Marketing Research Process

Some of the major steps involved in marketing research process are as follows: 1. Identification and Defining the Problem 2. Statement of Research Objectives 3. Planning the Research Design or Designing the Research Study 4. Planning the Sample 5. Data Collection 6. Data Processing and Analysis 7. Formulating Conclusion, Preparing and Presenting the Report. Marketing research exercise may take many forms but systematic enquiry is a feature common to all such forms. Being a systematic enquiry, it requires a careful planning of the orderly investigation process. Though it is not necessary that all research processes would invariably follow a given sequence, yet marketing research often follows a generalised pattern which can be broken down and studied as sequential stages.

The various stages or steps in the marketing research process are discussed below:

1. Identification and Defining the Problem:

The market research process begins with the identification “of a problem faced by the company. The clear-cut statement of problem may not be possible at the very outset of research process because often only the symptoms of the problems are apparent at that stage.

Then, after some explanatory research, clear definition of the problem is of crucial importance in marketing research because such research is a costly process involving time, energy and money. Clear definition of the problem helps the researcher in all subsequent research efforts including setting of proper research objectives, the determination of the techniques to be used, and the extent of information to be collected. It may be noted that the methods of explanatory research popularly in use are—survey of secondary data, experience survey, or pilot studies, i.

e., studies of a small initial sample. All this is also known as ‘preliminary investigation’.

2. Statement of Research Objectives:

After identifying and defining the problem with or without explanatory research, the researcher must take a formal statement of research objectives. Such objectives may be stated in qualitative or quantitative terms and expressed as research questions, statement or hypothesis. For example, the research objective, “To find out the extent to which sales promotion schemes affected the sales volume” is a research objective expressed as a statement. On the other hand, a hypothesis is a statement that can be refuted or supported by empirical finding. The same research objective could be stated as, “To test the proposition that sales are positively affected by the sales promotion schemes undertaken this winter.” Example of another hypothesis may be: “The new packaging pattern has resulted in increase in sales and profits.”

Once the objectives or the hypotheses are developed, the researcher is ready to choose the research design. 3. Planning the Research Design or Designing the Research Study: After defining the research problem and deciding the objectives, the research design must be developed. A research design is a master plan specifying the procedure for collecting and analysing the needed information. It represents a framework for the research plan of action. The objectives of the study are included in the research design to ensure that data collected are relevant to the objectives. At this stage, the researcher should also determine the type of sources of information needed, the data collection method (e.g., survey or interview), the sampling, methodology, and the timing and possible costs of research.

4. Planning the Sample:

Sampling involves procedures that use a small number of items or parts of the ‘population’ (total items) to make conclusion regarding the ‘population’. Important questions in this regard are— who is to be sampled as a rightly representative lot? Which is the target ‘population’? What should be the sample size—how large or how small? How to select the various units to make up the sample?

5. Data Collection:

The collection of data relates to the gathering of facts to be used in solving the problem. Hence, methods of market research are essentially methods of data collection. Data can be secondary, i.e., collected from concerned reports, magazines and other periodicals, especially written articles, government publications, company publications, books, etc. Data can be primary, i.e., collected from the original base through empirical research by means of various tools. There can be broadly two types of sources

(i) Internal sources—existing within the firm itself, such as accounting data, salesmen’s reports, etc. (ii) External sources—outside the firm.

6. Data Processing and Analysis:

Once data have been collected, these have to be converted into a format that will suggest answers to the initially identified and defined problem. Data processing begins with the editing of data and its coding. Editing involves inspecting the data-collection forms for omission, legibility, and consistency in classification. Before tabulation, responses need to be classified into meaningful categories. The rules for categorizing, recording and transferring the data to ‘data storage media’ are called codes. This coding process facilitates the manual or computer tabulation. If computer analysis is being used, the data can be key punched and verified.

Analysis of data represents the application of logic to the understanding of data collected about the subject. In its simplest form analysis may involve determination of consistent patterns and summarising of appropriate details. The appropriate analytical techniques chosen would depend upon informational requirements of the problem, characteristics of the research designs and the nature of the data gathered. The statistical analysis may range from simple immediate analysis to very complex multivariate analysis.

7. Formulating Conclusion, Preparing and Presenting the Report:

The final stage in the marketing research process is that of interpreting the information and drawing conclusion for use in managerial decision. The research report should clearly and effectively communicate the research findings and need not include complicated statement about the technical aspect of the study and research methods. Often the management is not interested in details of research design and statistical analysis, but instead, in the concrete findings of the research. If need be, the researcher may bring out his appropriate recommendations or suggestions in the matter. Researchers must make the presentation technically accurate, understandable and useful. Notes on the Benefits of Market Research for Small Firms

By Smriti Chand Research
Small firms are often unwilling to invest in market research as a market research exercise seems to be an expensive proposition. Moreover, it is a time-taking process and an entrepreneurial venture is usually in a hurry.

Image Courtesy : erainmaking.com/wp-content/uploads/2012/03/1dv24fin_Internet-Marketing-Benefits.png Many entrepreneurial ventures take a middle path and decide to undertake market research when there is a big decision to be taken. This is not necessarily the right approach. The question of when to resort to market research can be answered by a cost-benefit analysis. The costs of doing market research are the direct expenses of doing research as well as the probable loss in sales due to delaying the decision. The benefit of market research lies in the increase in revenue by improving the quality of the decision.

It is quite possible that the cost-benefit analysis may be against research even if stakes are high. A delay in the decision caused by waiting for the results of the market research can give an opportunity to competitors to capture market share at your cost. Market research is not to be confused with a field survey. A field survey is just one of the techniques used in market research. Any reliable information that improves the marketing decision is market research. Some other sources of information related to the market research are discussed below.

