Lesson Four

Marketing Research and Marketing Information

Systems
Marketers require information and market intelligence on market trends, customers,
competitors and aspects of the marketing environment. If this is information is not to hand
they must instigate marketing research. Once the information has been collected it must be
sorted, analysed and disseminated to decision makers, stored and retrieved from time to time.
This requires a marketing information system (MIS). Not all decisions are based on marketing
research programmes though. Most decisions require spontaneity and decisiveness and can
not wait the commissioning, undertaking and delivery of marketing research activity. On the
whole marketers base most of their decision making on their experience, instinct and reaction
from immediate colleagues. For more risky decisions, such as those on new brand identity,
new product development, innovative advertising campaign, entry into a new market etc.
marketers prefer to collect evidence to support their thinking and recommendations –
marketing research.

MIS
Design and
implementation
of data collection
on a regular
Marketing data Marketing Marketing Decision
basis
bank intelligence Maker

Marketing
Research
Collection of
data for a
specific purpose

Marketing Research

Marketing research is a formalised means of obtaining/collecting information to be used to

make sound marketing decisions when addressing specific problems. It consists of the
following five steps:

Defining and Locating Problems

The first sign of a problem is usually a departure from normal function, such as conflicts
between or failures in attaining objectives e.g. declining sales, likely impact of new competitor.
Conversely when the organisation experiences dramatic rise in sales or some other positive
event, it may conduct marketing research to discover the reasons and maximise the
opportunities stemming from them. Defining and locating the problem allows the marketing
research activity to be more focused, saving on time and expense.

Developing Hypotheses

A hypotheses is an informal guess or assumption about the likely cause of the research
problem based on the insight and knowledge available about the problem from previous
research studies and other sources. The hypothesis determines the data source to be used
and the methods through which the data will be collected. As information is gathered the
hypothesis should be tested. Sometimes several hypotheses are developed during the study;
the hypothesis that are accepted or rejected become the study’s chief conclusions.

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Lesson Four

Collecting Data
Marketing researchers have two types of data at their disposal. These are:

Secondary data

This is material that is readily available. It includes data from:

1. Non-commercial sources e.g. official statistics, produced by governments of different
countries or international organisations such as the OECD and IMF, concerning key
economic indicators, demographic and social trends and key industry and trade data; or
unofficial statistics produced by non-governmental organisations. This data is usually
published i.e. available publicly in libraries.
2. Commercial sources. These can be published sources e.g. country reports from the
Economist Intelligence Unit or from unpublished sources where the information has to be
bought. These include Experian and CACI that take census data and supply customers
with very detailed reports of key demographic data on a regional basis; or BARB who
supply data on television viewing; or BMRB who conduct national product and media
surveys, questioning adults about what products they use, the newspapers and
magazines they read and tv programmes that they view.
3. Other sources including trade journals, trade associations and the internet.

Primary data

This is data that are observed and recorded or collected directly from respondents. This type
of data must be gathered by observing phenomena or surveying respondents. This data can
be gathered through:

1. Experimentation – this involves keeping certain variables constant and varying others to
determine their effect e.g. a confectionary manufacturer can determine the effect of the
price of a chocolate bar on sales, by altering prices in one region. Experiments can be
conducted in a laboratory or field setting. In laboratory settings, participants are invited to
a central location to react or respond to stimuli. A problem with the laboratory setting is its
isolation from the real world. As a result it is not possible to duplicate all the choices that
affect the marketplace. Field setting experiments however are “real world” experiments
e.g. getting shoppers to decided which brand of margarine tastes better. However field
settings can be biased by unexpected events e.g. the weather or major economic news,
or competitors unexpectedly reducing prices.
2. Surveys:
a. Omnibus surveys – these are the quickest and cheapest form of primary data
collection. These are regular surveys using a pre-determined sampling frame, in
which the costs of the survey are shared between a number of organisations.
Each company can add its own questions to the survey, although by necessity
the number of questions asked by each company is limited. Omnibus surveys
allow a marketer to collect limited data on a regular basis. By asking the same
question regularly, a company can track issues, such as advertising awareness,
product usage and attitudes to products and promotions. Most omnibus surveys
are of a general nature, although companies can obtain more specialist ones.
Most surveys are conducted by telephone, using a computerised questionnaire.
b. Mail or postal questionnaires. These are simple and mailing lists are increasingly
cheaply and readily available. They lack interviewer bias and expenses and are
the most impersonal approach to marketing research. However they rely on a
well designed questionnaire that is easy to complete. However they are inflexible
and can not include probing or lengthy questions and lack the presence of an
interviewer to explain questions or seek clarification of responses. Rates or
response are low and the lead time of responses is much longer than for other
research methods. The quality of the result is dependent on the mailing list used.
c. Telephone surveys – These are very popular, given the ownership of telephones
and is useful if data is required quickly. It also offers a more cost-effective

