Market research refers to systematic collection, recording and analysis of data, aimed towards solving a marketing problem. It is the process of collecting information or facts relevant to the market and analysing and interpreting that information to strategize business decisions.
According to Philip Kotler, “Market Research is the systematic design, collection, Analysis, and reporting of data relevant to a specific marketing situation an organization is facing”
Market Research involves systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in the marketing of goods and services.
Objectives of Market Research
Discovering new markets for products
Increasing the market share for existing products
Forecasting the future demand for products
Analysing the tastes and preferences of consumers
Reducing the cost of marketing activities
Improving the quality of products
Formulating effective marketing policies
Determining competitors strategy
Studying the internal and external marketing environment
Types of Market Research
Market / Customer Research
Product, Price, Promotion Research
Information collected through Market Research
Total size of current market
Total size of potential market
Consumer taste & preferences
Price sensitivity analysis
SWOT of the firm and its competitors
Developing Information for Market Research / Techniques of Market Research
Market Research involves collection of primary and secondary data through various methods of data collection. They are:
Yearly reports of banks and businesses
National 5 year plans
Unpublished documentaries, biographies, letters, diaries etc.
Quiz, test, assignments
Projective techniques – Word association test, Sentence completion test, Story completion test, Verbal projection test, Pictorial techniques
Process of Market Research
(1) Identification and definition of Research Problem – It involves –
Identification of Research problem
Laying down objectives of the study, and
Determining the extent of information required.
(2) Conducting situational analysis and informal investigation – Situational Analysis involves collecting information regarding business environment, market situation, competitions and industry surrounding the problem in general. An informal investigation includes an investigation with the people outside the organisation like suppliers, wholesalers, consumers, advertising agencies etc. This is done to determine whether a detailed study in necessary and feasible or not.
(3) Planning and conducting formal investigation – It involves the following –
Preparing a research design – exploratory, descriptive, casual
Selecting the sources of information – Primary source or Secondary source
Deciding methods of data collection – Survey, Observation, Experimentation etc.
Collecting the data – Survey, Observation or Experimentation
(4) Analysing and Interpreting data – It involves classification, tabulation and interpretation of the data collected. Statistical techniques are used to draw conclusions and make recommendations. Efforts are made to generalize all the findings.
(5) Summarizing the findings and preparing a research report – The last step involves preparation of a written report that helps the management to make effective decisions based on the finding and recommendations of the report.
Guidelines for effective report –
There must be objectivity and clarity in presentation of data
It must be concise and precise
Charts and illustrations must be only used if necessary
The layout of the report must be – Preliminary pages, Main Body and End Matter
It must contain the following:
Title of Report
Date, Acknowledgement and Foreword
Table of Contents
Objectives of Study
Summary of Findings
Suggestions and Recommendations
Conclusion, Appendices, Bibliography
Importance of Marketing Research
It helps in formulation of marketing plans, policies and strategy
It helps in Problem solving and Decision making
It acts as a controlling technique for marketing activities
It helps to understand market complications and opportunities
It aids in understanding consumer behaviour and consumption patterns