Marketing Research: To Get a Competitive Edge in an Information Age

An organisation's information link with its customers and competitors.

You have a new product that your company is certain will be a winner. Your advertising agency guarantees you that a costly advertising and promotional campaign will be effective for a service you want to revamp. The client servicing people tell you that they know the customers whose needs will not change.

Actual marketing is seldom, if ever, straightforward or certain. Marketers often have only conjecture, hunches and hearsay and lack even fundamental marketing information. Marketing research is increasingly used as a marketing information tool to help attain marketing objectives which in turn are meant to achieve overall organisational goals. Yet many marketers do not know what marketing research entails and so cannot utilise it effectively.

Marketing research may be described as an organisation's information link with its customers and competitors for supporting effective marketing decision making. The marketing research process may be conceptualised in terms of five critical stages: problem specification, research design, data collection, data analysis and solution formation, and presentation of findings.

Stage 1: Problem Specification

With the assistance of the marketing research agency, your needs or problems have first to be specified to facilitate research design. For example, there may be a consumer product that your company is introducing. You want to know first, if the product should be launched and second, in what form.

More specifically, you need to know the present and potential market size, the major manufacturers, their market share and main distribution networks. You also want to identify the product features that customers demand; you need detailed information to refine your product. With the target market well defined, you can then get the most effective advertising and promotional campaign possible for your money.

Stage 2: Research Design

Depending on the problem specified, a research design has to be formulated that yields information that will solve the problems or meet your needs. The design may involve one or both types of research techniques: quantitative and qualitative.

Quantitative research numerical and uses statistics derived from a sample which estimates the characteristics of the population under study (for example, professionals who earn more than $3,000 a month, household consumers who regularly buy detergent or mothers with infants below 12 months of age). Surveys, the main quantitative research technique, are ideal for obtaining such information as the awareness of brand names, purchasing intentions, attitudes or opinion on certain ideas and so on. As sizeable numbers of respondents, from a couple of hundreds to several thousands, have been randomly sampled or selected to avoid bias, findings can usually be generalised to the sector or market of interest.

Qualitative research involves non-statistical but in-depth study on the awareness, motivations and attitudes which yield detailed responses to a new product, service or concept, ideas for an advertising campaign and so on.

Since the people selected for study are not randomly selected nor sizeable in number, findings obtained from focus groups, in-depth interviews and other qualitative research techniques cannot be accurately generalised to the population. However, qualitative research is useful in providing exploratory ideas to be tested by quantitative research, that is, to ascertain if the ideas obtained from a handful of people are representative of or applicable to the population of interest.

Stage 3: Data Collection

There are two main types of data or information: primary and secondary. The former is new or original information (for example, customers' feedback about your services) while the latter comprises existing information (for example, competitors annual reports).
Data can be collected by various means: face-to-face or telephone interviews, focus group discussions, self-administered questionnaires, observation as well as information gathered from reports, publications and computer databases. Data collected have to be verified for accuracy before processing for data entry.

Stage 4: Data Analysis and Solution Formulation

Information gathered has to be analysed in the context of your problems or needs to yield directly applicable solutions. In the example used in Stage 1: Problem Specification, a new product is being considered. Based on overall findings, the marketing research agency should be able to recommend and justify if you should embark on the new venture.

With estimates on the current market size and projections on its expected growth, the main players, their market share and distribution channels, etc, are considered in a competitive analysis.

On the demand side, customer profiles are identified in terms of their needs and preferences. Analysis should come up with the product features that will allow the refined product to fulfil needs not previously met. A well-defined target market will facilitate a focused advertising and promotional campaign (which can be evaluated and explored in focus groups) for maximum impact.

All relevant findings including methodology, limitations and recommendations should be clearly set out in a report.

Stage 5: Presentation of findings

Research findings are usually presented not only to marketers but to management who often may not have time to read the report. Well conducted presentations can highlight key findings to allow management to set guidelines for the team to achieve marketing objectives. In the final analysis, marketing research is but a tool. Like any tool, it may be ineffectively utilised or even misused (see box story) as many marketers are not familiar with the process of marketing research- In an information age, effective marketing research can provide marketers with the competitive edge.

Subsequent articles will attempt to give marketers sufficient insight into the main research techniques' strengths and limitations and suggestions for a fruitful marketer-research agency relationship for effective marketing decision making.

Actions to Avoid in Marketing Research

There are technical limitations and ethical considerations in marketing research. As in any professional field, you would expect established marketing research agencies to observe a code of ethics which protects the rights and interests of individuals and organisations being researched not to mention the agencies' reputation.

Marketers similarly have their code of ethics. But even in professions with formal codes of ethics and watchdog bodies, what constitutes ethical conduct can be a grey area. Many are well aware of the possibility of observing the letter but not the spirit of ethics. Marketing research users may feel restricted by ethical constraints and be tempted to persuade their marketing research agency to do unto others what they hope would not be done unto them and violate ethics, not to mention the law, in the process.

Confirming your marketing decisions. Marketing research should not be used to "confirm" your marketing decisions. If you have already decided on, for instance, the features of a new service and the advertising and promotional approach, you should not expect your marketing research agency to yield certain findings.

Marketing research should be used to test your ideas, judgements and assumptions at the drawing board or you risk throwing away much time and money.

Influencing your marketing research agency. Factual accuracy is sacred in marketing research. One step further from expecting findings to go in a certain direction by, for instance, dropping strong hints to your agency and you might as well write the report yourself!

One of the reasons for working with marketing research agencies is their third party independence and any inadvertent influence would interfere with the professionalism of the marketing research process.

Inadvertently misusing research findings. There might be pressure to make attention-grabbing claims by selective use of research findings which could be inaccurate. It would be prudent to check with your agency or you might unknowingly violate your code of ethics and put the reputation of your marketing research agency at stake.

Gathering confidential information, Some marketers may have an unfounded belief that marketing research agencies can do wonders to obtain information akin to the realm of industrial espionage. The types of information that your company would not publish in an annual report, reveal to the public nor disclose in an anonymous interview are probably those that should not be obtained.

Selling disguised as research. Pretending to conduct research in order to gain access and opportunity to make sales pitches is clearly unprofessional practice for the agency and the marketer.

Invading privacy. There is a limit to getting in touch with your customers. The right to give informed consent is obviously fundamental for individuals to be researched. Anonymity is also a common assurance given to consenting respondents. Obtaining information by covert means or by deception would be unethical.

A final word. Marketers can obviously play their role by being aware and understand their marketing research agency's professional ethics. An agency that is willing to "bend the rules" for you is likely to do the same for your competitors with regard to information relating to your company.

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