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Purpose of Marketing Research

How Do You Conduct Market Research?

❶Surveys are conducted using Consumer Panels and market researchpanels and reports are made made based on their responses. What does causal marketing research entail?

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Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications. It is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services.

The goal of marketing research is to identify and assess how changing elements of the marketing mix impacts customer behavior. The term is commonly interchanged with market research ; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets , while marketing research is concerned specifically about marketing processes.

Marketing research is often partitioned into two sets of categorical pairs, either by target market:. Consumer marketing research is a form of applied sociology that concentrates on understanding the preferences, attitudes, and behaviors of consumers in a market-based economy , and it aims to understand the effects and comparative success of marketing campaigns.

Thus, marketing research may also be described as the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities in marketing.

The purpose of marketing research MR is to provide management with relevant, accurate, reliable, valid, and up to date market information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment. Managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs.

They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing , promotion, and distribution.

Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes.

Another factor in this mix is the complexity of consumers. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers.

In the absence of relevant information, consumers' response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers. Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers.

However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of marketing research in managerial decision making is explained further using the framework of the DECIDE model.

Evidence for commercial research being gathered informally dates to the Medieval period. In , the German textile manufacturer, Johann Fugger , travelled from Augsburg to Graben in order to gather information on the international textile industry. He exchanged detailed letters on trade conditions in relevant areas. Although, this type of information would have been termed "commercial intelligence" at the time, it created a precedent for the systemic collection of marketing information.

During the European age of discovery, industrial houses began to import exotic, luxury goods - calico cloth from India, porcelain, silk and tea from China, spices from India and South-East Asia and tobacco, sugar, rum and coffee from the New World. During this period, Daniel Defoe , a London merchant, published information on trade and economic resources of England and Scotland.

Defoe was a prolific publisher and among his many publications are titles devoted to the state of trade including; Trade of Britain Stated, ; Trade of Scotland with France, and The Trade to India Critically and Calmly Considered, - all of which provided merchants and traders with important information on which to base business decisions.

Until the late 18th-century, European and North-American economies were characteristed by local production and consumption. Produce, household goods and tools were produced by local artisans or farmers with exchange taking place in local markets or fairs. Under these conditions, the need for marketing information was minimail. However, the rise of mass-production following the industrial revolution, combined with improved transportation systems of the early 19th-century, led to the creation of national markets and ultimately, stimulated the need for more detailed information about customers, competitors, distribution systems and market communications.

By the 19th-century, manufacturers were exploring ways to understand the different market needs and behaviours of groups of consumers. A study of the German book trade found examples of both product differentiation and market segmentation as early as the s. In , Amercian advertising agency, N. Between and , George B Waldron, working at Mahin's Advertising Agency in the United States used tax registers, city directories and census data to show advertisers the proportion of educated vs illiterate consumers and the earning capacity of different occupations in a very early example of simple market segmentation.

Parlin published a number of studies of various product-markets including agriculture ; consumer goods c. In Paul Cherington improved on primitive forms of demographic market segmentation when he developed the 'ABCD' household typology; the first socio-demographic segmentation tool. In the first three decades of the 20th-century, advertising agencies and marketing departments developed the basic techniques used in quantitative and qualitative research - survey methods, questionnaires, gallup polls etc.

Duncan of the University of Chicago. Adequate knowledge of consumer preferences was a key to survival in the face of increasingly competitive markets. The advent of commercial radio in the s, and television in the s, led a number of market research companies to develop the means to measure audience size and audience composition.

In , Arthur Nielsen founded market research company, A C Nielsen and over next decade pioneered the measurement of radio audiences.

He subsequently applied his methods to the measurement of television audiences. Around the same time, Daniel Starch developed measures for testing advertising copy effectiveness in print media newspapers and magazines , and these subsequently became known as Starch scores and are still used today.

During, the s and s, many of the data collection methods, probability sampling methods, survey methods, questionnaire design and key metrics were developed. By the s, Ernest Dichter was pioneering the focus group method of qualitative research. For this, he is often described as the 'father of market research. These methods eventually lead to the development of motivational research. By the s, the first courses on marketing research were taught in universities and colleges.

Brown became one of the popular textbooks during this period. Marketers, such as Paul Green, were instrumental in developing techniques such as conjoint analysis and multidimensional scaling , both of which are used in positioning maps, market segmentation, choice analysis and other marketing applications.

Web analytics were born out of the need to track the behavior of site visitors and, as the popularity of e-commerce and web advertising grew, businesses demanded details on the information created by new practices in web data collection, such as click-through and exit rates.

As the Internet boomed, websites became larger and more complex and the possibility of two-way communication between businesses and their consumers became a reality.

Provided with the capacity to interact with online customers, Researchers were able to collect large amounts of data that were previously unavailable, further propelling the marketing research industry.

In the new millennium, as the Internet continued to develop and websites became more interactive, data collection and analysis became more commonplace for those marketing research firms whose clients had a web presence.

Retail outlets were appearing online and the previous need for bricks-and-mortar stores was diminishing at a greater pace than online competition was growing. With so many online channels for consumers to make purchases, companies needed newer and more compelling methods, in combination with messages that resonated more effectively, to capture the attention of the average consumer.

Having access to web data did not automatically provide companies with the rationale behind the behavior of users visiting their sites, which provoked the marketing research industry to develop new and better ways of tracking, collecting and interpreting information. This led to the development of various tools like online focus groups and pop-up or website intercept surveys. These types of services allowed companies to dig deeper into the motivations of consumers, augmenting their insights and utilizing this data to drive market share.

