greater and smaller variances at a specified level of significance) for accepting or rejecting the nullhypothesis.

All these tests are based on the assumption of normality i.e., the source of data is considered to benormally distributed. In some cases the population may not be normally distributed, yet the testswill be applicable on account of the fact that we mostly deal with samples and the samplingdistributions closely approach normal distributions.

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SAMPLING

SOME BASIC TERMS

1. Population – In statistical usage the term population is applied to any finite or infinitecollection of individuals. It has displaced the older term universe, which is derived from theuniverse of discourse of logic. It is practically synonymous with aggregate and does notnecessarily refer to a collection of living organisms.

2. Census - The complete enumeration of a population or groups at a point in time withrespect to well-defined characteristics such as population, production, traffic on particular roads. In some connection the term is associated with the data collected rather than the extentof the collection so that the term Sample Census has a distinct meaning. The partialenumeration resulting from a failure to cover the whole population, as distinct from a designed

sample enquiry, may be referred to as an 'incomplete census’.

3. Sample - A part of a population, or a subset from a set of units, which is provided bysome process or other, usually by deliberate selection with the object of investigating the

properties of the parent population or set.

4. Sample survey – A survey, which is carried out using a sampling method i.e. in which a portion only, and not the whole population, is surveyed.

5. Sampling unit - One of the units into which an aggregate is divided or regarded as divided for the purposes of sampling, each unit being regarded as individual and indivisible when theselection is made. The definition of unit may be made on some natural basis, for example,households, persons, units of product, tickets, etc. 01 on some arbitrary basis, e.g. areas defined

by grid coordinates on a map. In the case of multi-stage sampling the units are different atdifferent stages of sampling, being 'large' at the first stage and growing progressively smaller with each stage in the process of selection. The term sample unit is sometimes used in asynonymous sense.

6. Sampling Frame - A list, map or other specification of the units, which constitute theavailable information relating to the population designated for a particular sampling scheme.There is a frame corresponding to each state of sampling in a multi-stage sampling scheme.The frame may or may not contain information about the size or other supplementaryinformation of the units, but it should have enough details so that a unit, if included in thesample, may be located and taken up for inquiry. The nature of the frame exerts a considerableinfluence over the structure of a sample survey. It is rarely perfect, and may be inaccurate,incomplete, inadequately described, out of date or subject to some degree of duplication.Reasonable reliability in the frame is a desirable condition for the reliability of a sample survey

based on it. In multi-stage sampling it is sometimes possible to construct the frame at higher stages during the progress of the sample survey itself For example, certain first stage units may

be selected in the first instance, and then more detailed lists or maps be constructed bycompilation of available information or by direct observation only of the first-stage unitsactually selected

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================7. Sampling design - A. sample design is a definite plan for obtaining a sample from the

sampling frame. It refers to the technique or the procedure the researcher would adopt inselecting some sampling units from which inferences about the population is drawn. Samplingdesign is determined before any data are collected.

8. Statistic(s) and parameter(s) - A statistic is a characteristic of a sample, whereas a parameter is a characteristic of a population. Thus, when we work out certain measures such as mean,median, mode etc from samples, then they are called statistic(s) for they describe thecharacteristics of a sample. But when such measures describe the characteristics of a

population, they are known as parameter(s). For instance, the population mean ( µ ) is a parameter, whereas the sample mean (X) is a statistic. To obtain the estimate of a parameter from a statistic constitutes the prime objective of sampling analysis.

9. Sampling error - That part of the difference between a population value and an estimatethereof, derived from a random sample, which is due to the fact that only a sample of values is

observed, as distinct from errors due to imperfect selection, bias in response or estimation,errors of observation and recording, etc The totality of sampling errors in all possible samplesof the same size generates the sampling distribution of the statistic which is being used toestimate the parent value

10. Precision - Precision is the range within which the population average (or other parameter)will lie in accordance with the reliability specified in the confidence level as a percentage of the estimate ± or as a numerical quantity. For instance, if the estimate is Rs. 4000 and the

precision desired is ± 4%, then the true value will be no less than Rs. 3840 and no more thanRs. 4160. This is the range (Rs 3840 to Rs. 4160) within which the true answer should lie. Butif we desire that the estimate should not deviate from the actual value by more than Rs. 200 in

either direction, in that case the range would be Rs. 3800 to Rs. 4200.

11. Confidence level and Significance level - The confidence level or reliability is the expected percentage of times that the actual value will fall within the stated precision limits. Thus, if wetake a confidence level of 95%, then we mean that there arc 95 chances in 100 (or .95 in 1) thatthe sample results represent the true condition of the population within a specified precisionrange against 5 chances in 100 (or .05 in 1) that it does not. Precision is the range within whichthe answer may vary and still be acceptable; confidence level indicates the likelihood that theanswer will fall within that range, and the significance level indicates the likelihood that theanswer will fall outside that range. We can always remember that if the confidence level is95%, then the significance level will be (100 — 95) i.e., 5%:, if the confidence level is 99%,the significance level is (100 — 99) i.e., 1%, and so on. We should also remember that the areaof normal curve within precision limits for the specified confidence level constitutes theacceptance region and the area of the curve outside these limits in either direction constitutesthe rejection regions.

12. Sampling distribution - We are often concerned with sampling distribution in samplinganalysis. If we take certain number of samples and for each sample compute various statisticalmeasures such as mean, standard deviation, etc., then we can find that each sample may give itsown value for the statistic under consideration. All such values of a particular statistic, saymean, together with their relative frequencies will constitute the sampling distribution of the

particular statistic, say mean. Accordingly, we can have sampling distribution of mean, or the

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sampling distribution of standard deviation or the sampling distribution of any other statisticalmeasure. It may be noted that each item in a sampling distribution is a particular statistic of asample. The sampling distribution tends quite closer to the normal distribution if the number of samples is large. The significance of sampling distribution follows from the fact that the meanof a sampling distribution is the same as the mean of the universe. Thus, the mean of thesampling distribution can be taken as the mean of the universe.

13. Bias - Generally, an effect which deprives a statistical result of representativeness bysystematically distorting it, as distinct from a random error which may distort on any oneoccasion but balances out on the average

14. Biased sample - A sample obtained by a biased sampling process, that is to say, a processwhich incorporates a systematic component of error, as distinct from random error which

balances out on the average Non-random sampling is often, though not inevitably, subject to bias, particularly when entrusted to subjective judgment on the part of human beings

CENSUS SURVEY AND SAMPLE SURVEY:

Census survey means survey or complete enumeration of population with certain objectives. Thegovernment in India after every ten years conducts such census survey. The entire geographicalarea and entire population is covered in census survey. The data collected are tabulated and

published as census report. Such census data are used for different purposes including economic planning and policy decisions. Census survey is a costly and time-consuming activity and alsoneeds huge organization and manpower for its orderly conduct. In commercial research, suchcensus survey is not conducted due to various constraints particularly relating to funds, time and

manpower.

Census implies collection of information from each element of the group or population of interest,(e.g. Survey of industrial consumers). In many cases, complete enumeration is not possible andthe only alternative available is sampling.

Sample survey is the survey of a small representative part of the population taken up for detailedscrutiny and study purpose. A sample is a small representative of the whole and conclusionsdrawn from such sample are equally applicable to the entire population. Sample survey gives the

benefits of census survey but with less time, expenditure and manpower. It is a better substitute tocensus survey. Sample surveys are commonly conducted in marketing research projects and gives

promising results.

A survey which is carried out using a sampling method i.e. using a representative portion of thewhole population is called sample survey which is a short cut alternative to census survey butgives similar benefits.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================REASONS FOR IMPRACTICALITY OF CENSUSThere are certain reasons that make census impractical or even impossible. The reasons are asfollows:1. Cost: Cost is an obvious constraint on the determination of whether a census should be taken.

If information is desired on grocery purchase and use behavior (frequencies and amounts of purchase of each product category, average amount kept at home and the like) and the population of interest is all households in a country, the cost will preclude a census beingtaken. Thus a sample is the only logical way of obtaining new data from a population of thissize.

2. Time: The kind of cost we have just considered is an outlay cost. The time involved inobtaining information from either a census or a sample involves the possibility of alsoincurring an opportunity cost. That is, the decision until information is obtained may result insmaller gain or a larger loss than would have been the case from making the same decisionearlier. The opportunity to make more (or save more. as the case may be) is, therefore,foregone.

3- Accuracy: A study using a census, by definition, contains no sampling error. A study using asample may involve sampling error in addition to other types of error. Other things beingequal, a census will provide more accurate data than a sample. However it has been arguedthat a more accurate estimate of the population of a country could be made from a sample thanfrom a census. Taking a census of a population on a "mail out - mail back" basis requires thatthe names and addresses of almost all households be obtained, census questionnaires mailed,and interviews conducted of those not responding. The questionnaires are sent to a populationof which only about half have completed high school. The potential for errors in a returnedquestionnaire is therefore high.

4. Destructive nature of the measurement: Measurements are sometimes destructive in nature.When they are, it is apparent that taking a census would usually defeat the purpose of a

measurement. If one were producing firecrackers, electrical fuses, or gas seed, performing afunctional use test on a all products for quality control purposes would not be considered froman economic standpoint. A sample is then the only practical choice. On the other hand, if thelight bulbs, bicycles, or electrical appliances are to be tested, a 100% sample (census) may beentirely reasonable.

According to Crisp R. D., the fundamental idea of sampling is that a small number of items or parts (called a sample) are chosen at random from a large number of items or a whole (called auniverse or population) the sample will tend to have the same characteristics and inapproximately the same proportion as the universe.

FEATURES OF SAMPLING(1) Sampling is a small representative of the whole. It is an effective alternative to the censussurvey.(2) Sampling reduces the time, efforts and money of the researcher on data collection without anyadverse effect on its quality.(3) The sampling technique is based on the assumption that random selection of sample from theuniverse do possesses the same features and characteristics as that of the universe.(4) The findings of sample survey are accurate and reliable. The larger sample is better as theresults available are more accurate.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(5) Sampling is used in data collection as well as for different purposes in our daily life.(6) The concept of sampling is quite common and popular in marketing research as it helpsresearchers to finalize their findings and recommendations within a short period.

FEATURES / ATTRIBUTES OF A GOOD / RELIABLE SAMPLE(1) Goal-oriented: A sample design should be goal oriented. It is means and should be orientedto the research objectives and fitted to the survey conditions.(2) Accurate representative of the universe: A sample should be an accurate representative of the universe from which it is taken. There are different methods for selecting a sample. It will betruly representative only when it represents all types of units or groups in the total population infair proportions. In brief sample should be selected carefully as improper sampling is a source of error in the survey.(3) Proportional: A sample should be proportional . It should be large enough to represent theuniverse properly. The sample size should be sufficiently large to provide statistical stability or reliability. The sample size should give accuracy required for the purpose of particular study.

(4) Random selection: A sample should be selected at random . This means that any item in thegroup has a full and equal chance of being selected and included in the sample. This makes theselected sample truly representative in character.(5) Economical: A sample should be economical. The objectives of the survey should beachieved with minimum cost and effort.(6) Practical: A sample design should be practical. The sample design should be simple i.e. itshould be capable of being understood and followed in the fieldwork.(7) Actual information provider: A sample should be designed so as to provide actualinformation required for the study and also provide an adequate basis for the measurement of itsown reliability.

In brief, a good sample should be truly representative in character. It should be selected at randomand should be adequately proportional. These, in fact, are the attributes of a good sample.

ADVANTAGES OF SAMPLING METHOD:

(1) Saves time and money: Sampling facilitates primary data collection easily / quickly and withless cost. It is time saving and economical method of survey for data collection.(2) Provides reliable data: The conclusions drawn from the sample survey are reliable, accurateand also applicable to the whole population/universe. Sampling has no adverse effect on thequality of data collected. It gives quality results with lesser volume of work.(3) Scientific base: The concept of sampling has scientific backing as it is based on the law of

statistical regularity and the law of inertia of large numbers.(4) Facilitates better supervision on data collection: Sampling method is restricted to limitednumber of respondents. Naturally effective monitoring and supervision on the data collectionwork is possible. This improves the quality of data collected.

LIMITATIONS OF SAMPLING METHOD:(1) Findings are not completely accurate: The findings of sampling method are reasonably

accurate but not completely accurate .The findings and conclusions drawn from sample surveymay be comparatively less accurate compared with that available from the census technique inwhich the entire population is covered.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================(2) Findings may not be reliable: The findings may not be reliable if the sample selected is too

small or is not adequately representative in character. In such cases the conclusions drawnmay be misleading and this may affect the quality of research work.

(3) Difficulties in the selection of representative sample: There are many practical difficultiesin the selection of representative sample. This may defeat the very purpose of sampling..

(4) Data collection difficult in the case of large sample: Data collection becomes difficult whenlarge size sample is decided. This also leads to more time and money for data collection.

A sample survey is a better alternative to the census or complete investigation, which is lengthyand also costly. For example, census reports are published by the Government two or three yearsafter the collection of data. However, survey reports (based on samples) can be prepared and

published within a few months. Thus, sampling is widely used methodology in MR. It is one vitalelement of research design.

STEPS IN SAMPLING PROCESS:Having looked into the major advantages and limitations of sampling, we now turn to thesampling process. It is the procedure required right from defining a population to the actualselection of sample elements. There are seven steps involved in this process.Step 1 : Define the population It is the aggregate of all the elements defined prior to selection of the sample. It is necessary todefine population in terms of (i) elements(ii) sampling units(iii) extent

(iv) time.A few examples are given here.

If we were to conduct a survey on the consumption of tea in Gujarat, then these specificationsmight be as follows(i) Element: Housewives(ii) Sampling units: Households, then housewives(iii) Extent Gujarat State(iv) Time January 1-10, 1999

If we were to monitor the sales of a product recently introduced by us, the population might be(i) Element Our product(ii) Sampling units Retail outlets, super markets, then our product(iii) Extent Delhi and New Delhi(iv) Time January 7-14, 1999

It may be emphasized that all these four specifications must be contained in the designated population Omission of any of them would render the definition of population incomplete

Step 2 : Identify the sampling frame

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Identifying the sampling frame, which could be a telephone directory, a list of blocks andlocalities of a city, a map or any other list consisting of all the sampling units. It may be pointedout that if the frame is incomplete or otherwise defective, sampling will not be able to overcomethese shortcomings

The question is—How to ensure that the frame is perfect and free from any defect Leslie Kish hasobserved that a perfect frame is one where "every element appears on the list separately, onceonly once, and nothing else appears on the list" This type of perfect frame would indicate one-to-one correspondence between frame units and sampling units But such perfect frames are rather rare Accordingly, one has to use frames with one deficiency or another, but one should ensure thatthe frame is not too deficient so as to be given up altogether

This raises a pertinent question -What are the criteria for a suitable frame? In order to examine thesuitability or otherwise of a sampling frame, a number of questions need be asked. These are

1 Does it adequately cover the population to be surveyed?

2 How complete is the frame? Is every unit that should be included represented?3 Is it accurate? Is the information about each individual unit correct? Does the frame as a whole

contain units, which no longer exist?4 Is there any duplication? If so, then the probability of selection is disturbed as a unit can enter

the sample more than once5 Is the frame up-to-date? It could have met all the criteria when compiled but could well be

deficient when it came to be used This could well be true of all frames involving the human population as change is taking place continuously

6 How convenient is it to use? Is it readily accessible? Is it arranged in a way suitable for sampling? Can it easily be re-arranged so as to enable us to introduce stratification and toundertake multi-stage sampling?

