Final MR Notes (2

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Prof. Hemant Kombrabail
MEANING OF MARKETING RESEARCH

The term "Marketing Research" is composed of two words -"Marketing" and "Research". Marketing Marketing basically consists of spotting the needs of customers and meeting them in the best possible manner through appropriate production and distribution activities. The term marketing refers to buying and selling activities. Exchange/transfer of ownership is the essence of marketing. Research Research means detailed/systematic/comprehensive study of a problem. . Research is a process involving a series of steps to collect and analyze the information needed for decision-making in the desired / specific field of inquiry. The term research can be applied to any field of human activity. Research means studious enquiry" or "thorough, honest and impartial study conducted by trained men using scientific methods". It means detailed study relating to a particular subject. The term MR is used extensively in modern marketing management. It acts as a tool for accurate decision making in marketing of goods and services. It is also useful for studying and solving different marketing problems faced by business units. . Here, the details (information and data) of the marketing problem are collected and studied, conclusions are drawn and suggestions/recommendations are made to solve the problem quickly, correctly and systematically. In MR/ marketing problem is studied in depth by collecting and analyzing all relevant information and solutions are suggested to solve the problem relating to consumers, product, market competition, sales promotion and so on. MR is a special branch of marketing management. It is comparatively of recent in origin. MR acts as an investigative arm of a marketing manager. It suggests possible solutions on marketing problems for the consideration and selection by a marketing manager. It also acts as an important tool to study buyer behavior, changes in consumer life-styles and consumption patterns, brand loyalty and forecast market changes. MR techniques are used by manufacturers/exporters/distributors and service organizations to collect information on various aspects of marketing. The information collected is analyzed and used for decision-making in the marketing management. MR facilitates accurate marketing decisions for consumer satisfaction on the one hand and sales promotion on the other hand. It is rightly treated as the SOUL of modern marketing management. MR suggests possible solutions on marketing problems to marketing manager for his consideration and final selection/decision. It is rightly said that the beginning and end of marketing management is marketing research. Decisions on each element of the marketing mix-product, price, distribution and promotion-need marketing research support. Marketing research is primarily used to provide information needed to guide marketing decision viz., market mix. It acts as a support system to marketing management.
TYBMS DEFINITIONS OF MARKETING RESEARCH: Let us now, consider some definitions of MR:
(1) The most widely accepted definition of marketing research is given by American Marketing Association (AMA). The AMA has defined marketing research as "the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services (2) According to Richard D. Crisp: "Marketing research is the systematic, objective and exhaustive search for and study of the facts relevant to any problem in the field of marketing." (3) According to Philip Kotler: "Marketing research is systematic problem analysis, model building and fact-finding for the purpose of improved decision-making and control in the marketing of goods and services." (4) Luck, Wales and Taylor have defined marketing research as "the application of scientific method to the solution of marketing problems" (5) Green and Tull have defined marketing research as "the systematic and objective search for and analysis of information relevant to the identification and solution of any problem in the field of marketing." (6) British Institute of Management: In 1962, the British Institute of Management defined marketing research as/ "The objective gathering, recording and analyzing of all facts about problems relating to the transfer and sales of goods and services from producer to consumer." FEATURES OF MARKETING RESEARCH: (a) Marketing research is concerned with systematic gathering, recording and analyzing of information: In MR, information that is relevant to the marketing problem is collected in a systematic manner from all available sources. Thereafter, the same is tabulated and recorded for systematic scrutiny. Such scrutiny will offer certain specific conclusions useful for solving the marketing problem. (b) In MR, information is to be collected objectively and accurately: This feature of MR suggests that the required information needs to be collected objectively. In brief, the information collected should be accurate, precise, relevant and properly verified. The conclusions drawn and the remedial measures introduced will be ineffective if the information collected is not reliable. (c) Marketing research is a tool for solving marketing problems: MR is a means and not the end in itself. It is a tool in the hands of management for identifying and analyzing marketing problems. The purpose is to solve them correctly.
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CHARACTERISTICS OF MARKETING RESEARCH: (1) Systematic and continuous process: MR is a continuous process. This is natural as new marketing problems are bound to come from time to time in the course of marketing of goods and services. One type of research is not adequate to resolve all marketing problems. Similarly, new research projects will have to be undertaken to solve new marketing problems and challenges. A marketing company faces new marketing problems from time to time. For facing these problems marketing research activities need to be conducted on a regular basis. A marketing company has to conduct MR regularly for its survival & growth in the present dynamic marketing environment. (2) Wide/comprehensive in scope and application: MR is wide in scope as it deals with all aspects of marketing of goods and services. It is more than just collecting data on marketing. Introduction of new products, identification of potential markets, selection of appropriate selling techniques, study of market competition and consumer preferences, introduction of suitable advertising strategy and sales promotion measures, are some areas covered by MR. It plays a role in all the three phases of the management process in marketing: planning, implementation and evaluation. (3) Emphasizes on accurate data collection and critical analysis: In MR, required data should be collected objectively and accurately. The data collected must be reliable. It should be analyzed in a systematic manner. This will provide comprehensive picture of the situation and possible solutions. (4) Offers benefits to sponsoring company and consumers: MR is useful to the sponsoring company. It raises the turnover and profit of the company. It also raises the competitive capacity and creates goodwill in the market. It enables a company to introduce consumeroriented marketing policies. Consumers also get agreeable goods and more satisfaction due to MR activities. (5) Commercial equivalent of military intelligence: MR is the commercial intelligence activity. It is similar to military intelligence where systematic study is made before taking any military action. MR acts as the intelligence tool of marketing management. (6) Tool for managerial decisions: MR acts as a tool in the hands of management for identifying and analyzing marketing problems and finding out solutions to them. It is an aid to decision-making. It suggests possible solutions for the consideration and selection by managers. MR is an aid to judgment and never a substitute for it. (7) Applied type of research: MR is applied knowledge. It is also called 'decisional research as it provides specific alternative solutions to deal with a specific marketing problem. It studies specific marketing problem and suggests alternative solutions and possible outcome of each alternative. In addition, it is both science and an art. MR is also becoming highly professional activity. (8) Reduces the gap between the producers and consumers: MR is an essential supplement of modern competitive marketing. It is useful for understanding the needs and expectations of consumers. It reduces the gap between producers and consumers and adjusts the marketing activities to suit the needs of consumers. (9) Not an exact science: MR is both science and an art. It collects information and studies marketing problem in a scientific manner. The information collected is also applied to real lire problem. However, MR is not an exact science. It only suggests possible solutions and
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not the exact solution to marketing manager for consideration and selection. At present, MR is treated as a professional activity. We have professional agencies (MR agencies or advertising agencies) dealing with the marketing problems of their clients on commission basis. (10) Use of different methods: MR can be conducted by using different methods. Data can be collected through survey or by other methods like observation method or experimentation method. Even computers and internet are used for data collection. The researcher has to decide the method that is suitable for the conduct of research project. This selection is important as the use of unsuitable methods affect the quality of research work. Dynamic character: MR is dynamic in nature. Its scope is fast expanding along with the new developments in the field of marketing. This is natural as MR is essentially for dealing with new problems and challenges in the field of marketing. In addition, developments in other subjects such as economics, statistics, computer science, sociology, psychology, cultural anthropology and behavioral sciences also bring corresponding changes in the field of MR. New methods, new techniques, etc., are used while conducting the research activities. This suggests that MR is a dynamic and progressive subject with new developments taking place regularly. Closely connected with marketing information system: Both the concepts are interrelated. In fact, MR is one component of MIS. Both are useful for solving marketing problems and for accurate and quick decision-making in the field of marketing. Phenomenal growth: MR has made a phenomenal growth since its inception. It has become an important tool in the hands of management (to solve marketing problems) along with the advent of consumer-oriented philosophy in modern business. The increasing research budgets of companies are the indicators of its tremendous growth in recent years. AIMS AND OBJECTIVES OF MARKETING RESEARCH: The aims of the marketing research and analysis may be stated as follows: (1) To study the needs, wants and expectations of consumers. (2) To find out reactions of consumers to the products of the company. (3) To evaluate company's sales promotion measures for suitable adjustment and improvement. (4) To study current marketing problems and opportunities for suitable follow-up actions. (5) To suggest the introduction of new products, modifications of existing products and to discover new uses of existing products. (6) To design and test appropriate packages of company's products and make packaging as attractive as possible (7) To study existing pricing, channels of distribution and market competition for suitable changes, if necessary. (8) To find out methods for making the products of the company popular and raising its goodwill and market reputation. (9) To assess competitive strength and policies. (10) To estimate potential buying-power in various areas
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TYBMS (11) To know the company's expected share of the market.
(12) To determine the dimensions of the marketing problems, facilitate evaluation of the alternative solutions of different problems and help in the selection of a right course of action. (13) To define the probable market for a specialized product and to report on general market conditions and tendencies, buying habits, etc. MARKET RESEARCH V/S MARKETING RESEARCH: The two terms market research" and "marketing research" are used interchangeably though there is difference in the meaning and scope of the two terms. "Market research" is used as a popular synonym for "marketing research". Market is a part of marketing and market research is only a part of marketing research. It covers only a few aspects of marketing. According to Philip Kotler, the term "market research" is accurate for describing research into the market, its size, geographical distribution, income and so on. However, it fails to cover the idea of research into the effects of marketing efforts on the market for which the term "marketing research" is more accurate. MR is increasingly coming into favor as the term that describes both ideas. Marketing research need not be treated as pure academic research. It is a type of applied research with scientific orientation. Distinction between market research and marketing research Dimension Meaning Market Research Market research directly relates to market situation i.e. size, location, market competition and features of customers. It provides details about the market for decisionmaking and policy framing. Market research is a branch of marketing research. Marketing Research Marketing research is a systematic and comprehensive search/study of different aspects of marketing including the current marketing problems and challenges for decision-making & policy framing. Marketing research is one branch of Marketing Information System.
Nature Scope
The scope of market research is The scope of marketing research is limited/restricted to the study of comprehensive & wide as it covers market or market situation all aspects of marketing. Market research is a narrow term Marketing research is a wide/broad as it relates to one aspect of term as it covers all aspects of marketing marketing Market research is undertaken in order to deal with the problems and challenges relating to different aspects of market such as competition, market demand and consumer needs Marketing research is undertaken in order to study varied types of marketing problems such as product line, marketing mix, advertising, packaging, branding and so on.
Type of term
Objective
TYBMS GROWING IMPORTANCE OF MARKETING RESEARCH:
Marketing research has received attention and importance along with the growth of highly competitive consumer-oriented marketing philosophy. Research activities in different aspects of marketing are necessary and useful in such competitive and flexible marketing environment. Large companies marketing consumer items noted the growing need of MR activities in the marketing decision-making process. They naturally took initiative in conducting research activities within the organization itself. This was followed by the formation of specialized marketing research agencies and advertising agencies for this purpose. This is how professional orientation was given to MR. Many marketing research departments and agencies were established after World War II. MR activity (as we understand today) is comparatively new in the field of marketing. This activity probably began around 1950s (Modern era of marketing research) and attracted the attention of companies interested in marketing their products in the national and global markets. However, the concept of MR got firm roots in the marketing activity after 1910. First time the marketing research techniques were used by newspapers to predict the election results. However, during the second decade of 20th century, marketing research emerged as a valuable management tool to solve marketing problems. In the developed countries, marketing research activity is conducted on scientific lines. Even in India, large manufacturing companies treat marketing research as an essential supplement of planning and decision-making in the marketing field. It is treated as an indispensable tool for profitable and consumer-oriented marketing. The popularity of MR increased after 1960 due to the introduction of computers in data collection and analysis. In the early period, marketing research activities were confined to market studies only but in 1950s research relating to marketing activities was broadened to include all managerial aspects-price, produce place and promotion. In late 1950's motivational and psychological techniques were introduced to generate more information on consumers. Several factors have contributed to the growing importance of marketing research. For example, due to large-scale production, producers could not have direct contact with the consumers. This created many problems before producers. For solving all such problems developed due to the gap between producers and consumer and marketing research activities prove to be useful. Secondly, the shifting from sellers market to buyers' market made it necessary to have better understanding about consumer net-expectations. For this, marketing research proved to be useful. Thirdly, the introduction of computers has contributed to the growth of marketing research activity. Fourthly, rapid changes in the business environment, shift to consumer-oriented philosophy in business are also responsible for growing importance of marketing research. Finally, the scope of marketing has widened due to population growth and development of rural markets. MR proved to be useful for dealing with the problems created by national and global markets. In brief, growing importance of marketing research in the present marketing system is the net result of various factors and forces available in the present marketing system. At present, MR activities are undertaken by marketing companies on their own. In addition, marketing research consultants and agencies provide expert advice to companies on general and specific marketing problems of their clients.
TYBMS Relevance of MR under Globalization:
The business world is fast moving towards globalization in which all countries participate. Every country has to face competition in the domestic as well as in export marketing. Survival in the global business is possible through quality improvement, cost reduction and by attracting consumers through various sales promotion techniques. Here, MR offers helping hand to companies. It offers suggestions for survival under global competitive environment. In brief, the importance/relevance of MR is fast growing along with the globalization of business. It is a must for survival and growth under globalization. Current marketing scenario is different as compared to traditional one. There is a new trend towards liberalization and globalization. Markets (domestic as well as foreign) are becoming highly competition. New companies and new products are entering in the markets. Survival is difficult under the present marketing environment. Here, MR offers various services. It is, now, a professional activity with new developments in regard to scope/coverage and techniques. In brief, MR has great relevance in the current marketing scenario in India as well as in all countries- developed and developing of the world. MR has enormous capacity to help and guide marketing companies in regard to their marketing problems and challenges. FUNCTIONS OF MARKETING RESEARCH: MR performs five basic functions. These are: Description, evaluation, explanation, prediction and finally aid in decision-making. These functions are related to the research project undertaken. Usually, every research study performs all the five functions explained below: (1) Description: MR provides data and gives information/description of customers who buy the product. This includes information about their age/sex, education, income and the amount of money that they are willing to spend on the product. Description of the customers is useful in order to draw certain conclusions about the customers and their buying behavior. Even marketing strategies can be decided as per the information available. (2) Evaluation: MR is useful for understanding the views/reactions of the buyers. This includes views of consumers on packaging/ advertising/sales promotion measures used. A manufacturer gets these details as well as the information about his product in comparison with the products of his competitors. This facilitates evaluation of the marketing policies. For example, how far the packaging of the product is attractive to consumers or superior as compared to packaging by competitors and so on. (3) Explanation: MR gives explanation to certain questions of a manufacturer. It may be related to decline in sales, retailers negative reaction or resistance of consumers in a particular marketing area. MR enables a manufacturer to understand why sales are reducing (causes) or why the response of the retailers is negative or why consumers in a particular region are not willing to purchase a specific product. Such explanation is important as it enables a manufacturer to adjust his marketing policies in order to rectify the prevailing unfavorable situation. (4) Prediction: MR conducts prediction function. Such predictions may be related to consumers, market environment/market competition, possible socio-economic changes and so on. This prediction function enables a manufacturer to understand how much people will spend on the
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specific product in the next year or the fashions that consumers may prefer in the next year. In addition, prediction about the possible turnover in the years to come is also possible through suitable marketing research studies. In brief, marketing research is useful for understanding the marketing environment likely to develop in future. This facilitates proper adjustment in the marketing policies for the future period. In this sense, the prediction function is important even when all predictions made through research studies may not prove to be fully correct. However, the trend indicated can be used for appropriate policy decisions. (5) Aid in Decision-making: One more function of MR is to facilitate the process of decisionmaking in the marketing field. MR guides the manufacturer as regards the manner in which he can make effective advertising appeal or create incentive among his salesmen/distributors. It also gives him guidance as regards price fixation and sales promotion techniques that will be useful for the future period. This function of marketing research is closely related to other functions that it performs. These functions facilitate reasonably correct decision-making by marketing managers. They also suggest the practical utility of MR activities. MR functions provide feedback (information and guidance) to marketing managers and improve the quality of their decision-making. This practice is certainly safer as compared to decisionmaking on the basis of past experience or intuition. When reality is complex and many facts are not detectable, intuition is not adequate for decision-making. Similarly, experience is useful but decisions on experience alone may not be accurate. Large companies and professional executives prefer to resort to marketing research than depending on experience. This is because information available is based on real data and is more reliable/ dependable. This facilitates correct decision-making. Thus, marketing executives should prefer decisions on the basis of information supplied through marketing research. Such decisions are likely to be more accurate as they are based on actual market situation. In brief, the basic function of MR is to support marketing decision-making process. Marketing research does not provide ready-made decisions or exact solutions on all marketing problems. It only provides the clues or possible solutions that should be taken into consideration in the decision-making process. It provides support to skills and abilities of marketing managers. The different functions of marketing research are supplementary in character. These functions enable a manufacturer to keep close touch with the marketing situation and enable him to make suitable changes in his marketing policies and programmers. They also suggest the role marketing research activity in modern competitive and consumer oriented marketing. Marketing research functions certainly improve the quality of decision-making by marketing managers.
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ADVANTAGES/IMPORTANCE OF MARKETING RESEARCH: 1. Indicates current market trends: Marketing research keeps business unit in touch with the current market trends and offers guidance for facing market situation with confidence. 2. Pinpoints deficiencies in marketing policies: MR pinpoints the deficiencies as regards products, pricing, promotion, etc. It gives guidance regarding different aspects of marketing. They include product development, branding, packaging and advertising. 3. Explains customer resistance: MR is useful for finding out customer resistance to company's products. The researcher also suggests remedial measures to deal with the situation. This makes the products and marketing policies agreeable to consumers. 4. Suggests sales promotion techniques: MR enables a manufacturer to introduce appropriate sales promotion techniques, select most convenient channel of distribution, suitable pricing policy for the products and provision of discounts and concessions to dealers. Marketing research facilitates sales promotion. 5. Offers guidance to marketing executives: MR offers information and guidance to marketing executives while framing marketing policies. Continuous research enables a company to face adverse' marketing situation boldly. It acts as an insurance against possible changes in market environment. 6. Facilitates selection and training of sales force: Marketing research is useful for the selection and training of staff in the sales organization. It also suggests the incentives that should be offered for motivation of employees concerned with marketing. 7. Promotes business activities: Marketing research enables a business unit to grow/expand its activities. It creates goodwill in the market and also enables a business unit to earn high profits through consumer-oriented marketing policies and programmers. 8. Facilitates appraisal of marketing policies: Research activities enable business executives to have an appraisal of the present marketing policies in the light of findings of research work. Suitable adjustments in the policies are also possible as per the suggestions made by the researchers. 9. Suggests new marketing opportunities: MR suggests new marketing opportunities and the manner in which they can be exploited fully. It identifies emerging market opportunities. 10. Facilitates inventory study: Marketing research is useful for the evaluation of companys inventory policies and also for the introduction of more efficient ways of managing inventories including finished goods and raw materials. 11. Provides marketing information: MR provides information on various aspects of marketing. It suggests relative strengths and weaknesses of the company. On the basis of such information, marketing executives find it easy to frame policies for the future period. MR provides information/ guidance and alternative solutions to current marketing problems. 12. Suggests appropriate distribution channels: MR can be used to study the effectiveness of existing channels of distribution and the need of making suitable changes in the distribution system. 13. Provides information on product acceptance: Marketing research helps in knowing the probability of acceptance of the product in its present form. It is also useful for the introduction of modifications in the existing product line of a firm.
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14. Creates progressive outlook: MR generates a progressive and dynamic outlook throughout the business organization. It promotes systematic thinking and a sense of professionalization within the company. It also creates enthusiasm among marketing executives. This brings success and stability to the whole business unit 15. Has wider social significance: MR is of paramount importance from the social angle. It is the means by which the ultimate consumer literally becomes king of the market place, with his desires/ prejudices and every whim transmitted to the producer and distributor. In brief, MR has wider social significance. It is useful to all parties involved in the process of marketing. Marketing research need not be treated as a fad. It is one of those fundamental tools that todays marketing manager needs to keep sharpened all the time so that he might be-m a position to minimize the business or marketing risk. Limitations of marketing research are as explained below: (1) Marketing research offers suggestions and not decisions: Marketing research is not a substitute for decision-making process. It only offers possible suggestions/solutions to marketing problems. It actually acts as a tool that facilitates decision-making process. It guides marketing managers in taking balanced, result-oriented and rational decisions. The suggestions offered by marketing researchers are usually possible/probable solutions but not the exact solutions. MR offers predictions but they are not necessarily accurate or perfect. Such predictions should be taken in the right spirit by the management. It offers information and guidance to marketing managers but not the final decisions, which are to be taken by managers themselves. MR does not provide readymade solutions to marketing problems. It only provides indicators. It may not provide conclusive information on marketing problems. The marketing managers have to use available information properly and take appropriate marketing decisions. The effectiveness of MR depends on the skill of the decision-maker. For this/ various marketing forces need careful consideration. However all such forces are not covered by research project undertaken. MR aids managerial decision-making but it cannot replace judgment and experience of marketing executives/managers. (2) Marketing research cannot predict accurately: In MR, efforts are being made to estimate or predict the possible future situation. For this/ certain research studies are undertaken. However, the results/ conclusions arrived at may not be complete, perfect or accurate. They predict possible tendencies but not certainties. Future is always uncertain and exact prediction about the future is just not possible through marketing research. This is because market environment is ever changing consumer behavior is difficult to estimate correctly and reliable data for research purpose may not be available. As a result, the decisions taken and policies framed on the basis of such research studies may not be accurate and useful for solving current marketing problems.
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Marketing research gives guidance to marketing managers through information and conclusions drawn but such guidance may not be accurate as it is based on the predictions about future situation. The guidance offered through research activities may prove to be outdated at the time of taking current marketing decisions. (3) MR conclusions are not always dependable: There are many who are skeptics of MR. Their criticism is that MR conclusions are not dependable. There are examples where the research failed to deliver desired results or a product failed even when the research had shown promising market demand and consumer support. The classical example is that of Coke. Its MR showed that 68% customers in US liked the taste of the new formula developed by the Coca-Cola Corporation. However, the New Coke failed and in less than six months of its launch, the Coke management had to re-launch old Coke under the brand name Coke Classic. However, this failure of MR was mainly due to conventional approach of researchers. (4) Not an exact science: Since marketing research plates to consumers, it cannot be accepted as an exact science. Both quantifiable and non-quantifiable factors have to be assessed with the help of various techniques available to formulate marketing policies that will help to achieve maximum sales. The technical part of marketing research comes into operation particularly while collecting, analyzing, interpreting facts and figures. No amount of sophistication makes the subject an exact science. Because, as stated earlier, it concerns primarily the consumer as a human being Study of human behavior precludes absolute mathematical accuracy Probable trends, at the most can be indicated within predetermined limits. This sets a basic limitation to marketing research. At the same time, it necessitates a creative and skilled approach to the conduct of research. In this way, marketing research can contribute immensely to decision-making in a dynamic market. For accurate judgment, the marketer must be fully aware of the nature of limitations of marketing research. (5) Time lag in presentation and implementation: There are other constraints as well that make for qualified utility of marketing research in decision-making. For example, there is the limitation of time. Collection of data, their checking as to accuracy and analysis and presentation often involve considerable time. The formulation of policies and their implementation as also their subsequent evaluation, which are a necessary follow-up, also take time. People's tastes and preferences are subject to frequent changes. It is, therefore necessary, keeping in mind the scope and nature of marketing research, that the projects should be completed in time to ensure their utility. In this process, at times, as a compromise some accuracy may have to be sacrificed, but the degree of it can be decided in relation to the specific circumstances. (6) Limitations of personnel: Another constraint that is experienced pertains to personnel and its quality. Trained, well-equipped and well-directed research personnel can improve the quality and utility of marketing research. In the absence of this, research is likely to be costly and unreliable. Correct and complete information has to be collected from the respondents tactfully. The interviewer has to be reasonably aware of the psychological make-up of the persons that are being interviewed and should be able to analyze their thoughts and reactions. Apart from this, interviewers may have their own failings and weaknesses. Hence the training interviewers and investigators is a must. These limitations and constraints can be overcome or at least their impact can be minimized. To the extent a market researcher is
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successful in his task, the value of the findings can be improved. What is most important is that reliable data should be available on the basis of which production and marketing plans and programmers can be formulated with a fair degree of accuracy. It is better to be certain about 50 percent reliable information than do a guesswork, which has more chances of going wrong. (7) Difficult to ascribe results: It is also difficult to ascribe results as a direct consequence of market research. The rupee value received by a firm from marketing research, therefore, cannot be measured accurately and completely. This has contributed to an element of hesitation on the part of organizations to undertake marketing research in many cases, especially in the developing countries. (8) A cost-generating operation: Marketing research is expensive. The existence of sellers market or a sheltered market in many developing countries in particular has also been responsible for an apathetic approach to marketing research. However, with the growth and development of their economies, the marketing conditions are changing in favor of buyers and the need for and the value of marketing research are being increasingly recognized by the enterprises in these countries also. With the communication between the purchaser and the manufacturer becoming indirect, meagre and unsatisfactory and as a result of competition, the manufacturer is increasingly becoming anxious to know the magnitude of his sales to consumers, where they are being effected, the kinds of people buying his goods and their reactions and responses. All this information is essential to the manufacturer, as this decides ultimately whether he will survive in the market or not. He can improve his product and marketing strategy to secure consumer satisfaction and logically profit from these changes. (9) Marketing research cannot study all marketing problems: Marketing research is rather very wide in scope. However, it cannot study all marketing problems particularly where it is difficult to collect relevant data. Similarly, research study is not possible where value judgments are involved. Even it is not useful for dealing with urgent marketing problems where quick decisions and follow-up actions are necessary. Thus, all marketing problems are not researchable and all research problems are not answerable. MR cannot provide answer to each and every marketing problem. A problem like Profitability Vs. Consumer satisfaction is difficult to answer with complete accuracy. The present marketing research techniques have certain limitations. MR fails to offer guidance to managers while dealing with specific problems. Thus, marketing research cannot study all marketing problems and do not offer ready-made solutions to all marketing problems faced by a business unit. It is also argued that very many times, marketing research tends to be fragmentary in its approach. As a result, it becomes difficult to have an overall perspective in which a marketing problem is to be viewed and studied. (10) Resistance by marketing executives: Researchers study marketing problems and offer information and guidance to marketing executives in their decision-making process. However, some executives are reluctant to use the solutions suggested by the researchers. They feel that such extensive use will act as a threat to their personal status. Findings of the research work may bring them in difficulties if the policy-decisions taken accordingly prove to be wrong. Marketing executives may also feel that researchers suggest solutions that are academic in character and lack practical utility. They use guidance and suggestions given by the
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researched only when they are compelled to do so. There is absence of meaningful dialogue between the marketing managers and the marketing research team. As a result/ marketing researchers get divorced from the main stream of marketing. Such attitude of indifference on the part of researchers and marketing executives makes marketing research meaningless. It is necessary to have effective communication between researchers and marketing executives. Secondly, researchers should try to act as friend and guide of marketing executives. Marketing executives should also consider the findings of researchers in an impartial manner. Such attitude of mutual confidence and understanding is useful for cooperation between researchers and marketing executives. Conflict between researchers and executives is always undesirable but do exist in many companies. It is treated as one limitation of MR activity. (11) Lengthy and time-consuming activity: MR is a lengthy and time-consuming activity. It involves various stages/steps, which need to be completed in an orderly manner. It is not desirable to conduct research work in a haphazard manner. Naturally, the research work takes longer period for completion and the findings when available may prove to be old and outdated. Even data collected very soon become old or historical due to fast changing market environment. As a result, research findings based on them become irrelevant in the changed situation. MR is not useful for dealing with urgent marketing problems. Moreover, research work cannot be conducted overnight and marketing decisions cannot be postponed till the research work is completed. Thus, urgent/pressing marketing decisions arc usually taken without the support of research work. In brief, lengthy and time consuming aspect of marketing research reduces its practical utility and is rightly treated as one limitation of marketing research technique. (12) Non-availability of qualified staff: For scientific MR, professional marketing researchers with proper qualifications, training and experience are necessary. Research work is likely to be incomplete/ unreliable in the absence of such expert staff. Companies find it difficult to have the services of such expert staff. They find it difficult to pay high salary to professional consultants. Research activities are conducted in limited areas due to non-availability of properly qualified staff. Such staff includes statisticians, psychologists, sociologists, economists and computer experts. (13) Complexity of the subject: Marketing research fails to give complete and full proof solutions to management. This is because marketing research itself is not an exact science. It is concerned with the study of human beings and human behavior is always difficult to predict, errors in drawing conclusions are possible due to this human element in marketing research activities. Errors in the research studies are also possible due to uncertainty of human behavior and also because of non-availability of reliable data. (14) Changing behavior of consumers: Consumer is the focal point in marketing research. However, his buying motives are difficult to judge precisely and accurately. This brings some sort of uncertainty in the conclusions drawn from the research activity. The findings of the research work (particularly in the case of consumer research) may not prove to be accurate.
