Marketing
research
FIGURE 3.1
The marketing planning process
with the "Gatta Have Sweet" theme. Rougi1ly 70 percent of respondents voluntarily recalled the Juicy Fruit name after watching the commercial (the average recaJI for a brand of sugar
gum is 57 percent). Sales of 100-stick boxes of
Fruit rose 5 percent after the start of
the ad campaign , reversing a 2 percent decline prior to it. Juicy Fruit's market share also
increased from 4.9 percent to 5.3 percent, the biggest gain of any established chewing gum
brand during the year following the campaign.
Marketing research addresses the need for quicker, yet more accurate, decision mak-
ing by the marketer. The impetus for this situation is the complex relationship between the
business firm and the ever-changing external environment. In particular, most marketers are
far removed from their customers ; yet must know who their customers are, what they want,
and what c o m p e t i t o r s are doing. Often the marketer relies on salespeople and dealers for information, but more and more the best source of information is marketing research.
It should be noted that most marketing decisions are still made without the use of
formal marketing research. In many cases, the time required to do marketing research is
not available. In other cases, the cost of obtaining the data is prohibitive or the desired data cannot be obtained in reliable form. Ultimately, successful marketing executives make decisions on the basis of a bl end of facts and intuition.
In this chapter, we provide an overview of the marketmg research process. We start
the discussion with a look at business information. As noted in Figure 3.1, marketing research
is applicable throughout the marketing planning process.
THE NATURE AND IMPORTANCE
OF MARKETING RESEARCH
Informal and, by today's standards, crude attempts to analyze the market date back to the
earliest days of the marketing revolution. Only in recent years, however, has the role of
research as it relates to management been clearly recognized.
Reflecting this change in orientation, the foJIowing definition of marketing research
is offered: marketing research is the scientific and controlled gathering of nonroutine mar-
WHAT NEEDS RESEARCHING IN MARKETING?
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keting information undertaken to help management solve marketing problems. There is often
hearty disagreement over the answer to the question of whether marketing research is a sci-
ence. One's answer depends on the employed definition of "science." To be specific, a research activity should use the scientific method. In this method, hypotheses (tentative statements
of relationships or of :;olutions to problems) are drawn from informal observations. These
hypotheses are then tested. Ultimately, the hypothesis is accepted, rejected, or modified
according to the results of the test. In a true science, verified hypotheses are turned into
"jaws." In marketing research, verified hypotheses become the generalizations upon which management develops its marketing programs. (To simplify our discussion, we will use "questions" as a synonym of "hypothesis.")
The mechanics of marketing research must be controlled so that the right facts are
obtained in the answer to the correct problem. The control of fact-finding is the responsi-
bility of the research director, who must correctly design the research and carefully super-
vise its execution to ensure
it goes according to plan. Maintaining control in marketing
research is often difficult because of the distance that separates the researcher and the mar-
ket and because the services of outsiders are often required to complete a research project. I
WHAT NEEDS RESEARCHING IN M ARKETING ?
An easy, and truthful, answer to this question is "Everything." There is no aspect of marketing to which research cannot be applied. Every concept presented in this marketing text
and every element involved in the marketing management process can be subjected to a
great deal of careful marketing research. One convenient way to focus attention on those
matters that especially need researching is to consider the elements involved in marketing
management. Many important questions relating to the consumer can be raised. Some are:
• Who is/are the customer(s)?
• What does he/she desire in the way of satisfaction?
• Where does he/she choose to purchase?
• Why does he/she buy, or not buy?
• When does he/she purchase?
• How does he/she go about seeking satisfaction in the market?
Another area where research is critical is profits. Two elements are involved. First,
there is the need to forecast sales and related costs- resulting in profits. Second, there is
the necessity to plan a competitive marketing program that will produce the desired level
of
an appropriate cost. Sales forecasting is the principal tool used in implementing
the profit-direction element in the marketing management concept. Of course, the analy-
sis of past sales and interpretation of cost information are important in evaluation of per-
formance and provide useful facts for future planning.
A great deal of marketing research is directed toward rather specialized areas of man-
agement. These activities are broken down into five major areas of marketing research. Briefly,
these activities are :
1. Research on markets- market trends, market share, market potentials, market char-
acteristics, completion, and other market intelligence.
2. Research on sales-sales analysis, sales forecasting, quota-setting, sales territory design, sales performance measurement, trade channels, distribution costs, and
inventories.
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