These are demanding criteria and it is most unlikely that any frame would meet them all Nevertheless, they are the factors to be borne in mind whenever we undertake random samplingIn marketing research most of the frames are from census reports, electoral registers, lists of member units of trade and industry associations, lists of members of professional bodies, lists of dwelling units maintained by local bodies, returns from an earlier survey and large scale maps.

Step 3: Specify the sampling unitThe sampling unit is the basic unit containing the elements of the target population. The samplingunit may be different from the element. For example , if one wanted a sample of housewives, itmight be possible to have access to such a sample directly. However, it is easier to select

households as the sampling unit and then interview housewives in each of the households.

As mentioned in the preceding step, the sampling frame should be complete and accurateotherwise the selection of the sampling unit might be defective. It is necessary to get a further specification of the sampling unit both in personal interviews and in telephone interviews. Thus,in personal interviews, a pertinent question is—of the several persons in a household, who should

be interviewed? If interviews were held during office timings when the heads of families andother employed persons are away, interviewing would under-represent employed persons andover-represent elderly persons, housewives and the unemployed. In view of these considerations,it is necessary to have a random process of selection of the adult residents of each household. Onemethod that could be used for this purpose is to list all the eligible persons living at a particular

address and then select one of them.

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Step 4: Specify the sampling methodIt indicates how the sample units are selected. One of the most important decisions in this regard

is to determine which of the two—probability and non-probability sample—is to be chosen.

In case of a probability sample, the probability or chance of every unit in the population being inthe sample is known. Further, the selection of specific units in the sample depends entirely onchance. No substitution of one unit for another is permissible. This means that no human

judgment is involved in the selection of a sample. In contrast, in a non-probability sample, the probability of inclusion of any unit in the population in the sample is not known. In addition, theselection of units within a sample involves human judgment rather than pure chance.

In case of a probability sample, it is possible to measure the sampling error and thereby determinethe degree of precision in the estimates with the help of the theory of probability. This theory alsoenables us to consider, from amongst the various possible sample designs, the one that will givethe maximum information per rupee. This is not possible when a non-probability sample is used.Probability sampling enables us to choose representative sample designs. It also enables us toestimate the extent to which the results based on such a sample are likely to be different fromwhat we would have obtained had we covered the population in our study. Conversely, the use of

probability sampling enables us to determine the sample size for a given degree of precision,indicating that our sample results do not differ by more than a specified amount from thoseyielded by a study covering entire population.

Although non-probability sampling does not yield these benefits, on account of its convenience

and economy, it is often preferred to probability sampling. If the researcher is convinced that therisks involved in the use of a non-probability sample are more than offset by its being relativelycheap and convenient, his choice should be in favor of non-probability sampling.

There are various types of sample designs that can be covered under the two broad groups,random or probability samples and non-random or non-probability samples.

Step 5: Determine the sample size In other words, one has to decide how many elements of the target population are to be chosen.

Step 6: Specify the sampling plan

This means that one should indicate how decisions made so far are to be implemented. For example, if a survey of households is to be conducted, a sampling plan should define a household,contain instructions to the interviewer as to how he should take a systematic sample of households, advise him on what he should do when no one is available on his visit to thehousehold, and so on. These are some pertinent issues in a sampling survey to which a sampling

plan should provide answers.Step 7: Select the sampleThis is the final step in the sampling process. A good deal of office and fieldwork is involved inthe actual selection of the sampling elements. Most of the problems in this stage are faced by theinterviewer while contacting the sample-respondents.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================item is impartial and independent of the person making the study. There is no scope for any

biased selection of sample units.

Probability sampling methods include random sampling, stratified, cluster, sampling, etc. Suchmethods are used extensively in marketing research. These methods provide unbiasedinformation. The probability sampling methods are objectively designed. However, these methodsare time consuming and also costly for use. Greater statistical competence and time are requiredto plan and use probability sampling methods.

(b) Non-probability Sampling MethodsHere, sample units are selected in a non-random manner. The selection may be purposive. It may

be based on the convenience or the judgment of the researcher. The selection is deliberate notrandom. Every item is not given a definite chance of being included in the sample. The non-

probability sampling ' methods include convenience sampling, judgment sampling, and quotasampling. In these methods, the sample is selected in a subjective manner and the decision

regarding sample is taken by the researcher * himself. The sample selected may not berepresentative of the universe to be studied. The selection of sample may be influenced by thesubjective consideration of the person connected with research work (researcher).

Non-probability sampling methods are also used in marketing research along with probabilitymethods. Such methods are sometimes preferred because they cost less per observation, requireless time and need relatively little statistical sophistication in planning the sample design and inthe selection the respondents. Probability sampling methods are more scientific and capable of yielding more representative samples than non-probability sampling methods. However, there isno sampling method (probability or non-profitability) that can be considered to be best in allsituations. Any suitable method may be selected and used properly for promising results.

PROBABILITY SAMPLING V/S NON-PROBABILITY SAMPLING

Probability Sampling Non-Probability Sampling

Meaning(i) Probability sampling providesan equal chance of beingselected in the sample to eachelement of the population.(ii) A probability sample is one,where the selected units havesome specific chance of being

included in the sample.

(i) Non-Probability samplingdoes not provide an equal chanceof being selected in the sample toeach element of the population.(ii) A non-probability sample isarbitrarily selected.

Type of method It is a systematic and modernmethod of sampling

It is a traditional and rather outdated method of sampling.

Selection of sample

The sample is selected by chanceor at random

The sample is selected by choice

Selection process The selection process iscontrolled objectively so that theitems will be chosen strictly atrandom

The selection process is, at least partially, subjective

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Benefit It helps to select a truly

representative sample Here, theselection of sample items isindependent of the personmaking the study (researcher)

The sample selected may or maynot be a true representative of thewhole population as it is selectedas per the convenience of theresearcher

Nature of process It is a mechanical andmathematical process

It is a mental process/exercise of the researcher

(A) PROBABILITY SAMPLING METHODS

(1) SIMPLE RANDOM SAMPLINGRandom sampling is one popular and extensively used sampling method In this method, each andevery unit of the population has an equal chance of being selected or included in the sampleRandom selection does not mean haphazard selection It is one type of selection in which everyitem in the universe has an equal chance of being selected alone with all other items In randomsampling, the complete list of the universe is taken but the selection is made 'at random' from thislist However, some uniform system is used for the selection of sample Random sampling is usefulfor the conduct of telephone or mail survey It is an ideal method in the surveys of specializednature

The process of randomness does not mean that it is 'haphazard', as a layman may be inclined tothink. What it means is that the process of selecting a sample is independent of human judgment.To ensure this, there are two methods that are followed when drawing a random sample. Theseare: (i) the lottery method and (ii) the use of random numbers.In the lottery method , each unit of the population is numbered and shown on a chit of paper or disc. The chits are folded and put in a box from which a sample of the requisite size is to bedrawn. In case discs are used, these are well mixed up before a draw is made so that no particular

unit can be identified before it gets selected. The sample is drawn in the same manner as winningnumbers in a lottery are drawnIn the second method, the tables of random numbers are used. The members of the populationare numbered from 1 to N from which n members are selected. This process is explained belowwith the help of an illustration.Suppose a sample of size 50 is to be selected from a population of 500. First, number the 500units from 1 to 500, the order being quite immaterial. While numbering the units, ensure that eachunit in the population has uniform digits, in this case, three. Thus, 1st unit would have a three-digit number 001, 2nd unit 002, 10th unit 010, 11th unit O11, and so on. After the units have beengiven three-digit numbers, the table of random numbers is to be used. One may start from the left-hand top corner of the table of random numbers and proceed systematically down sets of three-

digit columns, rejecting numbers over 500 and those that have occurred earlier.Using the first thousand numbers from the table of random numbers (an excerpt from the table isgiven below), a sample of 50 out of 500 will thus be chosen.231 055 148 389 117 433 495 367 070 313092 259 113 455 126 426 062 401 100 488434 325 211 207 398 225 485 035 171 047318 263 239 108 379 420 122 441 493 310032 194 144 337 224 006 068 043 500 222

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Advantages Of Simple Random Sampling Method (1) Simplicity: Simple random sampling is simplest method of probability sampling and can beused for different types of surveys(2) Scientific: This method is scientific as there is equal opportunity to every unit for selection assample(3) Truly representative character: The samples selected by this method are truly representativein character.(4) Quality results: Random sampling can be used effectively (for quality results) when theuniverse to be studied is small and can be listed accurately (e. g. motor car owners in a city)

Limitations Of Simple Random Sampling Method (1) Difficult when the universe is very large: In simple random sampling, the whole list of universe is taken up for selection Obtaining the complete and up-to-date list of the universe isdifficult It is difficult particularly when the universe is very large in number.

(2) Costly: The cost for conducting survey by this sampling method is high as the samples areselected at random and it is obligatory to contact them and collect the information(3) May prove inefficient: This method may prove to be statistically inefficient and provide alarger standard of error than the other types of sampling designs(4) Administrative difficulties: Random sampling involves administrative difficulties asregards the selection of sample and follow-up measures for the collection of information(5) May not be fully represented: The sample selected may not be fully representative as theselection is from the whole population and not from the groups that constitute the population

(2) STRATIFIED SAMPLING:

In stratified sampling, the units included in the sample constitute roughly the same population inwhich they are present in the total population

Stratified sampling is also called proportional random sampling. In this sampling, the populationis first subdivided into certain mutually exclusive groups or strata Such groups may be formed onthe basis of geographical area / size of the household or income After stratification, a randomsample of a given size is selected from each stratum of the total population This is how an attemptis being made to make the sample more representative in character Here, each of the strata isrepresented in the sample in relation to its importance

The following example will make this clear.

Strata income per month (Rs)

(1)

Population number of households

(2)

Sample(Proportionate)

(3)

Sample(Disproportionate)

(4)

0-500 5,000 50 75501-1000 4,000 40 201001-2000 3,000 30 202001-3000 2,000 20 253001 + 1,000 10 10

15,000 150 150

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================In the above example, the population consists of 15,000 households, divided into five strata on the

basis of monthly income. Column (3) of the table shows the sample, i.e., number of householdsselected from each stratum. The sample constitutes one per cent of the population. A sample of this type, where each stratum has a uniform sampling fraction, is called a proportionate stratifiedsampling. If, on the contrary, the strata have variable sampling fractions, the sample is called adisproportionate stratified sample. The figures given in column (4) of the above table show adisproportionate stratified sample. It will be seen that the sampling fraction varies from onestratum to another. Thus, for example, it is 0.015 for the monthly income Rs 0-500 and 0.01 for the stratum, Rs 3001+.

It may he noted that a stratified random sample with a uniform sample fraction results in greater precision than a simple random sample. But, this is possible only when the selection within stratais made on a random basis. Further, a stratified proportionate sample is generally convenient onaccount of practical considerations,

There are some other considerations in favor of the stratified random sample. The researcher may be interested in the results for separate strata rather than for the entire population. A simplerandom sample will not show results by strata as it presents only an aggregative picture. Another consideration is that it may be administratively expedient to split the population into strata. Yetanother consideration is that one can use different procedures for selecting samples from variousstrata. If the data are more variable in any particular strata, a larger sampling fraction should betaken in that stratum. This would result in greater overall precision

This method reduces the sampling error and it is a more accurate and representative samplingmethod Naturally, it is treated as an improvement over simple random sampling. It providesinformation about different components of the total population Use of stratified sampling also

leads to administrative conveniences In order to use a stratified sample, some informationregarding the population and its strata should be available to the researcher

The process of stratified random sampling differs from simple random sampling In simplerandom sampling, sample items are chosen at random from the entire universe while in stratifiedrandom sampling, a separate random sample is chosen from each stratum Stratified randomsampling is used in order to increase the precision of sampling estimates.

(3) SYSTEMATIC RANDOM SAMPLING:In systematic random sampling method, the units of a population are first listed and the sample isselected as per a well-defined system. The sample is drawn by selecting every nth item is thesampling frame, "n" is determined on the basis of the desired size of the sample A number isdrawn at random, usually a number between 1 and 10 is selected For example, we have 50,000items in the universe and a sample size is decided as 5,000 items In our case 'n' is equal to 10

Naturally, we have to select every 10th item from the universe However, the first item is selectedat random e.g. let us take 3. Such numbers are like 3, 13, 23, 33, 43, etc

Advantages of Systematic Random Sampling (a) It is a simple and unbiased sampling method.(b) It ensures speedy selection of sample.(c) It is more efficient statistically than simple random sampling.(d) It ensures more representative sample.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================In sampling the blocks, stratification and sampling with probability proportional to a measure of size are commonly employed. However, stratification in area sampling is based on geographicalconsiderations Thus, when blocks are identified and numbered on the map, they can be groupedinto some meaningful strata representing the different neighborhoods of the town. The point toemphasize is that these blocks must be identifiable without any difficulty

On the basis of the blocks thus identified, numbered and assigned to strata, a stratified sample of dwellings can be selected This can be done in either of two ways First, a sample of dwellings may

be drawn from all the dwellings included in a selected block Second, blocks may be divided intosegments of a more or less equal size, and a sample of these segments can be chosen and finallyall the dwellings from the selected segments may be taken in the sample It will thus be seen thatthe second method introduces another stage of sampling, namely, segments

Although the above discussion relates to area sampling with respect to a city or town, the sameapproach is applicable to a large area, say, a state or a country, the only difference being that one

or more additional stages of sampling may have to be introduced

Finally, it may be pointed out that area sampling is perhaps the only possibility if a suitablesampling frame is not available

(6) MULTI-STAGE SAMPLING

Multi-stage sampling, as the name implies, involves the selection of units in more than one stage.In such a sampling, the population consists of a number of first stage units, called primarysampling units (PSUs). Each of these PSUs consists of a number of second-stage units. First, asample is taken of the PSUs, and then a sample is taken of the second-stage units. This processcontinues until the selection of the final sampling units. It may be noted that at each stage of sampling, a sample can be selected with or without stratification.

An illustration would make the concept of multi-stage sampling clear. Suppose a sample of 5000urban households from all over the country is to be selected. In such a case, the first stage samplemay involve the selection of districts. Suppose 25 districts out of say 500 districts are selected.The second stage may involve the selection of cities, say four from each district. Finally, 50households from each selected city may be chosen. Thus, one would have a sample of 5000 urbanhouseholds, arrived at in three stages. It is obvious that the final sampling unit is the household.