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(15) Limited practical utility: MR is regarded as an academic exercise. It is often been delinked from the business strategy. As a result many research reports become "academic" in nature and are 'filed'. Researchers take more interest in conducting research work rather than in supplying information and guidance to marketing managers in the decision-making process. Many research reports are rather bulky and unintelligible due to the use of technical language and unnecessary details. Such reports are rejected or are not used meaningfully b) marketing managers. This brings down the practical utility of MR. (16) Passive nature: MR is passive by its nature. Sometimes, it becomes too superficial and faulty in business management. Man) conclusions drawn from the marketing research activities may be imaginary or not based on realities. Its use and effectiveness largely depend on the ability of marketing executives to get the most promising results out of it. Marketing research by itself may not give any benefit. It only shows the way to executives in the decision-making process. (17) Fragmentary approach: On many occasions, marketing research tends to be fragmentary in its approach. It suggests solutions that may be difficult to put into operation. This is because overall marketing environment is not given adequate attention while suggesting the solution. Such fragmentary approach is not useful for solving marketing problems in an integrated manner. (18) Absence of effective communication: The research activity will be useful and result-oriented only when there is meaningful dialogue between the marketing management and marketing research team. However, such dialogue is ineffective in many organizations. This make' research activity ineffective. Inspite of the limitations noted above, MR is necessary and useful in marketing management. SCOPE OF MARKETING RESEARCH / BRANCHES OF MR: Marketing research is a subject with wide scope. Broadly speaking, it is concerned with the marketing activities of an enterprise. All activities of a seller-to market his products to consumers are covered by such research. Marketing research is primarily concerned with "4 Ps" of marketing mix. These are: Product, Price, Place and Promotion. The scope of marketing research is comprehensive and is actually widening in recent years. Products research, sales research, pricing research, brand and package research, promotion research and customer research arc the usual areas covered by MR. In addition, specialized research activities such as motivation research, consumer satisfaction research, etc. are also undertaken to meet the specific needs of a business unit. Additional areas and new methods of conducting research activities are regularly added within the scope of MR. In 1973, the American Marketing Association noted that marketing research activities were undertaken on 36 different topics of 1322 companies interviewed. Even in India, large companies conduct research activities on many marketing problems. Finally, it may be pointed out that marketing research is essentially for solving the marketing problems of a business unit. Naturally, research activities will be adjusted accordingly. This suggests that there is no limit to the areas covered by marketing research. Everything connected with marketing comes within the scope of MR..
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The branches of MR are as explained below: 1. Product Research: Product research relates to products that are to be marketed to consumers. It is useful for introducing new product that will be agreeable to consumers. Product research relates to various aspects such as design, development and introduction of new products, testing of existing products, product modification studies and so on. 2. Packaging Research: Packaging research is a part of product research and is important for making the products attractive and agreeable to consumers. Packaging is now treated as a tool for sales promotion. It attracts the attention of consumers and induces them to purchase products. Constant changes in the package design are-required for sales promotion. For innovation in the package design/ packaging research is necessary. Packaging research is now treated as an independent branch of marketing research. Such research is conducted in order to know the impact of packaging. Branding and packaging normally go together and hence brand research is treated as a part and parcel of packaging research. 3. Pricing Research: Pricing research relates to pricing of the product It relates to analysis of pricing policies and strategies, studies market price trends, fixation of market prices, studies relating to prices charged by competitors, studies relating to future price trends, price incentives for sales promotion and provision of price discount and other price concessions to dealers and consumers. 4. Market Research: Market research proper relates to analysis of consumer markets, assessment of market trends, forecasting of business conditions, setting of sales territories and sales quota, sale potentials studies, studies of wholesale marketing, demography descriptions of customers, market competition studies, sale-forecasting, estimating demand for new products, analyzing relative profitability of sales territories and monitoring competitive-marketing activities. 5. Sales Research: Sales research relates to studies of sales outlets, sales territories and their revision, trends in sales, sales forecasting, effectiveness of sales force, sales policies and sales performance and so on. 6. Promotion and Distribution Research: Promotion research related to assessing effectiveness of the sales force and selling efforts, testing of media selected, advertising copy and assessing effectiveness of advertising campaigns. The scope of this area of marketing research also includes the study of channels of distribution for modification, distribution cost analysis of the physical distribution, problems relating to warehousing, inventory control and handling of goods. 7. Consumer Research: It relates to finding out consumers' needs and preference, consumers' purchasing intentions, consumers' choice of brands, trends in consumer preferences and purchasing patterns
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8. Policy Research: Policy research activity is connected with the evaluation of effectiveness of marketing policies, sales policies, distribution policies, pricing policies, inventory policies and so on. Necessary changes in such policies are possible through intensive policy research studies. 9. Advertising Research: It relates to evaluation of advertising effectiveness, analyzing competitive advertising and selection of appropriate advertising media. 10. Media Research: Different media are used for communicating message about the products to prospective buyers. Media are used for advertising and publicity purpose. Newspapers, radio, TV magazines, transport vehicles, etc. are the media used for advertising. Media research relates to detailed study of different media for selection and use. 11. Motivational Research: Motivational research is one aspect of consumer research as it deals with consumer behavior. It studies "Why" aspect of consumer behavior. Consumer research is useful for finding out the sentiments, buying motives, priorities and inner feelings of consumers. It is a type qualitative research. 12. International Marketing Research: International marketing research deals with foreign markets that are attractive and profitable provided products and marketing activities are adjusted as per the need of foreign markets and buyers. Such research is useful for exploring profitable foreign markets, for export promotion and for making suitable modifications in the exportable items. Data collection about foreign markets, market surveys, etc. are undertaken under international MR. Such research is costly and time consuming as compared to internal research. However, it is a must in the case of exporting companies. International MR is also undertaken by export promotion organizations such as Export Promotion Councils and Commodity Boards. APPLICATION OF MARKETING RESEARCH A. TRADITIOMAL APPLICATION OF MARKETIMG RESEARCH Traditionally, marketing decisions have been divided into 4P's - product, price, promotion and place decisions. I. NEW-PRODUCT RESEARCH New product development is critical to the life of most organizations as they adapt to their changing environment. Since, by definition, new products contain unfamiliar aspects for the organization, there will be uncertainty associated with new products. New product can be divided into four stages
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a. Concept generation There are two types of concept generation research. They are: 1. Need identification. The emphasis In need research is on identifying unfilled needs in the market. Marketing research can identify needs in various ways. Some are qualitative and others, such as segmentation studies can be quantitative. Following are some examples: i. Perceptual maps, in which products are positioned along the dimensions by which users perceive and evaluate, can suggest gaps into which new products might fit. Multidimensional scaling is used to generate these perception gaps. ii. Social and environment trends can be analyzed. iii. An approach termed benefit structure analysis has product users identify the benefits desired and the extent to which the product delivers those benefits, for specific applications. The result is an identification of benefits sought that current product do not deliver. iv. Lead user analysis the approach in which instead of just asking users what they have done, their solutions are collected more formally. Lead users are positioned to benefit significantly by solving problems associated with these needs. Once a lead user is identified, the concepts that company or person generates are tested. 2. Concept identification. During the new product development process there is usually a point where a concept is formed but there is no tangible usable product that can be tested. The concept should be defined well enough so that it is communicable. There may be simply a verbal description, or there may be rough ideas for a name, a package, or an advertisement approach. The role of marketing research at this stage is to determine if the concept warrants further development and to provide guidance on how it might be improved and refined
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b. Product Evaluation and Development Product evaluation and development, or product testing, is very similar to concept testing, in terms of both the objectives and the techniques. The aim is still to predict market response to determine whether or not the product should be carried forward. 1 Use testing - The simplest form of use testing gives users the product and after a reasonable amount of time asks their reactions their intentions to buy it. 2. Predicting trial -Trial levels (the percentage of a sample of consumers who had purchased the product at least once within 12 months after launch) were predicted on the basis of three variables: Product class penetration (PCP) Promotional expenditure Distribution of the product 3. Pretest marketing - Two approaches are used to predict the new brand's market share. The first one is based on preference judgments. The preference data are used to predict the proportion of purchases of the new brand that respondents will make given that the new brand is in their response set. The second approach involves estimating trial and repeat purchase levels based on the respondent's purchase decisions and intentions-to-buy judgments. c. Test marketing Test marketing allows the researcher to test the impact of the total marketing program, with all its Interdependencies, in a market context as opposed to the artificial, context associated with the concept and product tests that have been discussed. Test marketing has two primary functions. The first is to gain information and experience with the marketing program before making a total commitment to it. The second is to predict the program's outcome when it is applied to the total market There are really two types of test markets: 1. Sell-in test markets are cities in which the product is sold just as it would be in a national launch. In particular the product has to gain distribution space. 2. Controlled distribution scanner markets are cities for which distribution is prearranged and the purchase of a panel of customers are monitored using scanner data. Early stages of the product life cycle are sacrificed in the expectation that higher volumes in later periods will generate sufficiently greater prompts to result in overall profit for the product over its life III. DISTRIBUTION RESEARCH Traditionally, the distribution decisions in marketing strategy involve the number and location of sales persons, retail outlets, warehouses and the size of discount to be offered The discount to be offered to the members in the channel of distribution usually is determined by what is being offered by existing or similar products and also whether the firm wants to follow; a "push1 or a "pull strategy Marketing research, however, plays an important role in the number and location in decisions about numbers and locations a. Warehouse and Retail Location Research The essential questions to be answered before a location decision is made are "What costs and delivery times would result if we choose one location over another?"
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Simulation of scenarios is used to answer these questions. The simulation can be relatively simple paper-and-pencil exercise for the location of 3 single warehouse in a limited geographic area. or it can be a complex, computerized simulation of a warehousing system for a regional or national market i. Center of gravity simulation - The center for gravity method of simulation is used to locate a single warehouse or retail site In this method, the approximate location that will minimize the distance to customers, weighted by the quantities purchased is determined The more symmetry there is in customer locations and weights the more nearly the initial calculation approximates the optimal location The location indicated by the first calculation can be checked to be determine if it is optimal (or near optimal) by using a "confirming procedure. If it is not optimal, successive calculations can be made as necessary to home in" on the best location ii. Computerized simulation models - The concept involved m simulations for this purpose is quite simple Data that describes the customer characteristics (location of plants, potential warehouse and retail sites) and distribution costs (costs per mile by volume shipped, fixed and variable costs of operating each warehouse the effect of shipping delays on and variable costs of operating each warehouse, the effect of shipping delays on customer demand) are generated and input into the computer The computer is programmed to simulate various combinations of numbers and locations of warehouses and to indicate which one(s) gives the lowest total operating cost Effective results have been achieved by using computer simulations to design distribution systems iii. Trade area analysis - Formal models have been developed that can be used to predict the trading area of a given shopping center or retail outlet based on relative size travel time and image A variety of other techniques can be used to establish trading areas. An analysis of the addresses of the credit card customers or license plates of the cars (by plotting the addresses of the car owners) can provide a useful estimate of the trading area. Check-clearance data can be used to supplement this information. The best, but also the most expensive way of establishing trading area bound Aries is to conduct surveys to determine them iv. Outlet location research. - Individual companies and, more commonly, chains, financial institutions with multiple outlets, and franchise operations must decide on the physical location of their outlets). Three general methods involves plotting the area surrounding the potential site in terms of residential neighborhood, income levels, and competitive stores. Regression models have been used for location studies for a variety of retail outlets, including banks, grocery stores, liquor stores, chain stores and hotels. Data for building the model and for evaluating new potential locations are obtained through secondary data analysis and surveys. b. Number and location of Sales Representatives How many sales representatives should be in a given territory? There are three general research methods for answering this question. The first, the sales effort approach, is applicable when the product line is first introduced and there is no operating history to provide sales data. The second involves the statistical analysis of sales data and can be used after the sales program is under way. The third involves a field experiment and is also applicable only after the sales program has begun.
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IV. PROMOTION RESEARCH It focuses on the decision that is commonly made when designing a promotion strategy. The decision for the promotion part of a marketing strategy can be divided in to (1) Advertising and (2) Sales promotion. Sales promotion affects the company in the short term, whereas advertising decisions have long-term effects. Companies spend more time and resources on advertising research than on sales promotion research because of the greater risk and uncertainty In advertising research. 1. Advertising research Most companies concentrate on advertising because advertising decisions arc more costly and risky than sales promotion decisions. Advertising research typically, involves generating information for making decisions In the awareness, recognition, preference and purchasing stages. What separates an effective advertisement from a dud? The criteria will depend, on the brand involved and its advertising objective. However, following basic categories of responses are used in advertising research in general and copy testing in particular a) Advertisement recognition b) Recall of the commercial and its contents c) The measure of commercial persuasion and the impact on purchase behavior. Purchase behavior - Coupon stimulating purchasing - Split-cables tests. Information Resources Inc's (IRI) Behavior Scan is one of several split-cable testing operations. Behavior Scan monitors the purchases of panel members as well as in-store information such s special prices, features and displays. Tracking studies When a campaign is running, its impact often is monitored via a tracking study Periodic sampling of the target audience provide a time trend of measures of interest. The purpose is to evaluate and reassess the advertising campaign, and perhaps also to understand why it is or is networking. Among the measures that often are traced are advertisement awareness, awareness of elements of the advertisement, brand awareness, beliefs about brand attributes, brand image, occasions of use, and brand preference. Of particular interest is, knowing how the campaign is affecting the brand, as opposed to how the advertisement is communicating the message. Diagnostics testing A whole category of advertising research methods is designed primarily not to test the impact of a total ad but rather to help creative people understand how the parts of the ad contribute to its impact. Which are weak and how do they interact? Most of these approaches can be applied to mock-ups of proposed ads as well as finished ads. Copy test validity This test refers to the ability to predict advertising response. * Budget decision Arriving at analytical research-based judgments as to the optima! advertising budget Is surprisingly difficult. However, there are research inputs that can be helpful. Tracking studies that show advertising is either surpassing or failing to reach communication objectives can suggest that the budget should be either reduced or increased. Media research
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In evaluating a particular media alternative, it is necessary to know how many advertising exposures it will deliver and what will be the characteristics of the audience. A first cut of the vehicle's value is the cost per thousand (circulation), the advertisement insertion cost divided by the size of the audience. 2. Sales Promotion Research There are three major types of sales promotion: consumer promotion, retailer promotion and trade promotions. In consumer promotion, manufacturers offer promotions directly to consumers, whereas retail promotions involve promotions by retailers to consumers. Trade promotions involve manufacturers offering promotions to retailers or other trade entities. Trade entities can also promote to each other. For ex ample, a distributor can offer a steep temporary price cut to retailers in order to sell excess inventory. It is called trade promotions, since the recipient of the promotion is a marketing intermediary. Sometimes several manufacturers or several retailers combine in one promotion. These are called cooperative promotions or promotion partnerships. B. CONTEMPORARY APPLICATIONS OF MARKETING RESEARCH 1. Competitive Advantage. The notion that achieving superior performance requires a business to gain and hold an advantage over competitors is central to contemporary strategic thinking. Businesses seeking advantage are exhorted to develop distinctive competencies at the lowest delivered cost or to achieve differentiation through superior value. The assessing competitive advantage can be done in number of ways. The methods can be broadly classified as market-based and process-based assessment Market-based assessment is direct comparison with a few target competitors, whereas process-based assessment is a comparison of the methods employed. 2. Brand Equity. Brand equity is defined as a set of assets and liabilities linked to a brand that add to or subtract from the value of a product or service to a company and/ or its customers. The assets or liabilities that underlie brand equity must be linked to the name and/or symbol of the brand. The assets and liabilities on which brand equity is based will differ from context to context. However, they can be usefully grouped into five categories: a) Brand loyalty b) Name awareness c) Perceived quality d) Brand association e) Other proprietary brand assets: patents, trademarks, channel relationships etc. 3. Customer satisfaction. The measurement of customer satisfaction and its link to product/service attributes is the vehicle for developing a market-driven quality approach This approach requires a sequential research design that uses the results from each research phase to build and enhance the value of subsequent efforts. During this process, it is imperative to study customers who were lost, to determine why they left This issue must be addressed early in the system design The steps involved in customer satisfaction is a) Define goals and how information will be used
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Discover what is really important to customers and employees Measure critical needs Act on the information Measure performance overtime Issues in questionnaire design and scaling in satisfaction research
4. Total quality management TQM Is a process of managing complex changes In the organization with the aim of improving quality. The power of measurements is clearly visible in applications of quality function deployment (QFD), a Japanese import used to make product design better reflect customer requirements. In QFD. a multifunctional team measures and analyzes in great detail boih customers attitudes and product attributes. Marketing research plays a crucial role atthis stage of the process. Then the team creates a visual mtrix in order to find ways to modify product attributes (engineering characteristics) so as to improve the product on the customer-based measures of product performance. Along the way, the team must develop a series of measures of several different types. C. EMERGING APPLICATION OF MARKETING RESEARCH 1. Database marketing A database is a customer list to which has been added information about the characteristics and the transactions of these customers. Businesses use it to cultivate customers - as they seek new customers. Need A database provides the means for research to support decisions. It enables profiling of customers by searching for prospects who are similar to existing customers. It provides the means for implementation of profitable programs of repeat business and cross-selling. It assists in marketing planning and forecasting. Further a database can: Match products or services to customers' wants and needs Help select new lists or use new media that ft the profile of existing customers. Maximize personalization of all offers to each customer. Provide for on going interaction with customers and prospects. Pinpoint ideal timing and frequently for promotions Measure response and be accountable for results Help create the offers most likely to elicit responses from customers Help achieve a unique selling proposition (USP), targeted to appeal to your customers Integrate direct-response communication with other forms of advertising Demonstrate that customers are valuable assets. Types of database 1. Active customers 2. Inactive customers 3. Inquiries Benefits of database marketing a) Customers are easier to retain than acquire. The first reason is that it takes five times the energy and budget to get new customer a sit does to keep an existing one. Also, a
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disproportionately small number of your customers generate a very large proportion of your income. b) Determine their "Lifetime Value. Building a lasting relationship becomes the obvious way to a prosperous and profitable future. c) Developing relationships with customers. Understanding your customers' tastes and preferences on an individual basis is the foundation for relationship marketing. Relationship marketing combines elements of general advertising. sales promotion, public relations and direct marketing to create more effective and more effective ways of reaching consumers. It centers on developing a continuous relation ship with consumers across a family of related products and services. 2. Relationship marketing The relationship marketing process incorporates three key elements. 1. Identifying and building a database of current and potential consumers, which records and cross-references a wide range of demographic, lifestyle and purchase information, 2. Delivering differential messages to these people through established and new media channels based on the consumers' characteristics and preferences 3. Tracking each relationship to monitor the cost of acquiring the consumer and the lifetime value of his other purchases. Reasons for Inaccuracy in Marketing Research (1) Human behavior is always unpredictable: MR deals with humans who are far more complex and unpredictable than the subjects of physical sciences. A human being has ability to think and react. The responses of human beings are different unda1 different situations. These features of human behavior bring limitations on the findings of MR.. The conclusions drawn may not be always identical, accurate and reliable. This makes the conclusions less scientific. (2) Human behavior is difficult to measure precisely: MR is not fully scientific as human behavior is difficult to measure accurately Human beings are liable to change in their outlook and behavior during the process of experimentation. Moreover, devices for measuring human behavior are not available. This affects the conclusions drawn in the research work. General conclusions about human behavior can be given. However, such rough estimates are not completely scientific. In short, complexity of human behavior puts limitations on MR and makes it less scientific. (3) Human beings react differently under test conditions: MR is les^ scientific because human beings react differently under different conditions or while testing. The human tendency is to keep the real causes/reactions secret when interviewed for a research purpose. This affects the quality of results of research project. Such results are not scientific to the fullest extent. It is always difficult to collect reliable information from the persons selected for interview. It equally difficult to verify the correctness of the information collected from them. This makes MR less scientific. (4) MR cannot be completely objective: MR cannot be completely objective as human beings cannot be studied in complete isolation This is possible in laboratory work by physical scientists, as they can shut off all outside influences during the period of experimentation However an investigator in MR cannot be separated from the society. His attitudes and interests are bound to affect research findings. This affects the conclusions drawn out of the MR project.
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(5) Human beings cannot be studied in isolation: In MR, it is not possible to study the behavior of a consumer independently. It needs to be studied along with his personal interests, values, attitudes and so on. This situation affects the behavior of the consumer and the findings of the research work. The researcher has to conduct his study openly and has no control over the external factors. As a result, the findings of marketing researcher are bound to be less scientific. (6) Dearth of reliable information: Information serves as the base of MR. The quality of research work depends on the reliability of information collected. The information collected in MR may not be accurate or complete. It is possible to draw only rough estimates/ conclusions from such information/data. This makes research conclusions less accurate and reliable. Sometimes, even the attitude and approach of researchers, investigators, etc. may make the research work less scientific. CONSUMER ORIENTATION TO MARKETING RESEARCH: MR is concerned with all types of marketing problems. They may related to product, price, distribution, packaging and branding, publicity and sales promotion. All these problems are required to be studied in the context of consumer and his expectations. In other words, MR in the present marketing environment is essentially consumer-oriented and| not profit or product oriented. In MR the consumer and his need, expectations and satisfaction/welfare are given priority. All marketing aspects are studied in order to give convenience and satisfaction to consumers. Consumer research is one important branch of MR as all research activities move around the consumer and his satisfaction. Consumer orientation to marketing research means making research activities pro-consumer rather than pro-manufacturer. It also means giving more importance to consumers and their satisfaction, expectations, needs, etc. and not merely to sales promotion and profit to the manufacturer. Such orientation is essential as consumer is the center of all marketing activities and his satisfaction is the base or basic consideration in modern business. This consumer orientation to MR is the result of modern concept of marketing, which is basically different from the traditional concept of marketing. It is consumer-oriented and service-oriented. It is societal in character. As a result, in the marketing research activities, special attention is now given to consumers. All research activities are for making marketing useful, agreeable and acceptable to consumers. This is what is described as consumer orientation of MR. Research activities are now made pro-consumer rather than pro manufacturer or trader. Even research techniques and methodologies are adjusted according. The importance of consumer is now accepted not only in MR but also in all aspects of business management. In fact, consumer is the most important person in business. He is the king and should be treated accordingly. All production and marketing activities are for meeting his needs and also for raising his satisfaction and welfare. He is the cause and purpose of all business activities. Finally, modern business is not profit-oriented but consumer oriented or service oriented. All these arguments are equally applicable to MR. In other words, MR activities move around the consumer and his satisfaction. He is the focus point in all research projects as MR is essentially for adjusting the marketing activities as per the expectations of consumers. This clearly suggests the importance of consumers in all MR activities.
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Marketing research helps the management to be consumer-oriented in its policies and decisions. The benefits of MR will not be available if consumer and his needs, conveniences, expectations, etc. are not given due attention. This suggests that neglect of consumers in any type of research activity is undesirable and even dangerous. The benefits of marketing research will be available only when research activities are conducted after due regard to consumer who acts as the center of all marketing activities. Information available from consumer research can be used as a foundation for many important marketing decisions. Finally, it may be noted that there is nothing wrong in making MR activities pro-consumer. In fact, this trend exists since the early growth of marketing research activities. Consumer is important in all marketing activities and the same rule is applicable to MR activities. Research activities without due consideration to consumers may not give expected results. In fact, the purpose of MR is to find out precisely what the consumer wants and how to make marketing activities agreeable to consumers in all respects such as product, price, packaging, promotion j and so on. In brief, MR as a subject has consumer-orientation in all its| aspects. Consumer/Customer is the cause and purpose of all marketing research activities. How to make consumers happy and satisfied is the| basic issue before the researchers. At present, all manufacturing/, marketing companies spend huge money on marketing research. The purpose is to make marketing activities consumer oriented. NEED OF MARKETING RESEARCH The following factors suggest increasing need of MR: 1. Growth and complexity of markets: Markets are no more local in character. They are now national and even global in character. The marketing activity is becoming increasingly complex and broader in scope as more firms operate in domestic and global markets Manufacturers find it difficult to establish close contact with all mark and consumers directly. Similarly, they have no control on the marketing system once the goods are sold out to middlemen. The marketing procedures are now, complicated. The market competition is also severe This situation creates new problems before the manufacturers, which can be faced effectively through MR as it acts as a feedback mechanism to ascertain first hand information, reactions, etc. of consumers and middlemen. Marketing activities can be adjusted accordingly. 2. Wide gap between producers and consumers: Market research is needed as there is a wide gap between producers and consumers in the present marketing system. Due to mass sc production and distribution, direct (personal) contact between product and consumers is practically lost. This creates information gap between producers and consumers. The middlemen dominate the market] scene. Producers do not get dependable information as regards nee expectations and reactions of consumers. They are unable to adjust the products, packaging, prices, etc. as per the needs and requirements consumers. The problems created due to information gap can be solved Q] through MR as it is possible to establish contact with consumers a collect first hand information about their needs, expectations, likes & dislikes, preferences and special features of their behavior. Thus marketing research enables a manufacturer to make his marketing policies pro-consumers.
