Research Fundamentals

Chapter 2 - Research Process

Chapter 1 : Research Fundamentals

Chapter 2: Research Process

Prepared by Group 1

RICERCA

Chapter nos. Topics Page nos.

1 Research fundamentals

Definition of research

Basics vs applied research

Market and marketing research

Information systems, decision support systems, and marketing research

Advantages of MR

Limitations of the MR

Application of marketing research

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03

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2 Research process

Steps in the process of research

Problem discovery

Problem definition

Research objectives

Developing hypothesis for a particular problem

Research design

Research method

Data collection – sources and tools

Sampling methods

Use of scales in research

Data processing

Data analysis

Research report

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212122

2323

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1. RESEARCH FUNDAMENTALS

MEANING OF RESEARCH

Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. The Advanced Learner’s Dictionary of Current English lays down the meaning of research as a careful investigation or inquiry specially through search for new facts in any branch of knowledge. Redman and Mory define research as a “systematized effort to gain new knowledge.” Some people consider research as a movement from the known to the unknown. It is actually a voyage of discovery. We all possess the vital instinct of inquisitiveness for, when the unknown confronts us, we wonder and our inquisitiveness makes us probe and attain full and fuller understanding of the unknown. This inquisitiveness is the mother of all knowledge and the method, which man employs for obtaining the knowledge of whatever the unknown, can be termed as research.

Research is an academic activity and such a term should be used in a technical sense. According to Clifford Woody research comprises defining and redefining problems, formulating hypothesis or suggested solutions; collecting, organizing and evaluating data; making deductions and reaching conclusions to determine whether they fit the formulating hypothesis. D.Slesinger and M.Stephenson in the Encyclopedia of Social Sciences define research as “the manipulation of things, concepts or symbols for the purpose of generalizing to extend, corrector verify knowledge, whether that knowledge aids in construction of theory or in the practise of art.” Research is thus an original contribution to the existing stock of knowledge making for its advancement. It is the pursuit of truth with the help of study, observation, comparison and experiment. In short, the search for knowledge through objective and systematic method of finding solution to a problem is research. The systematic approach concerning generalization and the formulation of a theory is also research. As such the term ‘research’ refers to the systematic method consisting of enunciating the problem, formulating a hypothesis, collecting facts or data, analyzing the facts and reaching certain conclusion either in the form of solutions towards the concerned problem or in certain generalization for some theoretical formulation.

OBJECTIVE OF RESEARCH

The purpose of research is to discover answers through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research study has its own specific purpose, we may think of research objectives as falling into number of broad grouping: To gain familiarity with a phenomenon or to achieve new insights into it (studies

with this object in view are termed as exploratory or formulative research studies.


To portray accurately the characteristics of a particular individual, situation or a group (studies with this object in view are known as descriptive research studies);

To determine the frequency with which something occurs or with which it is associated with something else (studies with this object in view are known as diagnostic research studies).

To test a hypothesis of a casual relationship between variables (such studies are known as hypothesis-testing research studies).

BASIC VS APPLIED RESEARCH

Research can either be applied (or action) research or fundamental (or basic or pure) research. Applied research aims at finding a solution for an immediate problem facing a society or an industrial/business organization, whereas fundamental research is mainly concerned with generalizations and with the formulation of a theory. “Gathering knowledge for knowledge’s sake is termed as pure or ‘basic’ research”. Research concerning some natural phenomenon or relating to pure mathematics are examples of fundamental. Similarly, research studies, concerning human behavior carried on with a view to make generalizations about human behavior, are also examples of fundamental research, but research aimed at certain conclusions (say, a solution) facing a concrete social or business problem is an example of applied research. Research to identify social, economic or political trends that may affect a particular solution or the copy research (research to find out whether certain communications will be read and understood) or the marketing research or evaluation research are examples of applied research. Thus, the central aim of applied research is to discover a solution for some pressing practical problem, whereas basic research is directed towards finding information that has a broad base of application and thus, adds to the already existing organized body of scientific knowledge.

INFORMATION SYSTEMS, DECISION SUPPORT SYSTEMS, AND MARKETING RESEARCH

An information system (IS) is a continuing and interacting structure of people, equipment, and procedures designed to gather, sort, analyze, evaluate, and distribute pertinent, timely, and accurate information to decision makers. While marketing research is concerned mainly with the actual content of the information and how it is to be generated, the information system is concerned with managing the flow of data from many different projects and secondary sources to the managers who will use it. This requires database to organize and store the information and a decision support system (DSS) to retrieve data, transform it into usable information, and disseminate to users.

