Summary question 4.3

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About this chapter

Marketing research is undertaken by an organization in order to provide timely and relevant information that can be employed by managers to allow them to make fully informed decisions relating to marketing activities.

After reading this chapter, you will understand:

� The structure and role of a marketing information system.

� The internal sources of marketing data available to an organization.

� The difference between marketing intelligence and marketing research.

� The types of market research and market research methods that an organization can undertake.

� Approaches an organization can employ in carrying out marketing research activities.

� The stages in the marketing research process.

� The role e-marketing developments are having on marketing research activities.

4 C H A P T E R Marketing research

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Drummond, G., & Ensor, J. (2005). Introduction to marketing concepts. ProQuest Ebook Central <a onclick=window.open('http://ebookcentral.proquest.com','_blank') href='http://ebookcentral.proquest.com' target='_blank' style='cursor: pointer;'>http://ebookcentral.proquest.com</a> Created from csupomona on 2020-10-19 23:58:09.

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4 . 1 M a r k e t i n g i n f o r m a t i o n s y s t e m s

Jobber and Rainbow (1977) describe a marketing information system (MkIS) as

a system in which marketing information is formally gathered, stored, analysed and distributed to managers in accord with their informational needs on a regular planned basis.

All organizations require a marketing information system if they are to have the ability to make well-informed marketing decisions. Obviously the size and sophistication of the MkIS will depend on the size and scope of an organization’s operations.

The aim of an MkIS is to seek out data from the external marketing envi- ronment and then sift and analyse this information to identify any salient issues of which the organization’s managers need to be made aware. The MkIS will then distribute this relevant information to the company’s mar- keting decision-makers. This, however, is not a one-way process. The organization’s marketing decision-makers may also highlight areas where they require information in order to come to an informed judgement on an issue that requires action. This request will then initiate a specific investigation by the MkIS of various data sources in order to provide the manager with up-to-date and accurate information upon which to base a decision (for an overview of an MkIS system see Figure 4.1).

The type of information that feeds into a company’s MkIS and assists management to make marketing decisions is derived from three key sources (Figure 4.1), as follows:

Inter nal sources of data

Companies produce internal information and reports on a regular basis. This information can originate from a number of areas within the organi- zation, such as, finance, production, sales and marketing, or customer relations. Data from each of these areas will provide different perspectives on the day-to-day operation of the enterprise.

Much of this type of information is generated by organizations on a regular basis in the form of weekly or monthly reports. However, companies may also produce information on a ‘one-off ’ basis if there is a reason for monitoring a specific aspect of the business. An organization may wish to monitor sales reactions to specific advertising campaigns or to a change in pricing policy.

Marketing intelligence

Marketing intelligence is developed by an organization through a continu- ous process of monitoring the external environment within which it operates.

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This is a process of environmental scanning and concentrates on the longer-term factors that will have an impact on the enterprise. It is criti- cal that an organization forms this longer-term market intelligence by building on information from a wide range of sources. Much of this infor- mation will come from internal members of staff who are experts in their own area of activity but companies should also use external sources, such as research scientists, academics, sales people and distributors.

Marketing decision-makers

Planning, implementation and control

Assessing information

requirements

Internal sources of data

Marketing intelligence

Marketing research

Data analysis

Distribution of

information

External marketing environment

• Market (Customers, Competitors, Distributors), Technical and Acquisition developments

• Political, Economic, Social and Technical developments

Figure 4.1 A marketing information system

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As discussed in Chapter 3, a study by Diffenbach (1983) identified a number of positive consequences that stem from carrying out this type of continuous and organized environmental analysis (see Figure 3.1).

The process of undertaking an environmental analysis is normally referred to as scanning. According to Aguilar (1967), there are four forms of envi- ronmental scanning that an organization can undertake in order to form market intelligence. These are:

� Undirected viewing This activity concerns the viewer exploring information in general without carrying a specific agenda. The viewer is exposed to a large amount of varied information but this is not an active search looking for particular issues, just a broad attempt to be aware of factors or areas that may have changed.