In the absence of multi-stage sampling of this type, the process of the selection of 5000 urban

households from all over the country would be extremely difficult. Besides, such a sample would be very thinly spread over the entire country and if personal interviews are to be conducted for collecting information, it would be an extremely costly affair. In view of these considerations asampling from a widely spread population is generally based on multi-stage.

The number of stages in a multi-stage sampling varies depending on convenience and theavailability of suitable sampling frames at different stages. Often, one or more stages can befurther included in order to reduce cost. Thus, in our earlier example, the final stage of samplingcomprised 50 households from each of the four selected cities. Since this would involve theselection of households all over the city, it would turn out to be quite expensive and timeconsuming if personal interviews are to be conducted. In such a case, it may be advisable to select

two wards or localities in each of the four selected cities and then to select 25 households from

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================each of the 2 selected wards or localities. Thus, the cost of interviewing as also the time incarrying out the survey could be reduced considerably.

It will be seen that an additional stage comprising wards or localities has been introduced here.Thus the sample has become a four-stage sample – 1st stage – districts2nd stage – cities3rd stage – localities4th stage – households

From the preceding discussion it should be clear that a multi-stage sample results in theconcentration of fieldwork. This in turn, leads to saving time, labor and money. There is another advantage in its use. Where a suitable sampling frame covering the entire population is notavailable, a multi-stage sample can be used.

(7) MULTI-PHASE SAMPLINGA multi phase sample should not be confused with a multi-stage sample The former involves adesign where some information is collected from the entire sample and additional information iscollected from only a part of the original sample Suppose a survey is undertaken to determine thenature and extent of health facilities available in a city and the general opinion of the people. Inthe first phase a general questionnaire can be sent out to ascertain who amongst the respondentshad at one time or other used the hospital services. Then, in the second stage, a comprehensivequestionnaire may be sent to only these respondents to ascertain what they feel about the medicalfacilities in the hospitals. This is a two-phase or double sampling.

The main point of distinction between a multi-stage and a multi-phase sampling is that in theformer each successive stage has a different unit of sample whereas in the latter the unit of sampleremains unchanged though additional information is obtained from a sub-sample.

The main advantage of a multi-phase sampling is that it effects economy in time, money andeffort. In our earlier example, if a detailed questionnaire is sent out to a large sample comprisingindividuals, they would not be able to provide the necessary information. Second, more time will

be required. Finally, it will be far more expensive to carry out the survey, especially when personal interviews are involved.

(8) REPLICATED SAMPLINGReplicated sampling implies a sample design in which "two or more sub-samples are drawn and

processed completely independent of each other" It was first introduced by “Mahalnobis" in 1936,who used the term inter-penetrating sub-samples.

In replicated sampling, several random sub-samples are selected from the population instead of one full sample. All the sub-samples have the same design and each one of them is a self-contained sample of the population. For example, take the case of a random sample of 10households. This sample may be divided into, say, 10 equal sub-samples to be assigned to 10interviewers. Thus, each interviewer may be required to collect information from 10 households.

A replicated sample is particularly chosen on account of the convenience it affords in thecalculation of standard error. In many complex sample designs, the calculation of standard error

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becomes too laborious. Selecting a replicated sample design can considerably reduce thisdifficulty. However, in modem times when computers are being increasingly used, the ease incalculating standard error has made it somewhat less important. Apart from this advantage, thereare certain other advantages of replicated sampling. First, if the size of a sample is too large, itmay be advisable to split it up into two or more sub-samples. One sub-sample may be used to getthe advanced results of the survey. Second, replicated sampling can indicate the non-samplingerrors.

However, replicated sampling would not be helpful in undertaking a detailed investigation of biasas the numbers in the separate sub-samples tend to be small Further, such samples do not revealany systematic errors that may be more or less common to all interviewers and the compensatingerrors which cancel each other out over an interviewer's assignment.

Apart from the above limitations, replicated samples have other disadvantages If personalinterviews are to be conducted, replicated samples turn out to be costlier Likewise, tabulation

costs would be higher than in the case of a single large sample Finally, replicated samples aremore complex to administer.

(9) SEQUENTIAL SAMPLINGIn sequential sampling, a number of samples n1, n 2, n 3…nx are randomly drawn from the

population It is not at all necessary that each sample should be of the same size Generally, the firstsample is the largest, the second is smaller than the first, the third is smaller than the second, andso on

A sequential sampling is resorted mainly to bring down the cost and hence the smallest possible

sample is used The desired statistics from first sample, n i, are computed and evaluated If thesestatistics do not satisfy the criteria laid down, a second sample is drawn The results of the first andsecond samples are added and the statistics are recomputed This process is continued until thespecified criteria are satisfied The criteria are usually a minimum significance level, a minimumcluster size, or a minimum confidence interval

The main advantage of sequential sampling is that it obviates the need for determining a fixedsample size before the commencement of the survey

Suppose a firm is to decide whether a new product is to be introduced in the market or not It feelsthat if it is able to acquire 15 per cent market share in a country within a year, it should introducethe new product Further, it feels that if a market share of 10 per cent in a few test markets isachieved, it would be possible to acquire a 15 per cent market share in the country, say, within a

period of six months Now, when the firm has undertaken test marketing, it actually achieved far more than 10 per cent, say, 20 per cent, of the market share and that too within three months of test marketing The firm may be sure to achieve the 15 per cent national market share within oneyear even though it may not be possible for it to accurately forecast the test market share at theend of four months

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(B) NON-PROBABILITY SAMPLING METHODS

(1) CONVENIENCE SAMPLINGIn convenience sampling, the convenience of the researcher is given importance while selecting

the sample. The researcher as per his convenience decides inclusion of units in the sample. Theitems that are easily accessible or easily measurable are included in the sample. Specific

plan/system/method is not used for the selection of items in sample. As a result bias is likely toenter into the sample selected.Interviewing respondents on the street or at the bus stop or at the railway station are the examplesof convenience sampling. In this sense, convenience sampling is also called accidental sampling,as the respondents in the sample are included merely on account of their being available on thespot where the survey work is in progress. Convenience sampling is more suitable in exploratoryresearch, where the focus is mainly on getting new ideas and insights into a given problem.

Advantages of Convenience Sampling

(a) It is profitably used in pre-testing of questionnaires(b) It keeps the researcher free of tension.(c) It allows the respondents to answer questions in leisure.

Disadvantages of Convenience Sampling

(a) Sampling could be non-representative of the population e.g., students living in collegetown may not represent sample of student community.(b) Problem of element of chance(c) It cannot rule out bias of respondents.

(2) QUOTA SAMPLING

Quota sampling is quite frequently used in marketing research. It involves the fixation of certainquotas, which are to be fulfilled by the interviewersSuppose in a certain territory we want to conduct a survey of households Their total number is2,00,000 It is required that a sample of 1 per cent, i.e. 2000 households are to be covered We mayfix certain controls which can be either independent or inter-related These controls are shown inthe following tables

A sample of 2000 households has been chosen, subject to the condition that 1200 of these should be from rural areas and 800 from the urban areas of the territory Likewise, of the 2000households, the rich households should number 150, the middle class ones 650 and the remaining1200 should be

Independent Controls

Rural 1200 Rich 150Urban 800 Middle class 650

Poor 1200Total 2000 Total 2000

Inter-related Controls Rural Urban Total

Rich 100 50 150Middle class 400 250 650

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Poor 700 500 1200Total 1200 800 2000from the poor class These are independent quota controls The second table shows the inter-relatedquota controls As can be seen, inter-related quota controls allow less freedom of selection of the

units than that available in the case of independent controlsThere are certain advantages in both the schemes Independent controls are much simpler,especially from the viewpoint of interviewers They are also likely to be cheaper as interviewersmay cover their quotas within a small geographical area In view of this, independent controls mayaffect the representativeness of the quota sampling Interrelated quota controls are morerepresentative though such controls may involve more time and effort on the part of interviewersAlso, they may be costlier than independent quota controls

In view of the non-random element of quota sampling, it has been severely criticized especially by statisticians, who consider it theoretically weak and unsound There are points both in favor of

and against quota sampling These are given below Advantages of quota sampling

(a) It is economical as traveling costs can be reduced An interviewer need not travel all over atown to track down pre-selected respondents However, if numerous controls are employed ina quota sample, it will become more expensive though it will have less selection bias

(b) It is administratively convenient The labor of selecting a random sample can be avoided by using quota sampling Also, the problem of non-contacts and call-backs can be dispensedwith altogether

(c) When the field work is to be done quickly, perhaps in order to minimize memory errors,quota sampling is most appropriate and feasible

(d) It is independent of the existence of sampling frames Wherever a suitable sampling frameis not available, quota sampling is perhaps the only choice available

Limitations of Quota sampling

1 Since quota sampling is not based on random selection, it is not possible to calculate estimatesof standard errors for the sample results

2 It may not be possible to get a 'representative' sample within the quota as the selection dependsentirely on the mood and convenience of the interviewers

3 Since too much latitude is given to the interviewers, the quality of work suffers if they are notcompetent

4 It may be extremely difficult to supervise the control and field investigation under quotasampling

(3) JUDGEMENT SAMPLING

The main characteristic of judgment sampling is that units or elements in the population are purposively selected It is because of this that judgment samples are also called purposive samplesSince the process of selection is not based on the random method, a judgment sample isconsidered to be non-probability samplingOccasionally it may be desirable to use judgment sampling Thus, an expert may be asked to select

a sample of 'representative' business firms The reliability of such a sample would depend upon the

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judgment of the expert The quota sample, discussed earlier, is in a way a judgment sample wherethe actual selection of units within the earlier fixed quota depends on the interviewer

It may be noted that when a small sample of a few units is to be selected, a judgment sample may be more suitable as the errors of judgment are likely to be less than the random errors of a probability sample 16 However, when a large sample is to be selected, the element of bias in theselection could be quite large m the case of a judgment sample Further, it may be costlier than therandom sampling

(4) MASTER SAMPLESA master sample is one from which repeated sub-samples can be taken as and when required fromthe same area or population This was first used in the United States when the US Master sampleof agriculture was taken In this sampling, the rural area of over 3000 US counties was dividedinto segments of about four farms each "After selecting a systematic sample of 1/8 of thesegments, the materials were duplicated and made available, with instruction, at low cost" Thecrucial point to note in respect of master samples is that "the actual sample for each new survey isnot selected directly from the entire population but from a frame of segments and dwellings thatwas selected earlier from the entire population "

The utility of the samples is limited to a relatively short period for there may be changes in the population which would distort the representative character of the master samples In view of this,master samples should be relatively permanent, say, dwellings rather than individuals or household which frequently undergo changes on account of births, deaths and migration The mainadvantage of master samples is that they can be expeditiously selected on account of their simplicity Another advantage is that they are economical, because the same master frame is usedfor drawing samples for several surveys, as a result of which the cost incurred on the preparation

of the master frame is spread over these surveys. Further, on account of this economy in eachsurvey, one can initially spend more to create a good master frame. Thus, economy may lead toimproved quality in the listing.

(5) PANEL SAMPLESPanel samples are frequently used in marketing research. In panel samples, the same units or elements are measured on subsequent occasions. To give an example: Suppose that one isinterested in knowing the change in the consumption pattern of households. A sample of households is drawn. These households are contacted to gather information on the pattern of consumption, subsequently, say after a period of six months, the same households are approachedonce again and the necessary information on their consumption is obtained. A comparison of theresults of the two sets of data would indicate whether there has been any change, and, if so, towhat extent. In fact, the information is collected on a more or less continuous basis with the helpof panel samples.

Panel samples are extremely convenient and economical and the cost of drawing a second sampleis not incurred. But the main limitation of such samples is that it may be difficult to sustain theinterest of individuals included in the panel for a long period. Many respondents on the panel mayrefuse to be interviewed twice or may give poor answers. In either case the quality of the surveywill suffer. Another limiting factor in panel samples is that there may be bias on account of thecontinued participation in the panel. It is felt that the individual is conditioned to some extent bythe fact that data on purchases are reported. In such a case the purchase behavior of panel

members may become different from others not covered by the panel. Furthermore, panel samples

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remainder of the budget is allocated to sampling Dividing this remaining amount by theestimated cost per sampling gives the sample sizeThis method concentrates on the cost of the information and is not concerned about its valueAlthough cost always has to be considered in any systematic approach to sample sizedetermination, one also needs to give consideration to how much the information provided bythe sample will be worth. This approach produces sample sizes that are larger than required aswell as sizes that are smaller than optimal

3. Required Size Per Cell - This method of determining sample size can be housed on simplerandom, stratified random, purposive and quota samples For example, In a study of attitudeswith respect to fast food establishments in a local marketing area it was decided thatinformation was desired for two occupational groups and for each of the four age groups Thisresulted in 2x4 =-8 sample cells. A sample size of 30 was needed per cell for the types of statistical analyses that were to be conducted. The overall sample size was therefore 8 x 30 =240.

4 Use of Bayesian Statistical Model - The Bayesian model involves finding the difference

between the expected value of the information to be provided by the sample size and cost of sample. This difference is known as expected net gain from sampling (ENG) The sample sizewith the largest positive ENG is chosen.

The procedure for finding the optimal value of ‘n’ or the size of sample under this approach isas under:1. Find the expected value of the sample information (EVSI) for every possible n2. Also workout reasonably approximated cost of taking a sample of every possible n,3. Compare the EVSI and the cost of the sample for every possible n. In other words,

workout the expected net gain (ENG) for every possible n as stated below:For a given sample size (n): (EVSI) - (Cost of sample) = (ENG)

4. From above step the optimal sample size, that value of n, which maximizes the difference between the EVSI and the cost of the sample, can be determined

The computation of EVSI for every possible n and then comparing the same with therespective cost is often a very cumbersome task and is generally feasible with mechanized or computer help. Hence, this approach although being theoretically optimal is rarely used in

practice.

5. Use of Traditional Statistical Model - The formula for traditional statistical model dependsupon the type of sample to be taken and it always incorporates three common variables

an estimate of the variance in the populati on from which the sample is to be drawn

the error from sampling that the researcher will allowthe desired level of confidence that the actual sampling error will be within the allowablelimits

The statistical models for simple random sampling include estimation of means and estimation of proportion

SAMPLING ERRORSWhatever kind of sample is taken and whatever the sample size there will always be error arisingfrom the sampling process. The extent of such error may be defined as the difference between asample result, and the result that would have been achieved by undertaking a complete census.Such errors arise because particular types of cases are under-represented or over-represented in

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================the sample compared with the population as a whole. If, for example, the cases are individualconsumers, then the under- or over- representation of the sexes, ages or social classes will affectthe measurement (and, more importantly, the estimates made from them) of a large number of variables. Lack of representation in the appropriate quantities may be a product of two factors:

systematic error (or bias) and random error (or variance).