As information around the world became more accessible, increased competition led companies to demand more of market researchers. It was no longer sufficient to follow trends in web behavior or track sales data; companies now needed access to consumer behavior throughout the entire purchase process. This meant the Marketing Research Industry, again, needed to adapt to the rapidly changing needs of the marketplace, and to the demands of companies looking for a competitive edge.

Today, marketing research has adapted to innovations in technology and the corresponding ease with which information is available. This demand is driving marketing researchers to develop new platforms for interactive, two-way communication between their firms and consumers.

Mobile devices such as Smart Phones are the best example of an emerging platform that enables businesses to connect with their customers throughout the entire buying process.

As personal mobile devices become more capable and widespread, the marketing research industry will look to further capitalize on this trend. Mobile devices present the perfect channel for research firms to retrieve immediate impressions from buyers and to provide their clients with a holistic view of the consumers within their target markets, and beyond.

Now, more than ever, innovation is the key to success for Marketing Researchers. Marketing Research Clients are beginning to demand highly personalized and specifically-focused products from the marketing research firms; big data is great for identifying general market segments, but is less capable of identifying key factors of niche markets, which now defines the competitive edge companies are looking for in this mobile-digital age. First, marketing research is systematic.

Thus systematic planning is required at all the stages of the marketing research process. The procedures followed at each stage are methodologically sound, well documented, and, as much as possible, planned in advance.

Marketing research uses the scientific method in that data are collected and analyzed to test prior notions or hypotheses. Experts in marketing research have shown that studies featuring multiple and often competing hypotheses yield more meaningful results than those featuring only one dominant hypothesis.

Marketing research is objective. It attempts to provide accurate information that reflects a true state of affairs. It should be conducted impartially. While research is always influenced by the researcher's research philosophy, it should be free from the personal or political biases of the researcher or the management. Research which is motivated by personal or political gain involves a breach of professional standards.

Such research is deliberately biased so as to result in predetermined findings. The objective nature of marketing research underscores the importance of ethical considerations. Also, researchers should always be objective with regard to the selection of information to be featured in reference texts because such literature should offer a comprehensive view on marketing. Research has shown, however, that many marketing textbooks do not feature important principles in marketing research.

Organizations engage in marketing research for two reasons: This distinction serves as a basis for classifying marketing research into problem identification research and problem solving research. Problem identification research is undertaken to help identify problems which are, perhaps, not apparent on the surface and yet exist or are likely to arise in the future like company image, market characteristics, sales analysis, short-range forecasting, long range forecasting, and business trends research.

Research of this type provides information about the marketing environment and helps diagnose a problem. For example, the findings of problem solving research are used in making decisions which will solve specific marketing problems. The Stanford Research Institute , on the other hand, conducts an annual survey of consumers that is used to classify persons into homogeneous groups for segmentation purposes.

Standardized services are research studies conducted for different client firms but in a standard way. For example, procedures for measuring advertising effectiveness have been standardized so that the results can be compared across studies and evaluative norms can be established.

Market research can be broad or narrow in scope. It can encompass determining trends in an entire industry or be as specific as finding out how much people enjoyed a particular product during a short period of time five years previous.

Different kinds of market research need to be conducted during different periods in the life cycle of a company and those of a product. During the initial stages of a star- up company, for example, managers will need to discover whether there is an unmet demand for what their company produces and how they will sell it profitably. Conducting high level market research is more involved than putting in a few search terms through Google and asking family members what they think would make it on the market.

It often involves either contracting out to another firm that specializes in research or putting in the time and effort in a business library or using an informational service or database to come up with information relevant to an upcoming project.

Companies like Standard and Poor's will conduct business research for a hefty fee depending on how much information is necessary. Small companies or those with only a limited budget for research will benefit more from conducting research themselves. Potential researchers will first need to figure out how they want to go about it, and then must develop questionnaires, figure out a research budget, figure out how to conduct focus groups and surveys and determine the status of relationships with suppliers and other business partners.

The type of company that the research is being conducted for along with the status of the target market all affect how the research should be conducted. Market research isn't just for taking a magnifying glass to consumers--it's quite beneficial to conduct it for every product and service along the supply chain of any particular company.

It is a great way to optimize costs for every task that a business performs. Finding out more about the pricing of all the companies that a particular business is involved with can serve as excellent leverage in negotiations for reducing costs. Another example of a market research tool is the case study.

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Research guides your business's marketing plan and the four Ps of marketing: product, price, place and promotion. This research gives you the information to determine .

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Purpose of Marketing Research by John Hewitt - Updated September 26, Marketing research is a crucial management tool for helping businesses to discover whether or not the product or service that they are providing is actually desired by their customer base.

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The purpose of market research is to learn about the desires of a target customer base. Market research includes learning about current problems that a customer base has, as well as their preferred solutions. Start studying The Purpose of Marketing Research. Learn vocabulary, terms, and more with flashcards, games, and other study tools.

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Marketing research can help a business do one or more of the following: • • • • • • • Gain a more detailed understanding of consumers' needs – Marketing research can help firms to discover consumers' opinions on a huge range of issue Reduce the risk of product/business failure. Marketing research is the process of planning, collecting and analyzing data relevant to a marketing decision. Marketing Research Business Uses There are many ways that marketing research can help Detective Lombardo solve the store mystery.