Database


Information systems contain three types of information. 1. The first is recurring day-today information.2. A second type of information is intelligence relevant to the future strategy of the

business.3. A third input to the information system is research studies that are not of a

recurring nature. The potential usefulness of a marketing research study can be multiplied manifold if the information is accessible instead of filed and forgotten. However, the potential exists that others may use the study, although perhaps not in the way it was originally intended.

Decision support system

Database have no value if the insights they contain cannot be retrieved. A decision support system not only allows the manager to interact directly with the database to retrieve what is wanted, it also provides a modeling function to help make sense of what has been retrieved.

Application information system to marketing research

The information system serves to emphasize that marketing research should not exist in isolation as a single effort to obtain information. Rather, it should be part of a systematic and continuous effort by the organization to improve the decision-making process.

MARKETING DECISION SUPPORT SYSTEMS

A typical marketing manager regularly receives some or all of the following data: factory shipments or orders; consumer panel data; scanner data; demographic data; and internal cost and budget data.Managers don’t want data. They want, and need, decision-relevant information in accessible and preferably graphical form for(1) Routine comparison of current performance against past trends on each of the

key measures of effectiveness(2) Periodic exception reports to assess which sales territories or accounts have not

matched previous tears’ purchases and (3) Special analyses to evaluate the sales impact of particular marketing programs

and to predict what would happen if changes were made. In addition, different divisions would like to be linked to enable product managers, sales planners, market researchers, financial analysts and production schedules to share information.

The purpose of a marketing decision support system (MDSS) is to combine marketing data from diverse sources into a single database which line managers can enter interactively to quickly identify problems and obtain standards, periodic reports, as well as answers to analytical questions.

Characteristics of a 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 no need for a programmer in between.

2. Flexible. A good MDSS should be flexible. It should be able to present the available data in either discrete or aggregate form. It should satisfy the information needs of the managers in different 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 are menu driven and are easy to operate.

A typical MDSS is assembled from four components

1. Database2. Reports and displays3. Analysis capabilities4. Models

ADVANTAGES OF MR

For decision makers, faced with the decisions and doubts described above, what should be the benefits of having research conducted? The most universal and usually most vital is this: reduction of uncertainty. If research findings contribute any relevant knowledge of what exists, that the decision maker was ignorant of, or if it provides new clues to what is likely in the future, they should enable a more accurate conclusive decision to be reached.Uncertainty can not be wholly eliminated with relevant research, but it may be markedly reduced.

Manager

Manager

Modeling

Analysis Database

Display


Research also may be of benefit in ways ordinarily thought of as uncertainty reduction:(1) Problems may come to light that otherwise would be not be known until they

became very serious or even insoluble(2) Objectives may come under reevaluation when evidence indicates that(a) they may be too high to be feasible under expected conditions or(b) they should be higher due to overlooked opportunity(3) Better alternatives may be revealed or their conception stimulated(4) Marketing research may be useful as evidence in legal matters.We would call attention to other benefits, such as the psychological one of making the decision-maker feel more confident and willing to be decisive. Prejudice against new ideas may be overcome by evidence from the market place. Sociologically, research can keep the executives attuned to changing consumer needs and wants and to the impacts of consumerism. Less laudable are political motives for marketing research, like the executives who wants it to confirm some preconceived ideas and overcome rivals in the organization (but would suppress if they fail to confirm).

LIMITATIONS TO MR

Some of the limitations faced by the researchers in MR are:1. The lack of scientific training in the methodology of research is a great

impediment for researchers in our country. There is paucity of competent researchers. Many researchers take a leap in the dark without knowing research methods. Most of the work, which goes in the name of research, is not methodologically sound. Research to many researchers and even to their guides, is mostly a scissors and paste job without any sight shed on the collated materials. The consequence is obvious, viz, the research results, quite often, do not reflect the reality or realities. Before undertaking research projects, researchers should be well equipped with all the methodological aspects. As such, efforts should be made to provide short-duration intensive courses for meeting this requirement.

2. There is insufficient interaction between the university research departments on one side and business establishments, government departments and research institutions on the other side. A great deal of primary data of non-confidential nature remain untouched/untreated by the researchers for want of proper contacts. Efforts should be made to develop satisfactory liaison among all concerned for better and realistic researchers. There is need for developing some mechanisms of a university – industry interaction programme so that academics can get ideas from practitioners on what needs to be researched and practitioners can apply the research done by the academics.