Systematic errorBias arises when the sampling procedures used bring about over- or under- representation of typesof cases in the sample, which is mostly in the same direction. This may happen because:• the selection procedures are not random,• the selection is made from a list that does not cover the population, or uses a procedure that

excludes certain groups,• non-respondents are not a cross-section of the population.

If the selection procedures are not random then it means that human judgement has entered into

the selection process. For example, interviewers may be asked to choose respondents at somegeographical location or to select households in specified streets. The result is likely to be thatcertain kinds of people or households or organizations are excluded from the sample. Thuschoosing respondents in a shopping centre will miss out people who seldom or never goshopping; the selection of households by an interviewer may result in the omission of flats at thetops of stairs.

If the Electoral Register is used to select adults aged 16 or over, then, as indicated earlier, 16 and17 year-olds and many of the 18 year-olds will be missing from the list and will be under-represented in the final sample. The use of telephone directories will under represent certain socialgroups less likely to be in the telephone book (or those who are ex-directory). Duplication in lists,

for example in the Yellow Pages, may result in some over-representation. If we try to estimatesales of soap from a sample of private households, then all users in institutions of various kindswill be excluded.

Non-response is a problem for both censuses and samples. For censuses it means that theenumeration will be incomplete. If large numbers are missing, it would be inappropriate to treatthose successfully contacted as a representative sample'. For samples, it means that estimatesmade from the sample will he biased if non-respondents are not themselves representative of the

population. If they are representative, then non-response is not so much of a problem; but it maystill mean that analyses are made on the basis of too small a sample.

Whatever the reason for the systematic error, the effect will be that all samples that could bedrawn from a population will tend to result in the same direction of over- or under-representation.The average of all these samples will then not be the same as the real population average or

proportion. Thus if we took lots of samples using a procedure that tended to omit workingmothers with young children, then all the samples will manifest such under-representation rather than some over-representing them and some under-representing them so that the average of allsamples was very close to the real population proportion.

Systematic errors cannot be reduced simply by increasing the sample size. If certain kinds of people are not being selected, cannot be contacted or are not responding, it will not be 'solved' bytaking a bigger sample. Indeed, some kinds of errors -will increase with more interviewers, more

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================questionnaires and greater data-processing requirements. All the researcher can do is minimize thelikelihood of bias by using appropriate sample designs. Biases for some variables can be checked,for example against Census data or data from other sources. Sometimes attempts are made todiscover the characteristics of non-responders, for example by sending out interviewers to non-respondents to a postal survey, taking 'late' responders as typical of non-responders, or gainingdemographic data from the results of another survey that the non-responders have taken part in.

Random errorIf we took a number of random, unbiased samples from the same population there will almostcertainly be a degree of fluctuation from one sample to another. Over a large number of samplessuch errors will tend to cancel out, so that the average of such samples will be close to the real

population value However, we usually take only one sample, and even a sample that has usedunbiased selection procedures will seldom be exactly representative of the population from whichit was drawn. Each sample will, in short, exhibit a degree of error. Such error is often called'sampling error', 'hut it would he clearer to think of it as 'random sampling error' to distinguish it

from bias (which some statisticians and some textbooks, confusingly, categorize as 'non-sampling'error).

Unlike bias, which affects the general sample composition and relates to each variable beingmeasured in unknown ways, random sampling error will differ from variable to variable. Thereason for this is that the extent of such error will depend on two factors:• the size of the sample - the bigger the sample, the less the random sampling error (but by adeclining amount),• the variability in the population for that particular variable - a sample used to estimate avariable that varies widely in the population will show more random sampling error than for avariable that does not.

These two factors are used as a basis for calculating the likely degree of variability in a sample of a given size for a particular variable. This, in turn, is used as an input for establishing with aspecified probability the range of accuracy of sample estimates, or that sample findings are onlyrandom sampling fluctuations from a population of cases in which the findings are untrue.

NON-SAMPLING ERRORS Not all errors in a piece of research are a result of the sampling process Certain kinds of error mayarise even if a complete census is taken. There are four main categories of such error:• response errors,

• interviewer errors,• non-response errors,• processing errors.

Where research is based on asking people questions then response errors may arise where, for onereason or another, respondents give wrong answers. This may be through dishonesty,forgetfulness, faulty memories. unwillingness or misunderstanding of the questions being asked.Many of these errors arise as a result of poor or inadequate questionnaire design putting it theother way round, the potential for such errors to arise can be minimized by careful design of question-wording, question formulation and questionnaire layout. In interview surveys, whether face-to-face or by telephone, interviewers may themselves misunderstand questions or the

instructions for filling them in. they may be dishonest, inaccurate, make mistakes or ask questions

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================in a non-standard fashion. Interviewer training, along with field supervision and control can, to alarge extent, remove the likelihood of such errors, but they will never be entirely eliminated, andthere is always the potential for systematic differences between the results obtained by differentinterviewers.

In nearly all research there will be missing cases, but in survey research there will always be adegree of non-response because some people will refuse to he interviewed or to complete aquestionnaire, some will be ineligible because they turn out not to be part of the survey

population, some will terminate the interview or refuse to answer some of the questions, and somewill be non-contactable, for example, because they have moved away, died, or are on holiday atthe time of the survey. Even where a census is attempted, it will often remain incomplete. Theextent of non-response will vary considerably according to the type of research, the topic of theresearch, and, where based on face-to-face interviews, on the experience and training of the inter-viewers. Calculating the amount of non-response can be confusing since some researchers will,for example, take the proportion of refusals in the sample drawn, others will take refusals and

non-contacts as a proportion of those found eligible, and so on.

Processing errors can arise back at the office, particularly at the stage of entering answers toquestions onto a computerized database via a keyboard and screen. Agencies sometimes validatethese entries by, in effect, entering them twice, and the computer checks to see if the two entriesare identical. Alternatively, some agencies check samples of the entries. It is possible, in addition,to apply range checks and logical checks.

There are, then, a number of sources of non-sampling error, and it is important to bear these inmind when interpreting survey results, whether based on a sample or not. The crucial point is thatsuch errors can arise even if a census is taken.

Total survey error

Any research that is based on addressing questions to people and recording their answers riskserror resulting from the respondents themselves and from interviewers where these are used inaddition to those kinds of error that arise in any research from data handling, and frominadequacies of sampling. Total survey error is the addition of all these sources of error, bothsampling and non-sampling It is difficult to estimate what the total survey error is in any onesurvey, and it will tend to vary from question to question. What is certainly true is that the error that results from random sampling fluctuations - which is the only kind of error that is taken intoaccount when confidence intervals are calculated or tests are made against the null hypothesis -

accounts for only a very small proportion of the total survey error.

Errors of various kinds can always be reduced by spending more money, for example, on moreinterviewer training and supervision, on random sampling techniques, on pilot testing or ongetting a higher response rate. However, the reduction in error has to be traded off against theextra cost involved. Furthermore errors are often interrelated so that attempts to reduce one kindof error may actually increase another, for example, minimizing the non-response errors by

persuading more reluctant respondents may well increase response error Non-sampling errors tendto be pervasive, not well-behaved and do not decrease - indeed may increase - with the size of thesample. It is sometimes even difficult to see whether they cause under- or over-estimation of

population characteristics. There is, in addition, the paradox that the more efficient the sample

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================design is in controlling random sampling fluctuations, the more important in proportion become

bias and non-sampling error.

CONTROLLING NON-SAMPLING ERRORSIn practice, market research agencies make all reasonable attempts, within the limits imposed bycost and time constraints, to minimize or at least measure the impact or make some estimate of non-sampling errors and of bias in the sampling procedure. Thus, as far as response errors areconcerned, agencies may:

• pilot-test questionnaires in order to check for misunderstandings of questions,• analyse tendencies to overclaim or underclaim for certain kinds of consumer behaviour, for

example, the tendency to underclaim the consumption of alcohol, or to overclaim televisionwatching,

• use aided-recall techniques (prompted lists) to help respondents remember products that theymay have purchased and forgotten about, or radio programs that they forgot they had listenedto,

• use questioning techniques that minimize the effort respondents need to make.

To minimize interviewer error, agencies will often:• set rigorous training standards for interviewers,• monitor the process of interviewing by doing 'back checks' - calling or telephoning respondents

who have already been interviewed to check that the interview was carried out properly, or sending supervisors to accompany interviewers on a regular sample basis,

• computer analyses may be made of questionnaire errors to identify' interviewers who may needretraining or reminding of particular points.

To minimize errors resulting from non-response, agencies do one or more- of several things:• for interview surveys interviewers may be asked to make a specified number of callbacks if therespondent was not at home on the first call Three or four such callbacks may be made, ideallyat different times and days of the week

• interviewers may make an appointment by telephone with the respondent.• self-completing questionnaires may be left where no contact has been made• monetary incentives or gifts may sometimes help to improve the response rate,• interviewers may get a 'foot-in-the-door' by having respondents comply with some small request

before presenting them with the larger survey,• non-respondents to a postal survey may be sent interviewers to persuade respondents to

complete the questionnaire, or they may be sent further reminders.

Processing errors will be minimized by careful editing and checking of the questionnaires inaddition to the use of data entry validation procedures.

Market research agencies will try to minimize bias by using carefully constructed sample designsthat use random procedures wherever possible, or by imposing restrictions on interviewer choiceswhere it is not. These sample designs were described earlier. Biases will still remain, however,and sometimes these are known. Thus it may be known that there are too many women in thesample, or too few men aged 20-24, compared with known population proportions. Manyagencies will make corrections to the data to adjust for these biases by 'weighting' them.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================In the real world of market research agencies and their clients it is unfortunately true that manyclients do not understand or lack interest in the basics of sampling. In consequence many clientsdo not ask for estimates of bias or calculations of random sampling error. At the same time theagencies feel that to produce calculations, for example of confidence intervals for a large number of variables will only add confusion and perhaps distrust of the data. In consequence, samplingerrors are often quietly ignored, and the estimates given are taken to be the 'truth'. Agencies willinstead try to assure their clients that the occurrence and impact of non-sampling errors have beenminimized by:• demonstrating that the procedures for the collection, analysis and reporting of the results are

'respectable', meticulous and thorough,• showing that the research design features are such as to minimize sources of error within the

parameters set by time and cost,• emphasizing the extent of quality control checks that will uncover, correct and minimize the

occurrence of 'mistakes',• making corrections to the resulting data so that known biases are adjusted for.

Beyond these assurances, clients are sometimes given some indication of the extent of randomsampling error that remains. Clients may be given 'read-off tables for groups of products or typesof variable, based on the 'average' variability for that group or type, given a particular sample size.

Important Sampling DistributionsSome important sampling distributions, which are commonly used, are:

1. Sampling distribution of mean: Sampling distribution of mean refers to the probability distribution of all the possible means of random samples of a given size that wetake from a population. If samples are taken from a normal population, N ( µ , σ ν ), the

sampling distribution of mean would also be normal with mean µ x = µ and standarddeviation = σ ν / n , where µ is the mean of the population, σ ν is the standard deviationof the population and n means the number of items in a sample. But when samplings from a

population which is not normal (may be positively or negatively skewed), even then, as per the central limit theorem, the sampling distribution of mean tends quite closer to the normaldistribution, provided the number of sample items is large i.e., more than 30. In case we want'o reduce the sampling distribution of mean to unit normal distribution i.e., N (0, 1), we can

write the normal variate z =/v n

x µ

σ

−&for the sampling distribution of mean. This characteristic of

the sampling distribution of mean is very useful in several decision situations for accepting or

rejection of hypotheses.(2) Sampling distribution of proportion: Like sampling distribution of mean, we can as well have

a sampling distribution of proportion. This happens in case of statistics of attributes. Assumethat we have worked out the proportion of defective parts in large number of samples, eachwith say 100 items, that have been taken from an infinite population and plot a probabilitydistribution of the said proportions, we obtain what is known as the sampling distribution of

proportion. Usually the statistics of attributes correspond to the conditions of a binomialdistribution that tends to become normal distribution as n becomes larger and larger. If prepresents the proportion of defectives i.e., of successes and q the proportion of non-defectivesi.e., of failures (or q == 1 — p) and if p is treated as a random variable, then the sampling

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distribution of proportion of successes has a mean = p with standard deviation = p q

n×

where n is the sample size. Presuming the binomial distribution approximating the normaldistribution for large n, the normal variate of the sampling distribution of proportion

z = x p p p q

n

-´ where p x is the sample proportion of successes, can be used for testing of

hypotheses.3. Student's t-distribution: When population standard deviation (σ ν ) is not known and the

sample is of a small size (i.e., n ≤ 30), we use t distribution for the sampling distribution of mean and workout t variable as:

s

X t

n

m

s

-=

where2

1

( )

1

n

ii

X X

n=

-

-

å i.e., the sample standard deviation, t-distribution is also

symmetrical and is very close to the distribution of standard normal variate, z, except for smallvalues of n. The variable t differs from z in the sense that we use sample standard deviation(σ s) in the calculation of t, whereas we use standard deviation of population ( σ ν ,) in thecalculation of z. There is a different t distribution for every possible sample size i.e., for different degrees of freedom. The degrees of freedom for a sample of size n is n - 1. As thesample size gets larger, the shape of the t distribution becomes approximately equal to thenormal distribution. In fact for sample sizes of more than 30, the t distribution is so close to thenormal distribution that we can use the normal to approximate the t-distribution. But when n issmall, the t-distribution is far from normal but when n , t-distribution is identical withnormal distribution. The t-distribution tables are available which give the values of t for different degrees of freedom at various levels of significance. The table value of t for givendegrees of freedom at a certain level of significance is compared with the calculated value of tfrom the sample data, and if the latter exceeds, we infer that the null hypothesis cannot beaccepted.

4. F distribution: If ( σ s1)2 and ( σ s2)

2 are the variances of two independent samples of size n1 andn2 respectively taken from two independent normal populations, having the same variance,

( ) ( )1 2

2 2n ns s= , the ratio F= (σ s1)

2 /(σ s2)2, where ( ) ( )

1

22 1 1

1 1i

s X X

ns-

= -å and

( ) ( )2

22 2 2

2 1i

s X X

ns-

= -å has an F distribution with n 1 — 1 and n 2 — 1 degrees of

freedom. F ratio is computed in a way that the larger variance is always in the numerator.Tables have been prepared for F distribution that give value of F for various values of degreesof freedom for larger as well as smaller variances. The calculated value of F from the sampledata is compared with the corresponding table value of F and if the former exceeds the latter,then we infer that the null hypothesis of the variances being equal cannot be accepted.

