Principles of Marketing

Quarter 1 - Module 3

Marketing Opportunity Analysis

and Consumer Analysis

Lesson 3
Define Marketing Research,
Its importance to a Business Enterprise
and Identify the Steps in Marketing Research
Lesson 3: Define Marketing Research, Its importance to a Business
Enterprise and Identify the Steps in Marketing Research
(ABM_PM11-le-1-11)

What I Need To Know

Marketing research is the function responsible for acquiring and evaluating market
and consumer-based information for decision making and the determination of
marketing strategic direction. It is primarily responsible for the gathering, analysis, and
timely distribution of information for the use of marketing decision makers.

General Objectives:
After going through, you are expected to:
 Define marketing research and its importance to a business enterprise;
and
 Identify the steps in marketing research

What’s In

Activity 1:
Check your understanding about Marketing Research:

1. Caroline started doing her marketing research process by Identifying the

problem of poor marketing message penetration. What does Caroline
need to articulate next? Choose your answer below and Explain briefly

a. Develop the research plan

b. Objectives for the research
c. Conduct research
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 What Is It
MARKETING RESEARCH
Marketing research is a function under a business organization’s Marketing
Information System (MIS). MIS is primarily responsible for the gathering, analysis, and
timely distribution of information for the use of marketing decision makers.

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.

The Purpose and Importance of Marketing Research

Companies have complete information about their products from production to

distribution. However, it is a challenge for the companies to know what happens to
the product after it was purchased. Who uses the product, how it is used, how much
or how little of it used, and the general attitudes of the consumer toward the product
are not known explicitly. Thus, for new products or new markets, the company may
not be completely certain whether the product will be accepted by the market. The
value of the product to the consumer is difficult to measure because perceptions of
the value are subjective.
Although marketing research can be costly, it is indispensable. The following are
some of the issues that can be addressed by marketing research:
 Identify viable new products and services
 Enable risk reduction
 Identify market opportunities and threats
 Determine the level of customer satisfaction
 Pinpoint and anticipate market trends or changes
 Decide on the best advertising medium
 Pre-test and post-test advertising and promotional campaigns
 Evaluate the results of test marketing
 Evaluate the results of packaging, brand name, and label testing
 Determine consumer price awareness and sensitivity
 Undertake location studies

Steps in the Marketing Research Process

Marketing research can and should be used for various reasons. Marketing
research can be used to identify marketing opportunities and problems, generate and
evaluate potential marketing actions or plans, monitor marketing performance and
improve marketing as a process. But, how does one carry out marketing research? I
delved into the Marketing Research textbook by Alvin C. Burns and Ronald F. Bush
for the answers.
 Here are the 11 steps to conducting marketing research, but note that not all
marketing research follows these steps.

1. Establishing the need for marketing research

This could seem basic but is in fact fundamental to conducting marketing
research. Research takes time and money. Marketing research is not needed when
information is readily available (this could be through secondary data), when there is
not enough time to conduct a proper research study and answers are needed
immediately, when you can afford the research or when the costs outweigh the value.
It could also simply be that the answer is obvious.

2. Defining the problem

According to the authors, this is by far the most important step. If the problem is
incorrectly defined, all is wasted effort. Marketing research should only be conducted
to answer a problem. There are also needs to be alternatives. If there are no
alternatives, no decision is necessary.

3. Establishing research objectives

Objectives tell a researcher exactly what he or she should be looking for and what
he or she must do to obtain the information necessary to allow the manager to choose
between the decision and the alternatives.

4. Determining research design

• Exploratory research: informal search to learn more about the research
problem, learn terms and definitions or identify opportunities
• Descriptive research: most basic; used to describe the marketing phenomena
• Causal research: uncover factors that cause on event

5. Identifying information types and sources

• Primary: information collected specifically for the problem at hand
• Secondary: information already collected

6. Determining methods of accessing data

This can be done through observing consumers, surveys, online etc.

7. Designing data collection forms

Designing the form in which data will be collected. It can be a questionnaire or an
observation form.

8. Determining sample plan and size

Sample plan: describes how each sample element is to be drawn from the total
population
Sample size: how many elements of the population should be used to make up the
sample

9. Collecting data
Non-sampling errors in data are likely to occur and researchers need to know the
sources of these errors to implement controls to minimize them.
10. Analyzing data
Data analysis involves entering data into computer files, inspecting data for errors,
and running tabulations and various statistical tests.

