Process and Areas of Marketing Research | Marketing Information System in Nepal and its uses in Marketing Decisions

Process of Marketing Research         

There are four stages on marketing research. They are (1) Defining problems and setting the research objectives, (2) developing the research plan, (3) implementing the research plan and (4) interpreting and reporting the findings.

Marketing Research Process

1. Defining problem and setting research objectives

In the first stage of marketing research process, it is to define problem and set the research objectives. Marketing manager and marketing researcher should work together remaining in close contact to define problems carefully and to be in agreement with each other on the research objectives. Defining problem is to identify research area. This should be according to all resources like: financial, physical, and manpower. Literature review, case study, experience survey and brain storming can be used as basis to identify problem and define it. If the definition of the problem becomes wrong, collection of information, its analysis, conclusion and report also become wrong. The task of defining problem becomes complicated. While defining problem, problem and its nature should be clearly identified.

After the problem has been defined, the research objectives should be set. The research objectives should not be broad. After the objectives have been set, what types of information need to be collected becomes clear. Research model also can be determined by research objectives.

The statement of problem and research objectives guides the entire research process. So, both marketing manager and marketing researcher should agree to it for which they should work together.

2. Developing the research plan

After clearly defining problem and setting objectives, research plan should be developed. At this stage, plan is developed for collecting information. Sources of information, research method, research equipment, model plan, contact method, analyzing tool etc. are determined while developing research plan.

Information can be collected from two sources, primary and secondary, for researches. The matter, whether primary or secondary or both sources are necessary, depends on the problems and objective of the research. The first collected information data for special purpose are primary information whereas already published and used information are secondary information. Survey, observation, experiment etc. are the sources of primary information. Libraries, government, professional and business organizations, private business firms, advertisement media, university researches organization, Internet etc. are sources of secondary information.

Survey methods, observation method, consumer group method etc. are the major marketing research methods whereas questionnaires and mechanical devices are the major tools/equipment of research. Model units, models size and model methods are also included in model plan. The contact method of marketing research includes mail, personal interview, telephone, email, fax etc. Analytical tools include average, regression, correlation, variance etc.

3. Implementing the research plan

Implementation of research plan is the third stage of marketing research. After developing research plan, it is implemented or data are collected and is analyzed. Field study is done for collection of primary data. Qualified and skilled person is asked to collect data. Questionnaires are given to fill up, interview is taken and they are recorded.

Data analysis includes the task of coding, tabulation and statistical analysis of data. Proper statistical methods are used for data analysis. Computer helps much in data analysis.

4. Interpreting and reporting the findings

The task of interpreting the findings and reporting is the last stage of research process. The researcher should explain the findings and submit to the management. Researcher may be experienced in research and make out findings, but a marketing manager knows more about the problems and how decisions should be taken. So, the research findings should be interpreted by the researcher and the marketing manager together. Interpretation of findings is the important stage of marketing research process. If the manager accepts wrong interpretation, even the best research becomes worthless. So, both the researcher and the marketing manager should interpret the findings together and take responsibility of research process and decision. The report of research may be oral or written or both in form depending on the nature of research.

Areas of Marketing Research             

Market, products, price, promotion and distribution are included in marketing research areas. The selling and buying process or place of goods or service is called market. The goods, ideas or services having the power of meeting human needs are called goods. Goods are the bases of marketing. Goods or services are measured with money for selling in market. This is called price. Sale or purchase of goods or services cannot be without price. The tasks advertising, publicity, personal selling, sale exhibition etc. for supplying goods to target market is called promotion. Promotion of goods gives positive impression to the customers. The mechanism to supply goods to the ultimate consumers is called distribution. This includes physical distribution and marketing channels.

1. Market research

The place or process of buying and selling goods is called market. Market consists of goods, sellers and buyers. Sellers and buyers may deal directly or indirectly. Market research includes market segmentation research, buyers’ trend and behavior research, forecasting of demand research, dealers’ trend and behavior research, competition research, firm’s condition, market trend research etc.

2. Product research

The things or materials which can meet the needs of humans are called products. Products may be with or without physical shape. Product research should be done for making any product marketable. The product research includes quality research, feature research, style-color-size-shape-beauty research, brand and mark research, packaging research, product-line research, warranty research, post-sale research, development of new product research, product positioning research, product life cycle research etc.

3. Price research

The monetary value of any product is called price. It makes easy for buying and selling of products. Price should be equivalent to utility of the product. There should not be fixed high price for lower quality product. The price of product is affected by its production cost. If production cost is high, price becomes high and if production cost is low, price also becomes low. Price of any product directly affects demands. Price research includes price level research, pricing method research, price policy research, discount research, payment related research etc.