5. Chi-square (γ 2) distribution: Chi-square distribution is encountered when we deal withcollections of values that involve adding up squares. Variances of samples require us to add acollection of squared quantities and thus have distributions that are related to chi-squaredistribution. If we take each one of a collection of sample variances, divide them by the known

population variance and multiply these quotients by (n — 1), where n means the number of

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items in the sample, we shall obtain a chi-square distribution. Thus, ( ) ( )2

2 1 s

pns

s´ - would have

the same distribution as chi-square distribution with (n - 1) degrees of freedom. Chi-squaredistribution tat not symmetrical and all the values arc positive. One must know the degrees of freedom for using chi-square distribution. This distribution may also be used for judging thesignificance of difference between observed and expected frequencies and also as a test of goodness of fit. The generalized shape of γ 2 distribution depends upon the degree of freedomand the γ 2 value is worked out as under:

( )22

1

k i i

ii

O E

E g

=

-= å

Tables are there that give the value of γ 2 for given degree of freedom which may be used withcalculated value of γ 2 for relevant degree of freedom at a desired level of significance for testinghypotheses.

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MARKETING INFORMATION SYSTEM (MIS)

MEANING OF MARKETING INFORMATION SYSTEM (MIS)

Companies in India and across the world have been forced recognize and acknowledge - the rising power of customers (across all classes) and the emerging new generation of competitors. This risein customer power has gained prominence especially in the post-liberalization scenario, which istriggered by the extensive deregulation and the general import duty reduction, leading to cutthroatcompetition. Given this scenario, it is no wonder that firms are faced with the task of building upa database of customers (existing and potential), enhance their product/service offeringscontinuously, understand their customers' perceptions of its product and services vis - a - vis thatof their competitors and also to innovate (product and service mix) regularly so as to be able to setthem apart from the rest of the pack. This is no easy job because data may be available in plenty

but it has to be sorted and resorted so to ensure that this data reaches the people who need theinformation for decision-making.

Thus has begun the age of information explosion with marketing decision makers and also theother managers having learned that they need certain kinds of information during regular intervalsof time in order to deal with recurring decisions.

Marketing information system (MIS) is of recent origin and supports marketing decision-makingand marketing planning. It facilitates quick marketing decision-making and thereby raisesmarketing excellence. However, MIS is not a substitute for, but an aid to rational decision-making. Even after collecting all required information, the decisions are to be made by marketingexecutives. Information is those cues that make managerial decisions scientific. In brief, MIS is anessential support system for developing marketing decisions, plans and strategies.

Marketing information includes all facts, estimates, opinions and other data used in marketing decision-making. A lot of information is generated regularly from within the organization and alsofrom external sources. Such information can be collected purposefully for planning businessactivities and for decision-making. Information is useful to top and middle level management for

planning and control of marketing activities. The marketing manager takes marketing decisions inthe light of the information supplied through MIS. He is like a pilot on the flight desk controllingaircraft as per the information available through instrument panels. Such information system

provides updated and varied type of information in an uninterrupted manner to a businessorganization. In fact, information is the glue that holds organization together. Every organizationneeds efficient MIS to effectively manage the information collected. In business organizations,marketing information managers are appointed and are responsible for creation and disseminationof marketing information throughout the organization.

The meaning of MIS can be made clear with the help of a simple example of a pilot of an aircraft.When a pilot is at the controls of his aircraft, he is constantly monitoring its (aircraft's)

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performance in relation to air speed/ light and altitude, engine revolutions so that the, flight cancontinue safely towards a destination. The task of piloting the plane centers on his receivinginformation through the instrument panels on his flight deck. He takes decisions and sees that the

plane moves towards the destination quickly and safely. In many ways managing business or marketing activity is like piloting an aircraft. In order to achieve marketing objective, correctdecisions must be taken and correct decision-making is possible only when reliable, up-to-dateand adequate information is made available regularly and promptly. This suggests the meaningand significance (importance) of MIS.

It may also be noted that information has no value until managers use the information collected tomake better marketing decisions. For this the information gathered through MIS/marketingintelligence/ marketing research should be distributed promptly to the right marketing managers atthe right time. Developments in information technology have brought a revolution in informationdistribution. In many companies, marketing managers have direct access to the informationnetwork at any time and from virtually any location. This is due to advances in computers,

software and telecommunication.

For the purpose of decision-making, marketers generally require three types of information

• Information for the Purpose of Control: In order to ensure effective control, marketers areinterested in having access to weekly sales reports (on sales territories, product-wise etc.), sales-expense ratios, warehouse inventory reports, etc. Such information will enable the marketer toknow what is happening, what has happened in the past or what changes may be required to betaken in the future.

• Information for Planning Purpose: This will include economic and sales forecasts,

understanding demographic profiles, estimating social and political shifts• Information for an ad-hoc Study: This could be information being sought for one-time

decisions or study like - whether a proposed new product is to be introduced? What sort of anadvertisement should for used for a national campaign and so on.

The latter two types of information involve research. If the reports are not fed into the formalinformation system and is basically in the possession of the person who was originally seeking theinformation, then this may lead to another problem, i.e. another group or department may beseeking this type of information but in the absence of a formal filing of the research report, may

be unaware that such a study has already been conducted.

This reiterates the fact that an effective Marketing Information System must be such that it is ableto identify, manage and disperse all the above-mentioned three types of information. Moreover,the information systems will also have an impact on the location and methods of MarketingResearch.

It is to be noted that the Marketing Information System is spoken to be as the same u&Management Information System. This is because the systems are quite similar with the onlydistinction that the former system applies to a system dedicated to the marketing branch of management, while the latter refers to the whole spectrum of management. As mentioned earlier MIS can also be termed as an extension of the scope of Marketing Research. A more limited

meaning of a MIS is that of a computerized network which stores and supplies management

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================information. This means that the co-ordinated efforts of MIS and Marketing Research will enablethe management to take better decisions by supplying data and analytical operation facilities tothe Marketing Research and thereby relieving the latter from routine data and reports.

DEFINITIONS OF MARKETING INFORMATION SYSTEM:

(1) "A set of procedures and methods for the regular and planned collection, analysis and presentation of information in making marketing decisions.” – Cox and Good

(2) "A continuing and interacting structure of people, equipment and procedures to gather, sort,analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision-makers to improve their marketing planning, execution, and control.” – Philip Kotler

(3) "Marketing information system (MIS) is an ongoing, organized set of procedures and methodsdesign to generate, analyze, disseminate, store, and retrieve information for use in making

marketing decisions." – William Stanton(4) "Marketing information system (MIS) consists of people and/or equipment organized to

provide for the continuous, orderly collection and exchange of information – both internal and external needed in a firm’s decision making activities." – George Kress

FUNCTIONS OF MARKETING INFORMATION SYSTEM:(1) Assembling of information or relevant marketing data through internal and external

sources Such data act as raw material of MIS(2) Processing of information viz. editing, tabulating and summarizing the data collected

for the purpose of ready reference and critical analysis In short/ MIS decides theinformation needs of the organization and generate and process such information on acontinuing basis

(3) Analyzing the data collected which is essential for drawing conclusions for decision-making

(4) Storing of data collected viz. filing and indexing of information collected so that it can be made available for use when required

(5) Evaluating the data viz. finding out accuracy and reliability of the data collected(6) Disseminating relevant information to decision-makers - Marketing Managers(7) Updating the information collected periodically by discarding outdated data and

incorporating new data available(8) Introducing updated information technology in the collection / processing and storing

of the information collected

CHARACTERISTICS OF MIS:(1) Continuously operated process: Information is a skilled human accomplishment MIS isa consciously developed technique for the flow of information to the company. It operatescontinuously. Regular inflow of information acts as a feedback in decision-making. It is anongoing process as new information is added to the old one in a continuous manner. Theinformation supplied by the MIS should be relevant and pertinent.(2) Operates with speed and accuracy. Electronically operated data processing techniquecan be used to collect and process new information. Computers are now used for raising the

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efficiency of MIS. This brings speed and accuracy in the MIS and indirectly in the decision-making process.(3) Needs cooperation of departments and executives: Close cooperation andunderstanding among functional departments, executives and specialists (computer expert

programmer and system analyst) are essential for purposeful collection and utilization of themarket information. Information collection is important but its actual use in the decision-making process is more important. For this, cooperation of departments and executives isessential.(4) Facilitates prompt and correct decision-making: MIS provides updated information onvarious aspects of marketing to managers/ executives. As a result, managers are aware of newmarketing developments taking place. They are also in a position to take prompt decisionsfrom time to time due to the feedback provided by MIS. It acts as a data bank for the benefitof marketing managers. MIS stands between the marketing environment and marketingdecision maker. Marketing data flow from the environment to the MIS. The data is processedand converted into marketing information flow, which goes to the marketer for decision-

making.(5) Future-oriented: MIS provides information about possible future problems and their solutions through appropriate marketing decisions. It acts as a preventive mechanism inmarketing management and offers guidance to marketing executives.(6) Provides continuous information on marketing developments: MIS collects and

provides information on marketing to concerned executives. It goes to right people at the righttime. In other words, it provides right information at the right time to right people for decision-making. As a result, decision-making process becomes reasonably accurate andquick. MIS usually provides three types of information to marketing managers. Theinformation could be recurrent (information supplied on a periodic basis), monitoring(information obtained from regular scanning of certain sources) and requested (information

sought by a marketing manager (7) Acts as a link between external environment and internal resources: It providesupdated information about external marketing situation and facilitates suitable adjustment inthe internal resources to face the overall situation effectively.(8) Operates in a systematic manner: MIS operates in a rational and systematic manner.This is necessary for quick reference to required information. Proper system in the collectionand storing of information is necessary as varied type of information is now easily available.Such information needs to be stored after due classification, etc. In brief, MIS needs well-

prepared operational system for raising its utility and efficiency.(9) Uses modern technologies: Revolutionary changes are taking place in informationtechnology. New techniques and machines are available for collection, processing and storageof information. Required information is made available to marketing executives promptly.MIS is now becoming costly and also needs the services of technically qualified staff (software experts). MIS is now based on advanced technology. It is a computer-based methodof data collection, processing and storage. Due to the use of computers updated information is

provided to executives easily and quickly.

OBJECTIVES OF MARKETING INFORMATION SYSTEMMarketing information system is a scientific method of collecting information, arranging them inorder and reporting to suit and feed the organization with information.1. To gather data and information needed by the organization

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================2. To supply and maintain the flow of information periodically and continuously.3. To provide pertinent and relevant data needed by the executives.

Hence Marketing Information System must provide:1. Desired Information to the Executives: This is possible only by assessing the actual needs of the executive. Analysis of each executive's decision-making responsibilities should clarify his or her marketing information requirements; thereby identifying the information outputs that themarketing information system should provide him or her. The composite of the marketinginformation requirements for entire organization thus identifies the variety and nature of specificinformation output that the marketing information system should provide.'2. Supply Needed Information: It is not dumping information that is not needed or irrelevant. Itis to supply needed information 'Each executive wants complete and accurate informationreceived on a timely basis yet not provided (routinely) in overwhelmingly and confusingly largequantities. It is ironic that while organizations generate increasingly massive volumes of data,many executives continue to voice complaints that available information is too incomplete and not

sufficiently relevant or timely to use as a basis for marketing decisions. The marketinginformation system should have the built-in capability of extracting from the data bank timelyitems of information relevant for each executive's use in decision-making.

FACTORS JUSTIFYING THE NEED OF MARKETING INFORMATION SYSTEM: Thefollowing points justify the need as well as importance of MIS:

1. Need of correct decision-making: MIS is needed for correct decision-making bymarketing managers. They understand current market situation with the help of suchinformation. If the information is reliable, the manager can take the final decision quickly andwith confidence. Decisions relating to products, prices, sales promotion measures, channels of distribution, etc. can be taken by collecting and using the marketing information in a

purposeful manner. This is natural as correct view of total marketing environment is possibleonly through accurate MIS.

2. Need of promptness in decision-making: In the present aggressive marketing system,quick marketing decisions are necessary. Time factor is important in decision-making and alldecisions must be taken quickly as delayed decisions are costly and troublesome to a firm.Delayed decisions means not taking the benefit of promising marketing opportunities. Supportof reliable and updated information is essential for such quick decision-making. MIS providesregular feedback, which is a must for decision-making in the present ever-changing businessenvironment.

A marketing manager can now collect required information while working at a home office, ina hotel room or an airplane with the use of a laptop computer and phone. He can obtaininformation from company databases or from outside information services. He can analyze theinformation with the help of statistical packages and models; draw conclusions andcommunicate decisions through electronic communications.

3. Growth of consumerism and growing consumer expectations: Consumerism is agrowing force in modern marketing. Consumers are now conscious and oppose their exploitation. Their resistance is always harmful to marketing companies. It is, therefore,necessary to study their expectations. For this, MIS is needed. In addition, needs and

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(3) Estimate the expenditure required on MIS: In this stage, the firm has to estimate thecost of collecting and processing the required information. There should be cost-benefitanalysis of MIS. It is a non-productive service activity. Expenditure is required in order tocollect, arrange, process and store the required information. Such expenditure should beminimum as far as possible. At the same time, required information should be collected andmade available for decision-making.

(4) Collection of information: After deciding the information required and its sources, thenext step is to collect the information from the sources selected. For this, suitable departmentwith necessary facilities, infrastructure and expert staff should be established. The departmenthas to collect and store the information systematically in computers, files, etc. This will enablethe MIS department to supply information to other departments when required.

(5) Processing of information: The next step is data processing in which data are arranged properly for quick analysis by departments. The updating of data is also necessary in order tosupply latest information to concerned departments. This facilitates reasonably accuratedecision-making by departments.

(6) Creation of information/data bank: With the completion of the steps noted above, therewill be an information bank within the organization. It will have information required by alldepartments. The information will be properly processed, arranged and stored for readyreference. MIS department will maintain effective communication with all other departmentsso that information will be supplied to them quickly as per their need for decision-making.

PRECAUTIONS IN USING MIS

1. The firm should not put too much emphasis only on a computerized information systemand lose sight of the importance of human processors.

2. Efforts should be made to ensure the quality of data and not accept all computer output asgospel because there is an old adage which goes as - "garbage in -garbage out".3. Specific care be exercised that computer outputs should not be voluminous so as todiscourage use by marketing decision makers.4. The Marketing Information should be flexible enough to be adjusted according to thespecific use by decision makers and serve all levels of management.5. When newly establishing and developing a Marketing Information System rather thanmaking it very sophisticated at the outset itself, it will help if improvising is done by stages.6. Executives and managers wanting Marketing Information should be properly trained andalso communicate the type of information being sought.

SOURCES OF MARKETING INFORMATION SYSTEM:In MIS, information is collected, arranged, stored and made available to departments andmanagers for decision-making. Information is the base of MIS. Such information is collectedfrom different sources, which include internal and external.