11. Preparing and presenting the final report

It is important that it is not overstated as it is the report that properly communicates
the results to the client.

Making Marketing Research-based Decisions

Marketing research reports include a lot of information that can aid organizations
in making effective marketing decisions, rather than resorting to unsupported “gut feel”
decisions.
Some examples of reports and the marketing decisions they can support are:
 External factors research- The information from these researches helps
marketers identify macro-environmental shifts. These are bases in pinpointing
opportunities and anticipating threats.
 Observation research - This is an invaluable aid in determining consumer
behavior. It assists marketers in determining the retail shelf placement
strategy to use. It also reveals the effectiveness of point-of-purchase collateral
materials.
 Test marketing- Based on test marketing results, the company shall gauge
the acceptability of a proposed product/service. The company can, have the
opportunity
to re-calibrate elements in the marketing mix and to measure their effects on
consumer demand and overall satisfaction. Its finding can result in the
discontinuance of a proposed product/service if results indicate a general lack
of interest.
 Target market studies- These help identify, quantify, and understand the
target market better. Companies may decide to redefine its target market by
including characteristics the market should possess
 Concept, product development, and product studies- Using the results
generated by concept, product development, and product studies, marketing
organizations shall select the proposed product/service concepts that have
the highest level of market acceptance. It can also be used to decide on the
packaging, to determine the market acceptance. It can also be used to decide
on the packaging, to determine the market reaction, and to justify brand
positioning.
 Pricing tests- Pricing tests can be utilized by marketers to calculate a
product’s or service’s optimal price, to determine price elasticity, or to
determine how price adjustment can effect total demand for the product or
service.
 Location studies- Location studies determine ideal retail store locations and
is a valuable tool in site selection.
 Advertising pre- and post-testing- These tests can determine advertising
copy effectiveness, advertising recall, sales promotion response rates,
outdoor advertising traffic results, and the effectiveness of public relations
media placement. A product’s/service’s advertising theme or message and
 the mechanics of consumer sales promotions can be adjusted based on these
results.
 Usage, attitude, and image studies- These studies can provide cost-
effective ways on how to increase a product’s/ service’s awareness level and
brand trial. In addition, the results can reveal product usage and allow the
company to develop strategies to increase usage frequency. The
effectiveness of current distribution outlets can be ascertained. This can help
in determining if distribution outlets can be ascertained. This can help in
determining if distribution should be expanded or alternate distribution outlets
should be developed. Finally, product/service purchase drivers can be
quantified to calibrate its value offer effectively

What’s More

Activity 2: Multiple Choice

Directions: Write the letters of the correct answer.

1. Clearly communicate the research findings to the client.

a. Identify Information Types and Sources

b. Determine Methods of Accessing Data
c. Establish need for marketing research
d. Prepare and Present the Final Research Report

2. Research objectives tell the researcher exactly what information needs to

be gathered and analyzed to allow managers to make decisions related to
a problem. They need to be clear and measurable.

a. Determine Research Design

b. Establish the need for Marketing Research
c. Identify Information Types and Sources
d. Establish Research Objectives
3. You don’t need MR if:
- The information is already available
- The timing is wrong to conduct MR
- Costs outweigh the value of MR

a. Establish Research Objectives

b. Determine Methods of Accessing Data
c. Identify Information Types and Sources
d. Establish the need for making Research
 4. Can be found online, using surveys, or observing customers

a. Define the Problem

b. Determine Methods of Accessing Data
c. Determine Research Design
d. Prepare and Present the final Research Report

Activity 3: True or False

Directions: Write TRUE if the sentence is correct and right FALSE is not correct.

1. Using IBM or SPSS, data analysis is to use statistical tools to present data in a form
that fulfills the research objectives. (Establish the need for Marketing Research)
2. Primary Information: collected specifically for the problem at hand
Secondary: information already collected (always look at first). (Establish
the need of marketing research)
3. Define a Problem Statement that summarize the problem briefly. (Determine
Methods of Accessing Data)

What I Have Learned

Activity 4: Reflection:

1. Why is marketing research important for business owners?

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2. In what ways can marketing research help you as a consumer? Explain
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