Market Research

Prof. Aradhita Deb

Definition
 Market research is the process of determining the viability of a new
service or product through research conducted directly with potential
customers. Market research allows a company to discover the target
market and get opinions and other feedback from consumers about
their interest in the product or service

 Market research is a critical component in the research and

development (R&D) of a new product or service

 The purpose of market research is to look at the market associated

with a particular good or service to ascertain how the audience will
receive it. This can include information gathering for the purpose
of market segmentation and product differentiation or determine
which features are seen as a priority to the consumer.

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 A business must engage in a variety of tasks to complete the market
research process. It needs to gather information based on the
market sector being examined. The business needs to analyze and
interpret the resulting data to determine the presence of any patterns
or relevant data points that it can use in the decision-making process

 It is a technique to know:
1. Who are customers of our products or services?
2. Where do they live?
3. When and how do they buy the product and services?
4. Are customers of our products satisfied with the products?
5. Who are our main competitors in the market?
6. Are the company’s products inferior or superior to competitors’
products?
7. What policies and strategies are they following?
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Scope of Market Research:
 Clark and Clark define marketing research as “The careful and
objective study of product design, markets and such transfer
activities as physical distribution, warehousing advertising and
sales management. Thus the scope of marketing research lies in
its variety of applications.”

1. Diagnosing the current situation or problem based on detailed

information
2. Clearly identifying competitive strengths and weaknesses
3. Constantly analyzing what is happening in the market place.
4. Planning to watch company’s strengths with market
opportunities by outlining objectives for product and market
development and devising strategies and tactics to achieve them

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5. Watching out continuously for threats to the achievement of those
plans

6. Monitoring the progress of strategy implementation

7. Research creativity, at its best, marketing research develops

innovative ways to solve problems. The main objective of
marketing research is to enable manufacturers to make goods
acceptable and saleable and to see that they reach the market more
easily, quickly, cheaply and profitably without sacrificing
consumer interest

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 Market research covers the following items of study:

1. Size of the present and potential market

2. Consumer needs wants, habits and behavior
3. Analysis of the market size according to age, income,
profession, standard of living etc
4. Geographic location of customers
5. Analysis of market demand
6. Knowledge of competitors and their products.
7. Knowing the profitability of different markets.
8. Study the market changes and market conditions.
9. Analysis of various channels of distribution.

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Objectives of market Research:

1. To understand the economic factors affecting the

sales volume and their opportunities
2. To understand the competitive position of rival
products.
3. To evaluate the reactions of consumers and
customers.
4. To study the price trends.
5. To evaluate the system of distribution.
6. To understand the advantages and limitation of the
products.
7. To find new methods of packaging, by comparing
other similar packages
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8. To analyze the market size
9. To know the estimation of demand
10. To evaluate the profitability of different markets
11. To study the customer’s acceptance of products
12. To assess the volume of future sales
13. To study the nature of the market, its location and
its potentialities
14. To find solutions to problems relating to marketing
of goods and services

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Advantages of Market Research

1. Marketing research is used to measure market potential,

characteristics and share of markets for a company.
2. Companies can use marketing research to evaluate new
product opportunities and product acceptance and to
test existing products relative to the competitor’s
products.
3. It helps to make better advertising decisions.
4. It helps to evaluate the effectiveness of marketing
activities and draws attention to a potential problem.
5. It helps the manufacturer to adjust his productions
according to the conditions of demand.
6. It helps marketing of goods in efficient and economical
way by eliminating all types of wastage.
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8. It helps to find out defects in the products and take
corrective steps to improve the product.
9. It guides a dealer in planning, advertising and promotion
effort.
10. It helps to assess the effectiveness of advertising
programs.
11. It helps in evaluating the relative efficiency of different
advertising media.
12. It facilitates to evaluate the selling methods.
13. It helps to minimize the risks of uncertainties.
14. It helps in exploring new markets for its products.
15. It guides a firm in making sales forecasts for products
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 Limitations of Market Research:

1. Marketing Research (MR) is not an exact science though it uses the

techniques of science. Thus, the results and conclusions drawn upon
by using MR are not very accurate.
2. The results of MR are very vague as MR is carried out on consumers,
suppliers, intermediaries, etc. who are humans.
3. MR is not a complete solution to any marketing issue as there are
many dominant variables between research conclusions and market
response.
4. MR is not free from bias. The research conclusions cannot be verified.
The reproduction of the same project on the same class of respondents
give different research results.
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5. Inappropriate training to researchers can lead to misapprehension of
questions to be asked for data collection.

6. MR faces time constraint. The firms are required to maintain a

balance between the requirement for having a broader perspective
of customer needs and the need for quick decision making so as to
have competitive advantage.

7. Huge cost is involved in MR as collection and processing of data

can be costly.

8. MR is conducted in open marketplace where numerous variables act

on research settings.

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Data Collection in Marketing Research:

Data Collection in Marketing Research is a detailed process in which

a planned search for all relevant data is made by researcher.

Types of Data:

1. Primary Data- Primary data is the data which is collected first

hand specially for the purpose of study. It is collected for
addressing the problem at hand. Thus, primary data is original data
collected by researcher first hand.

2. Secondary data- Secondary data is the data that have been already
collected by and readily available from other sources. Such data
are cheaper and more quickly obtainable than the primary data and
also may be available when primary data can not be obtained at all.

