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Marketing Research by Geoff Lancaster Ð'©

1 Introduction

The marketing concept states that the nature of the marketing orientated organisation, whether product or service based, profit or non profit based, is the identification and genuine satisfaction of customers needs and wants, more effectively and efficiently than the competition. The marketing concept has been defined as �the key to achieving organisational goals’ and the marketing concept rests on �market focus, customer orientation, co-ordinated marketing and profitability’. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. In a �not for profit’ organisation, management substitutes profit for some other criterion such as maximum social benefits; a political party would be likely to substitute maximising votes for financial profit. A university on the other hand may substitute �research excellence’, to purely financial profit. In order for organisations to be able to arrange their assets and resources in such a way that they are able to produce �bundles of satisfactions’ that satisfy the genuine desires of specifically defined target markets better than the competition, they need to know what the market regards as valuable. The concept of value is subjective and lies in the mind of the individual prospective customer. Hence, in a broad sense, marketing management needs to understand the �minds’ of their target markets, their attitudes and value systems. They need a formalised, managerial approach to this most important task. This is the fundamental role of marketing research.

Without the information that marketing research provides, management cannot apply the marketing concept as an overriding business philosophy. It is not the intention to present a comprehensive treatment of marketing research, and indeed it would take an entire textbook to do this. The purpose of this material is simply to give you a �feel’ for the subject and relate how it fits into modern marketing practice.

2 Definition of Marketing Research

Kotler (1999) defines marketing research as �systematic problem analysis, model-building and fact-finding for the purpose of improved decision-making and control in the marketing of goods and services’. The American Marketing Association (AMA, 1961) defines it as �the systematic gathering, recording and analysing of data relating to the marketing of goods and services’. The emphasis is clearly on the improvement in marketing decision making. Marketing research is the �scientific’ approach to building value in the eyes of the organisation’s target market. The aim of research is to find, in a systematic way, reliable, unbiased answers to questions about the market for goods or services and to look at ideas and intentions on many issues. Marketing research is often concerned with the process of collecting, analysing and interpreting the facts to establish what it is that people want and why they want it.

It is employed by marketing management in the planning, evaluation and control of marketing tactics and strategy, but it is also of use in helping to make policy decisions in the non-commercial public sector. Research must be carefully planned with a disciplined and systematic approach, and a series of steps should be taken in the development, planning and execution of research. The aim is to give an adequate, but general view of a number of topics without going into detailed methodological technicalities.

On a simple definitions point, there is often confusion about the term �marketing research’ which is the overall descriptor and �market research’ which is a sub-set of marketing research and which concerns matters like �on street’ interviews.

3 Marketing Research and Marketing Information Systems

Formal marketing research may provide a large proportion of the information requirements for a firm, but not their total requirements. There are other valuable sources of marketing information beside formal marketing research. The information requirements of the modern firm should be professionally managed in a systematic way in some form of formal system that will assist in the collection, storage, retrieval and analysis of various forms of marketing information not simply consist of information collected using formal marketing research. Such a system is known as a marketing information system or MkIS for short. This is made up of four parts. Three of these components actually collect or �produce’ information of various sorts in it’s �raw’ form. These are the �Internal Data’, �Intelligence Data’ and �Marketing Research Data’ components of the system. The information from these three component parts of the system are then fed in as �input data’ to the fourth component part, which can be described as �Models and Statistics’. This component of the system adds value to the data produced from the other three component parts by altering it or modelling it in some way. Basically the �Models and Statistics’ part of the system employs management science techniques to the data derived from the other three component parts, and in so doing, makes the information more useable and valuable for strategic marketing planning purposes.

4 Types of Marketing Research

Marketing research activities can be classified by their purpose or general objective. Some marketing research exercises are intended to produce results that are purely exploratory in nature. Such research is usually carried out at the beginning of the overall research project. Other research may produce data that are descriptive, predictive or conclusive in nature. These general classifications are now examined in more detail.

4.1 Exploratory Research

This is usually undertaken at the initial stages of the overall research process. Unless researchers have experience of a particular industry or research area within a particular industry, then they will have to familiarise themselves with the general dynamics of that industry or research area in order for them to make an effective job of carrying out the main body of the research. Exploratory research is basically �having a look’ type of activity.