Systematic Observation:

It can comprise a variety of activities such as observing buying behaviour of customers in shopping places or observing the actual usage of the products by customers.

Focus Groups:
These are made up of random or selected individuals who discuss a topic of interest to the researcher.

Secondary Sources:
This refers to information from published sources such as magazines, journals, statistical outlines, archives, etc. This is the data that has been collected and is now available to others.

Test Marketing:

Releasing the product in a small part of the market targeted is a good way for getting reliable information on customer’s reaction to the product. Market research is not a very difficult activity, but there is a high level of sophistication involved. The entrepreneur should be well acquainted with the basics so that he/she has an idea of what can be expected and how to achieve it. Usually, it pays to get the services of professionals to conduct the market research. Even in the case of field surveys, there are some easy ways to cut costs, which should be seriously explored by the entrepreneur and his/her researchers. These are discussed here.

Convenience Sampling:

In this case, the field survey is restricted to the individuals you have easy access to, e.g. existing customers.

Snowball Sampling:
Here, you ask respondents to suggest others who could also be respondents. This can be a unique way of finding rare populations. For example, if you have come out with a product likely to be of use to polo players, asking a polo player can be the best way to find other polo players.

Omnibus Sampling:

A lot of research organizations such as IMRB conduct surveys and come up with results and compilations that will be of interest to many organizations. Such reports can be purchased at a fraction of the cost of doing a fresh research. The cost per customer is low as costs are shared by many. The disadvantage is that the survey is not tailored to your needs.

Low-cost Surveyors:

Many NGOs and student bodies come forward to do research work. With proper supervision, they will be able to do a good job for a relatively less cost of hiring a market-research agency. Results from a market research are useful, but the research is most valuable under the following circumstances: 1. The researcher understands decision alternatives and the information required. 2. The relationship between results and the decision is understood by the entre­preneur and the researcher. 3. The results are communicated well. Sometimes, the results can be cloaked in jargon and the researcher can fail to convey the true significance of the results. 4. The research design and planning is not poor. Otherwise, it can delay the research or can result in erroneous conclusions.

5. A lot of market research, particularly field surveys, is done under direct super­vision and there is no scope to fudge basic data. With fudged data, the results will get skewed and a wrong picture will be presented to the client. It pays to be careful with the results from a market survey. At best, it is a good estimate, but a number of factors can result in a good estimate that is nowhere near the actual market performance. Sometimes, the market-research agencies are also found to be optimistically overstating the results to get a favourable response from the clients. One of the commonest reasons for entrepreneurial firms to conduct a market survey is to forecast market demand. There can be a lot of methods to arrive at a forecasted demand, but most methods are based on the following steps:

i. Define the total market.
ii. Divide total demand into distinct market segments.
iii. Forecast drivers of demand in each segment.
iv. Match with own product to come up with possible sales of own product in that segment.
v. Total the forecasted sales in the segments that can be profitably targeted.
vi. Conduct sensitivity analysis to understand assumptions.

Meaning and Definition of Market Research:

A marketing manager can draw from many sources of information which vary on the basis of their availability, cost, usefulness, and the time needed to obtain information. Research study is an important method or strategy for obtaining market information. Some important definitions of market research may be given as follows: American Marketing Association, “Marketing Research is the systematic gathering, recording, and analysing of data about problems relating to the marketing of goods and services.” American Marketing Association defines marketing research {1987)—”Marketing research is the function which links the consumer, customer, and public to the marketer through information—information used to identify and define marketing opportunities and problems; generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing Research specifies the information required to address these issues; designs the method for collecting information; manages and implements the data collection process; analyses the results; and communicates the findings and their implications.”

Thus, market research may be defined as the systematic and objective process of collecting, generating, analysing, and interpreting information and communicating the findings for use in making marketing decisions. Hence, marketing research is a special effort rather than a haphazard attempt at gathering information. Marketing research is a systematic search and analysis of market information. Careful planning through all stages of the research is a necessity. For example, one should start with a clear and concise statement of the problem or issues to be investigated, indicate the information required to study that problem or those issues, define the methods to be adopted to collect the required data, specify the relevant technique to be employed to analyse the data, and finally state the search findings and their specific implications for marketing decision-making.

Secondly, objectivity in research is all-important, which implies unbiased or impartial gathering and analysis of information. Finally, the research should provide meaningful information in the most efficient manner through application of professional methodology so as to broaden managerial decision alternatives and reduce the range of decision error. For this purpose, marketing managers should also provide to the researcher a detailed scenario of the problems faced, and must allow him adequate time and budget for conducting the study. Market research should not be used as a fire-fighting device.

Objectives of Market Research:

1. To link the consumer with the company through information to know more about him. 2. To investigate the real needs and requirements of customers. 3. To search for and analyse information that can be used for evolving some marketing decision alternatives and finally arriving at the best alternative. 4. To suggest necessary changes in the goods and services in order to meet the market demands. 5. To find out reasons for slowly loosing market share, and to identify ways and means for strengthening company’s position in the market, within and outside the country. 6. To identify opportunities and threats in the external environment of the company. 7. To know about the reactions of the people in the market about the existing or newly introduced products of the company. 8. To know in advance what kind of target markets exist in the economy where the company may launch its products as an innovation in the line. Marketing Research: Scope, Advantage and Limitations |Marketing Management By Smriti Chand Marketing Management

Marketing Research: Scope, Advantage and Limitations!

Scope of marketing research means the possible applications of marketing research in corporate environment. Bulk of research is done to measure consumer needs and wants. Besides, marketing research is carried out to assess the impact of past marketing actions. Some research is done to understand the competitive, technological, social, economic, cultural, political or legal environments of the market. Another way of looking at the scope of marketing research is the look at the particular decision area, where research results are used. They may be outlined as follows:

Sales Analysis:

Much research is done in these areas which are broadly referred to as sales analysis— measurement of market potential/demand projection, determination of market characteristics, market share estimation, studies of business trends, etc.