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Data Collection Methods:
1. Qualitative Research- Qualitative Research is generally undertaken to
develop an initial understanding of the problem. It is non-statistical in nature.
It uses an inductive method, that is, data relevant to some topics are collected
and grouped into appropriate meaningful categories. There are two main
methods for collecting Qualitative data:
A) Direct Collection Method-When the data is collected directly, it
makes use of disguised method. The purpose of data collection is not
known. This method makes use of-
a) Focus Groups
b) Depth Interview
c) Case Study
B) Indirect Collection Method- Indirect methods of data collection
involve sourcing and accessing existing data that were not originally
collected for the purpose of the study. This type of data is known as
secondary data.
2. Quantitative Research- Quantitative Research quantifies the data and
generalizes the results from the sample to the population. In Quantitative
Research, data can be collected by two methods
1. Survey Method
2. Observation Method 13
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 Population and Sample:
 Population: Population is the entire set of items from which
you draw data for a statistical study. It can be a group of
individuals, a set of items, etc. It makes up the data pool for a
study.
 In statistics, population refers to data on your study of interest.
It can be a group of individuals, objects, events, organizations,
etc.

 Sample: A sample represents the group of interest from the

population, which you will use to represent the data. The
sample is an unbiased subset of the population that best
represents the whole data.

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Types of Population:
 Finite Population: When the number of elements of the
population is fixed and thus making it possible to enumerate
it in totality, the population is said to be finite.
 Infinite Population: When the number of units in a
population are uncountable, and so it is impossible to observe
all the items of the universe, then the population is considered
as infinite.
 Existent Population: The population which comprises of
objects that exist in reality is called existent population.
 Hypothetical Population: Hypothetical or imaginary
population is the population which exists hypothetically.

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Sampling:

 The process of collecting data from a small subsection of the

population and then using it to generalize over the entire set is
called Sampling.
 Samples are used when :
 The population is too large to collect data.
 The data collected is not reliable.
 The population is hypothetical and is unlimited in size. Take
the example of a study that documents the results of a new
medical procedure. It is unknown how the procedure will
affect people across the globe, so a test group is used to find
out how people react to it.

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Types of Sampling Methods:

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Types of Sampling Methods:

 Probability sampling: Probability sampling is a sampling

technique where a researcher selects a few criteria and
chooses members of a population randomly. All the
members have an equal opportunity to participate in the
sample with this selection parameter.

 Non-probability sampling: In non-probability sampling,

the researcher randomly chooses members for research.
This sampling method is not a fixed or predefined selection
process. This makes it difficult for all population elements
to have equal opportunities to be included in a sample.
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Probability Sampling:
 Simple random sampling: One of the best probability
sampling techniques that helps in saving time and resources is
the Simple Random Sampling method. It is a reliable method
of obtaining information where every single member of a
population is chosen randomly, merely by chance. Each
individual has the same probability of being chosen to be a
part of a sample.

 Cluster sampling: Cluster sampling is a method where the

researchers divide the entire population into sections or
clusters representing a population. Clusters are identified and
included in a sample based on demographic parameters like
age, sex, location, etc. This makes it very simple for a survey
creator to derive effective inferences from the feedback.

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 Systematic sampling: Researchers use the systematic
sampling method to choose the sample members of a
population at regular intervals. It requires selecting a
starting point for the sample and sample size
determination that can be repeated at regular intervals. This
type of sampling method has a predefined range; hence,
this sampling technique is the least time-consuming.

 Stratified random sampling: Stratified random

sampling is a method in which the researcher divides the
population into smaller groups that don’t overlap but
represent the entire population. While sampling, these
groups can be organized, and then draw a sample from
each group separately.

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Non- Probability Sampling:
 Convenience sampling: This method depends on the ease of
access to subjects such as surveying customers at a mall or
passers-by on a busy street. It is usually termed as convenience
sampling because of the researcher’s ease of carrying it out and
getting in touch with the subjects. Researchers have nearly no
authority to select the sample elements, and it’s purely done
based on proximity and not representativeness. This non-
probability sampling method is used when there are time and
cost limitations in collecting feedback. In situations with
resource limitations, such as the initial stages of research,
convenience sampling is used.
 Judgmental or purposive sampling: Judgmental or
purposive samples are formed at the researcher’s discretion.
Researchers purely consider the purpose of the study, along
with the understanding of the target audience.
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 Snowball sampling: Snowball sampling is a sampling
method that researchers apply when the subjects are
difficult to trace. This sampling technique is called
“snowball” because the sample group grows like a rolling
snowball. Non-probability sampling means that
researchers, or other participants, choose the sample
instead of randomly selecting it, so not all members of the
population have an equal chance of being selected for the
study.
 Quota sampling: In Quota sampling, members in this
sampling technique selection happens based on a pre-set
standard. In this case, as a sample is formed based on
specific attributes, the created sample will have the same
qualities found in the total population. It is a rapid method
of collecting samples.
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Population Vs. Sample:

 The collection of all elements possessing common characteristics that

comprise universe is known as the population. A subgroup of the members of
population chosen for participation in the study is called sample.
 The population consists of each and every element of the entire group. On the
other hand, only a handful of items of the population is included in a sample.
 The characteristic of population based on all units is called parameter while
the measure of sample observation is called statistic.
 When information is collected from all units of population, the process is
known as census or complete enumeration. Conversely, the sample survey is
conducted to gather information from the sample using sampling method.
 With population, the focus is to identify the characteristics of the elements
whereas in the case of the sample; the focus is made on making the
generalization about the characteristics of the population, from which the
sample came from.

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Marketing Research Process:

1. Defining the problem

2. Determining the information needed

3. Determining the source of information

4. Deciding Research methods

5. Interpretation of data

6. Preparation of the report

7. Make decision
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