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Effective communication with consumers is a possible through MR activities. Thus, MR is needed for removing wide communication gap between producers and consumers. 3. Changes in the composition of population and consumption pattern: In India, many changes are taking place in composition of population. There is a shift of population from rural urban areas. There have been considerable changes in the consumption and expenditure patterns of consumers in India. The incomes of people, in general, are rising. This brings corresponding increase in the purchasing capacity and buying needs and habits. The rising prices affecting the lower and middle class consumers and their purchasing power and purchasing priorities. Similarly, there are considerable changes in the purchasing pattern of clothing and other consumer items. The demand for consumer durables is fast increasing. The markets now flooded with consumer durables like TV sets and so on. Manufacturers are expected to know such qualitative & quantitative changes in the consumer preferences and their consumption pattern. For achieving this objective, MR activities are necessary and useful. It is possible to adjust production and marketing operations as per the information supplied from consumer surveys and market surveys conducted under various MR projects. In brief, MR is needed for the study of changes in the pattern of consumption and corresponding adjustment in the marketing planning, policies and strategies. 4. Growing importance of consumers in marketing: Consumers occupy key position in modern marketing system. They are now well informed about market trends, goods available, consumer rights and protection available to them through consumer protection acts. The growth of consumerism has created new challenges before manufacturers and traders. Even growing customer expectations create situation when manufacturers have to understand such expectations and adjust the production and marketing policies accordingly. Indifference towards consumer expectations may lead to loss of business. In the present marketing system, consumers cannot be taken for granted. Their expectations need special consideration in all marketing activities. Production needs to be adjusted as per the expectations of consumers. Marketing research particularly consumer research gives valuable data relating to consumers. It is possible to use such data fruitfully while framing marketing policies. Thus, marketing decisions can be made pro-consumer through marketing research activities . 5. Shift of competition from price to non-price factors: Cutthroat competition is unavoidable in the present marketing field. Such competition may be due to various factors such as price, quality, packaging, advertising and sales promotion techniques. Entry of new competitors creates new problems in the marketing of goods and services. In addition, market competition is no more restricted to price factor alone. There are other non-price factors such as packaging, branding, after-sale service and advertising which create severe market competition. Every producer has to find out the extent of such non-price competition and the manner in which he can face it with confidence. MR is needed as it offers guidance in this regard. A manufacturer can face market competition even by using certain non-price factors. The shifting of competition from price to non-price factors has made marketing of consumer goods more complicated and challenging. This challenge can be faced with confidence by using certain measures suggested through marketing research.
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6. Need of prompt decision-making: In competitive marketing, marketing executives have to take quick and correct decisions. Companies have to develop and market new products more quickly than ever before. However, such decisions are always difficult. Moreover, wrong decisions may bring loss to the organization. For correct decision-making, marketing executives need reliable data and up-to-date market information. Here, MR comes to the rescue of marketing managers. Problems in marketing are located, defined analyzed and solved through MR technique. This suggests its need as tool for decision-making. MR is needed as a tool for reasonably accurate decision-making in the present highly competitive marketing system. 7. Problems in the distribution system: Modern distribution system is complex and costly. How to market goods efficiently and economically is a basic issue in the present marketing system. Modern production is now possible because of the use of advanced technology. However efficient distribution is rather difficult. For this, it is necessary to identify new markets, new consumers, new channels of distribute and new sales promotion techniques. For such identification, MR needed. The cost of marketing is fast increasing in modern marketing. The burden of rising marketing cost is normally passed on to consumers. This creates adverse effects on marketing activities. In brief, obstacles large scale distribution and rising distribution costs are two problems in the present marketing system. These problems can be studied & solved through MR activities relating to products, distribution channel consumers and so on. This suggests the growing need of MR. 8. Recent developments in science and technology: Science and technology are making rapid progress. In fact, the impact of such progress touches all aspects of commercial and industrial activities. Me products are manufactured and brought in the market. Articles with good demand become old and out-dated within a short period Consumers prefer new/novel articles in place of old ones. Produce and distributors find it difficult to take decisions due to lack knowledge about future market trends. Here, marketing research useful as it provides information about future trends in the markets field and enables marketing managers to take quick and corn marketing decisions. This suggests the need of marketing research. 9. Existence of large size enterprises: Modern manufacturing enterprises are large in size. Such enterprises can work as viable units and make progress only when their products are made popular with the consumers. Large-scale enterprises need distribution of their products on a massive scale. Here, MR is useful. It helps the enterprises explore, identify and locate new consumer markets. It suggests the ways and means for large-scale distribution of goods at the national/global level. In brief, MR is needed as an essential element of large scale manufacturing and marketing. The factors noted above clearly suggest the growing need of MR in | the present consumeroriented marketing system. It is needed in order to reduce the risks and uncertainties in the marketing activity. It supports 1 marketing managers while dealing with the marketing problems. Marketing research is needed as it acts as a key factor in successful marketing of goods and services.
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ROLE OF MARKETING RESEARCH IN MARKETING MANAGEMENT: (i) Close relationship between MR and Marketing Management: Marketing management covers different areas of marketing such as production, packaging, branding, pricing, distribution, advertising and sales promotion. Marketing research activity is closely integrated with all these key areas of marketing. It is an integral part of scientific marketing management. This is natural as marketing research deals with the different marketing problems of a company and offers guidelines to marketing managers in solving such problems. In brief, marketing research acts as one useful and reliable tool for framing marketing policies and decision-making in regard to different aspects of marketing. It plays an important role in marketing management. MR collects and provides information to marketing managers for decision-making. It studies certain marketing problems and offers suggestions for solving them. It also acts as the intelligence wing of marketing management. Marketing management and marketing research are inter-related activities. In fact, marketing research cannot exist as a watertight compartment nor has it any existence independent of marketing management. It must be a part and parcel of the problem-solving process of marketing management. MR activities in any organization must be directly related to the marketing problems faced by that organization. This is natural as MR cannot be effective, if it is assigned some portions of a marketing problem for exploration in a piecemeal manner. It must be supplied with the full background required to study the whole problem in depth. This will enable the researcher to provide reasonably accurate solution to the problems faced by the marketing managers. Similarly, MR will be effective/purposeful, if the research activities are conducted in a regular and continuous manner and also as per the specific needs of the marketing management. (ii) Need of effective integration between MR and Marketing Management: Marketing research needs to be treated as a part and parcel of total marketing management. It has to operate as a problem-solving tool of marketing management or as an intelligence wing/tool of marketing management. Similarly, MR should not be conducted merel1 as an academic activity but as a tool for decision making by the marketing managers. It should facilitate quick and reasonably correct decision-making by the top-level marketing managers. MR should act as an aid to decisionmaking in the marketing management. This suggests that there should be effective integration in between marketing management and marketing research. Both these activities should be effectively co-ordinated. This will ensure efficient management of marketing activities of a company. There is no scope for any conflict in between the two as such conflict is undesirable to the company itself. However, on many occasions, differences of opinion and discord between research department and management are visible Keane, John G has spelt out the conflicting points of view of the to management and marketing researchers in the areas of research responsibility, research personnel, budget, assignments, problem definition, research reporting and use of research. MR will be effective/purposeful only when there is close c ordination between research and actual management. Research activities must be necessarily relevant to the marketing problems. Both (researchers and top-level management) should have a clear understanding and appreciation of each other's position and role. However, in practice, conflicts are noticed between the top-level management and the researchers. Such conflicts should be avoided. 28
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(iii) Responsibility of top management for effective integration: The top management should accept honestly that the researchers have a capacity to study marketing problems and offer valuable suggestions for solving the marketing problems. In addition, adequate budget provision and all necessary facilities should be provided to the researcher to investigate marketing problems minutely and make suitable recommendations. The top management should keep meaningful communication with the marketing researchers in a continuous manner. The bias attitude towards them is certainly undesirable. Finally management should avoid too many layers of communication between top management and researchers. It is also desirable to discuss the recommendations of researchers with open mind. Such liberal outlook will make MR activities useful to the marketing management. The researchers should also adopt open and constructive approach towards the top-level management. In the research project, attention should be given to the plans and priorities decided by the top-level management. The researchers should continuously improve the research methodology and see that their reports and recommendations are easily acceptable to the management. Delay in the research work should be avoided as top-level management can consider the recommendations if received in time as the nature of marketing problem changes in the course of time. 0n some occasions, the management is not convinced about the utility of marketing research. This may be due to past experience in regard to research activity undertaken. The other reasons for unfavorable opinions about marketing research include delay in the completion of research work, heavy expenditure involved, bulky and confusing report and finally recommendations made are not convincing and practical. The result is that the management forms negative impression about the very concept of marketing research. The company management fails to understand the practical utility of research work. It feels that MR is an unnecessary activity and funds should not be spent on the same. It is as good as waste of money as positive benefits may not available. Such negative opinion formation is the result of previous experience of the firm. It is a type of criticism of the researchers who failed to submit promising, result-oriented and practical research report. It need not be treated as the criticism of marketing research activity itself. The adverse opinions of companies on marketing research are undesirable and even dangerous to the future growth of MR activity. Here the responsibility lies on the researchers. They have to conduct research work honestly and also by taking keen interest in the proposed research project. As a result, the research report and recommendations 11 be promising and easily acceptable by the management. The marcher should prepare the outline of research project properly and place it before the management in a convincing manner. As a result, the management will be convinced about the utility of marketing research project and will be willing to spend money on the same. "Many a times, management is not convinced about the utility of marketing research and discards it as an unnecessary activity over which no funds should be spent." is possible when the research project is not prepared and placed properly before the management for consideration and approval. (iv) Responsibility of researchers for effective integration: The researchers should use their skills, experience and knowledge while conducting the research activities. Finally, they should maintain persuasive communication as inadequate/poor communication creates bias attitude on the part of top-level management. As a result, the recommendations are rejected or not used in actual practice. In addition, the superiority of the top-level management in the decision-making process should also be honored. The approach should be to help the management in all possible
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ways. Such positive/constructive approach on the part of researchers will enable them to make purposeful contribution in the field of marketing management. (v) Present Position: MR is now given more creative role as compared to the conventional role where it was used just for studying buyer behavior or for the feasibility studies for new products to be introduced in the market. MR until the mid-1980s, was considered a luxury, which only multinationals could afford. However, all companies now feel the need of MR due to growing competition and liberalization. Realizing the contribution that MR makes, more and more companies in India are now turning to MR. INTERACTION BETWEEN MANAGEMENT AND MARKETING RESEARCH Marketing research is a useful tool available at the disposal of management. At all stages of marketing cycle it can be used. On the other hand in certain quarters misunderstandings have cropped in about each other. Many organizations feel that marketing research is not at all needed. On the other hand, marketing researchers point out the lack of appreciation for their work by the organization. Some of the organizations complaints about marketing researchers are: 1. Research is not problem-oriented. It tends to provide a plethora of facts, not actionable results. 2. Researchers are too involved with techniques, and they appear to be reluctant to get involved in management problems. 3. Research is slow, vague and of questionable validity. 4. Researchers cannot communicate, they do not understand and they do not talk the language of management. Marketing researchers have the following complaints: 1. Management organizations do not include researchers in discussions of basic problems. Management tends to ask only for specific information about parts of problems. 2. Management pays no more than lip service to research and does not really understand or appreciate its value. 3. Management does not allow enough time for research. They draw preliminary conclusions based on early or incomplete results. BENEFITS OF MARKETING RESEARCH General benefits of marketing research are 1. Marketing research has made the job of forecasting and decision making easier by applying scientific norms. 2. Through this, the changing tastes of the consumers could be identified and the firm can suitably alter its production pattern or bring a new variety to meet in needs of the consumers. 3. By means of marketing research the type of competition that exists and the ability of the other manufacturers could be identified. 4. It helps the sales manager to push activities further thereby to enrich the sales as well as to find new markets and new customers. 5. It tells the management where the company stands in its industry 6. It tells management what the industry trends are & likely to be. 7. It is an essential tool in appraising and improving sales management effectiveness. Specific activities in this area include measuring variations in territorial sales yield, market share, sales
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effectiveness, measuring the effectiveness of individual salesmen and analysis of salesmen's activities. 8. It is an essential tool in the development and introduction of new products. 9. Supplies data to be used in salesman's and territorial quotas planning. 10. Supplies the facts for fixing the budget. 11. Helps determine the advertising methods that should be used and the angle that should be employed in the advertising copy. 12. Furnishes facts to convince dealers of the selling possibilities of given articles and to help them to increase their sales. 13. Predicts the trend of business conditions in given industries and furnishes a basis for promotion programs. 14. Ascertains the consumer's likes and dislikes. 15. Reports the methods used by the dealers, display, advertising and selling 16. Measures the stock in the dealer's hands. 17. Finds the dealer's reactions to given policies. 18. Furnishes data for fixing dealer's territories and quota. 19. Finds out and tabulates statistics in which the concern is particularly interested. 20. Keeps one informed about the developments in other industries, which may affect the business of the firm. 21. Measures the purchasing capacity of a given territory. 22. Discovers new uses for the product. 23. Analyzes the cost data that are available in published form. 24. Studies the organization of the concern with a view to suggesting changes or improvements (A) BENEFITS OF MARKETING RESEARCH TO TOP-LEVEL MANAGEMENT: Top management is concerned with the decision-making and policy framing at the highest level as regards production, marketing and so or it is the highest level planning, policymaking and controlling authority in the organization. The top-level management of a business unit includes Directors, Managing Director and other top-level marketing executives and other executives. Toplevel management has to take marketing decisions such as fixing short-term and long-term marketing objective and sales targets, finalizing marketing policies and strategies, evaluating marketing performance, forecasting sales, allocating resources t marketing activities and selecting suitable marketing channels. For taking decisions on these matters, reliable and updated data are requires and the same are provided by the MR department. This is one service that MR department provides to top-level management. It facilitates decision-making on marketing issues by providing necessary information on the marketing and other aspects of business. The top-level management needs feedback on current marketing environment and the MR department can provide this quickly. The feedback required in this regard can be provided in a continuous manner by the research department which studies marketing problems of the company in a regular and continuous manner. The research department is supposed to supply information to the top-level management on the following aspects of marketing: (1) Current business environment (more particularly marketing environment) faced by the company and the changes likely to take place in the near future. (2) Trends in consumer behavior, demographic information and consumer needs/expectations. (3) Changes in consumer purchasing power and data on demand and supply position in the market. (4) Trends about market competition and marketing policies of major competitors of the company and their marketing strategies.
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(5) Availability of better/cheaper raw materials and technology for manufacturing superior quality goods at lower costs. (6) Feedback on the marketing performance of the company and the challenges that it is facing. (7) Sales force requirement, recruitment and development. (8) Marketing opportunities available (domestic and foreign) and the marketing challenges likely to develop in the near future. (9) Any other information that the top management is expected to know for correct marketing decision-making and policy framing. The top-level management can take reasonably correct decisions in the following marketing areas with the help of updated feedback available from the marketing research department: 1. Deciding the long term marketing objectives and setting marketing plans, policies and strategies to achieve marketing objectives. 2. Designing of product or modifications in the existing products. 3. Determining the product line and adjusting the products as per the needs and expectations of consumers and allocation of resources among various products and marketing activities. 4. Improving the brand or package design, color, etc. 5. Fixing fair pricing of the product. 6. Fixing marketing strategies in order to face the competitors ever-changing market environment. 7. Selecting suitable channels of distribution for large scale an economical marketing of company's products. 8. Estimating sales i.e. sales forecasting for adjusting production and marketing activities of the company. 9. Designing internal mechanism to monitor and evaluate performance of marketing department and introduction of remedial measures, if required. In brief, MR is the crucial analytical tool and provides management with vital strategic and tactical information for decision-making. It guides management in the decision-making process. However, the final decision is to be taken by the top management. The feedback of Marketing department certainly plays a positive role in the correct decision making This suggests the importance and benefits of marketing research to top level management of the company. (B) BENEFITS OF MARKETING RESEARCH TO GOVERNMENT: Marketing research at the government level is conducted by various government departments concerned with agriculture, industry, commerce, industrial production, exports and imports, finance, foreign exchange and so on. These departments collect information on various aspects of national economy. In addition, government companies, public corporations, public sector banks, RBI/ etc. also collect information about various aspects of national economy. In India population census, (census survey) crop surveys, surveys of industrial production, wholesale and retail prices, cost of living index, estimates of imports and exports etc. for the future period are conducted regularly. In addition, needs of various sectors of the economy are estimated. Information collected through these sources is used while deciding government policies, budgets, funds allocation, etc. This suggests how research activities are given adequate importance attention at the government level. The data collected through census and other surveys are used while framing economic policies, long term development plans, allocation of resources and so on.
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MR at the government level is useful in the following areas: (1) Planning and controlling national economy: For planned economic development, available resources must be allocated in different sectors of the economy in a rational manner. Nation priorities must be decided clearly. The future needs of the economy must be estimated properly and arrangements need to be made meet them properly. Misdirection of resources must be controlled effectively. For such planned economic development, data on important aspects of the economy need to be collected. For this, research activities should be undertaken at different levels. (2) Control on production, distribution and other marketing activities: Government conducts various marketing activities on a large scale. It conducts production, looks after distribution and even restricts consumption of certain commodities through its marketing operations. The government has to bring equitable distribution of goods particularly essential commodities. Reasonable prices need to be maintained for social good. Production needs to be adjusted as per the needs of the entire economy. All such objectives can be achieved through appropriate policies. For the introduction of such policies, marketing research activities in the form of surveys, estimates and collection of data are useful. Research studies are also useful for the calculation of needs of the people, production required, consumption patterns of people and so on. (3) Control on exports and imports: Exports and imports are usually regulated by the government through suitable Exim policy. Exports must be adjusted as per the needs of the economy and also as per the surplus production available. Imports must be allowed to supplement the internal production. Large-scale imports are also necessary for export promotion. Proper policy decisions in this regard are necessary and are also visible in the Exim policy of the government. For framing such policy, adequate data must be available. This is possible through research activities. Surveys conducted are useful for estimating surplus production for exports, domestic consumption and imports required to be made. In brief, appropriate decisions as regards exports and imports can be taken with the help of data available through MR activities conducted at the government level. (4) Use of MR in Miscellaneous areas: Marketing research is useful to the government in many other areas of national economy. Such areas are: production plans (targets) in regard to consumer goods and industrial goods, foreign exchange requirement for the future period, regulation of production and prices, equitable distribution of goods and services, resource allocation and allocation of funds to social service at reasonable prices and so on. Census reports arc useful to the government for policy framing and decision-making on various social services such as facilities of primary education, and allotment of funds for primary education, provision for sports and recreation facilities, provision for medical facilities and provision for family planning and welfare facilities. In brief, marketing research is useful to the government in bringing economic stability and economic growth. The government can take correct decisions about various aspects of national economy with the help of the feedback provided by marketing research activities. Finally, it can solve economic problems and difficulties with the help research activities undertaken at the government level. This suggests the importance of marketing research at the government level.
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(C) BENEFITS OF MR TO ADVERTISING AGENCIES: Advertising agencies are specialized professional service agencies that offer different services to their clients as regards advertising and publicity through different media including press, TV and radio. Such agency performs various functions and offers varied services to its clients by charging necessary fees. Such services include booking space and time for advertising, preparation of advertising copy, organizing advertising campaigns of clients, offering guidance to the clients as regards packaging, branding, product modification and so on. Selection of suitable media for advertising, copy writing, testing effectiveness of advertising, advertising planning of the clients are some more functions/services offered by advertising agencies. Some agencies even conduct marketing research activities on behalf of their clients. In order to conduct its activities efficiently, an advertising agency needs adequate information and latest trends as regards advertising and marketing. Such information includes product details, readership details, details of different advertising media, media rates and so on. Such information is available from different sources such as data published by newspapers, TV, radio, advertising magazines and so on. An advertising agency also needs information as regards new trends and techniques used in advertising, legal and other restrictions on advertising and publicity in India, details of different advertising media (i.e./ rates, coverage, audience, popularity of the media, etc.). Information about market competition, new products available in the markets, advertising campaigns of competitors of its clients, etc. is also required by an advertising agency. For this, the agency has to conduct research activities in the field of advertising and marketing. An advertising agency has to collect and maintain all such information in an orderly manner for quick reference. It has to collect all useful data from different sources. Data already published on advertising and allied subjects need to be stored by the agency for ready reference. In addition, the agency has to conduct research activities in order to collect necessary information useful for the conduct of its functions. A well-maintained reference library is also necessary in the case of an advertising agency. Such activities will provide suitable feedback to the agency and the agency will be able to offer efficient services to its clients. This suggests the importance of MR and MIS in the case of advertising agencies. MR supports advertising agencies in regard to advertising activities. It provides reliable and updated information for correct decision-making on advertising budgeting, media planning, selection of advertising media for the clients and checking advertising effectiveness. An advertising agency can arrange advertising campaigns of its clients with the support of data available through MR. Finally, an advertising agency can give proper guidance to its clients on advertising matters with the help of information available through research activities on press, media, and so on.
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(D) BENEFITS OF MARKETING RESEARCH TO WHOLESALERS: MR is beneficial to wholesalers in the following areas of their business: (1) Location of business establishment: Every wholesaler has to locate his business establishment at a convenient place. Location includes location of main office, branches, warehouses and so on. The cost of marketing will be low if the location is optimum. Here, researchers undertake a survey of available convenient places and suggest the convenient places for locating business establishments. Thus, for selection of convenient location, locational survey is useful. (2) Selection of sales territory: Every wholesaler has to select promising area for his business. This selection is important as turnover and profit are related to the sales territory selected. For such selection, the features of product to be distributed, market demand of different areas, purchasing capacity of customers, possible increase in demand in future, possible benefits of sales promotion measures, etc. need to be taken into consideration. Researchers undertake surveys of different trading areas and suggest the best trading area to the wholesaler. (3) Reduction of distribution/marketing cost: Every wholesaler will like to reduce the cost of distribution as his net profit is closely linked with the cost of distribution. This cost includes expenditure on advertising, services to retailers, discount and credit facilities offered, arrangement for delivery of goods to retailers and so on. Such distribution cost needs periodical review in order to check wastage and liberal expenditure on distribution. Reducing distribution cost is difficult due to market competition but efforts should be made in this regard with the help of experts i.e. researchers. They suggest ways and means to bring down the cost of distribution without any adverse effect on total sales. (4) Decision on number of commodities for distribution: Every wholesaler has to decide the number of product lines he can handle efficiently. He has to decide the number of items that he can distribute effectively. Sometimes, marketing of limited items with good demand may be profitable. Similarly, stocking of different items may prove to be costly. In addition, every wholesaler has to consider his financial position, manpower available and storage facilities available while deciding the number of items for the business. Marketing researcher can study all relevant facts and offer suitable guidance to the wholesaler in this regard. (5) Storage and handling of goods: Every wholesaler has to maintain adequate stocks for smooth and regular supply of goods to retailers. Naturally, he has to give attention to storage, handling and transportation of goods. He has to conduct these activities economically. The wholesaler can undertake studies in these areas in order to find out ways and means for handling these activities speedily and economically. For this, research studies are useful. (6) Miscellaneous benefits to wholesalers: Marketing research is also useful to wholesalers while dealing with other aspects of marketing. They include cost-profit analysis, stock handling and delivery procedure, credit recoveries, incentives to retailers for their loyalty, sales promotion measures and so on. In short, MR offers guidance to wholesalers while dealing with their problems and difficulties. It is useful for the expansion of business and also for raising the margin of profit in the business. Wholesalers can undertake such research directly by making suitable internal arrangements. They
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can even study the published material and use it for the benefit of their business operations. Many wholesalers do not conduct their own research studies but take advantage of research studies conducted by others. (E) BENEFITS OF MARKETING RESEARCH TO CONSUMERS: Consumers do not conduct MR activities on their own. However, the benefits to all research activities are available to consumers. In fact, the purpose of MR is to study/understand the needs, expectations, problems, etc. of consumers and to give maximum possible convenience and satisfaction to them. This suggests that consumers secure the maximum benefits of research activities indirectly as all research activities are basically for the benefit and convenience of consumers. The benefits of MR to consumers are as noted below: 1. Supply of goods and services as per the needs and expectations of consumers. MR provides wide choice to consumers. Consumers get wide variety of goods at fair prices due to MR activities. 2. Suitable adjustments in the products (as per the requirements of consumers) through product planning, product innovation and product modification. 3. Supply of goods at right place, time and also at the right price. 4. Better return (in terms of convenience, satisfaction and welfare) of the price paid for goods and services. 5. Protection of the rights of consumers and prompt redressal of complaints relating to price/ quality, use, etc. 6. Availability of new / innovative products as per current socio-economic-cultural needs. 7. Provision of wide variety of goods for the convenience of consumers. 8. Better quality after-sales services. 9. Fair treatment and prevention of exploitation of consumers. 10. Production as per the expectations of consumers. 11. Provision of wide choice to consumers. (F) BENEFITS OF MR TO SMALL BUSINESSMEN: In general, MR is useful to all categories of businessmen - small or big. Small businessmen include small-scale manufacturers, small-scale dealers, retailers and so on. They can adjust their business policies and \ activities as per the information available from the research activities. They can take decisions regarding location of business/ sales territory, commodities for manufacturing or marketing, sales promotion policies, storage of goods, credit policies, pricing policies and so on with the help of information available through research activities. A small businessman may not be able to maintain separate research department for the conduct of research activities. However, he can collect necessary information from census reports, other financial and marketing reports, etc. published by different agencies. He can even refer to market reports and other reports on current economic issues and adjust his business policies accordingly. This is how marketing research is useful to small businessmen in the conduct of all their business activities properly and with foresight, imagination and vision. Small businessmen have to adjust their business policies and activities as per the need of the situation. Here, they use the research techniques (knowingly or unknowingly). This suggests that marketing research is useful to large business houses as well as small businessmen. In the case of 36
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small businessmen, the use of MR may not be extensive as in the case of large business houses. However, small businessmen study market situation as per their business needs, use available information on market competition, consumer needs, etc. and adjust their business plans, policies and operations according. This is precisely the manner in which they use marketing research for their benefit. Reasons for the Failure of Marketing Research: 1. There is resistance on the part of the business executives to use research, because they think that research is a threat to their personal status. They also think that marketing research may expose them adversely. 2. Sometimes, the executives develop their own objectives, which are in conflict with the organization, and they want research to support their views rather than the views of the organization. 3. The executives are unable to use specialists effectively. Marketing research presently draws on a variety of specialists from such disciplines as mathematics, statistics, economics, psychology, sociology, general semantics, anthropology, etc. 4. Marketing research department is often isolated from key departments. CHARACTERISTICS OF GOOD MARKETING RESEARCH The duty of marketing research is to solve the problems of the organization relating to its sales and related marketing issues. As such it is considered to be a primary tool by several managements and as a secondary tool by many managements. In spite of its drawback of arriving at exact results with complete accuracy, corporate world has accepted its relevance. One such drawback posed against marketing research is its cost-effectiveness. If the tools used are crisp and less costlier its service could be welcomed by all. For such recognition marketing research must possess certain characteristics, which are mentioned by Philip Kotler as follows: 1. Scientific method: Competent marketing research is characterized by an attempt to follow the scientific method, careful observation, formulation of hypotheses, prediction and testing. 2. Research creativity: At its best, marketing research develops innovative ways to solve a problem. 3. Multiple methods: Competent marketing researchers keep away from over reliance on any one method, preferring to adopt the method to the problem rather than the other way round. They also recognize the desirability of the simultaneous gathering of information in different ways to give greater confidence than any one method would provide. 4. Interdependence of models and data: Competent marketing researchers recognize that the facts do not speak for themselves but rather derive their meaning from models of the problem. They attempt to guide their search for information on the basis of causal decision model to help the executive. 5. Value and cost of information: Competent marketing researchers show concern for measuring the value of information against its cost. Value/cost is a consideration when the Marketing Research Department chooses which research projects to conduct, which research designs to use and whether to gather more information. BASIC VS. APPLIED MARKETING RESEARCH:
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Research can be divided into two classes viz., basic research and applied research. (1) Basic Research Often basic research is called 'theoretical 'pure' or 'fundamental' research. It is not directly concerned with solving marketing problems. Primarily it aims at improving academic knowledge about the subject matter. Basic research does not deal with commercial problems but it relates to fundamental questions concerning the business and allied subjects. Basic research may address itself to issues like economic and political changes in a country or reasons for changes in lifestyles in youth. (2) Applied Research Applied research directly deals with commercial problems. It tackles the business problems and attempts to find alternative solutions to the problems. Applied research may relate to locating reasons for fall in sales or to introduce a new brand of product. Applied research can be of two types (a) problem-solving research and (b) problem-oriented research. As the name indicates problem-solving research relates to a specific problem. This research can be conducted either by the marketing research department of the firm or by an outside research agency. By contrast problem-oriented research deals with problems that may be of interest to many firms. This type of research puts into practice the knowledge obtained through basic research.