Sales Methods and Policies:

Marketing research studies are also conducted with a view to evaluating the effectiveness of present distribution system. Such studies are used in establishing or revising sales territories. They are also helpful in establishment of sales quotas, design of territory boundary, compensation to sales force, physical distribution, cost analysis, etc. It is also done to assess the effectiveness of different promotional activities, such as premiums, deals, coupons, samples, etc.

Product Management:

Market research is also conducted in order to better manage the existing and new products—to assess consumer feedback, to assess consumer reaction before launching a new product, etc. Sometimes pricing studies, packaging research, and design or physical characteristics studies have also been conducted. Advertising Research:

These include media research, and advertising copy research.

Corporate Research:

Corporate research studies about the social value research, political studies {e.g., research to ascertain the public opinion about the election results),
and consumer service studies (e.g., many banks and large industrial houses have conducted market research to know the consumer’s changing needs, for service and possible grievances about existing operations).

Syndicated Research:

Several research agencies collect and tabulate marketing information on a continuing basis. Reports are sent periodically (i.e., weekly, monthly or quarterly) to clients who pay subscription for them.

Advantages of Marketing Research:

Importance:
The following advantages offered by marketing research show its importance:
1. Facilitates planned production:
By forecasts of probable sales in the coming years.
2. Discovery of causes of consumer’s resistance:
It helps in identifying the reasons for consumer resistance to existing or new products.
3. Correction of defects:
It reveals defects and therefore makes corrective action possible.
4. Reveals the nature of demand:
It brings out whether the product is in constant demand throughout the year or has a seasonal demand.
5. Effectiveness of existing channels of distribution:
For example, in the case of TVs it may be discovered that after sale service is not satisfactory. Then, arrangements may be made to remove such grievances of the customers.
6. Product utility:
It indicates why exactly the product is being purchased by the people and what exact service do they get out of it. For example, a market research conducted by Hindustan Lever Ltd., revealed that their ‘Sunlight Soap’ which was originally intended to serve as a washing soap, was being used as toilet soap by many people.
7. New uses of the product:

Marketing research may reveal certain new uses for the existing products.
8. Market information:
It provides complete information about the market and the changes that are likely to occur in demand for a certain product.
9. Discovery of potential
market:
It provides information about the possibility of potential (future) market.
10. Discovery of new lines of production:
It helps in the discovery of supplementary lines of products.

Limitations of Marketing Research:

It is important to note here the following limitations of market research: (i) A research study will fail to serve its purpose if marketing researcher merely collects some statistical facts; or is preoccupied with techniques or; uses data of questionable validity; or communicates the findings in too much vague or technical language. (ii) A research study will suffer if the marketing manager does not offer full perspective of the research problem; or allows inadequate time; or uses research as a ‘fire-fighting’ device; or does not really appreciate the value of research. (iii) Marketing research cannot by itself provide the solution or make the decision. It only reveals relevant information to the marketing managers who can be able then to make sound and strategic marketing decisions.

2nd

Reseaech Design

A research design is a systematic plan to study a scientific problem. The design of a study defines the study type (descriptive, correlational, semi-experimental, experimental, review, meta-analytic) and sub-type (e.g., descriptive-longitudinal case study), research question, hypotheses, independent and dependent variables, experimental design, and, if applicable, data collection methods and a statistical analysis plan. Research design is the framework that has been created to seek answers to research questions.

DATA COLLECTION METHODS

Registration

A register is a depository of information on fishing vessels, companies, gear, licenses or individual fishers. It can be used to obtain complete enumeration through a legal requirement. Registers are implemented when there is a need for accurate knowledge of the size and type of the fishing fleet and for closer monitoring of fishing activities to ensure compliance with fishery regulations. They may also incorporate information related to fiscal purposes (e.g. issuance or renewal of fishing licenses). Although registers are usually implemented for purposes other than to collect data, they can be very useful in the design and implementation of a statistical system, provided that the data they contain are reliable, timely and complete

6.3.2 Questionnaires

In contrast with interviews, where an enumerator poses questions directly, questionnaires refer to forms filled in by respondents alone. Questionnaires can be handed out or sent by mail and later collected or returned by stamped addressed envelope. This method can be adopted for the entire population or sampled sectors. Questionnaires may be used to collect regular or infrequent routine data, and data for specialised studies. While the information in this section applies to questionnaires for all these uses, examples will concern only routine data, whether regular or infrequent. Some of the data often obtained through questionnaires include demographic characteristics, fishing practices, opinions of stakeholders on fisheries issues or management, general information on fishers and household food budgets. A questionnaire requires respondents to fill out the form themselves, and so requires a high level of literacy.

Where multiple languages are common, questionnaires should be prepared using the major languages of the target group. Special care needs to be taken in these cases to ensure accurate translations. In order to maximise return rates, questionnaires should be designed to be as simple and clear as possible, with targeted sections and questions. Most importantly, questionnaires should also be as short as possible. If the questionnaire is being given to a sample population, then it may be preferable to prepare several smaller, more targeted questionnaires, each provided to a sub-sample. If the questionnaire is used for a complete enumeration, then special care needs to be taken to avoid overburdening the respondent. If, for instance, several agencies require the same data, attempts should be made to co-ordinate its collection to avoid duplication. The information that can be obtained through questionnaires consists of almost any data variable.

For example, catch or landing information can be collected through questionnaire from fishers, market middle-persons, market sellers and buyers, processors etc. Likewise, socio-economic data can also be obtained through questionnaires from a variety of sources. However, in all cases variables obtained are an opinion and not a direct measurement, and so may be subject to serious errors. Using direct observations (6.3.4) or reporting systems (6.3.5) for these sorts of data is more reliable. Questionnaires, like interviews, can contain either structured questions with blanks to be filled in, multiple choice questions, or they can contain open-ended questions where the respondent is encouraged to reply at length and choose their own focus to some extent.