3. Most of the business units in our country do not have the confidence that the material supplied by them researchers will not be misused and as such they are often reluctant in supplying the needed information to researchers. The concept of secrecy seems to be sacrosanct to business organizations in the country so much so that it proves an impermeable barrier to researchers. Thus, there is the need for generating the confidence that the information/data obtained from a business unit will not be misused.


4. Research studies overlapping one another are undertaken quite often for want of adequate information. This results in duplication and fritters away resources. This problem can be solved by proper compilation and revision, at regular intervals, of a list of subjects on which and the places where the research problems in various disciplines of applied science which are of immediate concern to the industries.

5. There does not exist a code of conduct for researchers and inter-university and inter-departmental rivalries are also quite common. Hence, there is need for developing a code of conduct for researchers which, if adhered sincerely, can win over this problem.

6. Many researchers in our country also face the difficulty of adequate and timely secretarial assistance, including computerial assistance. This causes unnecessary delays in the completion of research studies. All possible efforts be made in this direction so that efficient secretarial assistance is made available to researchers and that too well in time. University Grants Commission must play a dynamic role in solving this difficulty.

7. Library management and functioning is not satisfactory at many places and much of the time and energy of researchers are spent in tracing out the books, journals, reports, etc., rather than in tracing out relevant material from them.

8. There is also the problem that many of our libraries are not able to get copies of old and new Acts/Rules, reports and other government publications in time. This problem is felt more in libraries, which are away in places from Delhi and/or the state capitals. Thus, efforts should be made for regular and speedy supply of all governmental publications to reach our libraries.

APPLICATION OF MARKETING RESEARCH

TRADITIONAL APPLICATION OF MARKETING RESEARCH

Traditionally, 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 the organization, there will be uncertainty associated with new products. New product can be divided into four stages

Concept GenerationNeed Identification

Concept Identification

Concept Evaluation and Development


1. Concept generation

There are two types of concept generation research. They are:a. Need identification. The emphasis in need research is on identifying unfilled

needs in the market. 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 specification applications. The result is an identification of benefits sought that current product do not deliver.

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

b. Concept identification. During the new product development process there is usually a point where a concept is formed but there is no tangible usable product that can be tested. The concept should be defined well enough so that it is communicable. There may be simply a verbal description, or there may be rough idea 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.

2. Product Evaluation and development

Product Evaluation and Development

Testing the Marketing Program


Product evaluation and development, or product testing, is very similar to concept testing, in terms of both the objectives and the techniques. The aim is still to predict market response to determine whether or not the product should be carried forward.a. Use testing. The simplest form of use testing gives users the product and after a

reasonable amount of time asks their reactions their intentions to buy it.b. 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 three variables:

Product class penetration (PCP) Promotional expenditure Distribution of the productc. 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 the new brand is in their response set.

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

3. Test marketing

Test marketing allows the researcher to test the impact of the total marketing program, with all its interdependencies, in a market context as opposed to the artificial, context associated with the concept 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 before

making a total commitment to it. The second is to predict the program’s outcome when it is applied to the total

market.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

national launch. 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.

Really new product

Really new product normally take a long time (sometimes 15 to 20 years) from conception to national introduction. Really new products (RNPs) are those that: Create or expand a new category, thereby making cross-category competition the

key (e.g., fruit teas versus soft drinks) Are new to customers, for whom substantial learning is often required (i.e., what it

can be used for, what it competes with, why it is useful).


Raise broad issues such as appropriate channels of distribution and organizational responsibility.

Create (sometimes) a need for infrastructure, software and add-ons.

II. PRICING RESEARCH

Research may be used to evaluate alternatives price approaches for new products before launch or for proposed changes in products already on the market.There are two general approaches to pricing research.1. The first is the well-established Gabor and Grainger method. In this method,

different prices for a product are presented to respondents (often by using test-priced, with the corresponding number of affirmative purchase intentions is produced.

2. In a second approach, respondents are shown different sets of brands in the same product category, at different prices and are asked which they would buy. This multibrand-choice method allows respondents to take into account competitions’ brands as they normally would outside such a test. S such, this technique represents a form of simulation of the point of sale.

Decisions regarding price ranges for new product have to be made early in the development stage. A product concept cannot be tested fully, for example, without indicating its price, so when the product is ready to be introduced, a decision must be made about its specific price. Decisions on price changes-should we change the price, and, if so, in which way and by how much? – will then need to be made over the product’s life cycle.Either of two pricing strategies can be followed.