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Lesson Four

approach than personal interviews but the biggest difficulty is obtaining access to
the correct person to participate in the research – secretaries and receptionists
can act as gatekeepers. Telephone interviewing cannot include visual aids or
observations and in consumer markets have received a bad press, as they are
seen as a way of trying to sell unwanted products. Telephone interviews are often
automated with responses being captured by interviewers on touch screens, or
even an IVR system being used to capture responses, eliminating interviewers
entirely.
d. Web surveys – these are becoming more popular but tend to be restricted to a
company’s home site, questioning visitor’s to the businesses own site or
surveying registered users of the web site. Distribution lists of people’s email
addresses are not readily available. However companies have started to pool
their list of e-subscribers making commercially available these e-addresses for
marketing research and e-commerce.
e. Personal interviews – these permit the most probing of respondents and for core
issues of brand perception, advertising campaign and product testing are crucial.
In home interviews provide the respondent with the “security” of home territory
but are costly, time consuming and no loner widely deployed. Shopping mall
intercepts e.g. the person with the clipboard on the street corner, are very
widespread, relatively cheap and large samples can be surveyed in a matter of
weeks. Some rapport may be built up between interviewer and respondent, with
limited clarification of questions and answers possible. However such interviews
are restricted to 4 – 5 minutes and only limited stimulus material can be utilised.
f. Focus groups – these are 1.5 hour or 2.5 hour discussion groups, generally
single sex and corresponding around 8 respondents. The moderator focuses in
on a particular product, brand advertising campaign or marketing proposition as
the discussion proceeds. They are very popular for examining in-depth subjective
opinions and perceptions.
g. Quali-depth interviews – these are a hybrid between focus groups and personal
interviews, lasting around 25 minutes, permitting reasonable probing and use of
stimulus materials but not to the extent of home interviews of focus groups. They
generally take place in rented meeting rooms in town centres, with respondents
enticed off the streets to participate.

Sampling is necessary in most marketing research, expect industrial markets with few
customers. It is important to select respondents who reflect the make up and composition of
the overall larger population. There are four approaches to selecting a sample:

1. Random sampling – here everyone in the population has an equal chance of inclusion in
the survey.
2. Stratified sampling – here the population is divided into groups based on a common
characteristic or attribute and then probability sampling is conducted within each group.
This ensures that each group or segment receives its proportionate share of
representation. Sampling is stratified when researchers believe that they may be
variations in attributes such as age, sex, religion amongst respondents.
3. Area sampling – this involves selecting a probabilistic sample of geographical areas, such
as streets, census tracts and then selecting individuals in these areas. This is a version of
stratified sampling using geographic areas as segments. To choose individuals or units,
researchers may pick every nth house or use a more random procedure. Area sampling
may be used when a complete list of the population is not available.
4. Quota sampling – the final choice of respondents is left to the judgement of the
researchers. There are usually some controls limited to 2 or 3 variables e.g. age, sex,
occupation over choice of the respondents. These attempt to ensure that representative
categories of respondents are interviewed e.g. a mall intercept researcher may be asked
to interview “fifty ladies between 40 and 45 from a good background”. There is room for
error in this subjective approach as the samples are not statistically valid.

Analyzing and Interpreting Research Findings

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Interpretation is easier if marketers carefully plan their data analysis methods early in the
research process. They should allow for continual evaluation of data during the entire
collection period. They can get valuable insight into areas that ought to be probed during the
formal interpretation. Analysis should include statistical analysis of the data to focus on what
is typical or what deviates from the average. It indicates how widely responses vary and their
relation to the variable being measured. Interpretation relies on marketers judgement or
intuition but must take into account estimates of expected error or deviation from the true
population. Analysis may lead researchers to accept or reject the hypotheses being studied.

Reporting Research Findings

The marketer must take a clear objective look at the findings to see how well the gathered
facts answer the research question or support or negate the hypothesis posed in the
beginning. Often the study is unable to provide everything needed to answer the question and
the marketer must point out the deficiencies in the research and reasons for them, suggesting
areas that require further investigation.

Marketing Information System

The main function of the MIS is to provide marketing managers with the information they
need, is an appropriate form, at the appropriate time. The MIS is the framework for the day to
day mgmt and structuring of information gathered regularly from sources both inside and
outside the organisation. Hence the MIS should provide continuous information about sales,
prices, advertising expenditure, competition and distribution and so is an additional source of
information available to marketing researchers than marketing research which is
commissioned on an ad-hoc basis. The MIS takes inputs from internal and external data
sources, classifies it and develops categories for meaningful storage and retrieval. Marketing
decision makers then determine which information is useful for marketing decisions and
feedback from these decision makers allows those collecting data to adjust the information
inputs systematically.

Marketing Databank

Data brought into the organisation through the MIS and marketing research becomes part of
its data bank. The data bank allows researchers to retrieve information that can be used for
addressing problems that are quite different from those that prompted collection of the data.

Marketing Intelligence

This is the composite of all data and ideas available within an organisation that assists in
decision making.

Marketing Decision Support System

An MDSS goes further than the MIS by taking the MIS and adding question and answer
facilities. Where as the MIS concentrates on retrieval of information from the system, the
MDSS allows for more complex analyses of the data. Many forward marketing-orientated
businesses have added MDSS capabilities to their MIS and refer to the two systems as the
MIS. Interest in the MDSS has been driven by the widespread availability of computers and
statistical analysis software such as SPSS and SAS.

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