4. Promotion research

The activity that is all done to supply goods and services to target market is called promotion. Today’s age is the age of promotion. If the promotion is not effective, even the best quality goods cannot be sold out. Products can be promoted through advertisement, sale promotion, publicity, public contact, personal selling etc. So, all these things to be done are included in promotion research. Besides, media research, advertisement effectiveness research, channel promotion research, etc. are also included in promotion research.

5. Distribution research

The task of supplying goods and services to the consumption center from the production center is called distribution. Intermediaries, warehouse and transport have an important role in distribution. The task of distribution should be effective. Channel research, warehousing research, transport research, distribution cost research, distribution area research, inventory level and location research, order processing research etc. are included in distribution research.

Market research Market segmentation Buyer's behavior and attitudes Forecasting of demand Dealer's behavior and attitudes Competition Forecasting of business conditions and market trends Product research Quality Features Style, color, size, shape, beauty Brand name and brand mark Packaging Product line Warranty Service after sales New product development Life cycle of product Product positioning

Price research

• Price level
• Pricing methods
• Pricing policies
• Discount
• Payment

Promotion research

• Advertising
• Publicity
• Personal selling
• Sales promotion
• Public relation
• Advertising effectiveness
• Media

Distribution research

• Channel
• Distribution area
• Inventory level and location
• Transportation
• Warehousing
• Order processing
• Distribution costs

Marketing Information System in Nepal and Its Uses in Marketing Decisions

The age of today is the age of information technology. Nepal has also moved forward in the development of information technology. The development of telephone, mobile, fax, internet etc. has made marketing research easy and simple. Although some marketing managers in Nepal take decisions at notion, experience and hunch, all managers do not do so. While taking decision, they are found using marketing information system.

After the adoption of privatization policy in Nepal, seller's market has changed into buyer's market. Economic globalization is increasing. Internal competition is changing into global competition. Marketing environment is getting more complicated. In this context, marketing managers in Nepal also are gradually changing their traditional decision making style into modern style and started using marketing information system in taking marketing decisions.

1. Marketing research system

Products, price, distribution, promotion, customers, sales, and competition are researched in marketing research. In Nepal, more emphasis is found to have given to promotion, sales and competition than to price, distribution and customers.

2. Marketing intelligence system

The mechanism of collecting marketing information everyday is called marketing intelligence system. In Nepal, information is collected from both formal and informal sources. Sellers, intermediaries, marketing information center, specialists, private agencies etc. are the formal sources of information. Customers, managers and other concerned persons are informal sources. More emphasis is found to have given to intermediaries and customers in Nepal.

3. Internal record system

The record kept in order to manage the activities in an organization orderly is called internal record. Internal records are related to customers and sales. Account record, special report and annual report, audit report are also internal records. Internal records should be compulsorily kept in Nepal. Even if some organizations do not update such records, they keep internal record. Both marketing manager and researchers use internal records in taking marketing related decisions.

4. Marketing decision support system

Marketing decision support system is another component of marketing information system in Nepal. It is not widely used in Nepal. Some multinational companies and joint venture banks use marketing decision support system to interpret data. Ratios, graphs, statistical techniques and mathematical models are also used in Nepal.

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Components of Marketing Information System, Marketing Research System

Market research, marketing intelligence, internal records and information analysis are the important components of marketing information system.

1. Marketing Research System

The orderly research conducted to solve special market related problems is called marketing research system. While carrying out marketing researches, goods or services, price, place, promotion, customers, sale competition etc. are deeply studied and carefully analyzed using different research methods and tools. The main purpose of marketing research is to provide reliable and sufficient information needed for taking marketing related decisions. In marketing research, at first problems should be defined. Then gradually, objective of the research should be prepared, research plan be developed, necessary information be collected and analyzed and conclusion be drawn. The major sectors of marketing research are as follows:

a) Product research: Product research is one of the important areas of marketing research. While researching a product, a detailed study and analysis is done on development of new product, product life cycle, brand loyalty, product positioning, product experiment, packaging, design etc.

b) Price research: Price research is also another important research area of marketing research. While researching price, detailed study and analysis is done on the method of pricing, trend of pricing, cost structure, price of competitors’ products and their pricing policy.

c) Place research: The other important area of marketing research is place research. While researching a place, a detailed study and analysis is done on warehouse, transport, distribution channel, channel structure, delivery cost etc.

d) Promotion research: Promotion research is also one of the important areas of marketing research. While researching a promotion, a detailed study and analysis is done on the effectiveness of advertisement, media of advertisement, effect of promotion etc.

e) Consumer research: Research should also be done on consumers in marketing research. A detailed study and analysis should be done on the type and nature of consumers, motivating factors, consumers’ need and wants, consumers satisfaction etc.

f) Sales research: The other important area of marketing research is sales research. While researching sales, a detail study and analysis is done on sales turn-over, market share, sale performance, future market, sale forecasting etc.

g) Competition research: Research should also be done on competitors while carrying out marketing research. Degree of competition and their strategy should be studied in detail and analyzed.