1. Skimming strategy.

The skimming strategy is based on the concept of pricing the product at the point at which profits will be the greatest until market conditions change or supply costs dictate a price change. Under this strategy, the optimal price is the one that results in the greatest positive difference between total revenues and total costs.

2. Share-penetration strategy

Penetration strategy is a strategy based on the concept that average unit production costs continue to go down as cumulative output increases. Potential profits in the early stages of the product life cycle are sacrificed in the expectation that higher volumes in later periods will generate sufficiently greater profits to result in overall profit for the product over its life.

III. Distribution research

Traditionally, the distribution decisions in marketing strategy involve the number and location of salepersons, retail outlets, warehouses and the size of discount to be offered. The discount to be offered to the members in the channel of distribution usually is determined by what is being offered by existing or similar products, and also whether the firm wants to follow a “push” or a “pull” strategy. Marketing


research, however, plays an important role in the number and location in decisions about numbers and locations.

a. Warehouse and Retail Location Research

The essential questions to be answered before a location decision is made are: “What costs and delivery 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 a single warehouse in a limited geographic area, or it can be a complex, computerized simulation of a warehousing system for a regional or national market.i. 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 the distance to customers, weighted by the quantities purchased, is determined. The more symmetry there is in customer locations and weights, the more nearly the initial calculation approximates the optimal location. The location indicated by the first calculation can be checked to be determine if it is optimal (or near optimal) by using a “confirming” procedure. If it in not optimal, successive calculations can be made as necessary to “home in” on the best location.

ii. Computerized simulation models. The concept involved in simulations for this purpose is quite simple. Data that describes the customer characteristics (location of plants, potential warehouse and retail sites) and distribution costs (costs per mile by volume shipped, fixed and variable costs of operating each warehouse, the effect of shipping delays on and variable costs of 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 total operating cost. Effective results have been achieved by using computer simulations to design distribution systems.

iii. Trade area analysis. Formal models have been developed that can be used to predict the trading area of a given shopping center or retail outlet based on relative size, travel time, and image. A variety of other techniques can be used to establish trading areas. An analysis of the addresses 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 be used to supplement this information. The best, but also the most expensive way of establishing trading area bound Aries is to conduct surveys to determine them.

iv. Outlet location research. Individual companies and, more commonly, chains, financial institutions with multiple outlets, and franchise operations must decide on the physical location of their outlet(s). 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 and for evaluating new potential locations are obtained through secondary data analysis and surveys.

b. Number and location of Sales Representatives

How 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 and there 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

It focuses on the decision that are commonly made when designing a promotion strategy. The decision 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 advertising decisions have long-term effects. Companies spend more time and resources on advertising research than on sales promotion research because of the greater risk and uncertainty in advertising research.

1. Advertising research

Most companies concentrate on advertising because advertising decisions are more costly and risky than sales promotion decisions. Advertiseing reasearch typically, involves generating information for making decisions in the awareness, recognition, preference and purchasing stages.What separates an effective advertisement from a dud? The criteria will depend, on th brand involved and its advertising objective. However, four basic categories of responses are used in advertising research in general and copy testing in particular:

a) Advertisement recognitionb) 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) BehaviorScan is one of

several spilt-cable testing operations. BehaviorScan monitors the purchases of panel members as well as in-store information such s special prices, features and displays.

Tracking studies When a campaign is running, its impact often is monitored via a tracking study Periodic sampling of the target audience provide a time trend of measures of interest. The purpose is to evaluate and reassess the advertising campaign, and perhaps also to understand why it is or is not working. 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 testingA whole category of advertising research methods is designed primarily not to test the impact of a total ad but rather to help creative people understand how the parts of the ad contribute to its impact. Which are weak and how do they interact? Most of these approaches can be applied to mock-ups of proposed ads as well as finished ads. Copy test validityThis test refers to the ability to predict advertising response.

Budget decisionArriving at analytical, research-based judgments as to the optimal advertising budget is surprisingly difficult. However, there are research inputs that can be helpful. Tracking studies that show advertising is either surpassing or failing to reach communication objectives can suggest that the budget should be either reduced or increased. Media researchIn evaluating a particular media alternative, it is necessary to know how many advertising exposures it will deliver and what will be the characteristics of the audience. A first cut of the vehicle’s value is the cost per thousand (circulation), the advertisement insertion cost divided by the size of the audience.