To facilitate filling out forms and data entry in a structured format, the form should ideally be machine-readable, or at least laid out with data fields clearly identifiable and responses pre-coded. In general, writing should be reduced to a minimum (e.g. tick boxes, multiple choices), preferably being limited to numerals. In an open-ended format, keywords and other structuring procedures should be imposed later to facilitate database entry and analysis, if necessary.

6.3.3 Interviews

In interviews information is obtained through inquiry and recorded by enumerators. Structured interviews are performed by using survey forms, whereas open interviews are notes taken while talking with respondents. The notes are subsequently structured (interpreted) for further analysis. Open-ended interviews, which need to be interpreted and analysed even during the interview, have to be carried out by well-trained observers and/or enumerators. As in preparing a questionnaire, it is important to pilot test forms designed for the interviews.

The best attempt to clarify and focus by the designer cannot anticipate all possible respondent interpretations. A small-scale test prior to actual use for data collection will assure better data and avoid wasting time and money. Although structured interviews can be used to obtain almost any information, as with questionnaires, information is based on personal opinion. Data on variables such as catch or effort are potentially subject to large errors, due to poor estimates or intentional errors of sensitive information.

6.3.5 Reporting

In most complete enumeration approaches, fisheries staff do not directly undertake data collection, but use external data sources. Most commonly, these sources are data forms completed by the fishing companies themselves, middle persons, market operators, processors and even trading companies and custom offices. Such methods are almost exclusively used for semi-industrial and industrial fisheries and institutions. The advantage of using reports is that data are compiled by agents other than fisheries staff and sometimes can be made available in pre-processed computerised format directly from the company’s records, thereby reducing administration costs. Confidentiality of information (such as fishing grounds and catch rates) should be part of the agreement for data submission, and statistical outputs of the survey should not contain information related to individual fishing vessels or companies. However, there are also risks of under-reporting or of deliberate distortion of data, especially fishing ground, catch and revenue related information.

5 useful methods of collecting primary data in statistics

Statistical data as we have seen can be either primary or secondary. Primary data are those which are collected for the first time and so are in crude form. But secondary data are those which have already been collected. Primary data are always collected from the source. It is collected either by the investigator himself or through his agents. There are different methods of collecting primary data. Each method has its relative merits and demerits. The investigator has to choose a particular method to collect the information. The choice to a large extent depends on the preliminaries to data collection some of the commonly used methods are discussed below.

1. Direct Personal observation:

This is a very general method of collecting primary data. Here the investigator directly contacts the informants, solicits their cooperation and enumerates the data. The information are collected by direct personal interviews. The novelty of this method is its simplicity. It is neither difficult for the enumerator nor the informants. Because both are present at the spot of data collection. This method provides most accurate information as the investigator collects them personally. But as the investigator alone is involved in the process, his personal bias may influence the accuracy of the data. So it is necessary that the investigator should be honest, unbiased and experienced. In such cases the data collected may be fairly accurate. However, the method is quite costly and time-consuming. So the method should be used when the scope of enquiry is small.

2. Indirect Oral Interviews :

This is an indirect method of collecting primary data. Here information are not collected directly from the source but by interviewing persons closely related with the problem. This method is applied to apprehend culprits in case of theft, murder etc. The informations relating to one’s personal life or which the informant hesitates to reveal are better collected by this method. Here the investigator prepares ‘a small list of questions relating to the enquiry. The answers (information) are collected by interviewing persons well connected with the incident.

The investigator should cross-examine the informants to get correct information. This method is time saving and involves relatively less cost. The accuracy of the information largely depends upon the integrity of the investigator. It is desirable that the investigator should be experienced and capable enough to inspire and create confidence in the informant to collect accurate data.

3. Mailed Questionnaire method:

This is a very commonly used method of collecting primary data. Here information are collected through a set of questionnaire. A questionnaire is a document prepared by the investigator containing a set of questions. These questions relate to the problem of enquiry directly or indirectly. Here first the questionnaires are mailed to the informants with a formal request to answer the question and send them back. For better response the investigator should bear the postal charges. The questionnaire should carry a polite note explaining the aims and objective of the enquiry, definition of various terms and concepts used there. Besides this the investigator should ensure the secrecy of the information as well as the name of the informants, if required. Success of this method greatly depends upon the way in which the questionnaire is drafted. So the investigator must be very careful while framing the questions.

The questions should be

(i) Short and clear
(ii) Few in number
(iii) Simple and intelligible
(iv) Corroboratory in nature or there should be provision for cross check
(v) Impersonal, non-aggressive type
(vi) Simple alternative, multiple-choice or open-end type
(a) In the simple alternative question type, the respondent has to choose between alternatives such as ‘Yes or No’, ‘right or wrong’ etc. For example: Is Adam Smith called father of Statistics ? Yes/No, (b) In the multiple choice type, the respondent has to answer from any of the given alternatives. Example: To which sector do you belong ?

(i) Primary Sector
(ii) Secondary Sector
(iii) Tertiary or Service Sector
(c) In the Open-end or free answer questions the respondents are given complete freedom in answering the questions. The questions are like – What are the defects of our educational system ?

The questionnaire method is very economical in terms of time, energy and money. The method is widely used when the scope of enquiry is large. Data collected by this method are not affected by the personal bias of the investigator. However the accuracy of the information depends on the cooperation and honesty of the informants. This method can be used only if the informants are cooperative, conscious and educated. This limits the scope of the method.