� Conditional viewing Again this is not an organized search but the viewer is sensitive to information that identifies changes in specific areas of activity.

� Informal search This is an organized but limited search for informa- tion to support a specific goal.

� Formal search This type of search is actively pursued and specifically designed to seek particular information.

There is, of course, an unlimited amount of information that can be scanned. Any organization can only scan a certain amount of this information. A balance has to be struck between the resources allocated to this activity and the potential benefits. More information also does not necessarily lead to better decision-making. Understanding the dynamics of the environment is the critical aspect to this activity, not the volume of information reviewed.

Managers search for data in five broad areas (Aguilar, 1967; see Figure 4.2):

� Market developments.

� Technical developments.

� Acquisition developments.

� Broad issues.

� Other developments.

(Note: Aguilar uses the word tidings rather than developments.)

The study showed that 58% of managers saw issues in the market development category as the most critical area for obtaining external information, three times more important than the next most significant area, technical developments, at 18%. The importance placed on market developments was true across all functional areas. The most significant

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categories of information within this area were market potential, accounting for 30% alone, and structural change, accounting for 10%. The only other category that reached double figures was for the category of new products, process and technology under technical developments.

One crucial aspect of this scanning activity is to detect weak signals. That is, identifying fragments of information that indicate significant changes, but whose potential impact has generally not been perceived. This is obviously difficult, especially as many organizations fail to recognize major signals in the environment.

Area of external information Category General content

Market developments � Market potential → Capacity, consumption, imports, exports

� Structural change → Mergers, acquisitions, new entries

� Competitors and → Competitor information, industry industry policy

� Pricing → Effective and proposed prices � Sales negotiations → Information on specific current

or potential sales � Customers → Current or potential customers,

markets and problems

Technical developments � New product, processes → Technical information and technology relatively new or unknown to

enterprise � Product problems → Involving current products � Costs → For processing, operations, etc.

for suppliers, customers and competitors

� Licensing and patents → Products and processes

Acquisition developments � Leads for mergers, joint → Information concerning ventures, or acquisitions possibilities for the

organization

Broad issues � General conditions → General info political, demographic etc.

� Government actions and → Decisions affecting the industry policies

Other developments � Suppliers and raw → Purchasing information materials

� Resources available → Availability of people, land, other resources

� Miscellaneous → Any other information

Figure 4.2 Critical areas of external information (Source: adapted from Aguilar, 1967)

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Many of the factors that Aguilar states managers see as significant fall into the broad categories of political/legal issues, economic factors, social/ cultural issues as well as the specific area of technological developments. As discussed in Chapter 3, these factors fall into what is normally referred to as a PEST (Political, Economic, Social and Technological) analysis, although some writers use the alternative acronym of STEP analysis (see Figure 3.2).

The central role of building marketing intelligence is to identify the key factors that are likely to drive change in the organization’s area of activity. The aim is then to analyse how these key factors will affect the industry in general and the organization in particular.

Marketing research

Unlike marketing intelligence, which focuses on the long-term environ- mental factors affecting an organization, the focus of marketing research is on the immediate issues that an organization is facing in the short term.

4 . 2 I m p o r t a n c e o f m a r k e t i n g r e s e a r c h

Burns and Bush (2000) define marketing research as:

the process of designing, gathering, analysing and reporting of information that may be used to solve a specific marketing problem.

The aim of marketing research is to assist managers in their decision- making. David Ogilvy is quoted as saying ‘an advertiser who ignores marketing research is as guilty as a general who ignores the decodes of enemy signals’ (cited in Adcock et al., 1998). Although Ogilvy is referring to advertisers, in fact this observation applies to any manager making any type of marketing decision. However, management decisions cannot be based purely on marketing research information. Even high quality data can be misinterpreted. Managers have to apply judgement, skill and ini- tiative in interpreting marketing research data. Research data can play a significant role in reducing the level of risk associated with management decisions but it does not absolve managers from thoroughly testing this information before reaching any conclusions as to future action.