2. Sales Promotion Research

There are three major types of sales promotion: consumer promotion, retailer promotion and trade promotions.In general, the consumer promotion, manufactures offer of all sales promotion activities. In consumer promotion, manufacturers offer promotions promotions directly to consumers, whereas retail promotions involve promotions by retailers to consumers. Trade promotions involve manufacturers offering promotions to retailers or other trade entities. Trade entities can also promote to each other. For example ,a distributor can offer a steep temporary price cut to retailers in order to sell excess inventory. We call trade promotions, since the recipient of the promotion is a marketing intermediary.Sometimes several manufacturers or several retailers combine in one promotion. These are called cooperative promotions or promotion partnerships.


Manufacture Trade Trade promotions

Consumer Consumer Promotions Retailer Promotions

CONTEMPORARY APPLICATIONS OF MARKETING RESEARCH

1. Competitive Advantage.

The notion that achieving superior performance requires a business to gain and hold an advantage competitors is central to contemporary strategic thinking. Businesses seeking advantage are exhorted to develop distinctive competencies at the lowest delivered cost or to achieve differentiation through superior value. The assessing competitive advantage can be done in number 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 subtract from the value of a product or service to a company and/ or its customers. The assets or liabilities that underlie brand equity must be linked to the name and/or symbol of the brand. The assets and liabilities 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 In addition to perceived qualitye) 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 vehicle for developing a market-driven quality approach. This approach requires a sequential research design that uses the results from each research phase to build and enhance the value of subsequent efforts. During this process, it is imperative to study customers who were lost, to determine why they left. This issue must be addressed early in the system design. The steps involved in customer satisfaction isa) Define goals and how information will be usedb) Discover what is really important to customers and employeesc) Measure critical needsd) Act on the informatione) Measure performance over timef) Issues in questionnaire design and scaling in satisfaction research

4. Total quality management.

Brand loyalty

Name awareness

Other proprietary

Perceived quality

Brand Association

BRAND EQUITYName

Symbol

Provides Value to Customers by enhancing Customer’s Interpretation/

processing of information

Confidence in the purchase decision

Provides Value to firm by enhancing Efficiency and

effectivesness Brand loyalty Prices/margins Brand extension Trade leverage Competitive advantage


TQM is a process of managing complex changes in the organization with the aim of improving quality.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. In QFD, a multifunctional team measures and analyzes in great detail both customers attitudes and product attributes. Marketing research plays a crucial role at this stage of the process. Then the team creates a visual mtrix in order to find ways to modify product attributes (engineering characteristics) 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 different types.

EMERGING APPLICATION OF MARKETING RESEARCH

1. Database marketing A database is a customer list to which has been added information about the characteristics and the transactions of these customers. Business use it to cultivate customers – as they seek new customers.

Need

A 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 assist 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 fit the profile of existing customers. Maximize personalization of all offers to each customer. Provide for ongoing 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 asstes.

Types of database

1. Active customers2. Inactive customers3. Inquiries

Benefits of database marketing


a) Customers are easier to retain than acquire. The first reason is that it takes five times the energy and budget to get new customer as it does to keep an existing one. Also, a disproportionately small number of your customers generate a very large proportion of your income.

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 preferences on an individual basis is the foundation for relationship marketing. Relationship marketing combines elements of general advertising, sales promotion, public relations and direct marketing to create more effective and more effective ways of reaching consumers. It centers on developing a continuous relationship with consumers across a family of related products and services.

2. Relationship marketing

The 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 preferences.

3. Tracking each relationship to monitor the cost of acquiring the consumer and the lifetime value of his or her purchases.

Marketing planning and information systemMarketing planning and information system

Planning systemStrategic plansTactical plans

Planning systemStrategic plansTactical plans

Information systemDatabase

DSS

Information systemDatabase

DSS

1. Agree on Research Purpose1. Agree on Research Purpose

Problems or opportunitiesDecision alternativesResearch users

Problems or opportunitiesDecision alternativesResearch users

2. Establish Research Objectives2. Establish Research Objectives

Research questions HypothesesBoundaries of study

Research questions HypothesesBoundaries of study

ESTIMATETHE VALUE OF INFORMATIONIs benefit > cost?

ESTIMATETHE VALUE OF INFORMATIONIs benefit > cost?

