PRINCIPLES OF MARKETING
Marketing Research
Marketing Research is the function responsible for acquiring and evaluating
market and consumer-based information for decision making and the
determination of marketing strategy direction.
Through marketing research, companies can understand their target
audience better. They can make better products, improve user experience,
and design marketing strategies that attract quality leads.
The following are some of the issues that can be addressed by marketing
research:
✓ Identify viable new products and services
✓ Enable risk reduction
✓ Identify market opportunities and threats
✓ Determine the level of customer satisfaction
✓ Pinpoint and anticipate market trends or changes
✓ Decide on the best advertising medium
✓ Pre-test and post-test advertising and promotional campaigns
✓ Evaluate the results of test marketing
✓ Evaluate the results of packaging, brand name and label testing
✓ Determine consumer price awareness and sensitivity
✓ Undertake location studies
Steps in Marketing Research:
Step 1: Research Need Determination
This initial step in the marketing research process is necessary in order to save
effort, time, and cost. The problem situation has to be assessed to determine
if marketing research is needed at all.
The research may no longer be necessary if
• The required information for decision-making is already available
• There are budgetary constraints
• If cost-benefit analysis indicates that the cost is not warranted
• If the results cannot be delivered to the decision maker on time
Step 2. Problem/Opportunity Definition
Both problems and opportunities can be subjects of marketing research.
However, to set the general research direction and operational parameters, the
problem or opportunity must be defined in precision.
Step 3: Establishment of Research Objectives
The purpose of research objectives is to gather precise information to
address information gaps. Aside from being specific, research objectives
must be clear, detailed, and operational.
Step 4: Research Design Determination
At this step, methods and procedures for the collection and analysis of
information must be determined.
Four Major Types of Marketing Research Design:
1. Observational – a social phenomenon is observed in its natural setting, and
observations can be made at any one time or regularly within a period of
time.
2. Experimental – includes laboratory experiments and test marketing.
3. Qualitative – includes focus groups, in-depth interviews, and projective
techniques. This type of research uses only a small number of respondents.
4. Quantitative – one example of this type of research is the use of surveys.
The number of respondents is relatively large and randomly selected.
Step 5: Information Source/Type Identification
Two Basic Types of Information:
1. Primary information refers to data gathered by the researcher
himself/herself.
2. Secondary information is information acquired from previously conducted
researches, journals, periodicals and other similar sources.
Internal Data – data collected from company records.
Focus Groups or Focused Group Discussions – a marketing research tool
that involves a small group of people (usually eight to ten), and is used for the
purpose of acquiring information through spontaneous and unstructured
discussions.
Step 6: Determination of Data Access Methods
Ways of Data Access in Consumer Surveys:
1. Person-administered Surveys – could be administered through face-to-
face or telephone interviews.
2. Computer-administered Surveys – a faster method of data access because
computers can generate information in real time.
3. Self-administered Surveys – the respondents complete the surveys on their
own.
4. Hybrid Surveys – utilizes multiple data methods. This is rather complex to
develop and administer.
Step 7: Data Collection Forms Design
The survey questionnaire, which is the most common form used in data
collection, must be carefully prepared.
Major Parts of a Survey Questionnaire:
1. Introduction – contains a greeting, introduction, purpose, and a statement
assuring the respondent of confidentiality.
2. Screening - a series of questions designed to eliminate respondents who are
not qualified to take the survey.
3. Core – the body of the survey questionnaire
4. Classification – questions used to classify respondents into different groups
for analysis purposes.
Types of Questions Used in Questionnaires:
1. Categorical response questions – answer options are provided
2. Open-ended questions – can be answered in the respondent’s own words
3. Metric questions – can be answered using a scale developed by the
researcher.
Step 8: Sample Size and Sampling Plan Determination
In order to achieve 100% accuracy in the conduct of consumer surveys, it is
ideal to give questionnaires to every member of the target population, This type
of survey is called census.
However, if the research involves a total population of several millions, giving
questionnaires to all the members of the target population would be costly, time
consuming and impractical. A viable alternative would be to gather only a
representative portion of the target population, or a sample.
Sampling Methodologies:
1. Nonprobability sampling – does not involve probabilities; the members of
the survey population do not have equal chances of being selected to be part
of the sample.
Types of Nonprobability Sampling:
• Convenience sampling
• Judgment sampling
• Referral sampling
• Quota sampling
2. Probability sampling – utilizes the principle of randomness, where every
member of the survey population has an equal non-zero chance of being
selected as part of the sample.
Types of Probability Sampling:
• Simple random sampling
• Systematic sampling
• Cluster sampling
Step 9: Data Collection
This is the stage where the questionnaires are administered to the selected
respondents.
Problems That May Arise in Data Collection:
• Fieldworker errors e.g. erroneous recording of respondent responses
• Breakoffs e.g. when a respondent decides to abandon the survey at
midpoint
• Item Omission e.g when a respondent does not answer a particular
survey question but continues to answer the rest of the questions
• When a potential respondent refuses to be a participant in the
survey
Step 10: Data Analysis
At this stage, collected data is summarized and generalized. The differences
and relationships between and among data are determined.
Some common statistical tools used in data analysis are percentage, mean,
range, standard deviation, hypothesis tests, etc.
Step 11: Report Preparation and Presentation
This final stage involves the preparation and presentation of the report
findings, interpretations, conclusions and recommendations to marketing
decision makers. This serves as basis for strategic or tactical decisions.
Tables, graphs and charts must be incorporated for the user to visualize the
results and findings.
Making Marketing Research-Based Decisions
Marketing research reports include a lot of information that can aid
organizations in making effective marketing decisions.
Examples:
• External Factor Research helps marketers identify macro einvironmental
shifts and can be used in pinpointing opportunities and threats.
• Observational Research can be an invaluable aid in determining
consumer behavior.
• Test Marketing can be used to gauge the acceptability of a proposed
product or service.
• Pricing Tests can be utilized by marketers to calculate a product or a
service’s optimal price.
• Location Studies determine ideal retail store locations and is a valuable
tool in site selection