4. Schedule Method:

In case the informants are largely uneducated and non-responsive data cannot be collected by the mailed questionnaire method. In such cases, schedule method is used to collect data. Here the questionnaires are sent through the enumerators to collect informations. Enumerators are persons appointed by the investigator for the purpose. They directly meet the informants with the questionnaire. They explain the scope and objective of the enquiry to the informants and solicit their cooperation. The enumerators ask the questions to the informants and record their answers in the questionnaire and compile them.

The success of this method depends on the sincerity and efficiency of the enumerators. So the enumerator should be sweet-tempered, good-natured, trained and well-behaved. Schedule method is widely used in extensive studies. It gives fairly correct result as the enumerators directly collect the information. The accuracy of the information depends upon the honesty of the enumerators. They should be unbiased. This method is relatively more costly and time-consuming than the mailed questionnaire method.

5. From Local Agents:

Sometimes primary data are collected from local agents or correspondents. These agents are appointed by the sponsoring authorities. They are well conversant with the local conditions like language, communication, food habits, traditions etc. Being on the spot and well acquainted with the nature of the enquiry they are capable of furnishing reliable information. The accuracy of the data collected by this method depends on the honesty and sincerity of the agents. Because they actually collect the information from the spot. Information from a wide area at less cost and time can be collected by this method.

The method is generally used by government agencies, newspapers, periodicals etc. to collect data. Information are like raw materials or inputs in an enquiry. The result of the enquiry basically depends on the type of information used. Primary data can be collected by employing any of the above methods. The investigator should make a rational choice of the methods to be used for collecting data. Because collection of data forms the beginning of the statistical enquiry.

Secondary data

From Wikipedia, the free encyclopedia

Secondary data, is data collected by someone other than the user. Common sources of secondary data for social science include censuses, organisational records and data collected through qualitative methodologies or qualitative research. Primary data, by contrast, are collected by the investigator conducting the research. Secondary data analysis saves time that would otherwise be spent collecting data and, particularly in the case of quantitative data, provides larger and higher-quality databases that would be unfeasible for any individual researcher to collect on their own. In addition, analysts of social and economic change consider secondary data essential, since it is impossible to conduct a new survey that can adequately capture past change and/or developments.

Sources of Secondary Data

You can break the sources of secondary data into internal sources and external sources. Internal sources include data that exists and is stored inside your organization. External data is data that is collected by other people or organizations from your organization’s external environment. Let’s dig a little deeper into each of these general categories. Examples of internal sources of data include, but are certainly not limited to, the following:

Profit and loss statements
Balance sheets
Sales figures
Inventory records
Previous marketing research studies
If the secondary data you have collected from internal sources will not be sufficient, you can turn to external sources of data. Some external sources include:

Government sources, such as the U.S. Census Bureau

Corporate filings, such as annual reports to the U.S. Securities and Exchange Commission (SEC) Trade, business and professional associations
Media, including broadcast, print and Internet
Universities
Foundations
Think tanks, such as the Rand Corporation or Brookings Institute Commercial data services, which are businesses that find the data for you What is the difference between Primary and Secondary Data?

Primary Data
1. Primary data are always original as it is collected by the investigator.
2. Suitability of the primary data will be positive because it has been systematically collected.
3. Primary data are expensive and time consuming.
4. Extra precautions are not required.
5. Primary data are in the shape of raw material.
6. Possibility of personal prejudice.

Secondary Data
1. Secondary data lacks originality. The investigator makes use of the data collected by other agencies.
2. Secondary data may or may not suit the
objects of enquiry.
3. Secondary data are relatively cheaper.
4. It is used with great care and caution.
5. Secondary data are usually in the shape of readymade products.
6. Possibility of lesser degree of personal prejudice.

3 RD SAMPLING PROCESS
STEPS IN SAMPLING PROCESS:
It is the procedure required right from defining a population to the actual selection of sample elements.There are seven steps involved in this process. Step 1: Define the population
It is the aggregate of all the elements defined prior to selection of the sample. It is necessary to define population in terms of (i) elements
(ii) sampling units
(iii) extent
(iv) time.
A few examples are given here.

If we were to conduct a survey on the consumption of tea in Gujarat, then these specifications might be as follows
(i) Element: Housewives
(ii) Sampling units: Households, then housewives
(iii) Extent Gujarat State
(iv) Time January 1-10, 1999
It may be emphasized that all these four specifications must be contained in the designated population Omission of any of them would render the definition of population incomplete
Step 2 : Identify the sampling frame
Identifying the sampling frame, which could be a telephone directory, a list of blocks and localities of a city, a map or any other list consisting of all the sampling units. It may be pointed out that if the frame is incomplete or otherwise defective, sampling will not be able to overcome these shortcomings

The question is—How to ensure that the frame is perfect and free from any defect Leslie Kish has observed that a perfect frame is one where “every element appears on the list separately, once only once, and nothing else appears on the list” This type of perfect frame would indicate one-to-one correspondence between frame units and sampling units But such perfect frames are rather rare Accordingly, one has to use frames with one deficiency or another, but one should ensure that the frame is not too deficient so as to be given up altogether

This raises a pertinent question -What are the criteria for a suitable frame? In order to examine the suitability or otherwise of a sampling frame, a number of questions need be asked. These are 1 Does it adequately cover the population to be surveyed?

2 How complete is the frame? Is every unit that should be included represented? 3 Is it accurate? Is the information about each individual unit correct? Does the frame as a whole contain units, which no longer exist? 4 Is there any duplication? If so, then the probability of selection is disturbed as a unit can enter the sample more than once 5 Is the frame up-to-date? It could have met all the criteria when compiled but could well be deficient when it came to be used This could well be true of all frames involving the human population as change is taking place continuously 6

How convenient is it to use? Is it readily accessible? Is it arranged in a way suitable for sampling? Can it easily be re-arranged so as to enable us to introduce stratification and to undertake multi-stage sampling? These are demanding criteria and it is most unlikely that any frame would meet them all Nevertheless, they are the factors to be borne in mind whenever we undertake random sampling In marketing research most of the frames are from census reports, electoral registers, lists of member units of trade and industry associations, lists of members of professional bodies, lists of dwelling units maintained by local bodies, returns from an earlier survey and large scale maps.