METHODS OF CONDUCTING MARKETING RESEARCH
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The methods of conducting marketing research are broadly classified into the following four categories: (1) Desk Research: In desk research, the required information for research work is collected from published and other written sources of information available. Desk research is useful for the collection of secondary data. Secondary data are already collected for some other purpose but can be used conveniently by borrowing the same. Desk research is a type of in-house research. (2) Field Research/Investigation: In field investigation/survey method, the required information is collected from the consumers, dealers and others connected with marketing. In addition, consumers surveys are also conducted for this purpose. The data collected from such field investigation are called primary data. (3) Observation Method: In observation method, the required information is collected through actual physical observation of one or more phenomena under study. This method is also useful for the collection of primary data. (4) Experimentation Method: In experimentation method/ the required information is collected through a small scale experiment under controlled conditions. This method is used for primary data collection. The methods of data collection noted above have their special features, advantages and limitations. The researcher has to select any method convenient to him. Collection of reliable and authentic data is more important than the specific method used for data collection. DESK RESEARCH MEANING AND FEATURES OF DESK RESEARCH: Desk research means research activity conducted with the help of established information (data) by different agencies and also by using the information available from the internal sources of the company. The information published in trade journals, commercial press and data internally generated by the company are used for the desk research. Thus it is a critical study of published information (data). Such research is usually conducted within the marketing research department of the company by the research staff appointed. Desk research is simple and economical in nature. It saves time and money on research work to a considerable extent as field investigation for data collection is avoided. However, companies generally do not depend fully on desk research. They prefer to supplement desk research with field investigation. Desk research does not involve field work/survey work of any type. Naturally, desk research is rather easy and quick. It is actually finding out the required information from published journals, etc. and using it for the study of marketing research problem. ADVANTAGES/MERITS OF DESK RESEARCH: (1) Easy and quick: Desk research is easy and quick as required information is available from different agencies and sources -internal and external. Time in data collection is reduced in desk research as available data are used for research purpose. (2) Economical: Desk research is economical as information can be collected easily through libraries or by paying subscriptions. This reduces the expenditure on research activity. (3) Reliable data available: The data available in published form are generally reliable as they are collected by responsible agencies and institutions. This brings accuracy to the conclusions drawn through desk research.
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(4) Absence of interviewees bias: The published data are factual and away from interviewee's bias. Naturally, the information available is more reliable/dependable. (5) Convenience: Desk research is convenient as it relieves from the botheration of field investigation, tabulation, analysis and so on. (6) Suitable to small firms: Desk research is convenient in the case of small firms and non-profit organisations. DISADVANTAGES/LIMITATIONS OF DESK RESEARCH: (1) May not be exactly as per needs: The published data may not be always reliable and exactly as per the needs of survey work undertaken. The researcher has to make proper scrutiny before using published data. (2) Needs modification: Secondary data need suitable modification before actual use for research purpose. This is necessary in order to adjust data as per the need of the research work undertaken. (3) Testing required: Published data need proper testing through field investigation for verification of validity and reliability. (4) Too much dependence undesirable: Too much dependence on published data is undesirable and even dangerous. The conclusions drawn from such data may not be dependable. Desk research is not always dependable. (5) Secondary method: Desk research is a secondary method of MR. The data used in the desk research are secondary and may not be exactly as per the need of research study. (6) Lacks practical-orientation: Desk research is like library research work and lacks practicalorientation. SOURCES OF PUBLISHED INFORMATION (SECONDARY DATA): In the desk research, published information is used extensively. Such information is available from internal and external sources. Normally, information (secondary data) for desk research is available from the following sources: (A) External Sources: External sources are the reports and publications of various agencies including commercial press. External sources are used when internal records are not adequate or do not provide the required information readily. (1) Trade Journals: Trade journals are published regularly for the information and guidance of business community. They collect and publish commercial information regularly. Some journals even conduct surveys and publish- the data collected. Companies can subscribe to suitable journals and use the information published therein. A researcher can even refer to back issues of known journals for reference purpose. In India, large number of trade journals are published. They include, "Business Today", "Business India" and so on. Even business newspapers (e.g.. Economic Times) publish varied information on industrial, financial and economic matters. Such information can be used for research purpose. (2) Directories: Trade directories are published by different agencies like chambers of commerce and trade associations. They supply information in a compact form to researchers for different purposes. (3) Subscription Services / Syndicated Services: Some commercial organisations collect and supply information on specific subject/subjects regularly to its subscribers. Interested companies should pay the subscription fees periodically and in return they get required information in a compact form which can be used for research purpose.
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(4) Publications of Trade Associations and Chambers of Commerce: These associations collect and supply trade information to their members through journals, special reports, annual reports, booklets and other publications. Sometimes, surveys and special studies are conducted and the reports are given wide publicity through such publications. These associations maintain reference libraries for the benefit of their members and researchers where Indian as well as foreign journals are made available for reference purpose. (5) Publications of Management and Economic Consultants: Management consultancy companies collect information on business matters and give publicity to the same. This information is useful for research purposes. Even the research reports prepared by MR organisations can be used in the desk research (6) Publications of Banks and Financial Institutions: Banks, financial institutions, investment trusts and stock exchanges publish information on financial matters through their annual reports and other publications. In India, RBI publishes information on all aspects of Indian economy regularly. Such publications provide reliable statistical information to researchers. (7) Company Reports: Public limited companies publish their annual reports and financial statements which contain information about their activities and also about general economic situation in the country. Such reports can be used for desk research purpose (8) Specialised Libraries: In cities like Mumbai and Delhi, specialised libraries are available. They provide whatever information is required by researchers. Even the libraries of foreign embassies are useful for data collection on commercial matters (9) Government Publications and Publications of International Organisations: Government departments, public corporations and other government agencies publish information of varied nature through their publications. Census reports are also published by the government. Such reports provide valuable information to researchers. Along with this, international agencies like IMF, WTO, FAO and other agencies of United Nations publish useful information on trade, finance and other economic matters. Such information can be used for desk research. (B) Internal Sources: Along with external sources of secondary data, internal sources also supply sufficient information for research purpose. Internal sources are the documents, registers, and records (accounting and sales force) available within different departments of the organisation itself. Huge internal data are available within the organisation but in an unorganised manner. Such data need to be collected and arranged properly before actual use in the research project. Researchers go to external sources when they are unable to get required data within the organisation itself. Various departments of the company can provide information in the form of (1) periodical statements, reports and statistical data. (2) Past research reports, files, documents and correspondence of the company are also useful for reference purpose. (3) sales orders, customer's complaints and sales reports of different areas are useful for marketing research. (4) salesmens reports are useful for securing information about market situation.
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INTERNAL V/S EXTERNAL SOURCES OF DATA COLLECTION Internal Sources Internal sources of data collection means data collected from the documents available with the company Information available from internal sources can be used directly for research purpose. Modifications are not required Purchase records, sales records, periodical sales reports and annual reports are the examples of internal sources of data collection Limited coverage as they relate to company only. Internal sources are more reliable as they supply accurate data. Verification of data is not required Internal sources are easily available and that too without any extra cost. External Sources External sources of data collection means the use of data published by external agencies. Information available from external sources cannot be used directly as it is. Modifications as per the nature of research work are required. Trade journals, annual reports of companies, surveys conducted by press, census reports etc. are examples of external sources of data collection. Wide coverage as they are varied in character External sources may not supply accurate data. Naturally, a verification of data before actual use is necessary External sources are not easily available Money is required to be spent on them.
Meaning
Use of information
Examples
Coverage Reliability
Availability
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TYBMS Evaluation of Secondary Data
43
TYBMS ADVANTAGES/MERITS OF PUBLISHED DATA:
(1) Easy and economical availability: Published data are available easily, quickly and economically. (2) Extensive availability: Published data are available extensively on all aspects of marketing and can be used by referring to different sources This enables the researcher to make his primary data collection more specific and relevant to his study. (3) Supplementary role: Published data can be used as a good supplement to data collected through field investigation It supports and fill in the gaps in the primary data used Moreover, the researcher gets additional information about the problem under study His understanding of the marketing problem improves. (4) Facilitates completion of research work: Completion of research project without using published data is difficult as such data are needed when adequate primary data are not available Published data bring completeness to the research project. (5) Facilitates comparison: Secondary data can be used as a basis for comparison with the primary data collected by the researcher DISADVANTAGES/LIMITATIONS OF PUBLISHED DATA: (1) Old and outdated nature: Published data available may be old and outdated. The use of such data is irrelevant for research purpose. In fact, the utility of secondary data declines progressively as the period goes. (2) May not be complete and reliable: Such data may or may not be complete, accurate and reliable. It is rather difficult to find out the reliability of published data. Moreover, use of unreliable published data is dangerous for research purpose. (3) Too much dependence undesirable: It is not desirable to depend too much on the published data for research purpose as there is always a time gap in between the collection and publication of such data. Moreover, the deficiencies of published data will be carried forward in the research project undertaken. (4) May be of bias nature: The bias of the collecting agencies may be reflected in the research work or research report when published data are used extensively. (5) May not be directly adjustable (relevant) to research project undertaken: Secondary data rarely fit perfectly into the framework of marketing research problem under investigation. Such data are not exactly as per the need of research project undertaken. The data may not fit info the needs of investigation. PRECAUTIONS TO BE TAKEN WHILE USING PUBLISHED DATA: (1) Published data has certain limitations and should be used in the research work only when absolutely essential or when available as per the requirement of the research project. (2) Data published by a reputed and reliable agency should be used for research purpose. (3) Too much dependence on published data for research purpose should be avoided. (4) Old and outdated published data should not be used. (5) To the extent possible verification of published data should be made before actual use in the research project. Such evaluation avoids the use of unsuitable/unreliable data in the research work.
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TYBMS FIELD INVESTIGATION/SURVEY METHOD
MEANING OF FIELD INVESTIGATION/FIELD SURVEY: In addition to desk research, marketing research can be conducted through field investigation. For this, field surveys are conducted. They are used for primary data collection in MR. Survey means a planned attempt to collect required information from a representative sample of the relevant population. Field investigation means collecting first hand information by actually visiting markets or meeting consumers and dealers who are directly connected with the marketing activities. Data collected for the first time through field survey are called primary data. Here, the data are collected through suitable questionnaire and interviewing a limited number of people (a sample) selected from a/large group. Customers, traders and suppliers are the major sources supplying primary data. The primary data collected are superior to secondary data. Researchers turn to the primary data in order to overcome the limitations of secondary data which include incompatibility, obsolescence and bias. Primary data are also necessary when the secondary data are incomplete. Researchers prefer to use both primary and secondary data for research purpose as depending fully on secondary data is not fair. Primary data need to be collected from different sources such as surveys, observation and experimentation. The primary data are reliable. However, the problem in primary data is its cost, both in terms of money and time required for collection. In addition, researcher's bias also creeps in. Even with such limitations, the primary data are important and useful in MR. Primary data are of two types: (a) Census, and (b) Sample, Census refers to collection of data from the entire population. In India, population census is taken after every ten years, (the latest census was taken in 2001). It is a lengthy and costly method. As a substitute to census, sampling method of data collection is used. Sample refers to a pie taken from the population. Sample is a small representative of the whole universe. If the sample size is fair, the conclusions drawn are applicable to the entire universe. Random sampling is a popular method used for data collection. Sampling is an integral part of data collected through surveys. Sampling is used to collect primary data when the sources of data are too many to be exhaustively handled. A sample is only a representative portion of the universe/population. The sample needs to be decided clearly before starting the survey work. Field surveys are conducted extensively for the collection of primary data. Personal interview and telephone interviews are arranged for field surveys. A survey consists of gathering data by interviewing limited people. Such survey relates to consumers and other marketing activities. In survey method, direct communication with consumers/dealers is established and information is collected from them through questionnaire. Survey method is more effective and reliable as compared to desk research. According to Tull and Hawkins, "Survey is the systematic gathering of information from respondents for the purpose of understanding and for predicating some aspect of the behaviour of the population of interest."
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TYBMS DESK RESEARCH V/S FIELD RESEARCH: Desk Research Meaning Desk research is the research conducted within the marketing research department of a company. It is like library research work The sources of desk research are like trade journals, government reports, census reports and subscription service Desk research is an easy, quick and less expensive. The data collected are based on published data (secondary data) available. The testing by field investigation is absent.
Sources used
Time and Cost involved
Type of data that is collected/used
Position of investigators The data collected are free bias from investigator's bias Nature of method Secondary method of MR. Used to supplement field investigation and other methods of data collection Desk research uses secondary data for research
Data used
Field Research/Investigation Field research is the research conducted outside the research department. The information is collected straight from the consumers, dealers or markets The sources include personal interviews, telephone surveys and consumer panels. In addition, observational and experimentation methods are also used Field research is a timeconsuming and costly method of conducting marketing work The data collected are primary data and conclusions drawn are based on actual field investigation and are accurate and reliable. Testing is also possible The data collected and conclusions drawn may have interviewer's bias Field research is the oldest and primary method of marketing research and is used extensively even at present Field research uses primary data for research work
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TYBMS
METHODS OF FIELD INVESTIGATION/MARKET SURVEY: Survey methods are useful for the collection of primary data through interviewing. Field work calls for a lot of managerial and administrative skills on the part of the research agency. It should be properly planned and also supervised. The time schedule of field work must be strictly followed and the responses must be recorded accurately and honestly. Every survey method has its special features, advantages and limitations. A researcher should select suitable survey method for his research project and use it in a systematic manner. It is not possible to treat specific survey method as the best. The researcher has to consider the nature of research project, the type of information required, funds and time available, etc. and select one or two suitable survey methods. The use of survey method is essential for the collection of primary data on a marketing problem under investigation. Field investigation is one of the most widely used MR methods. Field investigation methods are important, as they are more accurate and reliable. Here, direct communication is established with the consumers and information is collected by asking relevant questions. Naturally, the information collected is accurate, first hand and factual. The conclusions drawn from such data are more accurate/ reliable. The rate of response to field investigation is generally positive. Investigators can even collect additional information through personal interviews. It is not possible to study market situation and consumer needs by reading published information. In this sense, field research is superior to desk research. All companies give special importance to field investigation and use it as a good supplement to desk research. Market survey/field investigation is normally used if the required data are not available from the company's internal records or from external published sources. MR will not be comprehensive, complete and reliable unless field investigation is conducted extensively. In fact, the quality of research work and its practical utility in decision-making depend on the extent to which field investigation is carried out. This clearly suggests the importance of field investigation in MR. There are four important methods used in field investigation/survey. These survey methods are: (a) Mail surveys (b) Telephone surveys (c) Personal interviews (d) Panel Research. (a) MAIL SURVEY MEANING AND FEATURES OF MAIL SURVEY: Mail survey (also called mail interview) is one method of data collection through field investigation. Here, questionnaire is prepared for the collection of specific information required for research purpose. The questionnaire is sent by post (mail) to potential respondents with a request to complete the same and return by post to the mailing company/research agency. The completed questionnaires received are checked and arranged properly. The information given therein is tabulated and analysed in an impartial manner. Finally, conclusions are drawn for framing policies and decision-making.
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In mail survey, interviewer is not available for asking questions, for guiding respondent and for noting the information. On some occasions, the questionnaire is published in the newspapers and readers are asked to supply information. In addition, copies of questionnaire are supplied to retailers with a request to collect completed questionnaires from the customers. Even the questionnaire may be supplied to consumers along with product's package with a request to supply information. These methods are not used extensively due to poor response from the consumers. Normally, the questionnaire is posted to the address of the consumer and he is requested to supply information by answering the questions asked. Mail/post office is used as a medium for the conduct of survey and hence it is rightly called mail survey. This method of survey is a complete antithesis of the personal interview. Here, the interviewers are not involved and naturally away from interviewer's bias. Wide area can be covered as postal facility exists in the whole country. National surveys can be conducted through mail survey as contact with large number of respondents is possible with the medium of post office. Mail survey needs to be planned properly for positive response from the respondents. Similarly, questionnaire prepared for the collection of information should be ideal/promising. Mail survey is economical as compared to personal interview. The respondents are given full explanation of the purpose of the survey with a request to give necessary co-operation by supplying required information in the space provided in the questionnaire itself. Stamped envelopes (reply paid envelopes) are also sent along with the questionnaire for quick response from the respondents. Care is also taken to see that the respondent remains anonymous. In the questionnaire, alternate replies are suggested and the respondent has to make tick marks on the questionnaire itself. This gives convenience in the tabulation work as the use of computers for tabulation is possible. Sometimes, small gift is also offered to respondents in order to have positive response from them. The respondent can study the questionnaire leisurely and give replies independently as per his desire. Naturally, the replies are given carefully and without pressure/tension. It is possible to contact respondents from different parts of the country by preparing a comprehensive mailing list. Mail survey method is now extensively used for marketing research. ROLE OF QUESTIONNAIRE IN MAIL SURVEY: In mail survey, questionnaire plays an important role. Naturally, it should be prepared with proper care. The questions asked should be clear and worded in a simple and clear language. The questions should be relevant precise and logically arranged. Lengthy questionnaire should also be avoided in mail survey as respondents may not like to answer a long questionnaire. Questionnaire should contain "control" questions which indicate the reliability of the respondent. Finally, questions of personal nature should be avoided. In mail survey, the response from the respondents largely depends on the quality of questionnaire prepared and hence special attention should be given to this aspect. In fact, the success of mail survey mainly depends on the manner in which the questionnaire is drafted.
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TYBMS MERITS OF MAIL SURVEY:
(1) Economical: Mail survey is economical as only postage and printed questionnaire are required. The cost of survey is limited as interviewers, supervisors, etc. are not required in mail surveys. (2) Wide coverage: In mail survey, wide geographical area can be covered by survey as postal facilities are available all over the country. Information can be collected from large number of respondents spread over the whole country by preparing a comprehensive mailing list. Information can also be collected from those with whom face to face interview is not possible. (3) Speed in data collection: Mail survey method has a speed. Large number of respondents can be contacted within a short period and information can be collected from them within a reasonable time. It is possible to send hundreds of questionnaire within a week and information will be available from many of them. (4) Avoids interviewees bias: In mail survey method, interviewees bias and errors are eliminated. Guidance/hints are not given to the respondents. As a result, first hand reliable information is available for survey purpose. This improves the quality of research work and the conclusions drawn. (5) Convenience to respondents: Respondents can answer the questionnaire at their own convenience. They can supply information even while remaining anonymous. Respondents are likely to be more thoughtful as they have not to give answers on the spur of the moment. Thus convenience to respondents is one major advantage of mail survey technique. (6) More information available: It is possible to collect more information by using both open ended and close ended questions in the mail survey questionnaire. (7) Investigators not required: The services of investigators can be dispensed with as personal contact with the respondents is not required in the case of mail surveys. Expenditure on staff training and supervision on survey work is also eliminated. (8) Simple and direct method: Mail survey method of data collection is extremely simple, clear and direct as only questionnaires are to be sent as per the mailing list prepared. If necessary, reminder may be sent to the respondents but this expenditure will be limited. (9) Centralized control: Mail surveys are often conducted from a single office and this brings centralized control on the whole survey work. (10) Convenient to medium/small companies: Mail survey method is convenient to small and medium sized companies. It can be used conveniently for collecting information from consumers spread over a wide geographical area. (11) Views of family members available: In mail survey, views of respondents as well as of their family members are collected as they participate while giving replies. Moreover, as respondents remain anonymous, they are likely to give honest replies.
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TYBMS LIMITATIONS OF MAIL SURVEY:
(1) Problem of "No replies": "No replies" is one major disadvantage of mail survey. Respondents do not take interest in the survey work and do not send the replies. Very few give positive response to the questionnaire. Others send replies only when reminder is sent. Many others do not send replies at all. Some others give incomplete response by not answering all questions asked. Thus, poor response to mail questionnaire (High non-response rate) is one important disadvantage of mail survey. (2) Updated mailing list required: For mail survey, up-to-date and comprehensive mailing list covering cross section of the society is necessary. The researcher may not have such accurate list of respondents at the state or national level. This affects the area covered by the survey. (3) Poor response, if questionnaire is defective: Questionnaire acts as a base of mail survey. The response will be limited if the questionnaire is too lengthy or if it contains difficult and confusing questions. Sometimes, busy persons ask their assistants to give replies. This affects the quality of mail survey conducted. (4) Lacks accuracy of information: In mail survey method the researcher cannot verify the accuracy of the information given by the respondents as he has no control on the respondents. There may be inconsistency/ambiguity in the answers given. The researcher has to accept or reject the information supplied. (5) Limited use: Mail survey method is of limited use in qualitative study or in causative research.. For probing psychological motivation, mail survey method is not suitable. (6) Effects of ambiguous questions: There is a possibility that some questions may not be understand by large majority of respondents. This may be due to ambiguity in the questions asked. As a result, the respondents may not give answer or may give answer which may not be correct or relevant. This affects the final outcome of the survey. (7) Changes in questions not possible: It is rather impossible to amend the approach or questions or their wordings once the questionnaire is issued to the respondents. This brings rigidity in the survey work. Required information about certain aspects of the survey may not be available if the questions asked are confusing. (8) Not suitable when quick information is required: Mail survey is not convenient when the researcher needs information quickly i.e. within two or three days. Mail survey is normally a time consuming activity. In addition, postal delays are quite common. (9) Non-verbal responses are not noted: It is not possible to gather non-verbal responses in the case of mail survey. The benefit of personal observation by the interviewer is also not available. (10) Not suitable for spontaneous answers: Mail survey is not suitable when the researcher is interested in the spontaneous answers from the respondents.
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TYBMS
(b) TELEPHONE SURVEY
MEANING AND FEATURES OF TELEPHONE SURVEY: Telephone survey/Telephone interview is another method of field investigation. It is a popular alternative to personal interview. Here telephone is used as a medium of communication as there is only vocal interface between the interviewer and respondent. In telephone survey method, telephone is used as an instrument for the collection of information from the respondents. Here/ a brief interview of the respondent is taken on telephone. The respondent is contacted on phone, questions are asked on the subject matter of survey and information is collected from him for further processing. It is a type of oral interview with the respondent who is necessarily a telephone subscriber. Telephone survey is a quick and economical method of survey as response is immediate and wide area can be covered without actual travelling to different places and parties. Telephone survey is similar to personal interview but personal contact with the respondents is absent. It is used as a substitute for personal interview. Originally the use of telephone was restricted to monitoring audiences for radio and TV programmes. Now, telephone is used for collecting information on marketing problems. Industrial surveys and trade surveys are also conducted by using this method. Computer-Assisted Telephone Interviewing (CATI) and Direct Computer Interviewing (DCI) are new developments in the field of telephone surveys. MERITS OF TELEPHONE SURVEY: (1) Economical: Telephone survey is economical as compared to personal interview. Moreover, busy persons like doctors and professionals are available as respondents in the case of telephone survey. (2) Quick response: It can be conducted quickly and rapidly. The information is available quickly. No time is needed for travelling, etc. Prompt answers is one special benefit of telephone survey. (3) High speed: There is high speed in telephone survey as large number of interviews can be completed within one day. It is also possible to use tape records for data recording. (4) Information available from VIPs: People who are difficult to contact personally are available for telephone interview. Many busy people are not prepared to grant personal interview but they are willing for brief conversation on telephone. For such respondents, telephone survey is convenient. (5) Simplicity: It is a simple method of conducting MR as information can be collected from a small office with telephone facility. (6) Frank response: Experience proves that respondents are more frank (free response) on telephone interviews and give quick response. They are willing to answer delicate/personal questions over telephone than personally. (7) Orderliness: There is orderliness in telephone survey. The questions are arranged logically and are asked in a planned manner. (8) Sample selection easy: A list of telephone subscribers can be prepared easily for the purpose of telephone survey. This means the sample selection is easy. (9) Secrecy of respondents: Anonymity and confidentially as regards the name of respondent and information supplied are possible.
51
TYBMS LIMITATIONS OF TELEPHONE SURVEY:
(1) Brief questionnaire required: In telephone interview, the questionnaire must be brief because lengthy interview with the respondent is not possible. As a result, telephone interview is useful for collecting limited information on specific points as the length of telephone interview is always very short. A respondent can close the conversation quickly as per his desire. (2) Limited / Brief information available: In telephone interview, the replies given by respondents are always brief and limited information is given. The communication with the respondents is oral/verbal. Detailed discussion is not possible. Interview length is limited. This narrows down the scope of survey. There is time limit for telephone interview. Even visual aids cannot be used in telephone survey. (3) Difficult to contact large number of respondents: It is difficult to contact large number of respondents, as many persons do not have telephone facility. As a result, the coverage of survey is limited. Similarly, many people may not be willing to talk over telephone. This restricts the scope of telephone survey. (4) Non-verbal responses are not available: In this method, observation of respondents is not possible. As a result, non-verbal responses cannot be seen and noted. (5) Non-availability of proper sample: In telephone survey, it is difficult to get a representative sample. It is only the list of telephone subscribers which can used for selecting samples. (6) Limited coverage of sample: Respondents from remote places cannot be contacted by this method. Even poorer sections of the society are not covered by telephone survey. (7) Limited questions: Questions of very personal nature or questions requiring lengthy answers cannot be asked in telephone interview. This makes the interview incomplete. Bias on the part of respondent is also possible. (8) Interviewers bias: There is a possibility of interviewer's bias in this survey method. (9) Difficulty in checking validity of information: It is difficult to check the validity of information supplied on phone. Even the person on telephone may not be the real respondent. (c) PERSONAL INTERVIEW MEANING AND FEATURES OF PERSONAL INTERVIEW: Personal/face-to-face interview is one popular and extensively used method of primary data collection for MR. It is probably the oldest method/technique of MR. It consists of a two-way conversation initiated by the interviewer for obtaining information on specific issues. Interviewing, in fact, is a social process; it involves an interaction between the two for specific purpose. It is a purposeful conversation between the interviewer and respondent for specific purpose. According to C. William Emory, "Personal interviewing is a two-way purpose conversation initiated by an interviewer to obtain information that is relevant to some research purpose". The backbone of personal interview is the questionnaire prepared for specific survey. The interviewer uses this questionnaire as a base and collects the required information from the respondents. For effective and purposeful personal interview, the interviewer needs proper education and training. He must ask the questions properly and encourage the respondent to supply maximum possible information. He should also note the additional information, if any, supplied by the respondent. The interviewer should be aware of the purpose for which the survey is being conducted.
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TYBMS
The outcome of personal interview largely depends on the ability, maturity and sincerity of the interviewer. The response from the respondent largely depends on the interest and initiative of the interviewer and the manner in which the interview is being conducted by the interviewer. The interviewers general responsibilities are as noted below: (a) To locate informants. (b) To translate these contacts into purposeful interviews. (c) To collect valid and reliable responses. (d) To record all such responses accurately. Personal interview method is certainly superior as compared to mail / telephone survey methods of data collection. There is direct communication in personal interview and the interviewer is in a position to collect additional information about the subject matter of research project and also about the respondent. This method is costly and time-consuming but is treated as an ideal method as it provides maximum possible information from the respondents. As a result, personal interviewing retains its long held dominance across a wide spectrum of surveys - market, social, political.