4 . 3 T y p e s o f m a r k e t i n g r e s e a r c h

Marketing research falls into two major categories: continuous and ad hoc research.

� Continuous research involves collecting information from external sources on a continuous basis. Reports are produced on a regular basis, normally either monthly, quarterly or annually. This type of data allows

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an organization to consistently compare trends over time. The key types of continuous research that organizations employ are consumer panels, television viewership panels, marketing databases, retail audits, customer relationship management systems and website audits.

� Ad hoc research is employed when an organization wishes to gain information when making a non standard or one-off decision. This could occur during the development of a new product. The findings of this type of research are usually presented as a formal report. As a result many managers associate this type of research as the main activity of a market research department. Although specialist one-off research reports may look impressive it is important not to underestimate the usefulness of the data produced through continuous research.

4 . 4 R e s e a r c h m e t h o d s

Secondary, often called desk research, and primary research are the two main categories of research data.

Secondar y research

Secondary data is information that is already available as it has been col- lected, and in some cases analysed, by other parties for reasons other than for use in the research project that is currently being undertaken. This type of data may be external information or it may be internally available within the organization. Normally, the first stage of any research project would be to search for secondary data before undertaking any primary research. Before using secondary data the researcher has to evaluate its rel- evance and reliability to the research project being undertaken. Burns and Bush (2000) claim that a researcher should examine five factors when evaluating a piece of secondary data. These are:

1 The reason the study was undertaken. Sometimes a piece of research is not independent in nature but has been carried out to support a specific point of view. Obviously, an organization should try to avoid taking decisions based on information that has been produced as a result of a biased piece of research.

2 The credibility of the organization or individuals who undertook the research.

3 What specific information was collected and what method the researcher employed to measure or evaluate the data.

4 How the data was collected. There are many different methods for collecting data, which will be discussed later in this chapter. Each method may have an affect on the quality of the findings of a piece of research.

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5 The consistency of the findings of a piece of research with other studies. If several studies report similar results, that may provide support for the reliability of any findings. If a report contradicts a number of other studies it may be an indication that the research is not reliable. However, in both cases the researcher has to evaluate a specific piece of research across all criteria and not merely agree with or discount a report’s findings on the basis that it does not agree with the majority of the results from other secondary research sources.

Secondary data can be obtained from a number of sources (see Figure 4.3).

Primar y research

Secondary research may have provided some useful data but it is likely that there will be gaps in this information which an organization will need to fill by undertaking some primary research. Primary research, sometimes referred to as field research, involves the organization in directly under- taking, or commissioning a research company to specifically undertake a piece of research. A range of approaches to carrying out primary research is available to an organization. These research methods fall into two key categories, qualitative and quantitative.

Qualitative r esearch

Qualitative research at a basic level could be described as the collection, analysis and interpretation of data obtained by studying the behaviour and language displayed by individuals in a particular situation. The key aim of qualitative research is to provide a rich insight into the perceptions, attitudes and motivations of consumers. Chisnall (1991) states that this type of research is appropriate to answer the questions What? Why? and How? Unlike quantitative research, qualitative techniques do not provide large sets of numerated data that can be statistically tested for their reli- ability and validity. However, qualitative techniques do provide highly sophisticated and subtle insights into the phenomena being studied. A number of techniques are available to the researcher in undertaking a qualitative study. Each will now be discussed in detail.

� Depth interviews This is a popular method of qualitative research and involves structured or semi-structured interviews that are normally around an hour long. The interviews are generally confidential in nature, undertaken face to face and respondents are encouraged to talk openly about the topic under discussion. The interview would normally be audio recorded so that a full transcript can be typed after the session has ended. The advantage of a depth interview is that the respondent is not influenced by other individuals, as can happen in focus groups. This type of interview also allows a deeper discussion to take place on a

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Figure 4.3 Sources of secondary research data

Information Information Type of information domain source

External Newspapers Up-to-date articles in quality newspapers can often provide pointers to other useful sources of information. Newspaper articles are very much of the moment, reflecting issues that are currently in vogue