Step 3: Specify the sampling unit

The sampling unit is the basic unit containing the elements of the target population. The sampling unit may be different from the element. For example, if one wanted a sample of housewives, it might be possible to have access to such a sample directly. However, it is easier to select households as the sampling unit and then interview housewives in each of the households.

As mentioned in the preceding step, the sampling frame should be complete and accurate otherwise the selection of the sampling unit might be defective. It is necessary to get a further specification of the sampling unit both in personal interviews and in telephone interviews. Thus, in personal interviews, a pertinent question is—of the several persons in a household, who should be interviewed? If interviews were held during office timings when the heads of families and other employed persons are away, interviewing would under-represent employed persons and over-represent elderly persons, housewives and the unemployed. In view of these considerations, it is necessary to have a random process of selection of the adult residents of each household. One method that could be used for this purpose is to list all the eligible persons living at a particular address and then select one of them.

Step 4: Specify the sampling method

It indicates how the sample units are selected. One of the most important decisions in this regard is to determine which of the two—probability and non-probability sample—is to be chosen.  In case of a probability sample, the probability or chance of every unit in the population being in the sample is known. Further, the selection of specific units in the sample depends entirely on chance. No substitution of one unit for another is permissible. This means that no human judgment is involved in the selection of a sample. In contrast, in a non-probability sample, the probability of inclusion of any unit in the population in the sample is not known. In addition, the selection of units within a sample involves human judgment rather than pure chance.

In case of a probability sample, it is possible to measure the sampling error and thereby determine the degree of precision in the estimates with the help of the theory of probability. This theory also enables us to consider, from amongst the various possible sample designs, the one that will give the
maximum information per rupee. This is not possible when a non-probability sample is used. Probability sampling enables us to choose representative sample designs. It also enables us to estimate the extent to which the results based on such a sample are likely to be different from what we would have obtained had we covered the population in our study. Conversely, the use of probability sampling enables us to determine the sample size for a given degree of precision, indicating that our sample results do not differ by more than a specified amount from those yielded by a study covering entire population.

Although non-probability sampling does not yield these benefits, on account of its convenience and economy, it is often preferred to probability sampling. If the researcher is convinced that the risks involved in the use of a non-probability sample are more than offset by its being relatively cheap and convenient, his choice should be in favor of non-probability sampling.

There are various types of sample designs that can be covered under the two broad groups, random or probability samples and non-random or non-probability samples.
Step 5: Determine the sample size

In other words, one has to decide how many elements of the target population are to be chosen.

Step 6: Specify the sampling plan

This means that one should indicate how decisions made so far are to be implemented. For example, if a survey of households is to be conducted, a sampling plan should define a household, contain instructions to the interviewer as to how he should take a systematic sample of households, advise him on what he should do when no one is available on his visit to the household, and so on. These are some pertinent issues in a sampling survey to which a sampling plan should provide answers.

Step 7: Select the sample

This is the final step in the sampling process. A good deal of office and fieldwork is involved in the actual selection of the sampling elements. Most of the problems in this stage are faced by the interviewer while contacting the sample-respondents.

5.6 Types of probability sampling designs

In social science research, sampling is virtually always done “without” replacement; that is, after a particular unit has been selected for observation, it is not put back into the pool so it can be selected again. For example, it would be impractical to survey the same person twice.

Recall that with probability samples, every unit in the population has a nonzero probability of being included in the sample, and random selection of units is used. There are four primary types of probability sampling designs.

(Type 1) Simple Random Sample — Every unit in the population has an equal chance of being selected in the sample. Each unit in the population is assigned a number. A set of numbers is then randomly selected with units assigned those numbers being included in the sample.

With a simple random sample, note that every unit in the population has an equal chance or probability of being selected for the sample. This probability is: p = 1/N

Where N=the size of the study population.

Using simple random sampling may be very difficult if the size of the study population is very large as it could be very cumbersome and time consuming to assign a number to every unit in the study population, especially if it has to be done by hand.

Sampling Frame — A list of all units in a study population that can be used to select a sample from.

(Type 2) Systematic Sample — The sampling fraction (k) is calculated by dividing the study population size by the desired sample size. A random number is selected between 1 and k. Beginning with the randomly selected number every kth unit in the population is selected for inclusion in the sample.

A sampling fraction is calculated as follows:

Study Population Size
Desired Sample Size

For example, there is a study population of 100 people. A sample of 10 persons is desired. In this case the sampling fraction would be 100/10 = 10. Thus, k = 10.

A random number is then selected between 1 and 10 (e.g., a 3 is selected). The 3rd unit would then be selected for the sample. Using the sampling fraction, 10 units would be skipped and the 13th unit would be included. Skipping ahead 10 more units, the 23rd unit would be included. This procedure would continue until 10 units were selected for the sample and the desired sample size reached.

Note that if a number between 1 and k were not randomly selected to start on (that is, if you just started on k), a systematic sample would not meet the criteria for a probability sample. By, randomly selecting the starting point, all units have a nonzero probability of being included.

The primary reason for using a systematic sample is that it may more practical in terms of time and resources compared to a simple random sample. Particularly, when the size of the study population is large and it would be too difficult to assign a number to each unit.

A primary danger of systematic sampling is that this design can produce a biased, or non-representative sample if the sampling frame from which the sample is selected is ordered in some kind of systematic fashion that will influence the composition of the sample.