TYPES OF PERSONAL INTERVIEW: (A) Individual interviewing involves talking with individual persons in their homes or offices or even on the street. (1) Structured Interview: In the structured interview, detailed questionnaire is prepared for the purpose of interview This questionnaire is similar to the questionnaire prepared for mail survey The interview is taken as per the questionnaire prepared This method brings uniformity in the survey work Limited choice/freedom is given to respondents while answering questions Possible answers are given and they have to select one of them (2) Semi-structured Interview: In the semi-structured interview, the interviewer notes down the key questions which are to be asked to each respondent He uses these questions supported by other supplementary questions which he puts forward while interviewing the respondent The interviewer has to use his skill and knowledge while conducting semi-structured interview Semi-structured interview is useful for collecting additional information from the respondents Freedom is given to the interviewer and interviewee Respondents are encouraged to express freely (3) Unstructured Interview: In an unstructured interview, detailed questionnaire is not used for reference The interviewer believes that the respondent has adequate useful information and it is his duty to collect that information through conversation This interview is useful only when the interviewer is properly trained with full knowledge of the nature and purpose of survey work and has adequate knowledge of human psychology Here, the interviewer and the respondents are given adequate freedom The interviewer can ask additional questions or can change the order of questions given for reference (4) Depth Interview: Depth interview uses techniques of psycho analysis to study in depth the behaviour of respondent. This method allows the interviewer to collect different views and opinions of respondent through personal interview. Such interviews are useful for the study of human behaviour.
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TYBMS
The depth interview method relates to behavioural sciences such as sociology and psychology. It is a clinical psychology method wherein the investigator attempts to get the respondent talk freely about certain topics in an informal manner. The term depth interview is used as the interviewer desires to discover underlying motives/desires of the respondents. Such interviews are usually undirected and require maturity, skill and experience on the part of the interviewer. In addition, it is a time consuming interview. Depth interviews are costly and are used for the group interviews rather than for individual interviews. In depth interview, the respondent is allowed to say what he knows or feels about the product or subject matter of discussion. The respondent is assessed (his behaviour or thinking process) through supplementary questions. Prepared questionnaire is not used by the interviewer but he is given a list of issues to be covered in the interview. The questions asked in the depth interview are not identical. Here/ the data collected is qualitative and not the quantitative one. In depth interview, the respondent is encouraged to talk freely and the interviewer takes the position of a good listener. He has to find out inner motives and feelings of the respondents. (B) Group interviewing consists of inviting a group people together for interview purpose. Group interview is also called group discussion. Information is collected jointly from them by a trained moderator. Group interview is a faster technique of interviewing as compared to individual interview In group interview, a group of 8 to 12 respondents is formed and information is collected collectively from the whole group It is a non-structured and informal type of group interviewing and is useful for data collection on human behaviour and motivation Here, the assumption is that people talk more freely/openly when in groups Focused Group Interview/Discussion: In the focus group interview the attention of group members is focused/concentrated on some particular problem/ product/topic and the group discussion is directly and closely related to the topic/product/problem The group leader (moderator) has to use his skills etc and see that the discussion do not move away from the main problem and that necessary information is available from the group The group discussion is tape recorded or video-taped The required information is collected from the tapes and conclusions are drawn The group selected for interview/discussion is called focus group and information is collected from the group as a whole. Though the term focus group interview is used here, the interviews of group members are not taken as per the usual style. The whole group is treated as one unit and a specific problem/topic is discussed by the group as a whole. In this sense, the terms focus group interview and focus group discussion need to be treated as identical. Focused interview (discussion) is a type of free interview in which a greater degree of control is applied to the course of the interview. Here, the interviewer puts a number of related questions to the respondents and tries to get information on all points at one time. The attention of the respondent is focused on limited number of inter-related questions. The respondent is given an opportunity to express his views freely but on limited number of questions/points. Unnecessary and unwanted discussion during the interview is avoided. The information and views expressed by the respondent are noted clearly and correctly by the interviewer. Focused interview is more precise, clear-cut and to the point. It reduces the time of interview but the information on important points is collected from the respondent.
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TYBMS
Focused interview is superior to free interview as unnecessary questions, conversation and irrelevant information are avoided. Along with this, adequate scope is provided for discussion on important matters on which the attention of the respondent is to be diverted. ADVANTAGES/MERITS OF PERSONAL INTERVIEW: (1) Flexibility: In personal interview, the interviewer can bring flexibility in his data collection process. There is closer interaction between the respondent and the interviewer. Questions can be adjusted as per his need and maximum possible information can be collected. This makes the survey work purposeful. (2) Better co-operation from respondents: In personal interview, the interviewer gets better cooperation from the respondent due to face-to-face communication. Additional questions can be asked for securing more information. The respondent also speaks freely about his opinions/views. (3) Benefit of longer duration interview: Personal interview is usually of a longer duration. The purpose of survey can be explained and detailed questions are asked thereafter. In the case of very positive response, supplementary questions can be asked. The information collected is also reliable as it is first hand information. Even the interviewer can note the family information such as home atmosphere, education and age of the respondent, through personal observation during the course of personal interview. (4) Availability of reliable and detailed information: In personal interview, the information collected is usually detailed and reliable. Detailed information is also collected through personal interview as the respondent has enough time to supply the necessary information. It is possible to seek clarifications on any point on the spot. (5) Better quality response: In personal interview, the quality of response is always high as compared to mail survey. Meeting with the respondent is possible on a holiday or with previous appointment. Once the interview starts, the respondent takes interest and gives answers to questions placed before him. (6) Personal questions can be asked: In personal interview, personal questions can be asked tactfully. Similarly, questions of lengthy answers can also be asked during the interview. This facilitates collection of adequate information. (7) Products can be shown/demonstrated before recording response: In personal interview, products, advertisements, etc. can be shown or demonstrated to the respondents in order to collect required information. Even visuals aids can be used during the interview. (8) Suitable when information from limited respondents is to be collected: Personal interview method is convenient when detailed data need to be collected from a relatively small number of people. The respondents can be selected properly. (9) Improves quality of research work: The conclusions drawn from the1 data collected through personal interview are more accurate. The delta collected can be checked properly. Moreover, the reactions and attitude of the respondents can also be noted correctly. (10) Non-verbal responses are observed: Personal interview serves as an opportunity available to the interviewer to observe respondents non-verbal responses. Facial expressions, body movements, gestures and voice modulation are clearly visible in personal interview and can be noted on the interview sheets. Even the spontaneous reactions of respondents can be noted.
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DISADVANTAGES/LIMITATIONS OF PERSONAL INTERVIEW: (1) Costly: Personal interview is a costly method of survey as the interviewer is required to be paid travelling and daily allowances. In addition, limited number of interviews are possible within one day by an interviewer. Supervisors are required to be appointed on the interviewers for effective control. Thus, it is a costly method. (2) Time consuming: Personal interview method of data collection is time-consuming. The interview time may be of 15 to 30 minutes but the interviewer has to spend time on travelling, etc. Naturally the survey work takes a longer duration. (3) Information supplied may not be accurate: The information supplied by the respondents may not necessarily be accurate as they have to supply information on the spot. The answers given by the respondents may not be fully supported by facts. The respondent may give inadequate information due to personal reasons. This is likely to affect the final outcome of the survey. (4) Long-term planning required: Personal interview needs long term planning and fixing of prior appointments with the respondents. The complicated scheduling must be followed strictly. (5) Effective supervision on interviewers required: Effective supervision on large number of interviewers appointed may not be possible due to large geographical area covered by the survey work. The investigators may not work sincerely if supervision on them is inadequate/ineffective. Insincere interviewers can produce high level of spoiled work. (6) Danger of personal bias: There is a danger of personal bias when the interview is conducted personally. This may be due to wrong selection of samples. It may also arise if the investigators are dishonest and try to suggest possible answers to the respondents. In brief, there is a possibility of interviewer bias or respondent bias in the personal interview method. (7) Possibility of rush interviews: There is a possibility of rush interviews by the interviewers. This is possible when they are given heavy interview target per day. This is also possible if the interviewers are paid in proportion to the interviews completed per day. Finally, rush interviews are possible if the questionnaire is too lengthy. However, this affects the quality of survey work. (8) Respondents from cross section of the society may not be available: For personal interview/people from all sections may not be available. Busy executives, industrialists and professionals are not easily available as samples for the survey work. (9) Information supplied may not be recorded properly: Sometimes, information supplied by the respondents is not recorded properly. The interviewers may record the information after completing the interview. Mistakes in recording actual replies is possible. This leads to wrong conclusions in the final research report. ADVANTAGES/MERITS OF DEPTH INTERVIEW: (1) Depth interview is useful for finding out consumer motivations, attitudes, feelings and desires relating to product etc. (2) The respondents get an opportunity to express freely their desires, motives and feelings. (3) The interviewer gets deeper insight into the problem under investigation. (4) Depth interview method do not give factual data but data which relates to human (consumer) behaviour and human psychology. (5) Depth interview is convenient when the respondents to be interviewed are few but the information to be collected is detailed.
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DISADVANTAGES/DEMERITS OF DEPTH INTERVIEW: (1) Depth interview method is costly and time-consuming. (2) Depth interviews can be conducted properly only by skilled, experienced and matured interviewers. (3) Findings of depth interviews cannot be quantified. (4) The attitudes, motives and desires expressed under research conditions may change in actual buying situations. Thus, depth interviews may not give correct answers to all MR problems. (5) The art of depth interviewing is difficult/complicated and needs proper background of knowledge and training.
ADVANTAGES OF FOCUS GROUP INTERVIEW / DISCUSSION: (1) There is saving of time and money as 8 to 12 persons are interviewed at one time. (2) Focused group interview provides detailed and accurate information from a small group easily and quickly. (3) Each member of the group is given an opportunity to participate in the discussion. This gives different views on one subject to the researcher. (4) There is stimulation to participants in group interview/discussion. Participants are free to express their view without fear/pressure. (5) New ideas are generated in the group discussion and the researcher can use them in his report/recommendations. (6) The information available through focus group interview/ discussion relates to one specific subject and is useful to researcher in his research work undertaken. (7) Focus groups are now used extensively in MR as they give a direct feel of individual consumers. DISADVANTAGES OF FOCUS GROUP INTERVIEW / DISCUSSION: (1) How to encourage participants for free discussion and how to secure their cooperation in the research work is a big problem in focus group interview technique of data collection. (2) The views/information available may not be of representative character due to nonparticipation of some members. (3) The benefit of this technique will be available only if the group leader is matured, experienced and effective communicator. (4) Members may express views on irrelevant matters or unrelated topics. This leads to wastage of time and money. (5) There may be one sided discussion in the group. The benefit of such discussion is limited for research purpose.
GUIDELINES FOR EFFECTIVE PERSONAL INTERVIEW: (1) Proper procedure: Personal interview should be arranged by following proper procedure. For this, the nature and purpose of research project should be finalised first. The information to be collected from the respondents should be decided clearly. This should be followed by preparation of suitable questionnaire and selection of samples for the survey. (2) Prior communication with respondent: The interview should be fixed on telephone followed by the letter of confirmation in which the purpose of the interview should be made clear to the respondent.
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(3) Proper atmosphere for interview: At the time of interview, the questionnaire should be kept ready and the interview should be initiated in the straight-forward manner. The questions which are easy should be asked first. This creates proper atmosphere for the interview and encourages the respondent to give positive response to the questions asked. The respondent should be encouraged to speak freely and frankly. (4) Proper recording of replies: The information supplied by the respondent should be recorded in full. Additional information supplied should also be recorded properly. The remarks based on the observations by the interviewer should also be noted by the interviewer at suitable places. (5) Trained interviewers should be appointed: The interviewer should be properly educated and well trained in the art of interviewing. Adequate and reliable information is available only when the interview is conducted in an orderly manner. QUALITIES AND QUALIFICATIONS OF A GOOD FIELD INVESTIGATOR (INTERVIEWER): (1) Sound general education: An interviewer needs sound educational background. He should possess better than average education. He also needs working knowledge of some important language spoken in the area in which research work is to be conducted. Education makes him impressive in his work, approach and outlook. (2) Pleasing appearance and manners: An interviewer needs impressive personality, pleasing manners and decent behaviour. He should be well dressed and also needs impressive appearance. Respondents are strangers. Their co-operation is possible only if an interviewer creates good impression on them. (3) Social outlook: An interviewer should be social by nature i.e., adjustable and accommodative in his approach and outlook. He should be at ease with all types of respondents. An investigator should not be hot tempered and indecent in his manners and behaviour as respondents will not be co-operative to such interviewers. He is supposed to show interest in the attitudes, problems and opinions of respondents. An investigator should be an extrovert. (4) Sound health and stamina: The job of an interviewer is hard. He has to move from place to place and speak with different types of respondents. Naturally, he needs sound health and stamina. He should be able to work hard for many hours and also should be able to do extensive travelling for survey work In addition, he needs capacity to accept uncertainties of interviewing life (5) Inquiring mind: An interviewer needs inquiring mind He needs desire to collect whatever information required for the survey He should not be satisfied with mere facts or minimum information He has to probe behind the facts and try to collect maximum possible information from his respondents For this, he needs inquiring mind (6) Sharp memory: An interviewer needs sharp memory for recording the information and facts accurately and completely He has to prepare various statements and reports and for this he needs sharp memory This brings speed and accuracy in his work (7) Integrity: An interviewer should be absolutely honest and reliable He should complete his work regularly as per the schedule decided His integrity plays an important role in the data collection work He is supposed to collect information by meeting respondents and not on the basis of guess work He should record the responses correctly and also immediately He should not do cheating in his field work as this affects the quality of research work (8) Minute observation: An interviewer should observe even minor points, events and remarks of his respondents He has to collect data even by accurate observation and for this he needs the faculty of accurate observation and a conscientious regard for details
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(9) Ability to record: An interviewer has to record the information supplied by respondents precisely, correctly, fully, promptly and without colour or bias Thus, he needs ability to record information supplied with precision (10) Ability to communicate: An interviewer should be a good communicator He needs oral communication skills so that the respondent can easily understand what he (interviewer) wants Ability to communicate properly brings positive response from the respondent This suggests that an interviewer needs the ability to communicate the right information in the right manner He also needs knowledge of local/regional language for easy communication with the respondents (11) Knowledge of business world: An interviewer needs atleast working knowledge of business, sales, advertising, market competition and so on He should be clear in his mind as regards the nature and purpose of his survey Marketing research relates to marketing and allied problems and an interviewer certainly needs adequate knowledge of such problems. Female interviewers are preferred as compared to male when required information is to be collected from housewives and female consumers. As a general rule also, women are preferred to men as interviewers particularly when the research work relates to consumer items. The possible reasons are: (1) Women are easily available for interviewing work as the timing is convenient to them. (2) They are generally honest and sincere in their work. Naturally, errors and cheating in the fieldwork are limited. (3) Women interviewers are systematic and decent in their work. This improves the quality of research work. (4) The response from the respondents is always encouraging in the case of women interviewers as compared to male interviewers. (5) Women interviewers are willing to accept part time job of interviewing. This gives convenience to them and also to the appointing agency. (d) PANEL RESEARCH Panel research is a technique similar to the survey, but with one major difference. In survey method a fresh sample is selected for every survey work, while in the panel research the same panel is used again and again for the collection of information. The panel acts as a permanent sample of respondents and information is collected from them at appropriate intervals through interviews. A panel means a sample of respondents who may be individuals, consumers, housewives, households or firms from whom information about purchasing, buying behaviour, etc. is collected at regular intervals. The panel members are given diaries. They note details of purchases, shopping patterns, etc. in which the researcher is interested. Panel members provide feedback to the researcher for detailed study of the marketing problem under consideration. Panel research offers certain benefits. For example the buying behaviour of selected consumers can be studied through panel. The changes in the behaviour can be analysed through panel research. However, panel research will be effective only when the panel members are cooperative and provide reliable information when requested. Members of the panel may not find it convenient to give information again and again. They may treat this as botheration and may not supply timely and reliable feedback.In spite or such limitations, panel research method is used in many marketing research projects
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Consumer panel/profile is one more method of consumer research, a technique of primary data collection which is similar to survey work. Here, a group of consumers (a permanent sample of respondents collectively called panel) is selected and their opinions/views/reactions collected. For this, personal interview or telephone inquiry is made, or the panel members may be asked to record regularly in the diaries provided their purchases or listening or viewing habits in the case of radio or TV. The information is collected often and again for the purpose of scrutiny In due course, it is tabulated for drawing conclusions The selection of panel members is usually made on the basis of age/ economic status, likes and dislikes, etc, of consumers and is used for data collection regularly over a long period. It is a permanent sample of respondents for research work and may include individuals, housewives, households, dealers or firms from whom information is collected periodically. The panel members also agree to co-operate by providing their views on different topics from time to time The other term used for consumer panel is Omnibus Panel It means a fixed sample of respondents who are interviewed (for information collection) on different variables over a period of time The information is collected from the respondents on certain matters such as purchases made, price paid, reactions on the products purchased, shopping behaviour, etc Suitable conclusions are drawn on the basis of information collected According to Ronald M. Weiers, "Panels consist of persons, households or business firms who report their purchasing activities at periodic intervals over time and who are typically selected based on a combination of their willingness and representativeness". A consumer panel may be defined as "a group of consumers who voluntarily agreed to be interviewed on the same topic or on different topics from time to time for data collection regularly and continuously". Panel method can be used effectively in order to study consumer behaviour under different situations. It also facilitates continuous study of behaviour of consumers over a particular period The reactions of consumers to the product, its quality, packaging, advertising, pricing, etc can be studied continuously through consumer panel method Consumer expectations can be studied with reasonable accuracy through such panels Consumer panel method gives reliable information for policy decisions on marketing There is close communication with the respondents This facilitates a continuous check on the record of consumer behaviour over a specific period The reactions of consumers are regularly recorded for policy decisions Some manufacturers supply samples of new products to panel members for testing. The reactions of members are collected through personal interviews Sometimes, cash prizes/gifts are given to panel members as incentive and thereby they are induced to give better co-operation in the survey work For better results, the panel members should be selected with proper care.
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TYPES OF CONSUMER PANELS The classification of consumer panels is made on the basis of the type of research being carried out. The following chart shows the types of consumer panels. Types of Consumer Panels
Purchase Panel
Audience Attitude Panel Panel
Dealer Panel
Product Panel
Testing Panel
Retail Panel
(1) Purchase Panel: Purchase panel is useful to study the purchasing habits and trends of consumers Such pane] is a group of selected consumers who are asked to record purchases made by them regularly in the diaries provided to them Information is collected from the panel members continuously for detailed analysis Panel members are expected to keep correct record of their purchases in the diaries specially provided to them The diaries of consumers are collected periodically for review and for studying information regarding the items purchased with details like prices, quantities, preferences and so on This provides information regarding the pattern of purchases and expenditure incurred on different items In addition to the study of diaries, personal contact is also kept with the panel members for the collection of additional information from them The consumers selected for purchase panel are usually housewives and they are asked to write down every day what they actually buy and to send the diaries periodically for review purpose The diaries provided are carefully designed for the convenience of panel members Purchase panels are used by manufacturers, marketing research firms and government departments Such panels may be formed in the case of consumer items which consumers purchase frequently and also in large quantities (2) Audience Panel: Audience panels are panels designed to provide information regarding media audiences Audience panels are of listeners/viewers of programmes on radio and TV The panel members are asked to listen the programmes on TV and radio regularly Their opinions on the programmes are collected for research purpose The popularity of programmes or the reactions of viewers can be judged with the help of such panels Even the effectiveness of radio and TV advertising can be judged through such audience panels The most famous media audience panel is one which is operated by the A. C. Nielson Company (USA). In European countries, such audience panels are used extensively to study the expectations of radio and TV audiences In India, advertising agencies are using the technique of audience panels for the benefit of their clients Such panels are used in the case of radio and TV advertising
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(3) Attitude Panel: Attitude panel is useful for the study of attitude of consumers towards a product/marketing practice Attitudes are usually studied along with the purchase behaviour of consumers Panel members are interviewed after a period of three or six months and their attitudes are studied Findings of such studies are given wide publicity for the benefit of all manufacturers (4) Dealer Panel: Dealer panels are useful for collecting information from the dealers in a continuous manner. They give data on dealer activities including total sales, prices charged, promotional efforts made, services offered and so on. Data are collected from selected dealers of important commodities with different brands. Information regarding the popularity of different products, market tends, sale of goods of specific brand, etc. is easily available from such research study. The relative sales made by dealers over a period of time indicate the strategic outlets to promote sales. Dealer panels are also useful for collecting data regarding retail sales, inventories and prices. The total sales of products and the share of a particular brand, etc., are also available from such dealer panels. Dealer panels offer valuable guidelines for the selection of suitable outlets for efficient marketing of products. Dealer panels are formed by manufacturers and information is collected from the dealers through diaries and also through personal interview. Dealer panels are useful for framing marketing policies for large-scale distribution of goods/services. (5) Product Testing Panel: Product testing panel is useful for testing the utility and other features of the product before bringing it in the market for large-scale marketing. The panel includes consumers from cross section of the society. They are given new product to test its use and other features. Their views are collected through personal interviews after regular intervals. This enables a manufacturer to judge the extent to which his product is agreeable to consumers. If necessary, certain modifications are introduced in the product before it is brought in the market on commercial basis. Product testing panels are used particularly for pre-testing consumer durables which are costly and need to be manufactured as per the current needs and expectations of consumers. (6) Retail Panel: Retail panel is a panel of retail traders who are willing to give information about their stocks at regular intervals purely for research purpose Panel members are required to note information about the sales and stock position and provide the record for study purpose. This enables the researcher to draw useful conclusions about marketing activities Information is also collected from panel members through personal interview, In India, the Operations Research Group (ORG), Baroda conducts retail audit on an extensive scale. It is useful to producers of food items, drugs, pharmaceuticals and confectionery. ADVANTAGES OF CONSUMER PANELS: (1) Supply useful information: Consumer panel gives valuable information to researchers about the research activity undertaken. The information is supplied regularly and continuously. Periodical changes in buyer behaviour can be monitored through such panels. The information collected enables researchers to forecast future behaviour of consumers with reasonable accuracy.
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(2) Longer interviews are possible: Longer interviews can be held with panel members and more detailed information can be collected from them. (3) Reliable data available: The data collected through diaries is more accurate and reliable. It is recorded by the respondents and the possibility of errors of lapses of memory are reduced considerably. Panel research is useful for noting behavioural changes of consumers. (4) Economical method: Consumer panel is an economical method for collecting continuous information and data. Data on the same subject are collected periodically. This facilitates suitable changes in the marketing policies of the firm. (5) Positive response from panel members: The response from the panel members is always better as they voluntarily agree to participate in the survey work and offer necessary cooperation. (6) Facilitates introduction of remedial measures: Consumer panels are useful for product development, product modification, selection of best channel of distribution and introduction of suitable packaging which will be attractive and agreeable to consumers. (7) Continuous supply of information: Consumer panel provides information in a continuous manner. The information is collected from the same group of persons. This gives idea about gradual changes in the behaviour of consumers The conclusions drawn through consumer panels are also accurate and dependable. (8) Real motives are visible: Consumer panel is useful for finding out the real motives behind the actions of consumers. Consumer behaviour can be studied more accurately through consumer panels. (9) Facilitates product testing: Consumer panels are used to judge different products at one time. Members are asked to state which products they like most and why. This facilitates product testing. DISADVANTAGES/LIMITATIONS OF CONSUMER PANELS: (1) Biased outlook of panel members: Panel members show biased outlook after they become members over a long period. This defeats the very purpose of research work as the data supplied may not be accurate, reliable and factual. (2) Limited co-operation from panel members: Panel members are cooperative and take interest in the initial period of survey. Thereafter, their interest goes on reducing and they supply data indifferently. This is because they do not want to be bothered again and again. As a result the degree of co-operation between the panel members reduces. (3) Absence of representative character: A small panel is always unrepresentative in character. The conclusions drawn with the help of such panel may not be applicable to the whole class of consumers. Thus, the panel as a sample may not represent the true picture of the whole population. (4) Panel members drop gradually: Panel members drop out from time-to-time. Every panel is subject to a certain amount of mortality. However, selecting new members with the same characteristics is not easy. The new members selected may be different and this affects the quality and accuracy of the whole project. (5) Panel members behave like experts: The members of the panel become sophisticated and also consider themselves as experts or professional testers. This harms the quality of research work. (6) Costly/expensive: Consumer panel research is rather expensive. It requires continuous efforts to build up and maintain the panel. Giving product for testing or a small gift to large number of panel members is costly. In India, only large companies like Hindustan Lever Limited do have consumer panels.
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(f) AUDITS Audits involve the physical inspection of inventories, sales receipts, shelf facings, prices, and other aspects of the marketing mix to determine sales market share, relative price, distribution, or other relevant information Store Audits The simple accounting arithmetic of Opening Inventory + Net Purchases (receipts - transfers out / returned inventory) - Closing Inventory_______________ _____________________________________ Sales is the basis for the audit of retail store sales. The most widely used store audit service is the Nielsen Retail Index, it is based on audits every 30 or 60 days of a large national sample of food, drug, and mass merchandise stores. The index provides sales data on all the major packaged goods product lines carried by these stores-foods, pharmaceuticals, drug sundries, tobacco, beverages, and the like (but not soft goods or durables). Nielsen contracts with the stores to allow their auditors to conduct the audits and pays for that right by providing them with their own data plus cash The clients receive reports on the sales of their own brand and of competitors' brands, the resulting market shares, prices, shelf facings, in-store promotional activity, stock outs, retailer inventory and stock turn-around, and local advertising These data are provided for the entire nation - by region, by size classes of stores, and by chains-versus independents. The data are available to subscribers on-line via computer as well as in printed reports 1. Product Audits Product audits, such as Audits and Surveys' National Total Market Index, are similar to store audits but focus on products rather than store samples. Whereas product audits provide information similar to that provided by store audits, product audits attempt to cover all the types of retail outlets that handle a product category. Thus, a product audit for automotive wax would include grocery stores, mass merchandisers, and drugstores (in this way it is similar to the Nielsen store audits) In addition, it would include automotive supply houses, filling stations, hardware stores, and other potential outlets for automotive wax. 2. Retail Distribution Audits Similar to store audits are retail distribution audits or surveys. These surveys do not measure inventory or sales; instead, they are observational studies at the retail level. Field agents enter stores unannounced and without permission They observe and record the brands present, price, shelf facings, and other relevant data for selected product categories. NRTI (Erhandt-Babic) and BOS (Burgoyne Inc.) are the suppliers of this type of data. .