Internal Sources of Information:(1) Old statistical records of the company.(2) Sales invoices and sales statistics(3) Sales-force reports(4) Sales Analysis(5) Production statistics

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on sound principles through efficient MIS. Thus/! MIS is beneficial as it raises the efficiencyof decision-making process in marketing.(4) Facilitates quick reference: Easy and quick reference to old information is possible dueto MIS. Computers are now used for easy accessibility of MIS. Quick reference to oldinformation is possible due to modem computer techniques. Thus, the use of computersfacilitates easy reference to old records and this raises the utility of MIS.(5) Provides information on changing marketing environment: MIS provides regular information to marketers about changing marketing environment much before it actually takes

place. Managers can forecast the future trends with the scrutiny of updated information. Thisenables managers to prepare marketing plans and strategies for the future period.(6) Promotes marketing excellence: MIS leads to marketing excellence. It is rightly saidthat to manage a business well is to manage its future and to manage the future is to manageinformation. Marketing decisions will be prompt and reasonably accurate when they are basedon dependable information. Thus/ MIS gives the benefit in the form of marketing excellence.(7) Facilitates tapping of marketing opportunities: MIS facilitates tapping of promising

marketing opportunities and effective defense against marketing problems and threats likely todevelop in the near future. Both benefits bring stability and prosperity to business.(8) Provides market intelligence: MIS acts as marketing intelligence wing of a marketingfirm. It provides information about new marketing trends likely to develop in future. Suchtrends may be related to price trends, consumer expectations, extent of market competition,new products likely to enter the market and so on. This information is useful for long termmarketing planning.

The advantages (noted above) suggest the importance of MIS. No marketing organization canfunction effectively without the support of appropriate information system. The informationsystem should cover every aspect of marketing - the consumer, the market, the competition and

the environment. The marketing excellence of a firm has a direct ^ relationship with the MISoperated by it. Marketing excellence is the net result of correct marketing decisions and correctdecisions are possible only when updated and reliable information is supplied promptly by theinformation system created within the organization. This briefly suggests the importance of MISin business/marketing management.

COMPONENTS OF MARKETING INFORMATION SYSTEM:The components of MIS are as noted and explained below:(1) Internal marketing information.(2) Marketing intelligence.(3) Marketing research.(4) Market information analysis.

(1) Internal Marketing Information: This component of MIS provides information from withinthe organization itself i.e., through the accounting system on sales, inventories, cost, cash flows,accounts receivable etc. and old records. Data on sales, turnover, costs, cash flows, accountsreceivable and payable, etc. provide information required for marketing decision making. All suchrecords are available within the firm and hence these sources are rightly called internal sources of marketing information. Reference to any old information is possible quickly if the availableinformation is already stored systematically through computer techniques.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Marketing managers use this internal source fully as the information is available easily andquickly. Even current marketing information is easily available. For easy availability of internalinformation, filing and record keeping system must be efficient.(2) Marketing Intelligence: The second component of MIS is the marketing intelligence. This

component provides information on external marketing environment. Here, information iscollected from external sources. This component of MIS provides information regarding currentmarketing environment and changing conditions in the market. Such information is easilyavailable through census data, weekly and monthly reports on markets and market news publishedin magazines and trade journals, commercial press, reports of trade associations and chambers of commerce, annual reports of companies and so on. Even reports of salesmen are useful to studycurrent market trend.Professional market research agencies publish information on various aspects of marketing andmarket trends. Information available from these sources may not be useful in the present form. Itis necessary to evaluate and arrange the information in a proper order. This enables the marketingexecutives to draw conclusions and frame marketing policies accordingly. Market intelligence

acts as a mirror of marketing environment and facilitates appropriate decision-making onmarketing.

(3) Marketing Research: Marketing research is one more component of MIS. In this component,specific marketing problem of the firm is selected for investigation. Data regarding the problemare collected, tabulated, analyzed and conclusions are drawn. In addition, suitable policy measuresare recommended in order to solve the problem. Marketing research as a component of MIS

provides information but such information is specific and useful for one specific purpose. MR andMIS are closely related functions. Both provide updated information for decision-making bymarketing executives. However, MIS and MR are not substitutes of each other.

(4) Market Information Analysis: Information gathered by the company's marketingintelligence and marketing research systems often requires more detailed analysis. Sometimes,managers may require more help to use the information to their marketing problems. This helpmay include advanced statistical analysis. With support from market information analysismanagers can make better marketing mix decisions, design sales territories and sales-call plans,select site for retail outlets and forecast new product sales.

ROLE OF MIS IN MODERN BUSINESS:(1) Essential supplement of business management: The role of MIS in the overall businessmanagement is universally accepted. It is an essential supplement of business management. It

performs various functions and offers useful services and this proves its constructive role inthe modern business management.(2) Helps in decision-making: Reliable information about all aspects of business is availablethrough MIS. This suggests that MIS plays an important role in planning and decision-making.(3) Provides feedback: MIS provides feedback and this suggests its supportive role in

business management. Managers at all levels need information. They analyze information,draw conclusions and take reasonably correct decisions. This suggests crucial role of MIS inthe management of business.(4) Provides accurate and timely information: It is rightly observed that modern businesscannot function efficiently, if the information system at its disposal fails to provide accurate

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and timely information. This suggests the importance of information network, which serves asa key resource in business management.(5) Provides information on business environment: Business activities are to be adjustedas per the changes in the business environment. MIS provides information about changes inthe environmental factors and enables managers to take appropriate decision to adjust businessactivities as per the need. This is how MIS plays a supportive role in decision-making andfollow-up measures in business management.

Marian Harper Jr. has rightly suggested the importance of MIS. According to him "To manage abusiness well is to manage its future, and to manage future is to manage information".

Thus, information management (collection, processing, tabulation, storage and easy reference) isan integral aspect of total business management. Policies, plans and decisions for .the future

period can be designed accurately with the help of MIS. This suggests the role of informationsystem in modern business. Correct understanding of total marketing environment is necessary for

success, progress and prosperity of business. This is possible through MIS. Business can be madecompetitive as well as consumer-oriented by using the available market information in anintelligent manner. In brief, information serves as the life & blood of modern business. MIS playsa positive role in modern dynamic, competitive and global business.

ESSENTIAL REQUIREMENTS OF A GOOD MARKETING INFORMATION SYSTEM(1) MIS should be Unified and Centralized: Trn1 MIS introduced should be managed as asingle entity even when the information collected and stored may be varied one. There may bedifferent information components in every MIS but the components should be integrated for reference purpose. It should operate as one unit. The MIS of the firm should be at the centraloffice. The chief of MIS must operate as the consultant, coordinator and controller of all

information components of the MIS. The operating departments of the firm should be free touse the information but the information management should be centralized.(2) MIS should be a Decision Support System: MIS is expected to play an important role inmaking marketing management more efficient accurate and result-oriented. It should offer guidance to marketing managers in the decision-making process. The MIS should act asdecision support system. For this, information should be supplied quickly and the informationsupplied should be up-to-date. The MIS should help the marketing manager in the selection of right policy for the benefit of the whole organization. The MIS should not act merely as a data

bank. It should accept more positive role and participate in the decision-making process in ameaningful manner.(3) MIS should be Quick and Accurate: The MIS should be user-oriented and also quick.The information flow should be done accurately and also with speed. This is necessary asthere is information flood in the field of business world. In addition, information should bemade available quickly to managers. Information must move with speed as informationsupplied late to the department is not useful in the decision making process. Even marketingopportunities are lost. This clearly suggests that MIS should be accurate and shouldmove/operate with speed within the organization.(4) MIS should be Economical: MIS should be economical as far as possible. This meansthe expenditure on running the system should be minimum as the system is not directly

productive. It is a service and supporting function. For such economy in the MIS/ the principleof selectivity should be introduced in the collection/ processing, storing and supplyinginformation system. The cost of MIS should not exceed its value. The expenditure of MIS

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should be minimum as far as possible. However, cost reduction should not be at the cost of quality and reliability of information.(5) MIS should be Selective: MIS should collect information that is absolutely essential anduseful in decision-making process. MIS should not be viewed as a mere courier servicedepartment. It should sort out the information that is really useful to the firm. This is essentialwhen there is information flood due to the use of electronic media of communication. Thusinformation needs of the organization should be assessed and the MIS should operateaccordingly. This avoids wastage of time and money.(6) MIS should be compatible with the Culture of the Firm : MIS should be adjusted withthe culture and level of sophistication attained by the business organization. The MIS required

by a large firm would be different as compared to one required in a small firm even when bothhave to maintain their own MIS. The MIS should be intelligible to the people who have to usethe system frequently. After all. MIS is a means and not the end in self. In brief, themanagement should set up a MIS that will cater to the needs of an organization and also offer operational convenience.

(7) MIS should provide updated Information : It is necessary to use new techniques for speed and accuracy in the MIS. Computers, microfilms, etc. should be used for raising theefficiency of MIS. Communication technology is making rapid progress in recent years. It isdesirable to improve the MIS by using the latest available techniques. Such updating of MIS isuseful for future marketing planning and also for quick, correct and relevant marketingdecisions. Thus, in-built updating arrangement should be incorporated in a good MIS.(8) MIS should be Flexible: The MIS introduced in an organization should be elastic or adjustable. It should not be rigid. When the system is flexible, new changes can beincorporated easily, quickly and smoothly. Moreover, modern techniques can be introducedfor raising the efficiency and accuracy of the system. In brief, flexibility is one essentialrequisite of a good MIS.

(9) MIS should use New Techniques: Along with information explosion, informationtechnology is also making rapid progress. New machines, methods and techniques are beingintroduced in the collection, processing and storage of information. New techniques bringspeed, updating and accuracy in the MIS. Managers can use the MIS to the fullest extent onlywhen the latest techniques such as computer technology and internet service are used in MISitself.

(10) MIS should be Future-oriented: The MIS should be forward looking. It should be futureoriented. It should consider the future information needs of the firm and adjust/readjust itsmanagement accordingly. The decisions are to be taken for the future period. For this, the MISshould be future oriented and not the past oriented.

A SIMPLE MODEL OF MIS

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Person needingInformation

MIS Facilitator

Database Analytic

System

StatisticalModels




The model is inclusive of a facilitator, a database along with analytic software and the capabilityto incorporate both continuous (internal and external) as well as one time or ad-hoc data apartfrom providing computerized information searches.

"MIS facilitator" is the person(s) or the equipment through which the desired information can beobtained. This could be a microcomputer or personal computer or a librarian located in thedecision maker’s office.

The "database" refers to the actual database accessible through the MIS. This will be inclusive of the usual or routine internal data of the firm as well as the external data regularly flowing into thefirm. The database is also able to provide computerized searches through both governmentagencies as well as commercial firms.

The "analytic system" refers to the general software packages that can be used to adjust or supplement to the basic data. These may comprise of statistical tools like the regression andanalysis of variance models and also marketing mix models. The latter could involve proceduresfor separating sales data into different criteria based on the requirement of different decisionmakers such as sales - customerwise / territorywise / productwise etc. The MIS should be able toacknowledge the existence as well as locate where or in which departments / units of the firmhave made use of ad-hoc studies.

A very important element in a MIS is that the system must allow for the timely disbursement of the desired information to the decision makers.

The "database" refers to the actual database accessible through the MIS. This will be inclusive of the usual or routine internal data of the firm as well as the external data regularly flowing into thefirm. The database is also able to provide computerized searches through both governmentagencies as well as commercial firms.

The "analytic system" refers to the general software packages that can be used to adjust or supplement to the basic data. These may comprise of statistical tools like the regression andanalysis of variance models and also marketing mix models. The latter could involve proceduresfor separating sales data into different criteria based on the requirement of different decisionmakers such as sales - customerwise / territorywise / productwise etc. The MIS should be able to

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Marketing

ComputerizedSearch

Capabilities

Internal DataInvoice dataSales dataInventory dataPa roll data

AdhocResearch

External DataGovernment

dataCommercial

data



Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================acknowledge the existence as well as locate where or in which departments / units of the firmhave made use of ad-hoc studies.

A very important element in a MIS is that the system must allow for the timely disbursement of the desired information to the decision makers.

RELATIONSHIP BETWEEN MIS AND MR:Marketing information system is closely connected with marketing research. In fact, it is one of the sub-systems included within the scope of MIS. Thus, marketing research is one component of MIS. MR conducts studies on specific marketing problems and reports its findings to marketingmanagement. Such studies are undertaken by qualified persons within the company or by anoutside agency. Marketing ' research offers information and guidance to marketing managerswhile dealing with specific marketing problems and difficulties.

Marketing research needs detailed information from different internal sources, which can be usedeasily and conveniently through the MIS. Problems relating to consumer behavior, product or brand preferences, advertising awareness, sales promotion, etc. can be studied with the help of information available through MIS. In brief, MIS provides data required for different marketingresearch projects.The basic objectives of MIS and MR are identical. Both offer information to marketing executivesand enable them to take quick and correct marketing decisions. Both are interrelated. Large-scalemanufacturing/marketing companies maintain up-to-date MIS and also maintain independentmarketing research department. In addition, both supply ready reference regarding marketingactivities and facilitate correct decision-making in the marketing field.MR and MIS are closely related functions. The basic purpose of both is to collect relevant

information in order to facilitate marketing ^decisions quickly and correctly. Both these functionsoffer guidance to marketing managers in the conduct of their marketing activities. However, MR generates information but MIS concentrates on the storage and flow of information to marketingmanagers for decision-making. Both the functions are interrelated as both the functions aim atmaking marketing decisions more effective. In this sense, it is said that MIS is a computer-basedextension of MR.MR is one vital component of MIS. It provides properly processed information on a specificmarketing problem and guides the marketing manager in finalizing plan to deal with such

problem. The information supplied by the MIS is of a general nature and needs to be analyzed properly for drawing conclusions and for using the information for taking decisions regardingmarketing activities. This purpose is achieved through MR. Similarly, both functions are treated

as important functions for promoting sales, for promoting consumer satisfaction and finally for effective planning and decision-making in the field of marketing. Thus MIS and MR are closelyinterrelated and complementary concepts. MR is some sort of marketing information systemwithout any responsibility of decision-making.MR and MIS are supporting functions as both deal with the management of information. Inaddition, they offer guidance to marketing managers in the conduct of their marketing activities.Along with this, there are some basic points, which indicate the difference between MR and MIS.For example, the job of MIS is to supply marketing information whereas MR is concerned with

problem analysis. MR uses marketing information but its purpose is problem solving throughappropriate marketing decisions. These points of difference between MR and MIS are as noted

below:

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Dimension Marketing Research (MR) Marketing InformationSystem (MIS)

Meaning MR is "the systematicgathering, recording andanalyzing of data relating to themarketing of goods andservices".

MIS is "a set of procedures andmethods used for the regular and

planned analysis and presentation of information for marketing decision making"

Nature of concept MR is a narrow concept as MR is one of the components of MIS

MIS is a broad concept. Its purpose is to collect informationon all aspects of business

Informationprovided

MR provides precise and properly analyzed informationregarding a specific marketing

problem with a view to solvingthat problem

MIS provides information onvarious aspects of marketing inorder to frame marketing

policies and marketingdecisions.

