The chapter will provide understanding towards the nature and scope of marketing research and the scientific process involved. It will also discuss the role of research in designing and implementing successful marketing programmes. It will explain the role of marketing research in marketing information systems and decision support systems and provide the conceptual framework of marketing research process. This chapter will also explain the process of defining a problem in marketing research and its importance. It will focus on describing the tasks involved in defining a marketing research problem and also explain in detail the nature and content of various components of a defining a correct problem. The chapter will help gain understanding of practitioners' view of marketing research and the complexities involved in the overall process of marketing research. At last, the chapter will focus on the issues marketing research cannot deal with and why decision makers need to be cautious when interpreting results of marketing research.
Broadly defined, the purpose of research is to answer questions and acquire new knowledge. This process of asking and answering question which in turn assists us in acquiring new knowledge (or in simple terms the process of research) is often viewed as the pillar of scientific progress in any field. Research is the primary tool used in virtually all areas of science to expand the frontiers of knowledge. For example, research is used in such diverse scientific fields as psychology, biology, medicine, physics, and botany, to name just a few of the areas in which research makes valuable contributions to what we know and how we think about things. Among other things, by conducting research, researchers attempt to reduce the complexity of problems, discover the relationship between seemingly unrelated events, and ultimately improve the way we live.
Although research studies are conducted in many diverse fields of science, the general goals and defining characteristics of research are typically the same across disciplines. For example, across all types of science, research is frequently used for describing an event, discovering the relationship between two or more events, or making predictions about future events. In short, research can be used for the purposes of description, explanation, and prediction, all of which make important and valuable contributions to the expansion of what we know and how we live our lives.
In recent years, the results of various research studies have taken centre stage in the popular media. No longer is research the private domain of research professors and scientists wearing white lab coats. To the contrary, the results of research studies are frequently reported on the local evening news, the Internet, and various other media outlets that are accessible to both scientists and non-scientists alike. For example, in recent years, we have all become familiar with research regarding the effects of stress on our psychological well-being and work-life balance issues, the health benefits of a low cholesterol diet, which automobiles are safest to drive, and the damaging effects of pollution and climate change. We may have even become familiar with research studies regarding the human genome, the Mars Land Rover, the use of stem cells, and genetic cloning. Not too long ago, it was unlikely that the results of such highly scientific research studies would have been shared with the general public to such a great extent and the consumers would be aware of such phenomenon and would have a viewpoint on the same.
A widely quoted definition of marketing was proposed by the American Marketing Association (AMA) in 1985 that "marketing is the process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational objectives". The definition was modified further in 2004 by stating that "marketing is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders". The marketing concept requires that customer satisfaction rather than profit maximization be the goal of an organization. In other words, the organization should be consumer oriented and should try to understand consumers' requirements and satisfy them quickly and efficiently, in ways that are beneficial to both the consumer and the organization. This means that any organization should try to obtain information on consumer needs and gather marketing intelligence to help satisfy these needs efficiently. Research would be the fundamental tool to achieve that efficiency and effectiveness.
The complexity in the marketplace has increased many folds in recent years and related decision making also has got complex by the day. This dynamism of the market affects marketing continuously because of the continuous change in the external environment. The decision maker is finding it difficult to take decision in today's environment because of such changes. For example, external factors like changing character of the market, growing concern for environmental quality, emergence of activist consumerism groups, increase in competition, growing shortage of raw materials, volatility of the political relationships, rapidly changing technology and shift in international economy power give rise to the growing difficulties in making efficient marketing decisions.
As these complexities in market increase, the decision makers feel increasing need for understanding the market and its players be it customers, suppliers or any other stakeholder. Managers must know who their customers are, what they want, what their competitors are doing, if they are to make sound decisions.1 Due to the increase in complexity each right or wrong decision may cost company a fortune.
Marketing research is a critical part of such marketing decision making; it helps in improving management decision making by providing relevant, accurate, and timely information. Every decision poses unique needs for information, and relevant strategies can be developed based on the information gathered through marketing research in action. Too often, marketing research is considered narrowly as the gathering and analyzing of data for someone else to use. However, firms can actually achieve and sustain a competitive advantage through the creative use of market information generated by marketing research. Hence, marketing research is defined as information input to decisions, not simply the evaluation of decisions that have been made. Market research alone, however, does not guarantee success; the intelligent use of market research is the key to business achievement. A competitive edge is more the result of how information is used than of who does or does not have the information.
As stated above understanding customers and more importantly identifying who they are, what they want in terms of products or services, how and where they want it to be available and delivered and at what price they will purchase it are some of the most important decision criteria a manager must be aware of. However, due to the globalised and very complicated system of branch offices, wholesalers, and retailers a barrier is created between managers and their widely scattered consumers. Therefore, most managers are far removed from their customers - the individuals who in the final analysis determine success or failure of an organization.2
Organizations worldwide lose half their customers every five years. But most managers fail to address that fact head-on by striving to learn why those defectors left.3 More than two - thirds of organizations fail to satisfy superior customer needs because their perceptions of what their customers really want are far from reality.4 It is not because they don't care about the customer's needs; but they try to reach the wrong end with the wrong mean. More often than not, companies conduct research to learn what went wrong. After - the -fact research is the most common type of research in world.5
From the above discussion it can be observed that, marketing research can help organizations in various decision making processes which can be put into two separate strands; (a) problem identification research and (b) problem solving research. The problem identification research is undertaken to help identify problems that are not necessarily apparent on the surface and yet exist or likely to arise in the future. On the other hand, problem solving research is undertaken to help solve specific research problems. The figure below provides classification of problem identification and problem solving research.
Classification of marketing research
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