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MEANING OF OBSERVATION METHOD: Observation method (observational research) is one extensively used method of primary data collection. Observation research means gathering of primary data by observing relevant people, actions and situations. According to Oxford Dictionary, observation means "accurate watching and noting of phenomena as they occur in nature with regard to cause and effect or mutual relation". It is the classical method of investigation widely practiced by scientists and social investigators. Here, consumer behaviour is observed directly and conclusions are drawn. As a result, the defects inherent in direct questioning are avoided. Observation method is more objective as it is based on accurate watching and noting the details of behaviour of consumers. It eliminates subjective element encountered with questionnaire method. Observation means "an act of recognizing and noting/acts a/occurrences." Personal behaviour of respondents can be observed with the help of observation. A consumer packaged goods marketer for example, may send his representative to supermarkets and observe shoppers as they look at the product, examine the packages and make actual buying decisions. Observation involves recording of events/actions as they take place in the environment. Here, data are collected by observing consumers involved in an activity in their natural environment. Consumers are not aware that they are being observed / watched by the observer stationed in the shop for this purpose. He records his observations about the behaviour of customers without their knowledge. Naturally, the data collected are accurate and dependable. A consumer may be observed while purchasing soap or toothpaste at a retail shop. Observation is also possible while selecting a specific product or brand. Here, the behaviour of the consumer at a market place is studied in detail. Naturally, co-operation of respondents is not necessary. It is the observer who takes the notes of things as they happen. In the observation method, the researcher records "what is happening rather than what has happened or what is going to happen." Observation method can be used to study customer movement, customer responses in retail shops, stock audit in retail stores and sales technique. However, interview may be used as a follow-up to get additional information. In fact, observation acts as a good supplement to other methods used for data collection. For instance, customers are observed buying toothpaste or soap in small packets instead of large packages. They may be asked why they prefer small packages rather than large packages. Observation is a process of noting people, objects and occurrences rather than directly asking for information. For example, instead of asking consumers what brand they buy, the researcher arranges to observe their behaviour at the sales counter and the way in which they select a particular brand. In addition, hidden video cameras, one-way mirrors, assessment of wear and tear of flooring in display areas are some more methods used in mechanical observation. Closed video monitoring is a common technique used in the observation method of primary data collection. Scientific observation is always purposeful, economical and immensely useful to researcher. The observers appointed should be skilled, properly trained and instructed. Such observation of consumers is possible in the retail shops, co-operative stores and also in the departmental stores where large number of consumers come frequently. 65
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In the observation method, more stress is on noting, watching and understanding and not on asking questions. Observation is possible through individual observers (live observation) or through mechanical devices like audiometer. In personal observation, the researcher poses as a customer and observes others. In mechanical observation, eye cameras or scanners are used. FEATURES OF OBSERVATION METHOD: (1) Observation means accurate watching and noting. It can be conducted by watching a customer or by using mechanical devices like eye camera (2) Observation method is reliable, accurate and scientific. It is useful for the collection of primary data (3) Observation is always selective as consumer behaviour relating to specific aspects (relating to research project) will be studied. (4) Observation may be physical or mental or both in character. METHODS OF OBSERVATION: Methods/Types of observation (as per techniques used, place and purpose) are as explained below: (1) Simple Direct Observation: Here, the observer looks and acts like a shopper. The other regular shoppers do not realise that they are being observed. Thus, the observer studies the purchase procedure and the behaviour of the customers while they purchase goods. It is a simple, easy and direct method of observation. The behaviour of a person/customer is observed as it occurs. (2) Indirect Observation: Indirect observation is meant to study the past behaviour. This is possible with the help of past records, films, photographs, etc. Films are frequently used to study past behaviour of shoppers, etc. In indirect observation, some record of past behaviour is observed. Here, the behaviour itself is not observed, but its effects are observed. In indirect observation, the observer looks for physical traces of behaviour or occurrence of an event. For example, in order to find out liquor consumption in a household, an observer would like study the empty liquor bottles in the garbage. The success of indirect observation depends on how best the observer is able to identify physical traces of the problem under study. Direct observation is very common than indirect observation. (3) Structured Observation: Here, the purpose of observation is clearly defined and the observer knows what to observe as regards the consumers who are busy in their shopping work. The observations to be made are clear to the observer and the observations will be completed accordingly. (4) Unstructured Observation: Here, the observer observes whatever he thinks pertinent It is similar to unstructured questioning The observer is clear about his objectives and he conducts observation activity accordingly (5) Mechanical Observation: Here, observation is made with the aid of electro-mechanical devices. Such observation may be recorded or live A number of mechanical devices for making observation have been developed Audiometer, eye camera, pupilometric camera, tape-recorder, VCR, psycho-galvanometer are some such devices used in mechanical observation Mechanical observation is economical and more accurate as compared to human observation
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(6) Manual / Human Observation: Human observation is done manually Here, human beings are appointed to observe and record the data It is a simple type of observation by a specially appointed observer He does observation without the use of electromechanical devices The human observations are carried out as per the guidelines provided to the investigator Mechanical observation provides more accuracy However, some special/extra information can be provided only by a human observer and not by a mechanical device (7) Disguised Observation (also called Covert Observation): In disguised observation, the subjects do not know that they are being observed by some specially appointed observer For example, disguised observation may be made by the observer by posing himself as one of the shoppers who are being observed This type of observation is preferred as people (shoppers) may behave differently when they know that they are being observed Here, the purpose of observation is not disclosed to the respondents They are also not aware of the fact that they are being observed for some specific purpose Disguised observation method may be used by the researcher when he feels that his presence may affect consumer behaviour or may spoil the whole data collection process An observer, for example, may enter the shop as a regular customer and may interact with fellow consumers without disclosing ins identity and purpose of interaction In undisguised observation, the purpose of observation is brought to the notice of respondents before the commencement of observation ADVANTAGES/MERITS OF OBSERVATIONAL TECHNIQUE: (1) Accuracy: Observational techniques are highly accurate They reduce interviewer's bias. A trained field worker is not likely to exert a bias in any direction of research The information available from observation is more objective and reliable than available through survey method. (2) Factual information available: It provides factual information into new areas of research. (3) Records events as they occur: In observational method, the events are recorded as they occur. The researcher is not dependent on the respondent for the supply of correct information. (4) Economical: Observational method is economical as preparation of a questionnaire, etc., are not required. (5) Objective data available: The data collected by observation method are more objective and accurate. Here, an attempt is made to avoid biases through memory, lapses, halo effects or other sources by observing respondents behaviour. (6) More accuracy in mechanical devices: Mechanical devices can be used to collect facts which will reduce the cost of data collection and the information collected is also accurate. (7) Effective method: Observational method is found to be quite effective and useful in researches related to marketing problems. LIMITATIONS OF OBSERVATIONAL TECHNIQUE: (1) Certain elements are missed: Observational method has no capacity to observe attitudes, motivations and intentions of customers. These elements can be observed only when they are converted into action. It is also difficult to pinpoint them as human behaviour is the net result of many drives and urges. (2) Human errors possible: Observational methods are used by observers who are human beings and are subject to errors and mistakes. Even highly experienced observers are likely to make mistakes while observing their respondents. (3) Purpose is defeated, if secrecy is not maintained: In some observational studies, the respondent gets the idea that he is participating in a test. He knows that he is being observed. Such situation will defeat the every purpose of observation.
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(4) Costly method under certain situations: Observational method is economical when used for observing events occurring rapidly. It proves to be costly when the events to be observed do not occur at rapid intervals. In addition, properly trained observers are required to be appointed. This makes survey work expensive. (5) Observer's bias: Field observers bias may creep in and thereby making the observations faulty. Even faulty observation by the observer may prove to be dangerous. (6) Limited application: Observation method has limited application. It tells about what actually happened but it cannot tell as to why it so happened (7) Needs support of personal interview: Observation method needs the support of personal interview in order to understand the motives, attitudes and opinions of individuals/consumers It is useful as a supplement of personal interview method EXPERIMENTATION METHOD MEANING AND FEATURES OF EXPERIMENTATION METHOD: In scientific inquiry, research is primarily centered on controlled experiments. Experiments are a special form of survey and/or observation method where respondents are asked questions about some controlled conditions or their reactions to some controlled conditions are observed In experiments, the researcher alters the environment and measures the effect of these alterations/manipulations Experimentation may be defined as "a process where events occur in a setting at the discretion/option of the researcher and controls are used to identify the sources of variation in respondent's response " Experimental research is best suited for gathering casual information It tries to explain cause-and-effect relationships Experimentation method is used extensively in scientific research and also used in marketing research It is now used in order to remove one primary weakness of observational method which relates to the influence of uncontrolled factors Experimentation method is useful for the collection of data which cannot be collected by survey method or observation method The scope for experimentation is limited in MR as the ideal experimental conditions of laboratory testing are virtually impossible in the field of marketing. Marketing relates to human behaviour which is difficult to predict precisely Experimentation can be undertaken under two types of setting (a) Field setting Field experiments are conducted at the market place but the purposes are not known to the participants in the experiment The investigator sets up the experiment before the subjects begin to participate There is more realism in this type of experimental method Field experiments are used rarely due to higher costs and longer time involved Field experiments arc usually conducted in test marketing in order to find out the acceptability of the new product by consumers For example, a company may test its new product in the local market before it is produced on a largescale for the national market Similarly, a company can find out colour of its new product (e g soap) which is likely to be most popular after its introduction. In addition, experimentation is extensively used in the following areas of marketing i. Product design ii. Package design iii. Pricing policies iv. Distribution policies v. Promotion policies.
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(b) Laboratory setting Experimentation is also possible under laboratory setting. The laboratory experimentation method is accurate but laboratory experiments are more artificial due to controlled conditions. Such experiments may be in the form of calling limited persons, offering them an article (e.g. soft drink) and asking them about their reactions. The purpose of experiment is made known to the participants and this makes them conscious. Such laboratory experiments are less costly and shorter in duration. They also give reasonably accurate results. ADVANTAGES OF EXPERIMENTATION METHOD: (1) Experimentation method of data collection is useful when the problem to be solved is clearly defined and the dependent or independent variables are clearly marked. (2) Experimentation method enables the marketers to take quick decision in the marketing field as the marketing problems are better understood and an insight is available due to experimentation. (3) One major benefit of experimentation method is its realism. It enables actual market test and simulates actual market situation. It suggests remedies which are extremely useful and effective. (4) Experimentation method provides unbiased feedback on how the product and marketing strategy will help the firm penetrate the market. Experimentation method of MR can be applied most suitably to certain problems like training and remuneration of salesmen, shelf display arrangements, package designs and advertising copy. Experimental marketing (test marketing) can be used to study the effect of certain sales promotion techniques such as premium, brand, package design and colour combination. The use of lengthy experimental methods is limited in India. This is due to heavy cost involved in them. Many companies now select smaller towns like Pune or Indore for test marketing. Certain techniques, such as split-run for evaluating alternative advertising copy are also used to a considerable extent in India. LIMITATIONS OF EXPERIMENTATION METHOD: (1) Experimentation method is costly and time consuming. (2) It requires the services of trained staff for the conduct of experiments. (3) Experimental methods suffer from many administration problems. (4) Controlling the variables in the market selected for experiments (as they may upset the result) is one major difficulty (5) The competitors may weaken the test market results through their marketing activities (6) There is lack of theoretical base to experimentation methods EXPERIMENTATION AND EXPERIMENTAL DESIGN: Experimentation As regards experimentation there is an attempt to measure the effect of one or more variables by changing the level of some variables and measuring the effects e g / post-testing effectiveness of an advertising campaign In order to know how well brand of the product is recorded in the mind of consumers, it is possible to measure brand awareness among a sample of target respondents This effort would be called experimentation
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Experimental Design Experimental design involves obtaining the proper information within an acceptable accuracy range for a cost that does not exceed the value of the information. It ensures that each experimental treatment is used within each classification of test units and each classification of extraneous forces is applied equally to all test units Experimental design originated in the field of agricultural research R. A. Fisher made significant contribution by stating that the practices prevalent for the measurement of output from plots of land could not provide unbiased and unambiguous findings Now experimental design is used in all areas of business FACTORS AFFECTING EXPERIMENTAL DESIGN: (1) Element of time: Experimental design is time consuming Planning experimental design takes lot of time because the researcher has to consider pros and cons of various design available to him (2) Commitment of management: Experimental design needs high level of management commitment If management becomes disheartened with any experiment and it is allowed to lapse without running its full course or is handled half-heartedly, all efforts will be wasted (3) Range of variation: Under proper condition, experimental design can indicate the effects of specific variations in one or more elements of the marketing mix The experiment can be done with only one variable like price or with multiple variables like colour of packaging, channel of distribution and sales promotion (4) Cost and accuracy: Experimental design must balance cost constraints with accuracy. Accuracy is related to the amount of error We should not assume that the possibility of an experimental error means that the error will occur The cost of running experimental design should be less and benefits obtained should be more (5) Identification of variables: Experimental design uses one or more variables in such a way that its effect on one or more variables can be measured Hence it becomes necessary to identify the variables correctly
REQUIREMENTS FOR A GOOD EXPERIMENT 1. Absence of Systematic Error A good experiment should be free from any systematic error. This is possible if experimental units receiving one treatment do not differ in a systematic manner from other experimental units given another treatment. This is achieved by randomization. 2. Precision A good experiment should have maximum precision. The indicator of precision is the magnitude of standard error, which should be sufficiently small. 3. Range of Validity To the extent possible, an experiment should be valid in a wide range of conditions so that the researcher can have a high degree of confidence in its results. An experimental technique that gives encouraging results in a certain setting may not give favourable results when conditions are different.
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4. Simplicity If an experiment is a complicated one, it will be difficult to carry it out properly without the help of trained and qualified personnel. It is, therefore, desirable for the experiment to have a simple design, particularly when it is to be performed by relatively unskilled people. Also. it is desirable to use relatively simple methods in the analysis of data. 5. The Calculation of Uncertainty A good experiment should enable the researcher to calculate the uncertainty in the estimates of treatment differences. This would mean that he should be able to ascertain the statistical significance of the differences between the treatments. FACTORS AFFECTING THE SELECTION OF SUITABLE METHOD FOR MARKETING RESEARCH: The factors to be considered while selecting the method for marketing research (data collection) are as explained below: (1) Nature and objectives of research project: The research project may be local or national in character It may be related to product, package or consumer behaviour A local survey covers a small area like one town or one district while a national survey covers wide area and population Similarly/ the objective of the study and the degree of accuracy required need special consideration while selecting one or the other method For example, mail survey is convenient for collecting information from large number of people while personal interview will be convenient when information is to be collected from limited number of respondents (2) Type of primary data required: One important factor influencing the selection of method is the type of primary data required for example, qualitative interview is very convenient method for collecting information on personal motives while telephone survey is convenient for collecting facts about radio or TV listening by people. Published data can be used if population data at the national level are required for research purpose. (3) Cost consideration of research project: MR is always subject to financial support available to the project. The method which is suitable to the funds available needs to be selected. For example, desk research is least expensive, but field investigation is expensive. Similarly, observation methods are more expensive then the experimental methods. In short, the budget provision need special consideration while selecting the method of research work. (4) Time consideration of the project: Some methods of MR or data collection are quick while others are time-consuming. This factor needs attention while selecting a research method. Field investigation is time-consuming and should be used when sufficient time is available for the completion of research project. Thus time available for research work is one major factor which needs careful consideration while selecting the method for data collection. (5) Physical resources available: Such resources include personnel and administrative machinery available with the researcher. For example, if there is shortage of skilled interviewers, the postal survey method is preferable. Similarly, field investigation method should be used when a researcher with knowledge of statistics is available. Observation and experimental methods can be used only when skilled and technically qualified persons are available.
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(6) Approach of the company: The approach of the company behind conducting research work is one important factor which needs consideration while selecting the research method. For example, a company conducting consumer-oriented marketing research should try to go as near to the consumers as possible. For this, personal interviews are suitable. For collecting general information from the consumers, mail order survey is adequate. (7) Availability of machinery for processing information: The data collected need to be processed properly. An organisation with suitable facilities for processing the information collected should use field investigation methods. In the absence of such facilities, desk research is convenient. (8) Type of sponsoring organisation: A big organisation with independent marketing research department and well-trained staff can select any direct method for research work. In the absence of such department, the research work should be given to an outside expert agency like advertising agency. (9) Coverage of research project: Some research projects have wide coverage. In other cases/ the samples to be examined may be less but detailed information is required to be collected. The method needs to be selected accordingly. For example^ if the sample is large and the information to be obtained is simple/ a postal questionnaire is convenient. Personal interview is suitable when detailed information is required to be collected from limited respondents. (10) Research facilities available: The marketing research department can conduct research work independently only when it has a competent machinery to analyse and interpret the data for drawing conclusions. In the absence of such machinery, the research project should be handed over to a competent professional agency.
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RESEARCH DESIGNS
The next step after stating the management problem, research purpose, and research hypotheses and questions, is to formulate a research design. The starting point for the research design is, in fact, the research questions and hypotheses that have been so carefully developed. In essence, the research design answers the question: How are we going to get answers to these research questions and test these hypotheses? The research design is a plan of action indicating the specific steps that are necessary to provide answers to those questions, test the hypotheses, and thereby achieve the research purpose that helps choose among the decision alternatives to solve the management problem or capitalize on the market opportunity DEFINITIONS OF RESEARCH DESIGN: (1) According to David J. Luck and Ronald S. Rubin, "A research design is the determination and statement of the general research approach or strategy adopted/or the particular project. It is the heart of planning. If the design adheres to the research objective, it will ensure that the client's needs will be served." (2) According to Kerlinger "Research design in the plan, structure and strategy of investigation conceived so as to obtain answers to research questions and to control variance." (3) According to Green and Tull "A research design is the specification of methods and procedures for acquiring the information needed. It is the over-all operational pattern or framework of the project that stipulates what information is to be collected from which source by what procedures." The second definition includes three important terms - plan, structure and strategy. The plan is the outline of the research scheme on which the researcher is to work. The structure of the research work is a more specific scheme and the strategy suggests how the research will be carried out i.e. methods to be used for the collection and analysis of data. In brief, research design is the blueprint of research. It is the specification of methods and procedures for acquiring the information needed for solving the problem. Questionnaires, forms and samples for investigation are decided while framing research design. Finally, the research design enables the researcher to arrive at certain meaningful conclusions at the end of proposed study. STEPS IN PLANNING THE RESEARCH DESIGN: There are four broad steps involved in planning the research design as explained below: (1) Determining work involved in the project: The first step in planning research design is determining the work involved in the project-and designing a workable plan to carry out the research work within specific time limit. The work involved includes the following: (a) To formulate the marketing problem (b) To determine information requirement (c) To identify information sources (d) To prepare detailed plan for the execution of research project. This preliminary step indicates the nature and volume of work involved in the research work. Various forms require for research work will be decided and finalised. The sample to be selected for the survey work will also be decided. Staff requirement will also be estimated. Details will be worked out about their training and supervision on field investigators, etc. In addition, the questionnaire will be prepared and tested. This is how the researcher will prepare a blue-print of the research project. According to this blueprint the whole research project will be
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implemented. The researcher gets clear idea of the work involved in the project through such initial planning of the project. Such planning avoids confusion, misdirection and wastage of time, money and efforts at later stages of research work. The whole research project moves smoothly due to initial planning of the research project. (2) Estimating costs involved: The second step in planning research design is estimating the costs involved in the research project. MR projects are costly as the questionnaire is to be prepared in large number of copies, interviewers are to be appointed for data collection and staff will be required for tabulation and analysis of data collected. Finally, experts will be required for drawing conclusions and for writing the research report. The researcher has to estimate the expenditure required for the execution of the project. The sponsoring organisation will approve the research project and make suitable budget provision accordingly. The cost calculation is a complicated job as expenditure on different heads will have to be estimated accurately. The cost of the project also needs to be viewed from the viewpoint of its utility in solving the marketing problem. A comprehensive research study for solving comparatively minor marketing problem will be uneconomical. (3) Preparing time schedule: Time factor is important in the execution of the research project. Planning of time schedule is essential at the initial stage. Time calculation relates to the preparation of questionnaire and its pre-testing, training of interviewers, actual survey work, tabulation and analysis of data and finally reports writing. Time requirement of each stage needs to be worked out systematically. Such study will indicate the time requirement of the whole project. Too long period for the completion of research work is undesirable as the conclusions and recommendations may become outdated when actually available. Similarly, time-consuming research projects are not useful for solving urgent marketing problems faced by a company. Preparing time schedule is not adequate in research design. In addition, all operations involved in the research work should be carried out strictly as per time schedule already prepared. If necessary remedial measures should be adopted in order to avoid any deviation in the time schedule. This brings certainty as regards the completion of the whole research project in time. (4) Verifying results: MR findings need to be dependable to the sponsoring organisation. Researcher may create new problems before the sponsoring organisation if the research work is conducted in a faulty manner. Such unreliable study is dangerous as it may create new problems. It is therefore, necessary to keep effective check on the whole research work during the implementing stage. For this suitable provisions need to be made in the research design. After deciding the details of the steps noted above, the background for research design will be ready. Thereafter, the researcher has to prepare the research design of the whole project. He has to present the project design to the sponsoring agency or higher authorities for detailed consideration and approval. The researcher can start the research project (as per design) after securing the necessary approval to the research design prepared.
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TYPES OF RESEARCH DESIGNS A research design is like a roadmapyou can see where you currently are, where you want to be at the completion of your journey, and can determine the best (most efficient and effective) route to take to get to your destination. We may have to take unforeseen detours along the way, but by keeping our ultimate objective constantly in mind and using our map we can arrive at our destination. Our research purpose and objectives suggest which route (design) might be best to get us where we want to go. but there is more than one way to "get there from here." Choice of research design is not like solving a problem in algebra where there is only one correct answer and an infinite number of wrong ones. Choice of research design is more like selecting a cheesecake recipesome are better than others but there is no one which is universally accepted as "best." Successfully completing a research project consists of making those choices that will fulfill the research purpose and obtain answers to the research questions in an efficient and effective manner. Choice of design type is not determined by the nature of the strategic decision faced by the manager such that we would use research design A whenever we need to evaluate the extent of a new product opportunity, or design B when deciding on which of two advertising programs to run. Rather, choice of research design is influenced by a number of variables such as the decision maker's attitude toward risk, the types of decisions being faced, the size of the research budget, the decision-making time frame, the nature of the research objectives, and other subtle and not-sosubtle factors. Much of the choice, however, will depend upon the fundamental objective implied by the research question: To conduct a general exploration of the issue, gain some broad insights into the phenomenon, and achieve a better "feel" for the subject under investigation (e.g.. What do customers mean by "good value"?). To describe a population, event, or phenomenon in a precise manner where we can attach numbers to represent the extent to which something occurs or determine the degree two or more variables covary (e.g., determine the relationship between age and consumption rate). To attribute cause and effect relationships among two or more variables so that we can better understand and predict the outcome of one variable (e.g., sales) when varying another (e.g., advertising).
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RESEARCH DESIGN
CONCLUSIVE RESEARCH DESIGN
EXPLORATORY RESEARCH DESIGN
CAUSAL RESEARCH
DESCRIPTIVE RESEARCH
CROSS-SECTIONAL DESIGN
LONGITUDINAL DESIGN
SINGLE CROSS-SECTIONAL DESIGN
MULTIPLE CROSS-SECTIONAL DESIGN
This classification is frequently used and is quite popular. Before we discuss each of these design types, a cautionary note is in order. Some might think that the research design decision suggests a choice among the design types. Although there are research situations in which all the research questions might be answered by doing only one of these types (e.g., a causal research experiment to determine which of three prices results in the greatest profits), it is more often the case that the research design might involve more than one of these types performed in some sequence. The overall research design is intended to indicate exactly how the different design types will be utilized to get answers to the research questions or test the hypothesis. A further cautionary note is needed to warn the reader that while it may appear that if sequencing is done the sequence would be exploratory, descriptive, then causal, that is not always the case. For example, some companies may do an annual survey of consumers to determine the frequency with which certain behaviors are performed (e.g., washing dishes by hand) followed by exploratory research that probes to gain an in-depth understanding of the circumstances surrounding that behavior (i.e., descriptive then exploratory rather than exploratory then descriptive). It is not hard to imagine a research design that might sequence as exploratory, then descriptive, then exploratory again; or causal, then descriptive. It is important to remember that because a research design is a plan of action to obtain answers to the research questions, it is those questions that suggest which design types are necessary and the sequence of conducting those design types, if a sequence is needed. An example later in this chapter will be used to illustrate this point. With these cautions in mind we will now discuss the design types in greater detail.
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A marketing research study may be either exploratory or full scale. Exploratory research is conducted when the researcher does not know how and why certain phenomenon occurs. Here, the hypothetical solutions or actions are explored and evaluated by the decision-maker, e.g. evaluation of quality of service of a bank/hotel/airline. Here, the quality cannot be assessed directly as tangible features are not available. The purpose of exploratory research is to know the unknown. Exploratory research determines fruitful alternatives that the executive would not have perceived. This also narrows down the scope of the investigation. Exploratory research is undertaken to get the answer to the following question. "What alternative courses of action might solve the problem and thereby reach the final objective?" This research is unstructured in character. Exploratory studies are important. They may provide adequate information on a decision situation or may greatly facilitate the design of formal research studies. To explore means to find out or discover. Exploratory research is conducted in order to find out causes/reasons behind a specific marketing problem. It is the starting point in all types of research projects. The purpose of exploratory research is to define the marketing problem precisely, collect required information/data relating to the problem and identify alternative courses of action in order to deal with the marketing problem. For example, advertising campaign of a company may not give positive results in terms of sales. The failure of campaign may be due to many possible causes relating to advertising copy, media selected, faulty pre-testing, faulty illustration give, wrong timing of ad. campaign or finally inadequate follow-up measures to the ad. campaign. In the exploratory research, the possible causes will be identified, the most appropriate causes will be selected, hypothesis will be developed and research activity will be conducted accordingly. Survey of consumers, retailers, sales executives and sales-force will be useful for exploratory research. On some occasions, small scale sales survey may provide useful data for exploratory research. In exploratory research, the stress/focus is on the discovery of ideas/causes. For example, sales may be declining for the last six months. Quick study may be conducted to find out the causes/factors responsible. Such causes will be listed. Here, an exploratory study/research may be conducted in order to find out the most likely cause so as to introduce suitable remedial measures. The objective of exploratory research is to generate/discover new ideas. The secondary/published data can be used for exploratory research as such data are easily available. If the services of respondents are used (for survey purpose), they should be given full freedom to express themselves. The same rule should be made applicable to focus groups. Exploratory research is useful for the study of marketing problems about which sufficient information/details are not available. Exploratory study needs to be flexible in its approach.
Exploratory Research is used: To define the problem more precisely.
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To identify relevant courses of action i.e. find the most likely alternatives, which are then turned into hypotheses. Isolate key variables and relationships for further examinations. Gain insights for developing an approach to a problem. Establish priorities for further research. Once a hypothesis is formulated, research is used to determine if the hypothesis was correct. Hypothesis is tentative answers to questions that serve as guides for most research projects Exploratory research may also be involved when the perceived problem is much less general; it is used to develop the most promising hypotheses. The findings of exploratory research should be regarded as tentative or as an input to further research. Typically, such research is followed by further exploratory or conclusive research. The analysis of primary data is qualitative. In general, exploratory research is meaningful in any situation in which the researcher does not have enough understanding to proceed with the research project. 2. Conclusive Research Design Conclusive Research Design is typically more formal and structured than exploratory research. It is based on large representative samples, and the data obtained are subjected to quantitative analysis. Conclusive Research is designed to assist (he decision maker in determining, evaluating and selecting the best course of action to take in a given situation. As shown in the figure conclusive research designs may be either descriptive or causal and descriptive designs may be either cross-sectional or longitudinal. (A) Descriptive Research: Descriptive research is undertaken when the researcher desires to know the characteristics of certain groups such as age, sex, occupation, income or education. The objective of descriptive research is to answer the "who, what, when, where and how" of the subject under study/investigation. Descriptive studies are normally factual and simple. However, such studies can be complex, demanding scientific skill on the part of researcher. Descriptive studies are well structured. It tends to be rigid and its approach cannot be changed often and again. In descriptive studies, the researcher has to give adequate thought to framing research questions and deciding the data to be collected and the procedure to be used for this purpose. Data collected may prove to be inadequate if the researcher is not careful in the initial stages of data collection. Descriptive research designs are used for some definite purpose. Descriptive research cannot identify cause and effect relationship.