DO NOT CONDUCT MRDO NOT CONDUCT MR

4. Design the research4. Design the research

Choose among alternative research approachesSpecify the sampling planDesign the experimentDesign the questionnaire

Choose among alternative research approachesSpecify the sampling planDesign the experimentDesign the questionnaire

5. Collect the data5. Collect the data

6. Prepare and analyze the data 6. Prepare and analyze the data

7. Report the research results and provide strategic recommendations7. Report the research results and provide strategic recommendations


Chapter 2. RESEARCH PROCESS STEPS IN THE PROCESS OF RESEARCH


1. PROBLEM DISCOVERY

It involves a search for causation among symptoms, problems, and decisions. A symptom is a condition that indicates the existence of a problem, and we, must be careful not to confuse this with a problem. Symptoms occupy an essential place in the problem-solving process, for the underlying problem. A problem exists whenever one faces a question whose answer – or a need whose fulfillment – involves doubt and uncertainty. If there is no answer or solution, there is no problem (although the consequences might be terrible); and if there is only a single possible answer or solution, there is no problem. A decision is a determination or resolution of a question. In the terms of a business executive, a decision is the determination of a course of action to be taken. Many routines or repetitive decisions to which marketing research is applied often invoke a complex of problems, and considerable work is entailed in the choice of the best available course of action.Business problems are not found by surprise or accidental circumstances. The persons who find problems are sensitized to be on the alert and are prepared to find them. Always there is evidence that the searching mind penetrates with insight. Our abilities can go beyond intuition or a sixth sense. Fortunately, there are means available to sharpen our capacities in problem discovery. First, an understanding of the different types of difficulties or symptoms which may call for decisions is useful. Second, provision of a marketing information system may often signify the existence of the problem to a decision maker.

2. PROBLEM DEFINITION

The first step in any marketing research project is to define the problem. In defining the problem, the researcher should take into account the purpose of the study, the relevant background information, what information is needed, and how it will be used in decision making. Problem definition involves discussion with the decision-makers, interviews with industry experts, analysis of secondary data, and, perhaps, some qualitative research, such as focus groups. Once the problem has been precisely defined, the research can be designed and conducted properly.

3. RESEARCH OBJECTIVES

The research objective is a statement, in as precise terminology as possible, of what information is needed. The research objective should be framed so that obtaining the information will ensure that the research purpose is satisfied.Research objectives have three components:1. Research question: It specifies the information the decision maker needs. The

research question asks what specific information is required to achieve the research. If the research question is answered by the research, then the information should aid the decision maker.

2. Development of hypotheses: A hypotheses is a possible answer to a research question. The research determines which of these alternative answers is correct. There are three steps to develop the hypotheses

a. The researcher can draw on previous research to generate hypotheses for future large-scale research efforts. The research purpose might be deciding whether to conduct the large-scale studies.


b. Second source is theory from such disciplines as psychology, sociology, marketing or economics. Thus, the economic theory might suggest the importance of price in explaining a loss of retail sales.

c. The most important source of developing hypotheses is the manager’s experience with related problems, coupled with knowledge of the problem situation and the use of judgment.

3. Research boundaries: Hypotheses development helps make the research question more precise. Another approach is to indicate the scope of the research or the research boundaries. For example, is the interest in current customers only or in all potential customers?

4. Hypotheses development model

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

4. RESEARCH DESIGN

The research problem having been formulated in clear terms, the researcher will be required to prepare a research design, i.e. he will have to state the conceptual structure within which research would be conducted. The preparation of such a

Source

Theory Management

experience Exploratory

Research Question

Hypothesis

Research Objective

Research Purpose

Research design


design facilitates research to be as efficient as possible yielding maximal information. But how all these can be achieved depends mainly on the research purpose. Research purposes may be grouped into four categories, viz., (i) Exploration(ii) Description(iii) Diagnosis (iv) ExperimentationA flexible research design, which provides opportunity for considering many different aspects of a problem, is considered appropriate if the purpose of the research study is that of exploration. But when the purpose happens to be an accurate description of a situation or of an association between variables, the suitable design will be one that minimizes bias and maximizes the reliability of the data collected and analyzed. There are several research designs, such as, experimental and non-experimental hypothesis testing. Experimental designs can be either informal designs (such as before-and-after without control, after-only with control before-and-after with control) or formal designs (such as completely randomized design, randomized block design, Latin square design, simple and complex factorial designs), out of which the researchers must select one for his own project.The preparation of the research design, appropriate for a particular research problem, involves usually the consideration of the following:(i) the means of obtaining the information(ii) the availability and skills of the researcher and his staff (if any)(iii) explanation of the way in which selected means of obtaining information will

be organized and the reasoning leading to the selection(iv) the time availability for research and(v) the cost factor relating to research, i.e. the finance available for the purpose.