2. Marketing Intelligence System

The mechanism of collecting information related to marketing environment each day is called marketing intelligence. It informs about daily changes in the marketing environment. This helps business organization to identify their weak and strong aspects of competitors and analyze them. As a result, the business organization becomes able to make necessary plans and strategies to get success in competitive market.

Market intelligence is also called environmental scanning. It scans internal and external environmental factors affecting business organization and helps make proper business strategy to ensure organizational success.

There are two sources of marketing intelligence. They are (a) formal source and (b) informal source. Sales men, intermediaries, information centers, experts, private agencies etc. are formal sources and newspapers, trade journals, magazines, employees etc. are informal sources.

a) Formal sources: The formal sources of marketing intelligence are as follows:

• Salesmen: Salesmen perform their works living in their respective fields. So, they directly know about the changes taken place in market. A business organization should collect all information of such changes from salesmen and analyze them. The organization should make the salesmen skilled for this purpose and motivate them for good performance.
• Intermediaries: The intermediaries include dealers, distributors, wholesalers, retailers etc. They remain acting as intermediaries of different products in the markets. They know everything about market. So, a business organization should motivate them to get important information.
• Marketing information center: An information center can be established under marketing information system. In this system, a business organization secretly keeps its employees in competitors’ organizations as secret agents to collect information. Such secret agents send all necessary information about their policy, program, strategies etc.
• Specialist/expert: A business organization may also appoint specialists for collecting market information. Such specialists become skilled in scanning market environment.
• Private agency: A business organization may buy market information from private agencies. Such private agencies become efficient in collecting market information and analyze them.

b) Informal sources: The informal sources of marketing intelligence are as follows:

• Reading newspapers, magazines, trade journals etc.
• Having interactions with production manager, financial manager, personnel manager, research and development manager, sales manager, employees etc.
• Having interaction with customers, intermediaries, other concerned persons etc.

3. Internal Record System

The records kept as systematic arrangement of different activities done within a business organization is called internal record system. Internal record is an easily available source of important records.

a) Customer related record: The information about customers’ demand, their profile etc. is provided by customer related records. Order letters, bills, invoices, stock record, shipment paper etc. are included in this record.

b) Sales related records: Sales record provides information related to customers’ behavior, their expectation, sales quantity, sales trend, market segmentation etc. Such information can be found from sales record.

c) Other records: A business organization also keeps other records besides sales related records and customers related records. They are: special report, annual report, audit report, financial report etc. Such reports also provide useful information.

4. Marketing Decision Support System (MDDS)

Marketing decision support system is also known as decision support system- DSS. It is a co-ordinated collection of data, system, tools and techniques with supporting software and hardware by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action. Marketing decision support system adds speed and flexibility to the marketing information system. According to William J. Stanton, DSS is a procedure that allows a manager to interact with data and methods of analysis to gather, analyze and interpret information. MDSS has the methods for analyzing data. These methods range from simple procedure such as computing ratio or graphs to sophisticated statistical techniques and mathematical models. The following figure depicts the relationship in a decision support system:

Structure of a decision support system

The components of marketing decision support system are as follows:

a) Data bank: A business firm collects different information from different sources. The store where such information is kept is called data bank. Every necessary kind of information can be found in such data bank.

b) Method bank: Different kinds of statistical tools are needed to analyze collected information. For example: average percent, classification, tabulation, regression, co-relation, survey, diagram, cluster analysis, factor analysis etc. The store to keep such different methods is called method bank.

c) Model bank: Decisions need to be taken on different heads in marketing. Decision should be rational and effective. Different kinds of quantitative models should be used to bring simplicity and effectiveness in decision-making process. These models define interrelationship among different elements. These models include sale response, model, new product pretest model etc.

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• Sources of Data and Information

Sources of Data and Information for Marketing Research

Sources of Data            

Data can be collected from two sources that are internal and external sources. The data collected from internal sources are called primary data whereas the data collected from external sources are called secondary data. The sources of data are shown clearly by the following figure.

Sources of Data

A. Sources of Primary Data

The data collected for the first time are called primary data. The methods mostly used in collecting primary data are survey, observation and experiment. Generally, all these methods are not used in a same project, because they have both good and bad aspects. The question which method should be selected depends on the nature, time and cost. Or method should be selected according to the nature, time and cost.