Descriptive research is designed to describe the present situation or the features of a group or users of a product. In marketing, such research is undertaken to know the characteristics of certain
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groups or users of a product such as age, sex education, income etc. Such research studies are based on secondary data or survey research. The major objective or descriptive research is to describe something - usually market characteristics or functions A major difference between exploratory and descriptive research is that descriptive research is characterized by the prior formulation of the hypotheses. Thus, the information needed is clearly defined. As a result, descriptive research is preplanned and structured. It is typically based on large representative samples A formal research design specifies the methods for selecting these sources of information and for collecting data from those sources. Uses of Descriptive Research: Descriptive research is conducted for the following reasons 1. To describe the characteristics of relevant groups, such as consumers, salespeople, or organizations, or market areas. For e.g. we could develop a profile of inc "heavy users" (frequent shoppers) of prestigious department stores such as Shoppers Stop. 2. To estimate the percentage of units in a specified population exhibiting a certain behavior e.g. the percentage of heavy users of prestigious department stores who also patronize discount department stores. 3. To determine the " perceptions of product characteristics. For e.g. how do households perceive the various department stores in terms of salient factors of the choice criteria? 4. To determine the degree to which marketing variables are associated. For e.g.: to what extent is shopping at department stores related to eating out? 5. To make specific predictions. For e.g. what will be retail sales of Shoppers stop (specific store) for fashion clothing (specific product category) in the Mumbai area (specific region)? 6. To collect demographic information of consumers/users of a product under study. 7. For finding out views and attitudes of customers, e.g. how many customers prefer branded goods or ISI marked goods. 8. Make predictions about future marketing trends, consumer needs or expectations or possible sales after n years. 9. To discover the relationship between certain variables, e.g. sale of toothpaste among rural population and urban population or rate of savings among low, middle and higher income groups.
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Descriptive research can be divided into the following two categories: (a) Cross-sectional studies Cross-sectional study is a study involving a sample of elements from the population of interest at a single point of time. It is a study concerned with a sample of elements from a given population. Such sample may deal with households, dealers, retail stores and other entities. Information/data on a number of characteristics are collected from the sample elements. Such data are analysed for drawing conclusions. Cross sectional studies include field studies and surveys. Field studies are conducted is the life situations such as schools, factories, institutions, etc. Here, the inter-relations among variables are studied under real setting. The cross-sectional analysis involves counting the simultaneous occurrence of the variables of interest. Field studies have certain merits and limitations. The important merit is that such studies are close to real life and cannot be criticised on the ground that they are away from real settings or are artificial. Filed studies are also socially significant. However such studies are scientifically inferior to laboratory and field experiments. There is also lack of precision in the measurement of variables. Cross-sectional study is possible through survey. Survey research is wide in scope. Detailed information can be collected from a sample of large population. This method is also economical as more information can be collected per unit of cost. The time required for sample survey is also less than a census-inquiry. However, in survey research, more importance is given to information collection and not to in-depth analysis. Secondly, survey research needs more time and money when conducted on a large scale. (b) Longitudinal studies Longitudinal studies are based on panel methods and panel data. A panel is a sample of respondents who are interviewed not only once but thereafter from time to time. Here data to be collected relate to same variables but the measurements are taken repeatedly. For example, purchase of grocery products by families/ households at regular intervals. Such data will reflect/indicate change in the buying behaviour of families/households. There are many advantages and limitations of panel data. Panel data are suitable when the researcher undertake detailed analysis. Similarly, panel data are more comprehensive as compared to data collected from individual families. Finally, panel data collected is more accurate as compared to data collected through survey. These advantages of pan> data improve the quality of research findings and conclusions. There are certain limitations of panel data. For example/ panels used for data collection may not be representative samples. Panel members may not be co-operative or may leave the panel membership. As a result, the representative character of the original sample may be adversely affected. Secondly, panel members may report wrong data. Their interest may reduce gradually and they may supply information in a casual manner. Their sense of participation/responsibility may reduce. This will affect the quality of data and also of findings.
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(B) Casual Research: Casual research design is the third type of research design. As the name indicates, casual design investigates the cause and effect relationship between two or more variables. This design measures the extent of relationship between the variables. Casual research designs attempt to specify the nature of functional relationship between two or more variables. Casual research is useful to show the impact of one variable on the other. For example, price and market demand relationship or relationship between market competition and sales performance. Even the positive/negative effect of advertising on sales can be studied through casual research. The relationship between the casual factors can be studied through casual research. In addition, the variables which create effect on other variables can be studied in depth through casual research. Data for casual research can be collected through field survey with the help of a questionnaire or by conducting laboratory experiments / controlled experiments. Laboratory experiments are possible in the case of testing of new products or package design. The casual research design is based on reasoning. The designs for casual research can be divided into three categories: (a) Historical (b) Survey (c) Experimental. IMPORTANCE / UTILITY OF RESEARCH DESIGN Research design is important as it prepares proper framework within which the research work/activity will be actually carried out Research design acts as a blue print for the conduct of the whole research project. It introduces efficiency in investigation and generates confidence in the final outcome of the study. Research design gives proper direction and time-table to research activity. It keeps adequate check on the research work and ensures its completion within certain time limit. It keeps the whole research project on the right track. Research design avoids possible errors as regards research problem, information requirement and so on. It gives practical orientation to the whole research work and make it relevant to the marketing problems faced by the sponsoring organisation. Finally, it makes the whole research process compact and result-oriented. A researcher should not go ahead with his research project unless the research design is planned properly.
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TESTING OF HYPOTHESES
(Parametric or Standard Tests of Hypotheses) Hypothesis is usually considered as the principal instrument in research. Its main function is to suggest new experiments and observations. In fact, many experiments arc carried out with the deliberate object of testing hypotheses. Decision-makers often face situations wherein they are interested in testing hypotheses on the basis of available information and then take decisions on the basis of such testing. In social science, where direct knowledge of population parameter(s) is rare, hypothesis testing is the often-used strategy for deciding whether a sample data offer such support for a hypothesis that generalization can be made. Thus, hypothesis testing enables us to make probability statements about population parameters). The hypothesis may not be proved absolutely, but in practice it is accepted if it has withstood a critical testing. Before we explain how hypotheses arc tested through different tests meant for the purpose, it will be appropriate to explain clearly the meaning of a hypothesis and the related concepts for better understanding of the hypothesis testing techniques. MEANING OF HYPOTHESIS Ordinarily, when one talks about hypothesis, one simply means a mere assumption or some supposition to be proved or disproved. But for a researcher hypothesis is a formal question that he intends to resolve. Thus a hypothesis may be defined as a proposition or a set of propositions set forth as an explanation for the occurrence of some specified group of phenomena either asserted merely as a provisional conjecture to guide some investigation or accepted as highly probable in the light of established facts. Quite often a research hypothesis is a predictive statement, capable of being tested by scientific methods, that relates an independent variable to some dependent variable. For example, consider statements like the following ones: "Students who receive counseling will show a greater increase in creativity than students not receiving counseling" or "the automobile A is performing as well as automobile B. These are hypotheses capable of being objectively verified and tested. Thus, we may conclude that a hypothesis states what we are looking for and it is a proposition that can be put to a test to determine its validity. CHARACTERISTICS OF HYPOTHESIS A hypothesis must possess the following characteristics: (i) Hypothesis should be clear and precise. If the hypothesis is not clear and precise, the inferences drawn on its basis cannot be taken as reliable. (ii) Hypothesis should be capable of being tested. In a swamp of un-testable hypotheses, many a time the research programs have bogged down. Researcher may do some prior study in order to make hypothesis a testable one. A hypothesis "is testable if other deductions can be made from it which, in turn, can be confirmed or disproved by observation." (iii) Hypothesis should state relationship between variables, if it happens to be a relational hypothesis (iv) Hypothesis should be limited in scope and must be specific. A researcher must remember that narrower hypotheses are generally more testable and he should develop such hypotheses.
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Researchers should state hypothesis as far as possible in most simple terms so that the same is easily understandable by all concerned. But one must remember that simplicity of hypothesis has nothing to do with its significance (vi) Hypothesis should be consistent with most known facts i e., it must be consistent with a substantial body of established facts. In other words, it should be one which judges accept as being the most likely (vii) Hypothesis should be amenable to testing within a reasonable time. One should not use even an excellent hypothesis, if the same cannot be tested in reasonable time for one cannot spend a life-time collecting data to test it (viii) Hypothesis must explain the facts that gave rise to the need for explanation. This means that by using the hypothesis plus other known and accepted generalizations, one should be able to deduce the original problem condition. Thus hypothesis must actually explain what it claims to explain; it should have empirical reference.
BASIC CONCEPTS CONCERNING TESTING OF HYPOTHESES Basic concepts in the context of testing of hypotheses need to be explained. (a) Null hypothesis and alternative hypothesis: In the context of statistical analysis, we often talk about null hypothesis and alternative hypothesis. If we are to compare method A with method B about its superiority and if we proceed on the assumption that both methods are equally good, then this assumption is termed as the null hypothesis. As against this, we may think that the method A is superior or the method B is inferior, we are then stating what is termed as alternative hypothesis. The null hypothesis is generally symbolized as H0 and the alternative hypothesis as Ha. Suppose we want to test the hypothesis that the population mean ( .) is equal to the hypothesized mean ( H0) = 100. Then we would say that the null hypothesis is that the population mean is equal to the hypothesized mean 100 and symbolically we can express as: H0: = H0 = 100 If our sample results do not support this null hypothesis, we should conclude that something else is true. What we conclude rejecting the null hypothesis is known as alternative hypothesis. In other words, the set of alternatives to the null hypothesis is referred to as the alternative hypothesis. If we accept H0, then we are rejecting Ha and if we reject H0, then we are accepting Ha. For H0: = H0 =100, we may consider three possible alternative hypotheses as follows:
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The null hypothesis and the alternative hypothesis are chosen before the sample is drawn (the researcher must avoid the error of deriving hypotheses from the data that he collects and then testing the hypotheses from the same data). In the choice of null hypothesis, the following considerations are usually kept in view: (1) Alternative hypothesis is usually the one which one wishes to prove and the null hypothesis is the one which one wishes to disprove. Thus, a null hypothesis represents the hypothesis we are trying to reject, and 'alternative hypothesis represents all other possibilities. (2) If the rejection of a certain hypothesis when it is actually true involves great risk, it is taken as null hypothesis because then the probability of rejecting it when it is true is (the level of significance) which is chosen very small. (3) Null hypothesis should always be specific hypothesis i.e., it should not state about or approximately a certain value. Generally, in hypothesis testing we proceed on the basis of null hypothesis, keeping the alternative hypothesis in view. Why so? The answer is that on the assumption that null hypothesis is true, one can assign the probabilities to different possible sample results, but this cannot be done if we proceed with the alternative hypothesis. Hence the use of null hypothesis (at times also known as statistical hypothesis) is quite frequent. (b) The level of significance: This is a very important concept in the context of hypothesis testing. Its always some percentage (usually 5%), which should be chosen, with great care, thought and reason. In case we take the significance level at 5 per cent, then this implies that H0 will be rejected when the sampling result (i.e., observed evidence) has a less than 0.05 probability of occurring if H0 is true. In other words, the 5 per cent level of significance means that researcher is willing to take as much as a 5 per cent risk of rejecting the null hypothesis when it (Ho) happens to be true. Thus the significance level is the maximum value of the probability of rejecting H 0 when it is true and is usually determined in advance before testing the hypothesis.
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(c) Decision rule or test of hypothesis: Given a hypothesis Ho and an alternative hypothesis Ha, we make a rule which is known as decision rule according to which we accept H0 (i.e., reject Ha) or reject Ho (i.e., accept Ha). For instance, if H0 is that a certain lot is good (there are very few defective items in it) against Ha that the lot is not good (there are too many defective items in it); then we must decide the number of items to be tested and the criterion for accepting or rejecting the hypothesis. We might test 10 items in the lot and plan our decision saying that if there are none or only 1 defective item among the 10, we will accept Ho otherwise we will reject Ho (or accept Ha). This sort of basis is known as decision rule. (d) Type I and Type II errors: In the context of testing of hypotheses, there are basically two types of errors we can make. We may reject H 0 when H0 is true and we may accept H0 when in fact H0 is not true. The former is known as Type I error and the latter as Type II error. In other words, Type I error means rejection of hypothesis that should have been accepted and Type II error means accepting the hypothesis, which should have been rejected. Type I error is denoted by (alpha) known as a error, also called the level of significance of test; and Type II error-is denoted by (beta) known as -error. In a tabular form the said two errors can be presented as follows:
The probability of Type I error is usually determined in advance and is understood as the level of significance of testing the hypothesis. If type I error is fixed at 5 percent, it means that there are about 5 chances in 100 that we will reject H0 when H0 is true. We can control Type I error just by fixing it at a lower level. For instance, if we fix it at 1 per cent, we will say that the maximum probability of committing Type I error would only be 0.01. But with a fixed sample size, n, when we try to reduce Type I error, the probability of committing Type II error increases. Both types of errors cannot be reduced simultaneously. There is a tradeoff between these two types of errors, which means that the probability of making one type of error can only be reduced if we are willing to increase the probability of making the other type of error. To deal with this trade-off in business situations, decision-makers decide the appropriate level of Type I error by examining the costs or penalties attached to both types of errors. If Type I error involves the time and trouble of reworking a batch of chemicals that should have been accepted, whereas Type II error means taking a chance that an entire group of users of this chemical compound will be poisoned, then in such a situation one should prefer a Type I error to
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a Type II error. As a result one must set very high level for Type I error in one's testing technique of a given hypothesis. Hence, in the testing of hypothesis, one must make all possible effort to strike an adequate balance between Type I and Type II errors. (e) Two tailed and One-tailed tests: In the context of hypothesis testing, these two terms are quite important and must be clearly understood. A two-tailed test rejects the null hypothesis if, say, the sample mean is significantly higher or lower than the hypothesized value of the mean of the population. Such a test is appropriate when the null hypothesis is some specified value and the alternative hypothesis is a value not equal to the specified value of the null hypothesis. Symbolically, the two-tailed test is appropriate when we have H0: = H0 and Ha: H0 which may mean < H0 or > H0. Thus, in a two-tailed test, there are two rejection regions (also known as critical regions), one on each tail of the curve which can be illustrated in Figure a: If the significance level is 5 per cent and the two-tailed test is to be applied, the probability of the rejection area will be 0.05 (equally split on both tails of the curve as 0.025) and that of the acceptance region will be 0.95 as shown in the curve in Fig. a. If we take = 100 and if our sample mean deviates significantly from 100 in either direction, then we shall reject the null hypothesis; but if the sample mean does not deviate significantly from , in that case we shall accept the null hypothesis. But there are situations when only one-tailed test is considered appropriate. A one-tailed test would be used when we are to test, say, whether the population mean is cither lower than or higher than some hypothesized value. For instance, if our H0: = H0 and Ha: < H0, Then we are interested in what is known as left-tailed test (wherein there is one rejection region only on the left tail) which can be illustrated as in Figure b: Figure a
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Mathematically we can state: Acceptance Region A: | Z | < 1.96 Rejection Region R: | Z | 1.96
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Mathematically we can state: Acceptance Region A: Z > -1.645 Rejection Region R: Z - 1.645 If our = 100 and if our sample mean deviates significantly from 100 in the lower direction, we shall reject H0, otherwise we shall accept H0 at a certain level of significance. If the significance level in the given case is kept at 5%, then the rejection region will be equal to 0.05 of area in the left tail as has been shown in the above curve. In case our H0: = H0 and Ha: > H0 we are then interested in what is known as one-tailed test (right tail) and the rejection region will be on the right tail of the curve as shown below:
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Mathematically we can state: Acceptance Region A: Z < 1.645 Rejection Region R: Z 1.645 If our = 100 and if our sample mean deviates significantly from 100 in the upward direction, we shall reject H0 otherwise we shall accept the same If in the given case the significance level is kept at 5% then the rejection region will be equal to 0 05 of area in the right-tail as has been shown in the above curve It should always be remembered that accepting H0 on the basis of sample information does not constitute the proof that H0 is true. We only mean that there is no statistical evidence to reject it, but we are certainly not saying that H0 is true (although we behave as if H0 is true)
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PROCEDURE FOR HYPOTHESIS TESTING To test a hypothesis means to tell (on the basis of the data the researcher has collected) whether or not the hypothesis seems to be valid. In hypothesis testing the main question is: whether to accept the null hypothesis or not to accept the null hypothesis? Procedure for hypothesis testing refers to all those steps that we undertake for making a choice between the two actions i.e., rejection and acceptance of a null hypothesis The various steps involved in hypothesis testing are stated below: (i) Making a formal statement: The step consists in making a formal statement of the null hypothesis (H0) and also of the alternative hypothesis (Ha) This means that hypotheses should be clearly stated, considering the nature of the research problem For instance, Mr. Mohan of the Civil Engineering Department wants to test the load bearing capacity of an old bridge which must be more than 10 tons In that case he can state his hypotheses as under: Null Hypothesis H0: = 10 tons Alternative Hypothesis Ha: > 10 tons Take another example The average score in an aptitude test administered at the national level is 80 To evaluate a state's education system, the average score of 100 of the state's students selected on random basis was 75. The state wants to know if there is a significant difference between the local scores and the national scores. In such a situation the hypotheses may be stated as under Null Hypothesis H0: = 80 Alternative Hypothesis Ha: 80 The formulation of hypotheses is an important step, which must be accomplished with due care in accordance with the object and nature of the problem under consideration It also indicates whether we should use a one-tailed test or a two-tailed test. If Ha is of the type greater than (or of the type lesser than), we use a one-tailed test, but when H a is of the type "whether greater or smaller", then we use a two-tailed test (ii) Selecting a significance level: The hypotheses are tested on a pre-determined level of significance and as such the same should be specified Generally, in practice, either 5% level or 1% level is adopted for the purpose The factors that affect the level of significance are (a) the magnitude of the difference between sample means (b) the size of the samples (c) the variability of measurements within samples (d) whether the hypothesis is directional or non-directional (A directional hypothesis is one which predicts the direction of the difference between, say, means). In brief, the level of significance must be adequate in the context of the purpose and nature of enquiry. (iii) Deciding the distribution to use: After deciding the level of significance, the next step in hypothesis testing is to determine the appropriate sampling distribution The choice generally remains between normal distribution and the t-distribution. The rules for selecting the correct distribution are similar to those that we have stated earlier in the context of estimation. (iv) Selecting a random sample and computing an appropriate value: Another step is to select a random sample(s) and compute an appropriate value from the sample data concerning the test statistic utilizing the relevant distribution. In other words, draw a sample to furnish empirical data.
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(v) Calculation of the probability: One has then to calculate the probability that the sample result would diverge as widely as it has from expectations, if the null hypothesis were in fact true (vi) Comparing the Probability: Yet another step consists in comparing the probability thus calculated with the specified value for , the significance level If the calculated probability is equal to or smaller than the value in case of one-tailed test (and /2 in case of twotailed test), then reject the null hypothesis (i e, accept the alternative hypothesis), but if the calculated probability is greater, then accept the null hypothesis. In case we reject H0, We run a risk of (at most the level of significance) committing an error of Type I, but if we accept H0, then we run some risk (the size of which cannot be specified as long as the H0 happens to be vague rather than specific) of committing an error of Type II.
FLOW DIAGRAM FOR HYPOTHESIS TESTING The above stated general procedure for hypothesis testing can also be depicted in the form of a flow-chart for better understanding as shown below:
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Tests of Hypotheses Hypothesis testing helps to decide on the basis of a sample data, whether a hypothesis about the population is likely to be true or false. Statisticians have developed several tests of hypotheses (also known as the tests of significance) for the purpose of testing of hypotheses which can be classified as: (a) Parametric tests or standard tests of hypotheses (b) Non-parametric tests or distribution-free test of hypotheses. Parametric tests usually assume certain properties of the parent population from which we draw samples. Assumptions like observations come from a normal population, sample size is large, assumptions about the population parameters like mean, variance, etc., must hold good before parametric tests can be used. But there are situations when the researcher cannot or does not want to make such assumptions. In such situations we use statistical methods for testing hypotheses, which are called non-parametric tests because such tests do not depend on any assumption about the parameters of the parent population. Besides, most non-parametric tests assume only nominal or ordinal data, whereas parametric tests require measurement equivalent to at least an interval scale. As a result, non-parametric tests need more observations than parametric tests to achieve the same size of Type I and Type II errors. Important Parametric Tests The important parametric tests are: (1) z-test z-test is based on the normal probability distribution and is used for judging the significance of several statistical measures, particularly the mean. The relevant test statistic, z, is worked out and compared with its probable value (to be read from table showing area under normal curve) at a specified level of significance for judging the significance of the measure concerned. This is a most frequently used test in research studies. This test is used even when binomial distribution or t-distribution is applicable on the presumption that such a distribution tends to approximate normal distribution as n becomes larger z-test is generally used for comparing the mean of a sample to some hypothesized mean for the population in case of large sample, or when population variance is known. z-test is also used for judging the significance of difference between means of two-independent samples in case of large samples, or when population variance is known. z-test is also used for comparing the sample proportion to a theoretical value of population proportion or for judging the difference in proportions of two independent samples when n happens to be large. Besides, this test may be used for judging the significance of median, mode, coefficient of correlation and several other measures. (2) t-test t-test is based on t-distribution and is considered an appropriate test for judging the significance of a sample mean or for judging the significance of difference between the means of two samples in case of small sample(s) when population variance is not known (in which case we use variance of the sample as an estimate of the population variance) In case two samples are related, we use paired t-test (or what is known as difference test) for judging the significance of the mean of difference between the two related samples. It can also be used for judging the significance of the coefficients of simple and partial correlations The relevant test statistic, t, is calculated from the sample data and then compared with its probable value based on t-distribution (to be read from the table that gives probable values of t for different levels of significance for different degrees of freedom) at a specified level of significance for concerning degrees of freedom for accepting or
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rejecting the null hypothesis. It may be noted that t-test applies only in case of small sample(s) when population variance is unknown. (3) 2-test or Chi-square test - test is based on chi-square distribution and as a parametric test is used for comparing a sample variance to a theoretical population variance. As a non-parametric test, it "can be used to determine if categorical data shows dependency or if two classifications are independent. It can also be used to make comparisons between theoretical populations and actual data when categories arc used." Thus, the chi-square test is applicable in large number of problems. The test is, in fact, a technique through the use of which it is possible for all researchers to (i) test the goodness of fit (ii) test the significance of association between two attributes, and (iii) test the homogeneity or the significance of population variance.
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(4) F-test. F-test is based on F-distribution and is used to compare the variance of the two independent samples. This test is also used in the context of analysis of variance (ANOVA) for judging the significance of more than two sample means at one and the same time. It is also used for judging the significance of multiple correlation coefficients. Test statistic, F, is calculated and compared with its probable value (to be seen in the F-ratio tables for different degrees of freedom for greater and smaller variances at a specified level of significance) for accepting or rejecting the null hypothesis. All these tests are based on the assumption of normality i.e., the source of data is considered to be normally distributed. In some cases the population may not be normally distributed, yet the tests will be applicable on account of the fact that we mostly deal with samples and the sampling distributions closely approach normal distributions.
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SAMPLING
SOME BASIC TERMS 1. Population In statistical usage the term population is applied to any finite or infinite collection of individuals. It has displaced the older term universe, which is derived from the universe of discourse of logic. It is practically synonymous with aggregate and does not necessarily refer to a collection of living organisms. 2. Census - The complete enumeration of a population or groups at a point in time with respect to well-defined characteristics such as population, production, traffic on particular roads. In some connection the term is associated with the data collected rather than the extent of the collection so that the term Sample Census has a distinct meaning. The partial enumeration resulting from a failure to cover the whole population, as distinct from a designed sample enquiry, may be referred to as an 'incomplete census. 3. Sample - A part of a population, or a subset from a set of units, which is provided by some process or other, usually by deliberate selection with the object of investigating the properties of the parent population or set. 4. Sample survey A survey, which is carried out using a sampling method i.e. in which a portion only, and not the whole population, is surveyed. 5. Sampling unit - One of the units into which an aggregate is divided or regarded as divided for the purposes of sampling, each unit being regarded as individual and indivisible when the selection is made. The definition of unit may be made on some natural basis, for example, households, persons, units of product, tickets, etc. 01 on some arbitrary basis, e.g. areas defined by grid coordinates on a map. In the case of multi-stage sampling the units are different at different stages of sampling, being 'large' at the first stage and growing progressively smaller with each stage in the process of selection. The term sample unit is sometimes used in a synonymous sense. 6. Sampling Frame - A list, map or other specification of the units, which constitute the available information relating to the population designated for a particular sampling scheme. There is a frame corresponding to each state of sampling in a multi-stage sampling scheme. The frame may or may not contain information about the size or other supplementary information of the units, but it should have enough details so that a unit, if included in the sample, may be located and taken up for inquiry. The nature of the frame exerts a considerable influence over the structure of a sample survey. It is rarely perfect, and may be inaccurate, incomplete, inadequately described, out of date or subject to some degree of duplication. Reasonable reliability in the frame is a desirable condition for the reliability of a sample survey based on it. In multi-stage sampling it is sometimes possible to construct the frame at higher stages during the progress of the sample survey itself For example, certain first stage units may be selected in the first instance, and then more detailed lists or maps be constructed by compilation of available information or by direct observation only of the first-stage units actually selected
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7. Sampling design - A. sample design is a definite plan for obtaining a sample from the sampling frame. It refers to the technique or the procedure the researcher would adopt in selecting some sampling units from which inferences about the population is drawn. Sampling design is determined before any data are collected. 8. Statistic(s) and parameter(s) - A statistic is a characteristic of a sample, whereas a parameter is a characteristic of a population. Thus, when we work out certain measures such as mean, median, mode etc from samples, then they are called statistic(s) for they describe the characteristics of a sample. But when such measures describe the characteristics of a population, they are known as parameter(s). For instance, the population mean ( ) is a parameter, whereas the sample mean (X) is a statistic. To obtain the estimate of a parameter from a statistic constitutes the prime objective of sampling analysis. 9. Sampling error - That part of the difference between a population value and an estimate thereof, derived from a random sample, which is due to the fact that only a sample of values is observed, as distinct from errors due to imperfect selection, bias in response or estimation, errors of observation and recording, etc The totality of sampling errors in all possible samples of the same size generates the sampling distribution of the statistic which is being used to estimate the parent value 10. Precision - Precision is the range within which the population average (or other parameter) will lie in accordance with the reliability specified in the confidence level as a percentage of the estimate or as a numerical quantity. For instance, if the estimate is Rs. 4000 and the precision desired is 4%, then the true value will be no less than Rs. 3840 and no more than Rs. 4160. This is the range (Rs 3840 to Rs. 4160) within which the true answer should lie. But if we desire that the estimate should not deviate from the actual value by more than Rs. 200 in either direction, in that case the range would be Rs. 3800 to Rs. 4200. 11. Confidence level and Significance level - The confidence level or reliability is the expected percentage of times that the actual value will fall within the stated precision limits. Thus, if we take a confidence level of 95%, then we mean that there arc 95 chances in 100 (or .95 in 1) that the sample results represent the true condition of the population within a specified precision range against 5 chances in 100 (or .05 in 1) that it does not. Precision is the range within which the answer may vary and still be acceptable; confidence level indicates the likelihood that the answer will fall within that range, and the significance level indicates the likelihood that the answer will fall outside that range. We can always remember that if the confidence level is 95%, then the significance level will be (100 95) i.e., 5%:, if the confidence level is 99%, the significance level is (100 99) i.e., 1%, and so on. We should also remember that the area of normal curve within precision limits for the specified confidence level constitutes the acceptance region and the area of the curve outside these limits in either direction constitutes the rejection regions. 12. Sampling distribution - We are often concerned with sampling distribution in sampling analysis. If we take certain number of samples and for each sample compute various statistical measures such as mean, standard deviation, etc., then we can find that each sample may give its own value for the statistic under consideration. All such values of a particular statistic, say mean, together with their relative frequencies will constitute the sampling distribution of the particular statistic, say mean. Accordingly, we can have sampling distribution of mean, or the sampling distribution of standard deviation or the sampling distribution of any other statistical 96
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measure. It may be noted that each item in a sampling distribution is a particular statistic of a sample. The sampling distribution tends quite closer to the normal distribution if the number of samples is large. The significance of sampling distribution follows from the fact that the mean of a sampling distribution is the same as the mean of the universe. Thus, the mean of the sampling distribution can be taken as the mean of the universe. 13. Bias - Generally, an effect which deprives a statistical result of representativeness by systematically distorting it, as distinct from a random error which may distort on any one occasion but balances out on the average 14. Biased sample - A sample obtained by a biased sampling process, that is to say, a process which incorporates a systematic component of error, as distinct from random error which balances out on the average Non-random sampling is often, though not inevitably, subject to bias, particularly when entrusted to subjective judgment on the part of human beings CENSUS SURVEY AND SAMPLE SURVEY: Census survey means survey or complete enumeration of population with certain objectives. The government in India after every ten years conducts such census survey. The entire geographical area and entire population is covered in census survey. The data collected are tabulated and published as census report. Such census data are used for different purposes including economic planning and policy decisions. Census survey is a costly and time-consuming activity and also needs huge organization and manpower for its orderly conduct. In commercial research, such census survey is not conducted due to various constraints particularly relating to funds, time and manpower. Census implies collection of information from each element of the group or population of interest, (e.g. Survey of industrial consumers). In many cases, complete enumeration is not possible and the only alternative available is sampling. Sample survey is the survey of a small representative part of the population taken up for detailed scrutiny and study purpose. A sample is a small representative of the whole and conclusions drawn from such sample are equally applicable to the entire population. Sample survey gives the benefits of census survey but with less time, expenditure and manpower. It is a better substitute to census survey. Sample surveys are commonly conducted in marketing research projects and gives promising results. A survey which is carried out using a sampling method i.e. using a representative portion of the whole population is called sample survey which is a short cut alternative to census survey but gives similar benefits.