Books Can provide useful background information on a specific topic

Academic Published research findings that have been indepen- journals dently evaluated by other academics and therefore should

demonstrate validity and reliability. Journal articles can tend to be dated rather than of the moment

Conference Conference papers are generally evaluated proceedings by other academics and therefore should

demonstrate validity and reliability. Research findings are likely to be more recent than the data found in journal articles

Directories and These sources provide information on indexes organizations in specific industry sectors

Government Provide a number of statistics on economic and statistics and market performance as well as census information reports

Company Companies’ annual shareholders reports can reports provide some useful information about the

situation of an organization’s competitors

Trade association Provide information on trends in the industry reports sector

Commercial Provide reports on business sectors and also market research reports on specific countries; will tend to charge a agencies commercial rate for allowing access to this information

Internal Sales reports Provide details of the trend of an organization’s sales over time. Also the profile of sales made by specific categories of customers can be obtained

Payment Provide details on customers’ payment records profiles. This allows an organization to

identify credit profiles and good credit risks

Stock records Provide a profile of stock holding trends, changes in consumers’ tastes in fashion, etc.

Research reports Valued information can be gleaned from previous research undertaken by the organization

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particular topic. The key disadvantage is that normally a series of inter- views with a range of individuals would need to be undertaken and that can be a costly process, both in terms of time and money. The choice of the individuals to interview will be based on their fit with the consumer profile for a particular product or service.

� Focus group discussions Focus groups are made up of six to eight respondents who undertake an unstructured or semi-structured discussion facilitated by the researcher who acts as moderator. These discussions have traditionally taken place face to face although Internet discussions are becoming more common. Once again the discussion is audio recorded and sometimes videoed. The researcher normally has a list of issues, relating to the overall focus of the research, that they wish to have discussed by the group, but the aim is to give as much freedom to the group as possible in order that they can discuss the issues that they deem to be important. Analysis of these discussions should allow a researcher to identify the beliefs, attitudes, motivations, behaviours and prefer- ences of the respondents and thereby gain a detailed understanding of the organization’s consumers. Focus groups provide information that allows researchers to form questionnaire items that have been identified as important by focus group respondents rather than by the researcher. It also allows the researcher to construct any items on a questionnaire in the language used by the respondents themselves. As the focus group members are representative of the wider population in some way, this decreases the potential for misinterpretation of the question by respond- ents when filling in a questionnaire return.

� Expert consultation Although much qualitative research is focused on the actual consumer, an alternative approach is to interview individ- uals with relevant expert knowledge. Various types of expert can be found in the academic community, financial services or the specialist press. Although they may not be a direct consumer of a particular prod- uct or service, they can be a rich source of specialist background knowl- edge. Experts may also be able to provide a valuable perspective on possible future developments in a product or service area.

� Observation Observation is a qualitative technique that finds its roots in the social anthropological approach of studying a society over periods of months or years. Consumer researchers employ a similar approach in taking detailed observations of consumers; however, nor- mally their observations are taken over relatively shorter periods of time. This technique can be employed to find out how consumers behave in a particular retail store, allowing the researcher to build up a picture of what factors may be affecting customers’ purchase decisions. A number of observation methods can be employed including direct observation by the researcher, video recording and electronic monitoring of traffic in supermarket aisles.

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Quantitative r esearch

Quantitative research focuses on gathering data that is quantifiable and, some would argue, therefore unlike qualitative research in that it is less open to interpretation. Quantitative data includes information available through secondary sources, such as, market size, market share, sales figures (see Figure 4.3). However, not all information is available through these sources and in that case primary research has to be undertaken. In these circumstances the majority of organizations will collect quantitative data through questionnaire-based surveys.

These surveys are generally undertaken to establish information that is statistically tested to provide evidence that the findings are reliable and valid, as demonstrated by the rigour of the analysis undertaken. In many circumstances, in order to demonstrate that the findings are representative of a larger population, large-scale surveys have to be undertaken. Surveys themselves can be administered in a number of ways.