Purpose The purpose of M.R. is to studya specific marketing problem indepth and to solve it quickly andalso in a satisfactory manner

The purpose of MIS is to provide relevant and reliableinformation to all departmentsand facilitate quick andreasonably correct decision-making

Coverage MR collects information relatingto specific marketing problemunder investigation

MIS collects information onvarious aspects of marketingsuch as products, consumer needs, market competition and

salesOperationalmethod

MR is conducted on problem by problem or project by project basis with each project having astarting and ending point

MIS is a continuous system andinformation is collected,analyzed used and also stored ina regular and continuousmanner.

Use of computer It is a non-computer basedsystem. However, computersmay be used while tabulatingdata or while analyzing theinformation collected.

MIS is a computer based processas computer technology isextensively used whilecollecting, analyzing andstoring the informationcollected

Type of orientation

MR is more past-oriented MIS is more future-oriented

Organizationalstructure

Every company may or may notmaintain MR department

Companies must always makearrangements for the collectionand storage of informationthrough MIS

Frequency of data collection

In M.R. data collection is notcontinuous but only as per theresearch projects undertaken.

In MIS data are collectedregularly on different marketingaspects in which the firminterested.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Sources of dataused

In MR external sources such assurveys and census reports areused for data collection

In MIS external as well asinternal sources (past records,documents, etc.) are used for data collection.

MARKETING DECISION SUPPORT SYSTEMThe introduction of computers has facilitated the setting up of MDSS (Marketing DecisionSupport System). Such system comprises of collection, storage, analysis and reporting of marketing data. The difference between MIS and MDSS is that whereas the former is centralized,the latter is decentralized and allows marketing managers to interact directly with the database.The systems are generally computerized with one or more models built in.

CHARACTERISTICS OF A GOOD MDSS

A good MDSS should have the following characteristics1.Interactive. The process of interaction with the MDSS should be simple and direct. With just a

few commands the user should be able to obtain the results immediately. There should be noneed for a programmer in between.

2. Flexible. A good MDSS should be flexible. It should be able to present the available data ineither discrete or aggregate form. It should satisfy the information needs of the managers indifferent hierarchical levels and functions.

3. Discovery oriented, The MDSS should not only assist managers in solving the existing problems but should also help them to probe for trends and ask new questions. The managers

should be able to discover new patterns and be able to act on them using the MDSS.4. User friendly. The MDSS should be user friendly. It should be easy for the managers to learn

and use the system. It should not take hours just to figure out what is going on. Most MDSS packages ere menu driven and are easy to operate.

MDSS has the following components:(a) Database (data sources, data management)(b) Display(c) Statistical analysis(d) Modeling.

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ATTITUDE MEASUREMENT

MEANING OF ATTITUDE Attitude means "settled behaviour indicating opinion." Attitude is a subjective and personalmatter. Opinion of a person is the verbal expression of attitude. Attitude is also readiness toresponse. Many researchers admit that attitude involves some acceptance or rejection of an issueor subject matter under study. When an individual responds to a social or business issue, itindicates an attempt to provide evaluation, which may be in favour or against.

DEFINITION OF ATTITUDE

Attitude has been defined by Gene F. Summers as a predisposition to respond to an idea or object.In marketing, this refers to the consumers’ predisposition about the product or . If it is favorable,then the consumer is likely to purchase the product or serviceAttitudes about products or services are composed of three elements

Beliefs such as the products strength or the economy of the product or serviceEmotional feelings such as likes or dislikesReadiness to respond to the product or service i.e. to buy it

These three elements combine together to form an image of the product or service in the mind of the consumer. When the car manufacturer, the movie producer or the insurance company refers to

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================the company's image, they are referring to some genera! averages of many individuals’ attitudestowards the company

MEANING OF MEASUREMENT Measurement is "the assignment of numbers to characteristics of objects, persons, states or events, according to rules." What is measured is not the object, person, state or event but somecharacteristic of it. People are not measured, only their age, height, weight, etc. are measured. Theterm number given in the definition of measurement are used as symbols to represent certaincharacteristics of the object and it does not mean addition, subtraction, division or multiplication.

One important aspect of measurement is the creation of the rules. These rules specify how thenumbers are to be assigned to the characteristics to be measured e.g., "Bata increased its marketshare by three percentage points during the last year" is understood by those who know themeasurement rule that is being applied. Those who are not familiar with the rule will notunderstand what has been measured. The market share can be based on units sold or sales

turnover in rupees or any other rules.

Measurement in physical sciences like physics, chemistry and biology is easy because they have physical reality to measure. Behavioural scientists like marketing researchers cannot see or feelattitudes, perceptions, brand loyalty etc. Hence they must attach numbers in the measurement

process. A chemist can exactly know the chemical content in an antibiotic capsule whereas themarket researcher can only obtain a good measure of intention to purchase.

PROCESS OF MEASUREMENT(1) Determine the constructs of interest: Constructs refer to constructions. Constructs do not

have tangible reality e.g. we cannot see consumer satisfaction but we can indirectly observe it

asking a series of questions. Other constructs are: brand loyalty, heavy users, competition etc.(2) Establish the constructs areas: A construct must identify its conceptual boundaries e.g.,

marketing orientation identifies and satisfies customer needs. It concentrates on the means bywhich an organisation can achieve its goals while satisfying those needs.

(3) Setting operational definitions: An operational definition indicates what observableattributes of the construct will be measured and the process that will be used to attachnumbers to those attributes. An example of operational definitions in a bank can beconstructed as: customer satisfaction, operational efficiency, marketing information systems,marketing efforts etc.

(4) Collect data to test measures: At this stage data is collected from the target population.Collecting relevant and dependable data will ensure that the researcher is on the right track with operational measures.

(5) Retain relevant data: Having collected the data the researcher has to decide which data tokeep and which one to reject. It is a relative exercise. Data thus retained will be of use onlynow. If any delay is caused, data can become obsolete.

(6) Establish validity of data: An important exercise for the researcher would be to determinevalidity of data. Marketing research is a financial proposition. In order to succeed in correctlymeasuring attitude it is important that the data are valid and reliable.

(7) Prepare research report: When the researcher has successfully developed measures that arereliable and valid, he is now ready to prepare research report which will help to achieve theobjectives of research study. The researcher has to check cause and effect relationship, test

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hypothesis, answer research questions and describe the extent to which a population behavesin a specific manner. In this way the research report will highlight the results of the research.

ATTITUDE MEASUREMENTAttitude measurement is also commonly referred to as scaling. The measurement techniques can

be divided into1. Non-Disguised, Non-Structured Techniques2. Non-Disguised, Structured Techniques3. Disguised, Non-Structured Techniques4. Disguised, Structured Techniques

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================The following diagram will illustrate the different methods and techniques of measuring attitude

NON-DISGUISED, NON-STRUCTURED TECHNIQUESThe essence of these methods is that the purpose of the interview is not a secret and that there isno fixed structure for conducting the interview.

Qualitative ResearchThe most common method of obtaining information about the behavior, attitudes and other characteristics of people is to ask them. However it is not always possible or desirable to usedirect questioning to obtain information. People may be either unwilling or unable to give

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Attitude Measurement

Non-Disguised, Non-StructuredTechniques

Non-Disguised,StructuredTechniques

Disguised,StructuredTechniques

FocusedGroupDiscussion

DepthInterview

Ratio Scale

NominalScale

IntervalScale

OrdinalScale

SemanticDifferentialScale

Multi-dimensionalScale

Disguised, Non-StructuredTechniques

WordAssociation

StoryCompletion

ThematicAppreciationTests

Cartoon /Bubble

Method

SentenceCompletion

Mini-groups

Third PersonTechniques

FantasyScenario

Personification

Role-playing

ConstantSumScaleThurstoneScale

Likert Scale



Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================answers to questions they consider to be an invasion of their privacy, that adversely affect their self-perception or prestige, that are embarrassing that concern motivations that they do not fullyunderstand or cannot verbalize, or for other reasons. Therefore additional approaches to obtainingsuch information may be necessary,

Marketing researchers frequently use depth interviews, Focused Group Interviews, Mini-groupInterviews and Projective techniques when direct questioning is impractical, more costly, or lessaccurate. These techniques generally referred to as Qualitative research.

A. Depth interviewsIndividual depth interviews typically require 30-45 minutes. The interviewer does not have aspecific set of pre-specified questions that must be asked according to the order imposed by aquestionnaire. Instead, there is freedom to create questions, to probe those responses that appear relevant and generally to try to develop the best set of data in any way practical. However theinterviewer must follow one rule; one must not consciously try to affect the content of the answersgiven by the respondents. The respondent. The respondent must feel free to reply to the various

questions, probes, and other, subtler, ways of encouraging responses in the manner deemed mostappropriate.Subject of interest is discussed in detail.There is no fixed pattern for eliciting information from the respondents.Generally conducted by highly trained interviewers. They must be thorough in probing the

respondents.The interviewee is asked about the subject of his choice, coffee, for example. and an

attempt is made to explore the respondents' attitudes in depth by probing extensively into anyother areas which may come up.

Interviewers have a general series of topics that they will introduce - perhaps such topicsas coffee or sleep, and will introduce them from time to time if the respondent does not bringthem up.

Tone of the interview is permissive and the respondent's allowed to talk as much as helikes.

The interviewer must not influence the answers of the respondent.The interpretation of the answers is very subjective and knowledge of human behavior is

required to analyze the information received.

Individual depth interviews uses three questioning techniques namely:1. Laddering involves having respondents identify attributes that distinguish brands by asking

questions. Each distinguishing attribute is then probed to determine why it is important or meaningful. These reasons are then probed to determine why it is important, and so forth. The

purpose is to uncover the “network of meanings” associated with the product, brand, or concept.

2. Hidden-issue questioning focuses on individual respondents feelings about sensitive issues.Analysis on focus on common underlying themes across respondents. These themes can then

be used to guide advertising development3. Symbolic questioning requires respondents to describe the opposites of the product / activity

of interest or a specific attribute of the product / activity.

Individual depth interviews have been found to generate more and higher quality ideas on a per respondent basis than either focus or mini-groups. They are particularly appropriate when:

1. Detailed probes of an individual's behavior, attitude or needs is required;

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================2. The subject matter under discussion is likely to be of a highly confidential nature (e. g. personal

investment)3. The subject matter is of an emotionally charged or embarrassing nature4. Certain strong, socially acceptable norms exist (e.g. baby feeding) and the need to conform in a

group discussion may influence responses5. Where highly detailed understanding of complicated behavior or decision-making pattern (e.g.

planning the family holiday) are required or the interviews are with professional people or with people on the subject of their jobs (e.g. finance directors)

B. Focus group discussions (F.G.D’s)The standard focus group interview in the United States involves 8 and 12 individuals and lastsabout 2 hours. Normally each group is designed to reflect the characteristics of a particular marketsegment. The respondents are selected according to the relevant sampling plan and meet at acentral location that generally has facility for taping and/or filming the interviews. In Europe,focus groups tend to consist of 6 to 8 respondents, vary in length from 1.5 to 4 hours and are often

conducted in the home of the recruiter. Otherwise the interviews are similar.The discussion itself is “led” by a moderator. The moderator attempts to progress through threestages during the interview{1) Establish rapport with the group, structure the rules of group interaction, and set objectives(2) Provoke intense discussion in the relevant areas(3) Summarize the groups responses to determine the extent of agreement. In general either the

moderator or a second person prepares a summary of each session after analyzing thesession's transcript

Focus Group Interviews can be applied to:1. Basic- need studies for product idea creation,2. New product idea or concept exploration,3. Product positioning studies.4. Advertising and communications research.5. Background studies on consumer's frames or reference,6. Establishment of consumer vocabulary as a preliminary step in questionnaire development7. Determination of attitudes and behavior

Advantages1. Each individual is able to expand and refine their opinions in the interaction with the other

members. This process provides more detailed and accurate information than could be derivedfrom each separately.

2. A group interview situation is generally more exciting and offers more stimulation to the participants than the standard depth interviews

3. The security of being in a crowd encourages some members to speak out when they otherwisewould not.

4. As the questions raised by the moderator are addressed to the entire group rather than anindividual the answer contains a degree of spontaneity that is not produced by other techniques.

5. Focus groups can be used successfully with children over five. They are also very useful withadults in developing countries where literacy rates are low and survey research is difficult.

6. A final major advantage of focus groups is that executives often observe the interview (from behind mirrors) or watch films of the interview.

Disadvantages

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================Projective technique is based on the theory that the description of vague objects requiresinterpretation and this can only be based on the individuals own background, attitudes, and valuesThe more vague or ambiguous the object to be described the more one must reveal of oneself inorder to complete the description

The following general categories of projective techniques are described - association, completion,construction and expression

I. Word Association TechniquesAssociation techniques require the subject to respond to the presentation of a stimulus with thefirst things that come to mind. The word association technique requires the respondent to give thefirst word or thought that comes to mind after researcher presents a word or phrase. In freeassociation only the first word or thought is required. In successive word association, therespondent is asked to give a series of words or thoughts that occur after hearing a given wordThe respondent is generally read a number of relatively neutral terms to establish the techniqueThen the words of interest to the researcher are presented, each separated by several neutral terms

The order of presentation of the key words is randomized to prevent any position or order biasfrom affecting the results The most common approach to analyzing the resulting data is to analyzethe frequency with a particular word or category of words given in the response to the word of interest to the researcher.

Word association techniques are used in testing potential brand names and occasionally for measuring attitudes about particular products, product attributes, brands, packages or advertisements.

o One of the oldest and simplest projection techniqueso Respondents are presented with a number or different words. one at a time. After each word.

they are asked to give the first word that comes to mind.o The assumption here is that through free words, the respondents will indicate their inner

feelings about the subjecto Responses are timed (the time limit is usually 5 seconds) so that those responses that

respondents "reason out are identified and taken into account in the analysis.o The usual way of constructing such a tests is to choose many stimulating and neutral words.

The words are read out to the respondent one at a time, and the interviewer essentially recordsthe "first word" association by the respondent.

o Respondents should not be asked to write their responses because then the interviewer will notknow if the responses were spontaneous or whether the respondent took time to think out the

responses.o An example of such a test is: the word “oatmeal”. The first response is "athletes". This means

that the respondent feels that the product is more suited for sportspersons. More words on thesame topic will reveal more about the respondent's attitude about the product

o While analyzing the results of words-association tests, responses are arranged along such linesas “favorable–unfavorable” and "pleasant-unpleasant".

II. Completion TechniquesThis technique requires the respondent to complete an incomplete stimulus. Two types of completion are of interest to marketing researchers- sentence completion and story completion.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================A. Sentence Completion as the name implies, requires the respondent to complete a sentence Inmost sentence completion tests the respondents are asked to complete the sentence with a phrase.Generally they are told to use the first thought that comes to their mind or "anything that makessense". Because the individual is not required directly to associate himself or herself with theanswer conscious or subconscious defenses are more likely to be relaxed and allow a morerevealing answer.