5. RESEARCH METHOD

In dealing with any real life problem it is often found that data at hand are inadequate, and hence, it becomes necessary to collect data which differ considerably in context of money costs, time and other resources at the disposal of the researcher.Primary data can be collected either through experiment or through survey. If the researcher conducts an experiment, he observes some quantitative measurements, or the data, with the help of which he examines the truth contained in his hypothesis. But in the case of a survey, data can be collected by any one or more of the following ways:(i) By observation: This method implies the collection of information by way of

investigator’s own observation, without interviewing the respondents. The information obtained relates to what is currently happening and is not complicated by either the past behavior or future intentions or attitudes of respondents. This method is no doubt an expensive method and the information provided by this method is also very limited. As such this method is not suitable in inquiries where large samples are concerned.

(ii) Through personal interviews: The investigator follows a rigid procedure and seeks answers to a set of pre-conceived questions through personal


interviews. This method of collecting data is usually carried out in a structured way where output depends upon the ability of the interviewer to a large extent.

(iii) Through telephone interviews: This method of collecting information involves contacting the respondents on telephone itself. This is not a very widely used method but it plays an important role in industrial surveys in developed regions, particularly, when the survey has to be accomplished in a very limited time.

(iv) By mailing of questionnaires: The researcher and the respondents do not come in contact with each other if this method of survey is adopted. Questionnaires are mailed to the respondents with a request to return after completing the same. It is the most extensively used method in various economic and business surveys. Before applying this method, usually a Pilot Study for testing the questionnaire is conducted which reveals the weakness, if any, of the questionnaire. Questionnaire to be used must be prepared very carefully so that it may prove to be effective in collecting the relevant information.

(v) Through schedules: Under this method the enumerators are appointed and given training. They are provided with schedules containing relevant questions. Data are collected by filling up the schedules by enumerators on the basis of replies given by respondents. Much depends upon the capability of enumerators so far as this method is concerned. Some occasional field checks on the work of the enumerators may ensure sincere work.

The researcher should select one of these methods of collecting the data taking into consideration the nature of investigation, objective and scope of the inquiry, financial resources, available time and the desired degree of accuracy. Though he should put attention to all these factors but much depends upon the ability and experience of the researcher.

6. DATA COLLECTION

The research design has a wide variety of methods to consider either singly or in combination. They can be grouped first according to whether they use secondary or primary sources of data. Secondary data are already available, because they were collected for some

purpose other than solving the present problem. Primary data are collected especially to address a specific research objective. A

variety of methods, ranging from qualitative research to surveys to experiments, may be employed.

7. SAMPLING METHODS

There are different types of sampling designs based on two factors viz., the representation basis and the element selection technique. On the representation


basis the sample may be probability sampling or it may be non-probability sampling. Probability sampling is based on the concept of random selection, whereas non-probability sampling is ‘non-random’ sampling. On element selection basis, the sampling is non-random sampling. On element selection basis, the sample may be either unrestricted or restricted. When each sample element is drawn individually from the population at large, then the sample so drawn is known as ‘unrestricted sample’, whereas all other forms of sampling are covered under the term ‘restricted sampling’. The following chart exhibits the sample designs

Element selection technique

Unrestricted sampling

Representation basis

Probability sampling Non-probability sampling

Simple random sampling Haphazard sampling or convenience sampling

Restricted sampling Complex random sampling, Purposive sampling (such (such as cluster sampling, as quota sampling, systematic sampling, judgment sampling)Stratified sampling etc.)

1. Probability samplinga. Simple random sampling. b. Systematic random sampling. c. Stratified random samplingd. Cluster samplinge. Multi stage sampling2. Non-probability samplinga. Judgment samplingb. Quota sampling c. Convenience sampling

8. USES OF SCALES IN RESEARCH

In research when the concepts to be measured are complex and abstract and we don not possess the standardize measured tools. Alternatively, we can say that while measuring attitude and opinions, we face the problem of their valid measurement. A researcher may face similar problem. To avoid this problem the scaling technique is used. Different types of scaling methods are:

1. Rating scalesa. The graphic rating scale


b. The itemized rating scale2. Ranking scalesa. Method of paired comparisonb. Method of rank order3. Arbitrary scale4. Differential scale (Thrustone-type scale)5. Summated scales (Likert scale)

9. DATA PROCESSING

Data processing’s total task in carrying out the analytical program is to convert crude fragments of observation and responses into orderly statistics for interpretation. The seven stages of data processing are given below:1. Data preparation. There are three preparation stages necessary in either

manual or computer processing: editing, classifying and coding. An additional stage with computers is card punching.