� Survey methods There are a number of approaches available to a researcher in carrying out a survey. These are:

� Face to face interviews When administering a survey, a personal inter- view is very different from the depth interview employed in qualitative research. In the case of a survey, a structured interview is undertaken employing a standard questionnaire that is administered to every respondent in the same way. Therefore the wording, layout and order of the questions is rigorously adhered to by the interviewer. This approach means that a large number of respondents can be interviewed in a rela- tively short period of time. Once the data is collected there is no require- ment for qualitative interpretation of the individual’s responses. The questionnaire is designed in such a way that the respondent has to make a choice from a limited number of prescribed answers to any specific question. Once the survey is complete a statistical analysis of the respondent’s replies is undertaken based on a numeric coding of each of the prescribed answers contained on the questionnaire. It is therefore critical that the questionnaire is designed and tested in such a way as to ensure that the respondents actually interpret the questions being asked in a manner consistent with the researchers’ intentions and the respon- dents’ answers are not overly constrained by the limited range of answers from which they are allowed to make a choice. A weakness of this approach can therefore be an inappropriately designed questionnaire.

� Telephone interviews Telephone interviews are less expensive than some other methods and provide a mechanism to collect information quickly. Participation is more likely if a limited amount of information is sought from the respondent. However, there are problems with this approach. Most respondents would be reluctant to supply personal details to an unknown researcher over the phone. The sample is likely

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to show some bias as only individuals listed in a telephone directory can be contacted. The sample may be further biased by only including those individuals who actually respond. In recent times this type of survey has been further compromised by consumers’ negative reactions to the growth in unsolicited telesales. This has made them less likely to answer any questions posed by an individual in an impromptu telephone call.

� Postal surveys Postal questionnaires offer the advantages of speed, extensive distribution and relative inexpense and can be used for any size of sample. Where respondents can be ensured of anonymity these methods can produce candid replies, eliminating the potential of bias associated with surveys undertaken using personal interviews. However, there are a number of problems linked with this method. Postal surveys often have quite high non-response rates, especially with longer questionnaires. Researchers using this method can face a problem in placing respondents into meaningful categories. There can also be a problem with ambiguity, unless very straightforward questions are asked, or questions are framed in such a way that they offer respondents the choice between highly polarized positions. Respondents may not be able to perceive the supposed subtlety of a question or indeed the researcher may not be able to interpret the respondents’ subtle answers.

� Panel surveys There are a number of consumer panels that are run continuously by commercial research agencies. Companies can pay to have questions about their products or services included in the regular survey. Several approaches are employed in carrying out these surveys, such as, questionnaires, consumer diaries or audits carried out in the consumer’s home.

� Questionnaire design There are two key stages in the development of a questionnaire. These are:

� Planning stage The aim of undertaking a questionnaire is to obtain rel- evant information to help an organization make appropriate marketing decisions. The first stage in constructing a questionnaire is therefore to establish the decisions that will need to be taken and the information that is required in order to make an informed choice. It is then necessary to construct a questionnaire that will reveal the necessary information.

� Design stage There are several important factors that have to be considered when designing a questionnaire. Each of these is dis- cussed below:

1 Sequencing of questions The order in which questions are posed on a questionnaire is critical. In order to allow the respondent to relax, simple questions that are general in nature are usually placed at the beginning of a questionnaire. The questions that follow should funnel down towards the detailed information that the

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researcher wishes to identify. In order not to waste the respon- dent’s time and also to avoid potentially alienating them, filter questions should be employed. These questions allow a respon- dent to avoid being asked individual questions or whole sections of the questionnaire that are not relevant to them.

2 Nature of the questions There are three types of questions that can be employed on a questionnaire. These are: (i) Open questions – which allow the respondent the freedom to

provide an answer in his or her own way using their own words. The responses to this type of question are difficult to analyse statistically and most surveys that aim to use a quantitative analysis will concentrate on different versions of closed ques- tions. However, open questions are often used in conjunction with closed questions and they can offer additional qualitative data for managers to study before making marketing decisions.

