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MARKETING: Marketing Research
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By Heidi Skovhus

altMost literature is about market research and not marketing research. There is quite a significant difference between the two. Market research is an orderly, objective way of learning about people, the people who buy from you or might buy from you. Market research is when you narrow down a specific target group and then conduct research within this narrow group of consumers. Marketing research is different. Different, because it is dealing with a broader range of consumers. Marketing research includes market research, but it also delves into new product research and distribution methods. The best way to differentiate between the two is to understand that marketing research is really about researching the marketing process of a company, not just who the company is targeting.

Marketing research process step by step

Generally speaking, the marketing research process consists of the following 9 steps:
1) Problem definition. What is the focus of the research, and which key questions must the research provide answers to?
2) Data collection method. How will data be collected in order to best solve the problem defined in step 1?
3) Determine sample method. What sampling is best to use? Will it be random sampling, a sampling that contains a similar element, or a natural sampling? Sampling represents those you will collect information from.
4) Data analysis. How will data be analysed? By hand or software? By yourself or a vendor?
5) Determine budget and time frame. How much can be spent on research, and when must it be completed?
6) Data collection. The actual collection of data, based on step 1-5 answers.
7) Analysis of data. Conduct an analysis of the data that has been collected in previous steps.
8) Error check. Check for data errors. It is not uncommon for errors to be found.
9) Create your report. Draft a report of your findings. It is important that the report clearly communicate the results that are found in the research, and the findings should lead to a solution to the problem identified in step 1.

When is it relevant?

altAn easy way to answer this is to say that all companies, big and small, new and old, have to do marketing research. There are, of course, some points in time where marketing research is more critical than others. This can be when starting a new business. Innovative ideas and gut feelings are not enough when it comes to predicting success for a product or service. It is important to know the following before investing: Is there a need for this service or product? Who is likely to buy it? What will they pay? Are there enough of these people to make a business? How can these people be found? Is there a competitor , and if yes, will you be offering something they cannot offer? Is there a profit margin?

Another critical time to conduct marketing research is when introducing a new product or service. If you do not do this, you could end up with a big stock of goods that are not sellable. In order to know whether or not there is a market for your new product or service you need to answer the same kind of questions as if you were opening a new business.

Finally, marketing research is also important when you are “just” maintaining your existing business. Success today does not necessarily mean success tomorrow.. It is important to know the following when maintaining the business: Is there a new untapped market? Are your customers ready for a new product? Are your prices in line? Is there a new technology that would enable modifications or substitutions? Has the preferences and/or beliefs of your target audience changed? Are competitors doing something new?

Be aware that marketing research is not a one-time only activity. It needs to be done on an on-going basis, and at least whenever a major business decision has to be made.

Conducting marketing research

altThere are two main sources of data: primary and secondary data. Primary research is conducted from scratch, and it is original and tailor-made to the problem at hand. It is rather expensive and time consuming, but it is much more focused. Secondary research already exists in some form. It is relatively cheap, and can be conducted quite quickly. However, the data tends to be collected for reasons other than the problem at hand. There are many sources of secondary data.

Several ways of conducting primary research exist. Each method should be studied and understood carefully before taken into use. Here are some of the main methods:
- Telephone interviews: This is a very common method, since it is a rather cheap way to collect data from a geographically dispersed sample. It tends to be very structured interviews and can lack depth.
- Face-to-face interviews: Conducted between the marketing researcher and the respondent. This is the best way to have open form questions and to go more in-depth. However, this method is expensive, and time consuming.
- Internet: Various data can be collected from the internet today: online questionnaires or tracking online behaviour.
- Email surveys: Create or buy a list of email addresses, then send out a questionnaire. This is an easy way to reach many respondents, and is very cost efficient. However, the response rate is often low, and a 5-10% response rate is considered normal.
- Focus groups: Often used for product or advertising testing. This provides in-depth qualitative feedback from 10-18 respondents per focus group. One of the disadvantages is that the moderator can play a role in the outcome, and some respondents might not be honest when being part of a group.
- Omnibus study: This is when a company purchases questions on a ‘hybrid’ interview. The company will be one of many who simply want a straightforward answer to a simple question. This research is far cheaper and requires less time and effort than doing your own research.

Qualitative versus quantitative research

Qualitative research deals in words, images and the subjective, whereas quantitative research deals in numbers, logic and the objective.

altThe standard empirical quantitative technique in marketing research is the survey questionnaire typically using scaling 1-5 or 1-7 and administered to a sample of a population, which enables us to draw inferences about the behaviour of a whole population based on a smaller sample. The emphasis is on breadth and representativeness, confidence levels and significance tests, and so forth. On the other hand, qualitative research results can be in the form of subjective summaries of mountains of data in reports, which can be lacking statistical proof. Running quantitative research alongside qualitative research offers a synergy, whereby, objective data can provide a structure to analysis of subjective qualitative data. Many marketers today know how to combine both kinds of data to provide the most useful and strategically significant reports.

Marketing research in China

China is a difficult market for marketing research. China should not be treated as one country, but as multiple markets when doing research, because of the great diversity within China. Furthermore, the discipline of doing marketing research does not have as long a history in China as in most Western countries. Some data is difficult to obtain, since companies are less transparent in China and it can be very difficult to obtain competitor information. However, with that said, the market here is still growing, and today, many of the big global research agencies from Europe and the US have entered China, along with many local vendors doing research. So, it is becoming easier to conduct trustworthy marketing research in China.
 
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