Definition: Marketing research is a system of identifying and analyzing the information related to the techniques and problems of marketing. It is a study of the market such as consumer, buyer and seller’s behaviour about the prices, their purchasing power, brand loyalty and many other marketing activities.
It helps the marketers in determining the contribution of various factors of the market, such as consumer habits for making decisions for the growth of their business.
Content: Marketing Research
- Types of Marketing Research
- Methods of Marketing Research
- Advantages of Marketing Research
- Limitations of the Marketing Research
Types of Marketing Research
It can be classified into three types:
- Exploratory Research: Exploratory research is done when the project is in its initial stage, and uncertainty chances are at their peak. It defines the environment’s parameters where the opportunity exists and identify the important factors to understand the environment. It helps the researchers in understanding the seasonal effects which may affect the results. The researchers use various data sources for the research, such as mini-surveys, observations and studying the case history, etc.
- Conclusive Research: Under conclusive research, a relevant course of action is selected by evaluating the gathered information. Thus, we can say it as formal or systematic research that involves sampling plans, possible trial and error system and various other ways of data analysis. The information and the alternative actions under consideration must have a valid link amongst them.
- Performance- Monitoring Research: Performance- Monitoring Research is a reaction to opportunities or threats which have been implemented and then ignored. It is a method of comparison between what has been planned and what has actually happened. Various marketing factors such as sales, market share should be evaluated properly.
Methods of Marketing Research
Following are some of the relevant methods of marketing research:
1. Observation Method: In this method, the information is collected directly without any direct talks. It helps in observing which products are used by an individual for their personal use or kept as stock in their stores. For Example, Suppose the shop was established in a nearby locality. In that case, observation of customers provides much relevant information about their tastes or preferences rather than by calling them and asking for their needs.
The shopkeeper must observe which quality product or specific brand product is mostly purchased by customers. There might be several customers who might pass nearby the shop once but came back to purchase the product as they have liked the product, such products should be displayed to attract more customers.
2. Experimental Method: In this marketing research method, a split-on test technique is used, which means the most selling products are kept in front of the shop. The other example of an experimental method is an advertisement in the newspapers which is placed in two different spaces, one on the front page and the other on the last page.
The readers get attracted to the advertisement on the first page at first instance. Similarly, the advertisement in black and white space is another example of an experimental method of marketing research. Such experiments help in guiding the marketers in their decision-making process.
3. Survey Method: Survey method is the most used method of marketing research. In this method, various questions are asked to the various classes of consumers in the market. The marketers collect the information from every class of consumer and note their opinions and interpretations on distinctive factors. However, recording descriptive data is more reliable than recording the opinions and interpretations of consumers. Thus, it can be said that surveys can be divided into three parts:
- Descriptive Survey: In this type of survey, a consumer is directly asked about the actual description of the product or brand they are using. However, it is not necessary that the result of such a survey is 100% accurate. Sometimes, to please the interviewer, the respondent may answer wrong questions.
- Opinion Survey: This survey by its name defines a survey of gathering individual opinions on different aspects. However, there might be high chances of getting an inappropriate opinion as immediate answer are required in it.
- Interpretative Survey: In this method, an individual becomes an interpreter; however, personal feelings of persons cannot be interpreted, as one can provide information about various aspects. Thus, in this method, an individual must be responsive.
Advantages of Marketing Research
Following are some of the advantages of the marketing research:
- One of the major advantages of it is that it follows a scientific approach in finding out the solutions to the problems by using statistical techniques.
- The market potential of any particular brand or company can be measured through effective marketing research.
- For the growth of a business, forecasting plays a vital role. Marketing research helps in gathering market information to formulate forecasting ideas.
- Before launching any new product in the market, it is essential to find out the market opportunities and the customer’s response to the product. Marketing research becomes beneficial in understanding consumer behaviour as well as the competitive market of your product.
- Efficient market research can help the marketer find out the problems in the initial stages, which helps the company in finding timely solutions and reduces the unnecessary production of goods that are not in demand.
- In planning the work norms and questionnaires, marketing research becomes advantageous for the companies. The risk factor involved in making market decisions are reduced to a greater extent with the help of marketing research.
- Marketing research helps the marketer to choose the best distribution channels according to their customer’s preferences to meet their needs effectively.
Limitations of the Marketing Research
Following are some of the limitations of the marketing research:
- Time-Bound: A marketer needs to complete his research within a stipulated time frame which sometimes becomes a hurdle in making efficient decisions as if research work has not been performed satisfactorily and information gathered is not enough to make any decision, the decision may be doubtful.
- Monetary Limit: For the work of the research, limited funds are allotted by the company in which the researchers have to complete their work. It bounds the researchers in certain limits. Thus, researchers choose to take small samples and becomes much dependent upon secondary data. However, it is not necessary that research cannot be performed with limited money, but if sufficient fund gets allotted for the research work, it will be more beneficial for the company.
- Lack of Skills: Marketing research is analytical work and needs a lot of proficiency to make efficient interpretations. If the researcher does not have enough knowledge about the statistical work, he may not become beneficial for the company. However, finding good researchers becomes hard for small companies as they ask for good remuneration, and companies might not have that much fund to provide them; thus, it also becomes one of the limitations for the company.