(ii) Closed questions – which offer the respondent a choice between pre-determined answers. This may be a simple choice between two opposing options or offer a range of choices through various multiple choice options. An alternative to simple multiple choice questions is the use of questions that employ scales in their responses. A number of scaling tech- niques are available to employ in a questionnaire, one of the most common being Likert scales. Using this technique a respondent may be asked a question such as, ‘On a scale of one to five (where one equals strongly agree and five equals strongly disagree) how far would you agree with the statement that product X offers outstanding value?’ These types of ques- tion can reveal quite subtle insights into consumers’ attitudes and beliefs about marketing issues. Whatever closed question technique is employed the pre-determined options offered to the respondents can be numerically coded to facilitate a detailed statistical analysis of the total survey data.

(iii) Control questions – which are placed on a questionnaire to test whether the respondent’s answers are consistent and this can be used as a way of confirming that a respondent’s answers can be taken as genuine.

Whatever type of questions employed on a questionnaire it is crucial that they are tested to ensure that they are:

(i) Easy to understand, using straightforward day to day language.

(ii) Not leading the respondent into a particular response.

(iii) Not ambiguous or asking two questions at the same time.

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(iv) Not based on assumptions about the likely views of respondents.

3 Layout A questionnaire needs to be structured in such a way that all the questions are well spaced out, ensuring that it is easy for respondents to read and navigate their way around.

� Probability sampling Generally, in quantitative research a probability sample is formed so that it can be thoroughly analysed using rigorous sta- tistical tests. The aim is to create a sample that demonstrates no significant differences between itself and the target population. The tar- get population is made up of everybody in the group the researcher wishes to focus upon. In market research many of these groups will be based on specific market segments as defined using criteria discussed in Chapter 5. The aim of forming a probability sample is in effect to attempt to construct a model representing the wider population. The data received from the respondents in the sample can then be statistically analysed and the findings can be considered as being representative of the wider population’s opinions within specific degrees of confidence.

� Simple random sampling Random sampling is a method of sampling that offers every member of a population identified as the focus of a research study an equal chance of being included in the survey. Simple random sampling involves assigning each individual in the sampling frame a number. The sample is then constructed by drawing numbers at random from the total numbers available.

� Stratified random sampling In this method of sampling a similar approach to random sampling is employed. However, the identified population, which will be the focus of the research study, is divided into discrete homogeneous groups (strata) of individuals based on what are deemed by the researcher to be key criteria. These criteria could be factors such as age, income, gender, educational qualifications etc., or indeed combinations of these and other factors. Once the groups have been identified the sample is then constructed by drawing numbers at random from each of the groups. Each group therefore has representation in the sample. Normally within the overall sample the number of individuals drawn from each group will be in proportion to the group’s size relative to the overall population.

� Cluster sampling This method of sampling is employed where the researcher considers the target population to be made up of natural groupings, normally termed clusters. Thus an organization may be seen to be made up of a number of clusters in terms of its business units or administrative departments. In this situation a random sample of departments is taken and then a complete census of every member of each of those chosen departments is undertaken.

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� Non-probability sampling processes Questionnaires can be admin- istered using other sampling techniques rather than probability samples. However, these techniques do not allow the researcher to employ the same level of statistical rigour that probability samples allow. One of these alternative techniques is quota sampling.

� Quota sampling Quota sampling is a common method employed in marketing research studies; however, as already stated, this is not a proba- bility sampling technique and therefore statistically not as rigorous as the methods discussed earlier. Under quota sampling the approach is similar to stratified sampling in that the identified population being studied is divided into discrete homogeneous groups. Once again the criteria used to identify these groups are likely to be factors such as age, income, gen- der, educational qualifications etc., or indeed combinations of these and other factors. In quota sampling, however, the researcher decides that a specific percentage of the total sample will be made up of each of these groups. Therefore the researcher might decide that 20% of the sample should be women aged 18 to 24 who are in employment. While this approach may be easier to administer than random samples, and allows the researcher more flexibility, the results may not be representative of the wider population and lack the statistical rigour of a probability sam- ple. However, quota samples are widely used and many researchers feel they can produce results that are a useful aid to decision-making.