1. Survey: Collecting data through interviews of the people is called survey method. Data can be collected through the means of individuals, telephones, mails etc.
1. Persons/individuals: Data can be collected by taking interviews from the different person/individuals. This method is more flexible than the telephone and mail interview. During the interview time, if the person being interviewed gives incomplete answer, it can be made clear asking repeatedly to complete the answer.
2. Telephone: Survey can be done through telephone. As different personalities can be contacted through telephone anywhere from center, this medium saves cost and time. This medium is quicker than others for prompt survey.
3. Mail: Data can be collected through mail. In this method, questionnaire is sent to potential respondents. They also send the answers back through mail. This medium is less expensive than the personal interview and becomes more useful for national survey.
2. Observation: Collecting data by observing activities of persons is called observation method. Observation may be personal or mechanical. Complete and accurate data can be collected through observation method.
1. Personal observation: This method is more useful to collect data about sellers’ performance and their priority given to the brand.
2. Mechanical observation: Mechanical observation can be done in various forms. For instance, scanner can be used in retail stores for keeping purchase record. Similarly, camera can be used to keep person’s reaction in video form.
3. Experimental method: Primary data can be collected through experimental method. Experimental works are done in lab and field for collection of primary data.
1. Laboratory experiment: The testing or trying out in lab is called laboratory experiment. Laboratory is used to taste/examine the components of marketing strategy.
2. Field experiment: The other method used to understand the consumers’ reaction is field experiment. This is also like a laboratory, but it is done remaining in real situation. Test marketing is a field experiment.

B. Sources of Secondary Data

The data used once are called secondary data. It becomes much easier to collect secondary data than the primary ones. Secondary data can be collected from several sources. The main sources are as follows:

1. Library: Library is the best source for collection of secondary data. All kinds of books, all publications, research oriented deeds, researched publications, useful materials, magazines, newspapers, official publication etc. can be found in libraries. Secondary data can be easily collected from such sources. Central Library, Keshar Library, British Council, American Library etc. are the major libraries of Nepal.
2. Government: Government publications are also the important sources for collection of secondary data. The business organizations should compulsorily submit their annual reports of income-statement, balance sheet, cash flow statement etc. to the government bodies. Such reports and statements are also the sources of secondary data. Besides, different governmental bodies update and publish government tax record, birth registration, house sale or purchase, marriage registration, registration of domestic animals, social classes, per capita income etc. So, such government publications are also the important sources for data collection.
3. Trade, professional and business associations: Trade, professional and business associations also give information about their activities through different kinds of publications. Some business organizations have their own library. For example; American Marketing Association has its own library containing more than four thousand books. The publications of SAFTA, WTO etc. organizations may be very useful for international marketing experts.
4. Private business firm: Private business firms collect important data. For example, R. L. Polk and Donnelley Marketing publish city and telephone directory. They cover almost the addresses, phone no. estimated income, purchasing habit etc. in them of almost every American. Such data become very useful for the marketing experts.
5. Advertising media: Magazines, newspapers, radios and televisions prepare useful data for householders and business organizations. For example, Sales and Marketing Management Magazine publishes ‘Survey of Buying Power’ each year. This report gives information about population, retail sale, income etc.
6. University research organization: Research Organizations are formed in big universities. Such organizations carry out local, national and international level researches and publish. Nepal’s Tribhuvan University also has research organizations such as CERID, CINAS, CEDA etc. These organizations conduct researches on different subjects. Michigan University of America conducts regular national researches on ‘Consumers Buying Intention’.

Sources of Information              

Refined and cleansed data is called information. This information becomes useful. Information can be collected from several sources. The main sources are as follows:

1) Marketing Research System

The orderly researches conducted in order to solve market related problems are called marketing research system. While carrying out researches on marketing, a deep study and analysis using different methods is done about goods, price, place, distribution, promotion, consumers, sale, competition etc. Such researches and studies are very important sources of information.

2) Marketing Intelligence System

The mechanism of collecting information every day about marketing environment is called marketing intelligence system. It collects changes occurred daily in marketing environment and gives information. Sellers, intermediaries, marketing information center, experts or specialists, private agencies etc. are the formal sources of marketing intelligence system whereas magazines, newspapers, trade journals, talks with customers, talks with managers and employees etc. are the informal sources of marketing intelligence system.

3) Internal Record System

The records kept by business organizations to systematize different internal activities are called internal records system. Internal record is an important and easily available source of information. Customer related record, sales related record, annual reports etc. are the main internal records.

4) Marketing Decision Support System (MDSS)

A decision support system is a procedures that allows a manager to interact with data and methods together, analyze, and interpret information. Data bank, method bank and model bank are the components of decision support system.

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