2. Programming. Every data-processing job, whatever the method used, needs preplanning that specifically lays out directions to the persons doing tabulating (manually) or to the machinery (with computers). This describes specifically the particular operations to take place, with what equipment, by whom, and so forth.

3. Sorting. All the bits of data have to be classified together with the other bits that are of the same nature, by being sorted into groups.

4. Counting. When the preparatory work has been done, the individual observations can be counted and accumulated in subtotals of the prescribed classifications.

5. Summarizing. The various subtotals and totals are brought together and summarized in tables that will exhibit the data in an informative manner.

6. Computations. When computers are employed, various calculations May be performed with the data during the tabulation operations. When other methods are utilized, the computations are performed as separate stages subsequent to the preparation of tables.

7. Control. Means for making proper checks of the accuracy of the data processing are practically essential. This includes examination of the coding and, if machines are used, the card punching and programs. Also, a base total of the number of questionnaire or other data forms being processed should be determined before the processing begins, thereby providing a total with which to verify whether each data breakdown, or analysis, totals to exactly this base figure.

10.DATA ANALYSIS

After the data have been collected, the researcher turns to the task of analyzing them. The analysis of data requires a number of closely related operations such as establishment of categories, the application of these categories to raw data through coding, tabulation and then drawing statistical inferences. The unwieldy data should necessarily be condensed into as few manageable groups and tables for further analysis. Thus, researcher should classify the raw data into some purposeful and usable categories. Coding operation is usually done at this stage through which the


categories of data are transformed into symbols that may be tabulated and counted. Editing is the procedure that improves the quality of the data for coding. With coding the stage is ready for tabulation. Tabulation is a part of the technical procedure wherein the classified data are put in the form of tables. The mechanical devices can be made use of at this juncture. Computers tabulate a great deal of data, especially in large inquiries. Computers not only save time but also make it possible to study large number of variables affecting a problem simultaneously.

Analysis work after tabulation is generally based on the computation of various percentages, coefficients etc., by applying various well-defined statistical formulae. In the process of analysis, relationships or differences supporting or conflicting with original or new hypothesis should be subjected to tests of significance to determine with what validity data can be said indicate any conclusions. For instance, if there are two samples of weekly wages, each sample being drawn from factories in different parts of the same city, giving two different values, then our problem may be whether the two mean values are significantly different or the difference is just a matter of chance. Through the use of statistical tests we can establish whether such a difference is a real one or is the result of random fluctuations. If the difference happens to be real, the inference will be that the two samples come from different universes and if the difference is due to chance, the conclusion would be that the two samples belong to the same universe. Similarly, the technique of analysis of variance can help us in analyzing whether three or more varieties of seeds grown on certain fields yield significantly different results or not. In brief, the researcher can analyze the collected data with the help of various statistical measures.

11.RESEARCH REPORT

Finally, the researcher has to prepare the report of what has been done by him. Writing of report must done with great care keeping in view the following: (1) The layout of the report should be as follows: (i) the preliminary pages.(ii) the main text and (iii) the end matterIn its preliminary pages the report should carry title and date followed by acknowledgments and foreword. Then there should be a table of contents followed by a list of tables and list of graphs and charts, if any, given in the report.The main text of the report should have the following parts:(a) Introduction: It should contain a clear statement of the objective of the research

and an explanation of the methodology adopted in accomplishing the research. The scope of the study along with various limitations should as well as stated in this part.

(b) Summary of findings: After introduction there would appear a statement of findings and recommendations in non-technical language. If the findings are extensive, they should be summarized.

(c) Main report: The main body of the report should be presented in logical sequence and broken-down into readily identifiable sections.

(d) Conclusions: Towards the end of the main text, researcher should again put down the results of his research clearly and precisely. In fact, it is the final summing up.


At the end of the report, appendices should be enlisted in respect of all technical data. Bibliography, i.e., list of books, journals, reports etc., consulted, should also be given in the end. Index should also be given specially in a published research report.(2) Report should be written in a concise and objective style in simple language

avoiding vague expressions such as ‘it seems,’ ‘ there may be’, and the like.(3) Charts and illustrations in the main report should be used only if they present the

information more clearly and forcibly.(4) Calculated ‘confidence limits’ must be mentioned and the various constrains

experienced in conducting research operations may as well be stated.

Research Fundamentals

Documents

research research

term research

meaning of research

research market

research process chapter

research fundamentals

research process steps

clifford woody research