� Sample size If the intention is to undertake a rigorous statistical analysis of a survey’s results then the size of the sample is critical. Calculations can be undertaken that determine the sampling error, that is the error that is caused by not interviewing everyone in the tar- get population. The sampling error will depend on the size of the sample and of the target population. The researcher will need to undertake a cost–benefit analysis about the level of sampling error they are content to live with compared with the time and expense of undertaking a more extensive study. Generally, a sample of around a 1000 will provide reasonably statistically sound results for a target population of several millions. However, undertaking a random sample of 1000 is still an expensive and time-consuming exercise.

4 . 5 A p p r o a c h e s t o m a r k e t i n g r e s e a r c h

An organization has three options in choosing how to undertake a mar- keting research project. These are:

� Undertake the work in-house This is an option in the case of small scale research projects or where an organization is large enough and employs specialist marketing staff.

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� Employ a fieldwork agency Even for an organization with specialist market research staff that can design a questionnaire and coordinate a survey they may find that, for a large survey, they don’t have the resources to actually carry out all the interviews. In this situation they can employ a specialist fieldwork agency who will undertake the inter- view then hand back the data for the organization to analyse. Many marketing research agencies will offer fieldwork administration as one of a range of services they offer clients.

� Employ a marketing research agency Another option available to an organization is to contract out all aspects of the research project to an outside agency. The agency then would complete all the stages of the research project as laid out in section 4.6 of this chapter. In order for this approach to work successfully there has to be very clear communication between the client and the agency about the objectives of the research.

4 . 6 S t a g e s i n m a r k e t i n g r e s e a r c h

In undertaking a marketing research project there are a number of distinct stages that should be followed, as outlined in Figure 4.4. Each of these stages will be discussed in turn:

� Problem definition As has already been stated, the aim of undertak- ing marketing research is to obtain relevant information to help an organization make appropriate marketing decisions. The first stage in undertaking a marketing research project is therefore to establish the decisions that will need to be taken and the information that is required in order to make an informed choice. This should lead to the identifi- cation of a series of research objectives.

� Develop research objectives Research objectives need to be established in order to provide a clear focus to the development of a research plan. The objectives should provide a clarity of vision for the individuals work- ing on the project that allows them to develop an effective research brief.

� Prepare a research brief A research brief is developed by the client in order to provide the researcher, whether they are in-house or an outside agency, with a clear definition of the organization’s precise require- ments. It is likely to contain the following elements:

� Background information on the nature of the problem the organiza- tion wishes to address.

� An account of the issue that is to be the focus of the research.

� A statement of the specific research objectives the organization has developed.

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Introduction to Marketing Concepts

� The time-scale that the research has to be completed within.

� The arrangements the organization requires for reporting the project’s outcomes.

� Develop a research proposal The research team undertaking the project will then need to develop a research proposal that is approved by the client before any work commences. This proposal may build on and refine aspects of the research brief. It is a statement of the project team’s interpretation of the client’s requirements as a result of a thorough examination of the research problem. The project team’s proposal should contain:

� Background information about the research.

� The research objectives.

� The research method, or methods, to be employed.

Problem definition

Develop research objectives

Prepare research brief

Develop a research proposal

Undertake data collection

Analyse and interpret data

Create final research report

Undertake post-study evaluationFigure 4.4 The market research process

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Marketing research

� The techniques to be employed in analysing any primary data.

� The role of the client in the research project.

� The interim reporting procedures.

� The format of the final research report.

� A timeframe for the project and a budget outline.

� Undertake data collection Once a research method is established and the technique that is to be employed for data collection is agreed, the fieldwork can be initiated.

� Analyse and interpret data When the primary data has been col- lected the research team will need to employ an appropriate research technique in undertaking an analysis and developing any reliable infor- mation to assist management in making marketing decisions.