In order to ensure that a systematic sample is representative, it is important to make sure that the sampling frame being used to select the sample is not ordered in some systematic fashion that will produce a biased (or unrepresentative) sample in relation to the key variables that are to be measured.

(Type 3) Stratified Sample — The population is divided up into subgroups or “strata.” A separate sample of units is then selected from each strata.

There are two primary reasons for using a stratified sampling design.

Reason 1 — To potentially reduce sampling error by gaining greater control over the composition of the sample, particularly concerning variables where it is important that the sample be representative.

Stratification Variable — variable or variables by which a study population is divided up into strata (or groups)in order to select a stratified sample.

Proportionate Stratified Sample — Stratified sample where the number of units selected from each strata for a sample is proportional to the number of units in each strata in the population.

Reason 2 — A second reason for using a stratified sampling design is to ensure that a small group within a population is adequately represented in a sample in order to compare it to a large group.

Disproportionate Stratified Sample — Stratified sample where the number of units selected from each strata for a sample is not proportional to the number of units in each strata in the population.

Disproportionate stratified samples work well when the research goal is to compare the behavior or characteristics of a small strata with a larger strata within a population. This type of design does not work as well when the goal is to draw inferences about the population as a whole as the sample is not representative of the population on the stratification variable. However, weighting can be used to attempt to correct this problem.

The major problem with using stratified sampling is that it is necessary for the researcher to have data on the characteristics of the population (i.e., have population data on the stratification variable) in order to select the sample. In many situations, data on population characteristics may be unavailable and unknown.

(Type 4) Cluster Sample — The population is divided up into subgroups or “clusters” that represent aggregates of individual units. A sample of clusters is then selected. All individual units that are contained within a cluster that is selected are included in the sample.

A major advantage of cluster sampling is that it can be used on very large populations and it is not necessary to have data on important variables for the entire population. Rather, it is just necessary to be able to divide the population up into clusters of some type.

A major disadvantage of cluster sampling is that this method tends to produce less representative samples compared to other probability sampling designs, particularly when the clusters contain large numbers of units within them and only a few are needed to meet the desired sample size.

5.7 Types of nonprobability sampling designs

Remember, with a nonprobability sample, every unit in the study population does not have a chance, or a nonzero probability, of being selected for inclusion in the sample. As a result of this, statistical tests, such as the calculation of confidence intervals, cannot be validly used, because such procedures assume that each unit in the population does have a chance of being included in the sample.

Therefore, any studies using nonprobability sampling designs should be viewed with suspicion if the researchers are trying to use the data to draw empirical generalizations, or inferences, to a larger population.

There are four basic types of nonprobability sampling designs:

(1) Convenience (Accidental) Sample — units are selected on the basis of availability.

(2) Quota Sample — units are selected on the basis of availability with “quotas” being selected to represent the distribution in the population. A quota sample is similar to a stratified sample, except that units are selected on the basis of convenience.

(3) Judgmental Sample — the researcher selects units he/she thinks are most representative of the population.

Thus, with this design, not only is every unit in the population not eligible for inclusion in the sample, but the composition may be affected by the personal biases of the researcher as to who he/she believes should be interviewed.

(4) Snowball Sample — a unit with a desired characteristic is identified. This unit is asked to identify other units with the desired characteristic. These additional units are also asked to identify other units with the desired characteristic. Through this process the size of the sample “snowballs” or grows larger.

This technique is useful when little is known about a population being studied or the goal is to study social groups such as “social networks.” The problem with the snowball sample is the same; that is, not all units in the study population would have a chance of being included in the sample. Therefore, inferences cannot be validly drawn to the study population.

In sum, nonprobability sampling should not be used when the goal of a study is to draw empirical generalizations, or inferences, about a larger population or group.

Nonprobability samples are best used in “exploratory” research studies, where the goal is to gain some initial insights into behaviors that we know little about. — Why do people join militias?

While findings obtained from nonprobability samples cannot be empirically generalized to a larger population, they could be viewed as “suggestive.” That is, the findings could be viewed as the results that a researcher “might” obtain, if he/she conducted a study using a probability sample. However, we don’t have the additional information of being able to attach probabilities to the accuracy of inferences that one could get in using probability samples.

10 Key Components of a Marketing Plan

Every business needs to begin with a well structured plan that is based in thorough research, competitive positioning and attainable outcomes. Your plan should be the basis for your activities over the coming months. However, you should always be willing to enhance or redirect your plan based on what proves successful.

Marketing Plan Basics

1. Market Research
Collect, organize, and write down data about the market that is currently buying the product(s) or service(s) you will sell. Some areas to consider: Market dynamics, patterns including seasonality

Customers – demographics, market segment, target markets, needs, buying decisions Product – what’s out there now, what’s the competition offering Current sales in the industry
Benchmarks in the industry
Suppliers – vendors that you will need to rely on

2. Target Market
Find niche or target markets for your product and describe them.
3. Product
Describe your product. How does your product relate to the market? What does your market need, what do they currently use, what do they need above and beyond current use?
4. Competition
Describe your competition. Develop your “unique selling proposition.” What makes you stand apart from your competition? What is your competition doing
about branding?
5. Mission Statement
Write a few sentences that state:
“Key market” – who you’re selling to
“Contribution” – what you’re selling
“Distinction” – your unique selling proposition
6. Market Strategies
Write down the marketing and promotion strategies that you want to use or at least consider using. Strategies to consider: Networking – go where your market is
Direct marketing – sales letters, brochures, flyers
Advertising – print media, directories
Training programs – to increase awareness
Write articles, give advice, become known as an expert
Direct/personal selling
Publicity/press releases
Trade shows
Web site
7. Pricing, Positioning and Branding
From the information you’ve collected, establish strategies for determining the price of your product, where your product will be positioned in the market and how you will achieve brand awareness.
8. Budget

Budget your dollars. What strategies can you afford? What can you do in house, what do you need to outsource.
9. Marketing Goals
Establish quantifiable marketing goals. This means goals that you can turn into numbers. For instance, your goals might be to gain at least 30 new clients or to sell 10 products per week, or to increase your income by 30% this year. Your goals might include sales, profits, or customer’s satisfaction.