The respondent is given a number of incomplete sentences and asked to complete them.The rule here too, is that respondent must fill in the first thought that comes to mind.Responses are timed.

Here the interviewer gets more information than the word association technique.However, it is difficult to disguise the motive of the study from the respondent who is usuallyable to diagnose the investigators purpose of studyFor example “ A man who reads Sportstar is ____________”The sentence can be worded in first or third person. No evidence suggests that one of theseapproaches could be better than the other.

B. Story Completion is an expanded form of sentence completion. As the name suggests part of astory is told and the respondent is asked to complete it.

Respondents are given a half completed story. This is enough to draw their attention to a particular issue, but the ending is left vague, so that responses can be varied.This technique is very versatile and has numerous applications to marketing problems.The findings about products/services give companies inputs to determine advertising and

promotional themes and product characteristics

III. Construction TechniquesThis technique requires the respondent to produce or construct something, generally a story,dialogue, or description They are similar to completion techniques except that less or no initialstructure is provided.

A. Cartoon Technique Here cartoons of one or more people, in a particular situation, are provided to the respondents. One or more of the characters in the cartoon are shown with asentence in bubble form above their heads and one of the others is shown with a blank bubble thatthe respondent is to fill in. (Instead of having the bubble show replies or comments, it can bedrawn to indicate the unspoken thoughts of one or more of the characters) This device allows therespondent to avoid any restraints that might be felt against having even a .cartoon character s peak as opposed to think certain thoughts

B. Third Person Techniques This allows the respondent to project attitudes onto some vaguethird person This third person is generally an “average women;" “a neighbor,” “the guys whereyou work", “most doctors” or the like Thus instead of asking the respondent why he or she didsomething or what he or she thinks about something the researcher asks what friends, neighborsor the average person thinks about the issue

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================C. Thematic Appreciation Test Another useful construction technique, involves using picturesto elicit stories. These pictures are usually relatively vague so that the respondent must use his or her imagination to describe what is occurring in the situation.

Here the respondent is shown about 20-30 ambiguous pictures and he is asked to spinstones about them.

The interviewer may ask questions to help the respondent to think For example "what ishappening here?” makes the answer focused towards an action Or which one is the aggressor makes the respondent think about the picture as one of aggression The reason that respondentsmust be asked such prompting questions is that the pictures are very abstract and general andas such are open to very broad and irreverent interpretations So some amount of focus isneeded to channel respondents thinking.

Each subject in the picture is a medium through which the respondent projects his/her feelings, ideas, emotions and attitudes The respondent attributes these feelings to thecharacters because he sees in the picture something related to himself.

Responses differ widely and analysis depends upon the ambiguity of the picture, the extent

to which the respondent is able to guess the conclusions and the vagueness of the supportquestions asked by the interviewer

D. Fantasy Scenario It requires the respondent to make up a fantasy about the products or brands

E. Personification The respondent is asked to create a personality for the brands or the products

IV. Expressive TechniquesRole-playing is the only expressive technique utilized to any extent by marketing researchers. Inrole-playing the consumer is asked to assume the role or behavior of an object or another person,

such as a sales representative for a particular department store. The role-playing customer canthen be asked to try to sell a given product to a number of different consumers who raise variedobjections The means by which the role player attempts to overcome the objections can reveal agreat deal about his or her attitudes. Another version of the technique involves studying the role-

players attitude on the typee of people who should shop in the store in question.

LimitationsAs projective techniques generally require personal interviews with highly trainedinterviewers and interpreters to evaluate the responses, they tend to be very expensive.Small sample sizes can increase the probability of substantial sampling error. The reliance onsmall samples often has been accompanied by non-profitability selection procedures.Some of the projective techniques require the respondents to engage in behavior that may well

be strange to them; this is particularly true for techniques such as role-plays. Thus there isreason enough to believe that there might be an error in the findings.Measurement is also a serious issue with respect to projective techniques. The possibility of interpreter bias is obvious.

BenfitsThey can uncover information not available through direct questioning or

observation.

They are particularly useful in the exploratory stages of research

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They can generate hypotheses for further testing and provide attribute lists andterms for more structured techniques such as the semantic differential.

The results of projective techniques can be used directly for decision- making

DISGUISED, STRUCTURED TECHNIQUESThe basic premise underlying such tests is that the respondents will reveal their attitudes by theextent to which their answers to the objective questions vary from the correct answers.Respondents are given questions that they are unable to correctly. Thus, they are forced to guessthe answers. The direction and extent of these guessing errors is assumed to reveal their attitudeson the subject. Individuals tend to gather information that supports their supports their attitudesand therefore the kind and extent of information individuals possess on a given subject indicatesomething of their attitude. e.g. Do cornflakes cost more or less per bowl than cereals? Or Howmuch do you think it costs for hot cereal alone in an bowl of cereal served for breakfast?

NON-DISGUISED, STRUCTUREDTECHNIQUES (SCALING TECHNIQUES / SCALESOF MEASUREMENT)The non-structured techniques for attitude studies are primarily of value in exploratory studieswhere the researcher is looking for the salient attributes of given products and the importantfactors surrounding purchase decisions as seen by the consumer. Structured techniques can

provide a more objective measurement system, one that is more compatible to a scale or yardstick.The term scaling has been applied to the efforts to measure attitudes objectively.

Measurement consists of assigning numbers to characteristics of objects or events so as to reflectsome aspect of reality. The objective should be to assign numbers so that the properties of the

numbers are the same as the properties of the objects or events that we are measuring. Thisimplies we have different kinds of numbers e.g., in a class a student may be identified by his rollnumber, which is different from his score on the final examination and this is different from hisfinal rank in the class. Common scales of measurement are:

(1) Nominal ScaleUnder nominal scale there is no numerical sanctity. Numbers are used only as labels e.g., if wewant to categorize male and female respondents, nominal scale can be used as 1 for male and 2for female. Alternatively, females can be labeled as 1 and males as 2 and it would be a validnominal scale. Other variables that are covered by nominal scale are: religion, languages (writtenand spoken), education, user/non-user category, reading habits, brand preference etc. It isimportant to mention that variables needing statistical computations like mean and standarddeviation cannot be done through nominal scale.

(2) Ordinal Scale They are the simplest and most widely used attitude measuring scales in marketing

research They serve to rank respondents/ responses according to some characteristic viz.

age of students or favorability to a brand They do not measure the degree of favorability of different rankings. All the scale

tells is that the individual has more , less or same amount of characteristic being measured.

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A set of data is said to be ordinal if the values / observations belonging to it can beranked (put in order) to have a rating attached.

You can count and order but not measure ordinal data. The categories for an ordinal set of data have a natural order. Suppose a group of

people were asked to taste varieties of biscuits and classify them on a rating scale of 1 to 5where 1 would correspond to strongly dislike and 5 would be strongly like. A rating 3indicates more enjoyment than 2. Such data is ordinal.

However the distinction between neighboring points on the scale is not necessarilythe same. For instance, the difference in enjoyment expressed by giving a rating of 2 rather than 1 may be much less than the difference in enjoyment expressed by giving a rating of 4rather than 3.

Ordinal scale is ranking scale. It possesses the characteristics of numerical scaleand also indicates the order e.g., there are five executives who are to be ranked as per their annual income such as.

If the executive with the highest income is given No. 1 and the next to it as No. 2 and so on, thefollowing order will be determined

The above example is numerical that dealt with the annual income of executives. Ordinal scalecan also be used to find out attributes of a certain product e.g., coffee. Respondents can be askedquestions on attributes like color, flavor, aroma, appearance etc. on a five-point scale:

By asking respondents about their level of acceptability, it is possible to give ranks. Individualrankings can be combined in order to get collective ranking of the group.

(3) Interval Scale Interval scale is also known as ratio-scaled data. This method can be used to compute the

commonly used statistical measures such as arithmetic mean, standard deviation and Pearson

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================correlation coefficient. The attitude of respondents is measured on a scale of 1 to 5 or 1 to 7 or 1to 10. For example, when a consumer is asked about brand preference on a scale of 1 to 7, it iscalled interval scale. It is possible to compute average rating given by all the respondents and alsostandard deviation.

They separate individuals or items by rank order but measure the distance between rank positions in equal units.Such a scale permits the researcher to say that the position 4 is above position 3 on the scale,and also the distance from position 5 to 4 is same as from 4 to 3.Such a scale however does not permit conclusions that position 6 is twice as strong as position 3

because no zero position has been established

An interval scale is a scale of measurement where the distance between any two adjacent units of measurement (or intervals) is the same but the zero point is arbitrary. Scores on an interval scalecan be added or subtracted but cannot be meaningfully multiplied or divided e.g. the time interval

between the starts of years 2001 and 2002 is the same as that between 2003 and 2004, namely 365days The zero point year 1 AD, is arbitrary as time did not begin then. Other examples of Intervalseries include the heights of tides, and the measurement of longitude.

(4) Ratio Scale Ratio scale enjoys the advantages of all the three methods discussed earlier. In addition it

possesses the concept of absolute zero or origin. This makes ratio scale superior to all other methods. Ratio scale commonly uses physical dimensions like weight height, distance, moneyvalue and population counts. Equal ratio on the ratio scale indicates the equal ratio among theelements being measured e.g. 9 kg and 45 kg are in the ratio of 1 : 5. If we convert kilogram intograms, the same ratio will be obtained. Therefore, 9,000 grams and 45,000 grams have the sameratio of 1 : 5. It thus suggests that one can change over from one unit of measurement to another

by using the relevant conversion factor. Only ratio scale provides the advantage of convertingfrom one unit of measurement to another.

(5) TheConstant Sum ScaleThe constant sum scale requires the respondent to divide a constant sum, generally 10 or 100,among two or more objects or attributes in order to reflect the respondent’s relative preference for each object, the importance of the attribute or the degree to which an object contains eachattribute.

The constant sum scale can be used in two cases1. For two objects at a time (paired comparison) or 2. More than two objects at a time (quadric comparison)

When rank order / ordinal data is used the researcher has no way of knowing the characteristicwhich is of overwhelming importance or of knowing a characteristic which is not of muchimportance compared to other characteristic. This can be explained with the following example:Suppose a sample of respondents from the target market is requested to rank order severalautomobile characteristics with 1 being more important. Assume the individual ranks are similar and produce the following median ranks for each attribute:

Price 1

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Economy 2Dependability 3Safety 4Comfort 5

Style 6

A constant sum measure of the importance of the same attributes could be obtained from thefollowing procedure - Divide 100 points among the characteristics listed so that the division willreflect how important each characteristic is to your selection of a new automobile.

PriceEconomyDependabilitySafetyComfortStyleTotal 100

All the responses to the constant sum scale would be consistent with the rank order results justdescribed.

A disadvantage could be that occassionally individuals may misassign poibts such that the total ismore than or less than 100. This can be adhusted by dividing each point allocation by the actual

taotal and multiplying it by 100.

(6) Thurstone ScaleThurstone and Chave in their book "The Measurement of Attitude" have advocated a technique inattitude measurement. They emphasized collection of large number of statements relating to thesubject matter of inquiry. These statements can be collected through personal experience,secondary data and discussion with knowledgeable people. The statements should indicate bothfavourable and unfavourable attitude. The number of statements should be reasonably large toaccommodate diversified attitude. Thurstone and Chive have given five criteria to select thestatements. They are:(i) The statements should be brief.(ii) Feasibility to accept or reject the statement in keeping with the attitude of the respondent.(iii) Acceptance or rejection should be based on reasoning.(iv) Ambiguous statements should be avoided.(v) Statements should include attitude variables that are measurable.

The procedure is as follows1. Collect a large number (as many as possible, perhaps 100) of statements related to the attitude

in question2. Have a number of judges ( ≥ 20) sort the statements independently into 11 piles that vary from

the most favorable through neutral to most unfavorable statements.

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Uploaded Exclusively for ManagementParadise.comTYBMS Prof. Hemant Kombrabail=====================================================================3. Study the frequency distribution of the ratings for each statement and eliminate those

statements that the different judges have assigned to a number of different piles.4. Determine the scale value of each of the remaining statements – that is the number of the pile

in which the median of the distribution lies.5. Select one or two statements from each of the eleven piles for the final scale.6. Separate cards are given to the respondents who are asked to sort these statements into a

number of intervals. Each respondent is given 11 cards, the first card having letter A, thesecond B and so on. The first card with letter ‘A’ represents most unfavourable attitude and thelast card with letter ‘K’ represents most favourable attitude. The middle card with letter ‘F’ isneutral neither representing favourable nor unfavourable attitude about the subject or event asshown below:

The advantage of this method is that it is easier to identify the neutral position since there are oddnumber pf parameters.

The disavantages of this system are1. Not widely used in marketing research because of the time consumed during preparation itself 2. The ratings may be influenced by the Judges personal attitude3. Different individuals can obtain exactly the same score from agreeing with quite different

terms4. It does not obtain the intensity of agreement with the ratings.

(7) Semantic Differential ScaleThis scale was developed by “Osgood” . This scale is commonly used to compare brands,determine the effectiveness of advertising, attitude change, evaluation of company image etc.Semantic differential scale is bipolar one indicating attraction or repulsion from an object. Whileframing semantic differential scale it is necessary to consider several factors. A scale is balancedwhen either side of the indifferent cue has an equal number of cues e.g. determining quality of service in a club the following cues can be considered:

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o The unique dharateristic of semantic differential scale is the use of bipolar scales to rateany product company or concept of interest.o Facilitates comaprison of competitive itemso Each scale consists of two opposing adjectives separated by a continuum of sevensegments, as seen aboveo Respondents are given a group of these scales and asked to check the segment thatrepresents the degree of their opinion of the subject in questiono It is best used for image descriptive purposes and is not recommended for overall attitudestudieso The method is easy and fast to administer, but it is also sensitive to small differences inattitude, highly versatile, reliable and generally valido The advantage of this method is its simplicity while producing results comparable withthose of the more complex scaling methods

(8) Multidimensional Scaling This is a data reduction technique. Basically it aims at opening up the hidden structure of a set of data. It helps us to represent the proximities between objects as in a map. Proximities mean anyset of numbers indicating similarity or differences between pair of objects whereas objects meanthings or events. Multidimensional scaling (MDS) attempts to map the objects in amultidimensional space in such a way that it reveals degree of similarity or dissimilarity among

them.

Consider for instance that a student seeking admission in medicine offered by some universitieshas to consider two dimensions viz., prestigious course and practical content, which can be shownas:

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The student has compared the medical course in ten different universities A to J. Verticaldimension shows practical content of the medical course whereas horizontal dimension indicatesrelative prestige of the course. The points that are close to one another show similarity and the

points that are wide apart indicate that the student has seen medical courses offered by variousuniversities differently on the basis of two dimensions viz./ prestigious course and practicalcontent.

Mr Notes- Kombrabail

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