� Create final research report In order to disseminate the results of the research the team should construct a final report that presents the find- ings within a clear and logical structure. The normal format for this report would contain the following elements:

� Title page.

� Table and contents.

Illustrative example 4.1 Norwich Union

In addition to its traditional customer satisfaction and product testing studies, Norwich Union has started using an online access panel. Access panels are a source of samples for questionnaire sur- veys. The online panel members are invited to take part in a spe- cific survey by an e-mail which contains a link to a Web survey. The access panel has 500 members who are recruited and managed on behalf of Norwich Union by a specialist company called Lightspeed Online Research. The advantage of online research such as this is that carrying out a survey is cheaper than other alter- native methods and results can be gathered in real-time. However, there are dangers in that poor recruitment and management of a panel can produce inadequate data. Online marketing research has been growing steadily over the past few years. In 2004, in Europe and the USA, online research is expected to grow by 18% over the 2003 figures and it is estimated global expenditure will reach £674m.

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Introduction to Marketing Concepts

� Executive summary.

� Introduction.

� Description and justification of the research method employed.

� Analysis and findings.

� Limitations.

� Conclusions and recommendations.

� Appendices.

� Undertake post-study evaluation Once a project is completed it is crucial that a review is undertaken into whether the research actually provided the client’s management with the quality and quantity of information they actually required to make effective marketing deci- sions. It is only by undertaking a post-study evaluation that both the client and the project team can revise and enhance their future marketing research activities.

4 . 7 e - M a r k e t i n g p e r s p e c t i v e

Websites can be useful sources of marketing information. Organizations can analyse how individuals navigate through their site. In doing so they can establish the type of information clients are seeking, the length of time they spend on sectors within the site and their actual purchases. The organization can build up a profile of customers with similar interests or purchasing habits. Through monitoring their website usage companies can also analyse the effectiveness of promotional campaigns such as dis- count vouchers.

The Internet also offers a new approach in carrying out a questionnaire sur- vey. The questionnaire can be circulated by e-mail. This provides a very low cost method of disseminating a survey. This approach has the added advan- tage that it can be more interactive than a traditional mail survey. Prompts on the questionnaire can provide the respondents with detailed clarification on particular points. However, there are some disadvantages with Internet surveys. The results may be skewed by the fact that Internet users are gen- erally found among more affluent consumers and in younger age groups. The fact that an individual’s e-mail address is attached to any returned e-mail questionnaire destroys their anonymity and therefore creates reserva- tions about the reliability of their responses on personal issues.

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Summary

Marketing research activities are central to developing marketing policies and practice within a company. Marketing research systems produce a range of outputs that allow marketing managers to make well-informed decisions about marketing activities. Whatever the nature of a specific marketing research project it is crucial that it is actively managed by the commissioning organization, or department, so that timely, relevant and accurate information is produced.

Discussion questions

1 What is the difference between marketing intelligence and marketing research?

2 What are the disadvantages of a telephone survey?

3 Discuss the proposition that a qualitative research method will produce more insight into a consumer’s motivation to purchase a particular product than a quantitative research approach.

4 What is the difference between a research brief and a research proposal?

R e f e r e n c e s

Adcock, D., Bradfield, R., Halborg, A. and Ross, C. (1998) Marketing: Principles and Practice, 3rd edn. Pitman Publishing, p. 111.

Aguilar, F.J. (1967) Scanning the Business Environment. Macmillan.

Burns, A. and Bush, R. (2000) Marketing Research, 2nd edn. Prentice Hall.

Chisnall, P.M. (1991) The Essence of Marketing Research. Prentice Hall.

Diffenbach, J. (1983) Corporate environmental analysis in large US corporations. Long Range Planning, Vol. 16, No. 3, pp. 107–116.

Jobber, D. and Rainbow, C. (1977) A study of the development and implementation of marketing information systems in British Industry. Journal of the Marketing Research Society, Vol. 19, No. 3, pp. 104–11.

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