10. Monitor Your Results

Test and analyze. Identify the strategies that are working.
Survey customers
Track sales, leads, visitors to your web site, percent of sales to impressions By researching your markets, your competition, and determining your unique positioning, you are in a much better position to promote and sell your product or service. By establishing goals for your marketing campaign, you can better understand whether or not your efforts are generating results through ongoing review and evaluation of results. As mentioned earlier in this article, be sure to use your plan as a living document. Successful marketers continually review the status of their campaigns against their set objectives. This ensures ongoing improvements to your marketing initiatives and helps with future planning.

Market segmentation

Market segmentation is a marketing strategy that involves dividing a broad target market into subsets of consumers who have common needs and priorities, and then designing and implementing strategies to target them. Market segmentation strategies may be used to identify the target customers, and provide supporting data for positioning to achieve a marketing plan objective. Businesses may develop product differentiation strategies, or an undifferentiated approach, involving specific products or product lines depending on the specific demand and attributes of the target segment.

Criteria for segmenting

An ideal market segment meets all of the following criteria:
It must be large enough to earn profit.
It is possible to measure.
It must be stable enough that it does not vanish after some time. It is possible to reach potential customers via the organization’s promotion and distribution channel. It is internally homogeneous (potential customers in the same segment prefer the same product qualities). It is externally heterogeneous(potential customers from different segments have different quality preferences). It responds consistently to a given market stimulus.

It can be reached by market intervention in a cost-effective manner. It is useful in deciding on the marketing mix.
It identifies the target customer(s) (surrogate(s))
It provides supporting data for a market positioning or sales approach. Methods for segmenting consumer markets

Geographic Segmentation

Marketers can segment according to geographic criteria—nations, states, regions, countries, languages, cities, neighborhoods, or postal codes. The geo-cluster approach combines demographic data with geographic data to create a more accurate or specific profile.[1] With respect to region, in rainy regions merchants can sell things like raincoats, umbrellas and gumboots. In hot regions, one can sell summer clothing. A small business commodity store may target only customers from the local neighborhood, while a larger department store can target its marketing towards several neighborhoods in a larger city or area, while ignoring customers in other continents. Geographic Segmentation is important and may be considered the first step to international marketing, followed by demographic and psychographic segmentation. The use of national boarders is the institutional use of geographic segmentation, although geographic segments may be classified by identified geological regions.

Demographic Segmentation

Segmentation according to demography is based on variables such as age, gender, occupation and education level [2] or according to perceived benefits which a product/service may provide. Benefits may be perceived differently depending on a consumer’s stage in the life cycle. Demographic segmentation divides markets into different life stage groups and allows for messages to be tailored accordingly.[3]

Behavioral Segmentation

Behavioral segmentation divides consumers into groups according to their knowledge of, attitude towards, usage rate or response to a product[4] There is an extra connectivity with all other market related sources.

Psychographic Segmentation

Psychographic segmentation, which is sometimes called Lifestyle. This is measured by studying the activities, interests, and opinions (AIOs) of customers. It considers how people spend their leisure,[5] and which external influences they are most responsive to and influenced by. Psychographic is highly important to segmentation, because it identifies the personal activities and targeted lifestyle the target subject endures, or the image they are attempting to project. Mass Media has a predominant influence and effect on Psychographic segmentation. Lifestyle products may pertain to high involvement products and purchase decisions, to speciality or luxury products and purchase decisions.

Segmentation by benefits

Segmentation can take place according to benefits sought by the consumer/customer.

Cultural Segmentation

Cultural Segmentation[6] is used to classify markets according to cultural origin. Culture is a strong dimension of consumer behaviour and is used to enhance customer insight and as a component of predictive models. Cultural segmentation enables appropriate communications to be crafted to particular cultural communities, which is important for message engagement in a wide range of organisations, including businesses, government and community groups. Cultural Segmentation can be applied to existing customer data to measure market penetration in key cultural segments by product, brand, channel as well as traditional measures of recency, frequency and monetary value. These benchmarks form an important evidence-base to guide strategic direction and tactical campaign activity, allowing engagement trends to be monitored over time. Cultural Segmentation can also be mapped according to state, region, suburb and neighbourhood.

This provides a geographical market view of population proportions and may be of benefit in selecting appropriately located premises, determining territory boundaries and local marketing activities. Census data is a valuable source of cultural data but cannot meaningfully be applied to individuals. Name analysis (onomastics) is the most reliable and efficient means of describing the cultural origin of individuals. The accuracy of using name analysis as a surrogate for cultural background in Australia is 80-85%,[7] after allowing for female name changes due to marriage, social/political reasons or colonial influence. The extent of name data coverage[8] means a user will code a minimum of 99 percent of individuals with their most likely ancestral origin.

Multi-Variable Account Segmentation

In Sales Territory Management, using more than one criterion to characterize the organization’s accounts,[9] such as segmenting sales accounts by government, business, customer, etc. and account size/duration, in effort to increase time efficiency and sales volume. Using segmentation in customer retention

The basic approach to retention-based segmentation is that a company tags each of its active customers with three values: Is this customer at high risk of canceling the company’s service? One of the most common indicators of high-risk customers is a drop off in usage of the company’s service. For example, in the credit card industry this could be signaled through a customer’s decline in spending on his or her card. Is this customer worth retaining?

This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer.[10][11] What retention tactics should be used to retain this customer? For customers who are deemed worthy of saving, it is essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing special customer discounts to sending customers communications that reinforce the value proposition of the given service.