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REASONS FOR IMPRACTICALITY OF CENSUS There are certain reasons that make census impractical or even impossible. The reasons are as follows: 1. Cost: Cost is an obvious constraint on the determination of whether a census should be taken. If information is desired on grocery purchase and use behavior (frequencies and amounts of purchase of each product category, average amount kept at home and the like) and the population of interest is all households in a country, the cost will preclude a census being taken. Thus a sample is the only logical way of obtaining new data from a population of this size. 2. Time: The kind of cost we have just considered is an outlay cost. The time involved in obtaining information from either a census or a sample involves the possibility of also incurring an opportunity cost. That is, the decision until information is obtained may result in smaller gain or a larger loss than would have been the case from making the same decision earlier. The opportunity to make more (or save more. as the case may be) is, therefore, foregone. 3- Accuracy: A study using a census, by definition, contains no sampling error. A study using a sample may involve sampling error in addition to other types of error. Other things being equal, a census will provide more accurate data than a sample. However it has been argued that a more accurate estimate of the population of a country could be made from a sample than from a census. Taking a census of a population on a "mail out - mail back" basis requires that the names and addresses of almost all households be obtained, census questionnaires mailed, and interviews conducted of those not responding. The questionnaires are sent to a population of which only about half have completed high school. The potential for errors in a returned questionnaire is therefore high. 4. Destructive nature of the measurement: Measurements are sometimes destructive in nature. When they are, it is apparent that taking a census would usually defeat the purpose of a measurement. If one were producing firecrackers, electrical fuses, or gas seed, performing a functional use test on a all products for quality control purposes would not be considered from an economic standpoint. A sample is then the only practical choice. On the other hand, if the light bulbs, bicycles, or electrical appliances are to be tested, a 100% sample (census) may be entirely reasonable. According to Crisp R. D., the fundamental idea of sampling is that a small number of items or parts (called a sample) are chosen at random from a large number of items or a whole (called a universe or population) the sample will tend to have the same characteristics and in approximately the same proportion as the universe. FEATURES OF SAMPLING (1) Sampling is a small representative of the whole. It is an effective alternative to the census survey. (2) Sampling reduces the time, efforts and money of the researcher on data collection without any adverse effect on its quality. (3) The sampling technique is based on the assumption that random selection of sample from the universe do possesses the same features and characteristics as that of the universe. (4) The findings of sample survey are accurate and reliable. The larger sample is better as the results available are more accurate. (5) Sampling is used in data collection as well as for different purposes in our daily life. (6) The concept of sampling is quite common and popular in marketing research as it helps researchers to finalize their findings and recommendations within a short period.
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FEATURES / ATTRIBUTES OF A GOOD / RELIABLE SAMPLE (1) Goal-oriented: A sample design should be goal oriented. It is means and should be oriented to the research objectives and fitted to the survey conditions. (2) Accurate representative of the universe: A sample should be an accurate representative of the universe from which it is taken. There are different methods for selecting a sample. It will be truly representative only when it represents all types of units or groups in the total population in fair proportions. In brief sample should be selected carefully as improper sampling is a source of error in the survey. (3) Proportional: A sample should be proportional. It should be large enough to represent the universe properly. The sample size should be sufficiently large to provide statistical stability or reliability. The sample size should give accuracy required for the purpose of particular study. (4) Random selection: A sample should be selected at random. This means that any item in the group has a full and equal chance of being selected and included in the sample. This makes the selected sample truly representative in character. (5) Economical: A sample should be economical. The objectives of the survey should be achieved with minimum cost and effort. (6) Practical: A sample design should be practical. The sample design should be simple i.e. it should be capable of being understood and followed in the fieldwork. (7) Actual information provider: A sample should be designed so as to provide actual information required for the study and also provide an adequate basis for the measurement of its own reliability. In brief, a good sample should be truly representative in character. It should be selected at random and should be adequately proportional. These, in fact, are the attributes of a good sample. ADVANTAGES OF SAMPLING METHOD: (1) Saves time and money: Sampling facilitates primary data collection easily / quickly and with less cost. It is time saving and economical method of survey for data collection. (2) Provides reliable data: The conclusions drawn from the sample survey are reliable, accurate and also applicable to the whole population/universe. Sampling has no adverse effect on the quality of data collected. It gives quality results with lesser volume of work. (3) Scientific base: The concept of sampling has scientific backing as it is based on the law of statistical regularity and the law of inertia of large numbers. (4) Facilitates better supervision on data collection: Sampling method is restricted to limited number of respondents. Naturally effective monitoring and supervision on the data collection work is possible. This improves the quality of data collected. LIMITATIONS OF SAMPLING METHOD: (1) Findings are not completely accurate: The findings of sampling method are reasonably accurate but not completely accurate .The findings and conclusions drawn from sample survey may be comparatively less accurate compared with that available from the census technique in which the entire population is covered. (2) Findings may not be reliable: The findings may not be reliable if the sample selected is too small or is not adequately representative in character. In such cases the conclusions drawn may be misleading and this may affect the quality of research work. (3) Difficulties in the selection of representative sample: There are many practical difficulties in the selection of representative sample. This may defeat the very purpose of sampling..
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(4) Data collection difficult in the case of large sample: Data collection becomes difficult when large size sample is decided. This also leads to more time and money for data collection. A sample survey is a better alternative to the census or complete investigation, which is lengthy and also costly. For example, census reports are published by the Government two or three years after the collection of data. However, survey reports (based on samples) can be prepared and published within a few months. Thus, sampling is widely used methodology in MR. It is one vital element of research design. STEPS IN SAMPLING PROCESS: Having looked into the major advantages and limitations of sampling, we now turn to the sampling process. It is the procedure required right from defining a population to the actual selection of sample elements. There are seven steps involved in this process. Step 1: Define the population It is the aggregate of all the elements defined prior to selection of the sample. It is necessary to define population in terms of (i) elements (ii) sampling units (iii) extent (iv) time. A few examples are given here. If we were to conduct a survey on the consumption of tea in Gujarat, then these specifications might be as follows (i) Element: Housewives (ii) Sampling units: Households, then housewives (iii) Extent Gujarat State (iv) Time January 1-10, 1999 If we were to monitor the sales of a product recently introduced by us, the population might be (i) Element Our product (ii) Sampling units Retail outlets, super markets, then our product (iii) Extent Delhi and New Delhi (iv) Time January 7-14, 1999 It may be emphasized that all these four specifications must be contained in the designated population Omission of any of them would render the definition of population incomplete Step 2 : Identify the sampling frame Identifying the sampling frame, which could be a telephone directory, a list of blocks and localities of a city, a map or any other list consisting of all the sampling units. It may be pointed out that if the frame is incomplete or otherwise defective, sampling will not be able to overcome these shortcomings
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The question isHow to ensure that the frame is perfect and free from any defect Leslie Kish has observed that a perfect frame is one where "every element appears on the list separately, once only once, and nothing else appears on the list" This type of perfect frame would indicate one-toone correspondence between frame units and sampling units But such perfect frames are rather rare Accordingly, one has to use frames with one deficiency or another, but one should ensure that the frame is not too deficient so as to be given up altogether This raises a pertinent question -What are the criteria for a suitable frame? In order to examine the suitability or otherwise of a sampling frame, a number of questions need be asked. These are 1 Does it adequately cover the population to be surveyed? 2 How complete is the frame? Is every unit that should be included represented? 3 Is it accurate? Is the information about each individual unit correct? Does the frame as a whole contain units, which no longer exist? 4 Is there any duplication? If so, then the probability of selection is disturbed as a unit can enter the sample more than once 5 Is the frame up-to-date? It could have met all the criteria when compiled but could well be deficient when it came to be used This could well be true of all frames involving the human population as change is taking place continuously 6 How convenient is it to use? Is it readily accessible? Is it arranged in a way suitable for sampling? Can it easily be re-arranged so as to enable us to introduce stratification and to undertake multi-stage sampling? These are demanding criteria and it is most unlikely that any frame would meet them all Nevertheless, they are the factors to be borne in mind whenever we undertake random sampling In marketing research most of the frames are from census reports, electoral registers, lists of member units of trade and industry associations, lists of members of professional bodies, lists of dwelling units maintained by local bodies, returns from an earlier survey and large scale maps. Step 3: Specify the sampling unit The sampling unit is the basic unit containing the elements of the target population. The sampling unit may be different from the element. For example, if one wanted a sample of housewives, it might be possible to have access to such a sample directly. However, it is easier to select households as the sampling unit and then interview housewives in each of the households. As mentioned in the preceding step, the sampling frame should be complete and accurate otherwise the selection of the sampling unit might be defective. It is necessary to get a further specification of the sampling unit both in personal interviews and in telephone interviews. Thus, in personal interviews, a pertinent question isof the several persons in a household, who should be interviewed? If interviews were held during office timings when the heads of families and other employed persons are away, interviewing would under-represent employed persons and over-represent elderly persons, housewives and the unemployed. In view of these considerations, it is necessary to have a random process of selection of the adult residents of each household. One method that could be used for this purpose is to list all the eligible persons living at a particular address and then select one of them.
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Step 4: Specify the sampling method It indicates how the sample units are selected. One of the most important decisions in this regard is to determine which of the twoprobability and non-probability sampleis to be chosen. In case of a probability sample, the probability or chance of every unit in the population being in the sample is known. Further, the selection of specific units in the sample depends entirely on chance. No substitution of one unit for another is permissible. This means that no human judgment is involved in the selection of a sample. In contrast, in a non-probability sample, the probability of inclusion of any unit in the population in the sample is not known. In addition, the selection of units within a sample involves human judgment rather than pure chance. In case of a probability sample, it is possible to measure the sampling error and thereby determine the degree of precision in the estimates with the help of the theory of probability. This theory also enables us to consider, from amongst the various possible sample designs, the one that will give the maximum information per rupee. This is not possible when a non-probability sample is used. Probability sampling enables us to choose representative sample designs. It also enables us to estimate the extent to which the results based on such a sample are likely to be different from what we would have obtained had we covered the population in our study. Conversely, the use of probability sampling enables us to determine the sample size for a given degree of precision, indicating that our sample results do not differ by more than a specified amount from those yielded by a study covering entire population. Although non-probability sampling does not yield these benefits, on account of its convenience and economy, it is often preferred to probability sampling. If the researcher is convinced that the risks involved in the use of a non-probability sample are more than offset by its being relatively cheap and convenient, his choice should be in favor of non-probability sampling. There are various types of sample designs that can be covered under the two broad groups, random or probability samples and non-random or non-probability samples. Step 5: Determine the sample size In other words, one has to decide how many elements of the target population are to be chosen. Step 6: Specify the sampling plan This means that one should indicate how decisions made so far are to be implemented. For example, if a survey of households is to be conducted, a sampling plan should define a household, contain instructions to the interviewer as to how he should take a systematic sample of households, advise him on what he should do when no one is available on his visit to the household, and so on. These are some pertinent issues in a sampling survey to which a sampling plan should provide answers. Step 7: Select the sample This is the final step in the sampling process. A good deal of office and fieldwork is involved in the actual selection of the sampling elements. Most of the problems in this stage are faced by the interviewer while contacting the sample-respondents.
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SAMPLING METHODS/SAMPLING DESIGNS Sample designs are different methods used for the conduct of sample survey. Quota sampling, judgment sampling etc. are the non-probability sample designs while random sampling, area sampling, etc. are the probability sample designs. In brief, the sample designs are divided into the following two categories: (a) Probability Sampling Methods (b) Non-Probability Sampling Method Types of Sampling Methods
Probability Sampling
Non - Probability Sampling
Convenience Sampling
Judgment Sampling
Quota Sampling
Master Samples
Panel Samples
Systematic Sampling Simple Random Sampling Cluster Sampling
Multi-Stage Sampling Multi-Phase Sampling Replicated Sampling
Stratified Sampling
Area Sampling Sequential Sampling
Probability/Random Sampling Methods In the probability sampling methods, the sample units are selected at random. This means the selection is haphazard/arbitrary. Every member in the universe has equal chance of being selected as the representative. The fact that any item can be selected is known. The selection of sampling item is impartial and independent of the person making the study. There is no scope for any biased selection of sample units. Probability sampling methods include random sampling, stratified, cluster, sampling, etc. Such methods are used extensively in marketing research. These methods provide unbiased information. The probability sampling methods are objectively designed. However, these methods are time consuming and also costly for use. Greater statistical competence and time are required to plan and use probability sampling methods.
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(a) Non-probability Sampling Methods Here, sample units are selected in a non-random manner. The selection may be purposive. It may be based on the convenience or the judgment of the researcher. The selection is deliberate not random. Every item is not given a definite chance of being included in the sample. The nonprobability sampling ' methods include convenience sampling, judgment sampling, and quota sampling. In these methods, the sample is selected in a subjective manner and the decision regarding sample is taken by the researcher * himself. The sample selected may not be representative of the universe to be studied. The selection of sample may be influenced by the subjective consideration of the person connected with research work (researcher). Non-probability sampling methods are also used in marketing research along with probability methods. Such methods are sometimes preferred because they cost less per observation, require less time and need relatively little statistical sophistication in planning the sample design and in the selection the respondents. Probability sampling methods are more scientific and capable of yielding more representative samples than non-probability sampling methods. However, there is no sampling method (probability or non-profitability) that can be considered to be best in all situations. Any suitable method may be selected and used properly for promising results. PROBABILITY SAMPLING V/S NON-PROBABILITY SAMPLING Probability Sampling (i) Probability sampling provides an equal chance of being selected in the sample to each element of the population. (ii) A probability sample is one, where the selected units have some specific chance of being included in the sample. Non-Probability Sampling (i) Non-Probability sampling does not provide an equal chance of being selected in the sample to each element of the population. (ii) A non-probability sample is arbitrarily selected.
Meaning
Type of method
It is a systematic and modern It is a traditional and rather method of sampling outdated method of sampling. The sample is selected by choice The selection process is, at least partially, subjective The sample selected may or may not be a true representative of the whole population as it is selected as per the convenience of the researcher
It is a mental process/exercise of the researcher
Selection of The sample is selected by chance sample or at random Selection process The selection process is controlled objectively so that the items will be chosen strictly at random Benefit It helps to select a truly representative sample Here, the selection of sample items is independent of the person making the study (researcher) Nature of process It is a mechanical and mathematical process (A) PROBABILITY SAMPLING METHODS (1) SIMPLE RANDOM SAMPLING
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Random sampling is one popular and extensively used sampling method In this method, each and every unit of the population has an equal chance of being selected or included in the sample Random selection does not mean haphazard selection It is one type of selection in which every item in the universe has an equal chance of being selected alone with all other items In random sampling, the complete list of the universe is taken but the selection is made 'at random' from this list However, some uniform system is used for the selection of sample Random sampling is useful for the conduct of telephone or mail survey It is an ideal method in the surveys of specialized nature The process of randomness does not mean that it is 'haphazard', as a layman may be inclined to think. What it means is that the process of selecting a sample is independent of human judgment. To ensure this, there are two methods that are followed when drawing a random sample. These are: (i) the lottery method and (ii) the use of random numbers. In the lottery method, each unit of the population is numbered and shown on a chit of paper or disc. The chits are folded and put in a box from which a sample of the requisite size is to be drawn. In case discs are used, these are well mixed up before a draw is made so that no particular unit can be identified before it gets selected. The sample is drawn in the same manner as winning numbers in a lottery are drawn In the second method, the tables of random numbers are used. The members of the population are numbered from 1 to N from which n members are selected. This process is explained below with the help of an illustration. Suppose a sample of size 50 is to be selected from a population of 500. First, number the 500 units from 1 to 500, the order being quite immaterial. While numbering the units, ensure that each unit in the population has uniform digits, in this case, three. Thus, 1st unit would have a threedigit number 001, 2nd unit 002, 10th unit 010, 11th unit O11, and so on. After the units have been given three-digit numbers, the table of random numbers is to be used. One may start from the lefthand top corner of the table of random numbers and proceed systematically down sets of threedigit columns, rejecting numbers over 500 and those that have occurred earlier. Using the first thousand numbers from the table of random numbers (an excerpt from the table is given below), a sample of 50 out of 500 will thus be chosen. 231 055 148 389 117 433 495 367 070 313 092 259 113 455 126 426 062 401 100 488 434 325 211 207 398 225 485 035 171 047 318 263 239 108 379 420 122 441 493 310 032 194 144 337 224 006 068 043 500 222 Advantages Of Simple Random Sampling Method (1) Simplicity: Simple random sampling is simplest method of probability sampling and can be used for different types of surveys (2) Scientific: This method is scientific as there is equal opportunity to every unit for selection as sample (3) Truly representative character: The samples selected by this method are truly representative in character. (4) Quality results: Random sampling can be used effectively (for quality results) when the universe to be studied is small and can be listed accurately (e. g. motor car owners in a city)
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Limitations Of Simple Random Sampling Method (1) Difficult when the universe is very large: In simple random sampling, the whole list of universe is taken up for selection Obtaining the complete and up-to-date list of the universe is difficult It is difficult particularly when the universe is very large in number. (2) Costly: The cost for conducting survey by this sampling method is high as the samples are selected at random and it is obligatory to contact them and collect the information (3) May prove inefficient: This method may prove to be statistically inefficient and provide a larger standard of error than the other types of sampling designs (4) Administrative difficulties: Random sampling involves administrative difficulties as regards the selection of sample and follow-up measures for the collection of information (5) May not be fully represented: The sample selected may not be fully representative as the selection is from the whole population and not from the groups that constitute the population (2) STRATIFIED SAMPLING: In stratified sampling, the units included in the sample constitute roughly the same population in which they are present in the total population Stratified sampling is also called proportional random sampling. In this sampling, the population is first subdivided into certain mutually exclusive groups or strata Such groups may be formed on the basis of geographical area / size of the household or income After stratification, a random sample of a given size is selected from each stratum of the total population This is how an attempt is being made to make the sample more representative in character Here, each of the strata is represented in the sample in relation to its importance The following example will make this clear. Strata income per Population number month (Rs) of households (1) (2) 0-500 5,000 501-1000 4,000 1001-2000 3,000 2001-3000 2,000 3001 + 1,000 15,000 Sample (Proportionate) (3) 50 40 30 20 10 150 Sample (Disproportionate) (4) 75 20 20 25 10 150
In the above example, the population consists of 15,000 households, divided into five strata on the basis of monthly income. Column (3) of the table shows the sample, i.e., number of households selected from each stratum. The sample constitutes one per cent of the population. A sample of this type, where each stratum has a uniform sampling fraction, is called a proportionate stratified sampling. If, on the contrary, the strata have variable sampling fractions, the sample is called a disproportionate stratified sample. The figures given in column (4) of the above table show a disproportionate stratified sample. It will be seen that the sampling fraction varies from one stratum to another. Thus, for example, it is 0.015 for the monthly income Rs 0-500 and 0.01 for the stratum, Rs 3001+.
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It may he noted that a stratified random sample with a uniform sample fraction results in greater precision than a simple random sample. But, this is possible only when the selection within strata is made on a random basis. Further, a stratified proportionate sample is generally convenient on account of practical considerations, There are some other considerations in favor of the stratified random sample. The researcher may be interested in the results for separate strata rather than for the entire population. A simple random sample will not show results by strata as it presents only an aggregative picture. Another consideration is that it may be administratively expedient to split the population into strata. Yet another consideration is that one can use different procedures for selecting samples from various strata. If the data are more variable in any particular strata, a larger sampling fraction should be taken in that stratum. This would result in greater overall precision This method reduces the sampling error and it is a more accurate and representative sampling method Naturally, it is treated as an improvement over simple random sampling. It provides information about different components of the total population Use of stratified sampling also leads to administrative conveniences In order to use a stratified sample, some information regarding the population and its strata should be available to the researcher The process of stratified random sampling differs from simple random sampling In simple random sampling, sample items are chosen at random from the entire universe while in stratified random sampling, a separate random sample is chosen from each stratum Stratified random sampling is used in order to increase the precision of sampling estimates. (3) SYSTEMATIC RANDOM SAMPLING: In systematic random sampling method, the units of a population are first listed and the sample is selected as per a well-defined system. The sample is drawn by selecting every nth item is the sampling frame, "n" is determined on the basis of the desired size of the sample A number is drawn at random, usually a number between 1 and 10 is selected For example, we have 50,000 items in the universe and a sample size is decided as 5,000 items In our case 'n' is equal to 10 Naturally, we have to select every 10th item from the universe However, the first item is selected at random e.g. let us take 3. Such numbers are like 3, 13, 23, 33, 43, etc Advantages of Systematic Random Sampling (a) It is a simple and unbiased sampling method. (b) It ensures speedy selection of sample. (c) It is more efficient statistically than simple random sampling. (d) It ensures more representative sample. Disadvantages of Systematic Random Sampling (a) It is time consuming and costly. (b) It can go wrong if every sample is assumed to be similar (c) It can create more confusion if the selection of sample is reckless. (4) CLUSTER SAMPLING: In cluster sampling, individual units are not selected as sample but are grouped together and are selected group-wise for inclusion in the sample Thus, groups are selected on random basis as sample For example, the total universe will be divided into number of groups. Each group contains equal number of items. The sample will be selected in groups only. Similarly, if one
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family is selected as sample, the information will be collected from each member of the family. Such selection of sample in group form is called cluster sampling. For example, if a survey is to be undertaken in a city to collect data from individual households, then, selection of households from all over the city would involve a considerable amount of fieldwork and consequently, would cost more. Instead, a few localities are first chosen. Then, all the households in these localities are covered in the sample. Apart from reduction in cost, such a cluster sample would be desirable in the absence of a suitable sampling frame for the whole population. If, on the other hand, a sample of individual households from the entire city is to be chosen, it will be necessary to first undertake the listing of all households. In view of the nonavailability of a satisfactory sampling frame, in the case of cluster sampling, such a listing could be confined to only a few localities that are to be entirely covered in the sample. A few points regarding cluster sampling may be noted here. First, "whether or not a particular aggregate of units should be called a cluster" will depend on the circumstances of each case. In foregoing example, localities were taken as clusters and households as individual units. In another case, the households may be taken as a cluster and the members of the households as individual units. Second, it is not necessary that clusters should always be natural aggregates such as locality constituencies, schools or classes. Artificial clusters may be formed, as is generally done in area sampling where grids may be determined on the maps. Third, several levels of clusters may be used in any one sample design. Thus, in a city survey, localities or wards, streets and households may be selected in which case localities or wards are the clusters at the first level and streets at the second level and households would be the units. Cluster sampling method is less costly as the expenditure on traveling of interviewers is minimized. It is useful when the researcher desires to study the characteristics of certain individuals or items of identical nature. (5) AREA SAMPLING: Area sampling is a form of multi-stage sampling in which maps, rather than lists or registers, are used as the sampling frame. This method is more frequently used in those countries that do not have a satisfactory sampling frame such as population lists In area sampling, the overall area to be covered in a survey is divided into several smaller areas within which a random sample is selected Thus, for example, a city map can be used for area sampling Various blocks can be identified on the map and this can provide a suitable frame The entire city area can be divided into these blocks which are then numbered and from which a random sample is finally drawn In sampling the blocks, stratification and sampling with probability proportional to a measure of size are commonly employed. However, stratification in area sampling is based on geographical considerations Thus, when blocks are identified and numbered on the map, they can be grouped into some meaningful strata representing the different neighborhoods of the town. The point to emphasize is that these blocks must be identifiable without any difficulty On the basis of the blocks thus identified, numbered and assigned to strata, a stratified sample of dwellings can be selected This can be done in either of two ways First, a sample of dwellings may be drawn from all the dwellings included in a selected block Second, blocks may be divided into segments of a more or less equal size, and a sample of these segments can be chosen and finally
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all the dwellings from the selected segments may be taken in the sample It will thus be seen that the second method introduces another stage of sampling, namely, segments Although the above discussion relates to area sampling with respect to a city or town, the same approach is applicable to a large area, say, a state or a country, the only difference being that one or more additional stages of sampling may have to be introduced Finally, it may be pointed out that area sampling is perhaps the only possibility if a suitable sampling frame is not available (6) MULTI-STAGE SAMPLING Multi-stage sampling, as the name implies, involves the selection of units in more than one stage. In such a sampling, the population consists of a number of first stage units, called primary sampling units (PSUs). Each of these PSUs consists of a number of second-stage units. First, a sample is taken of the PSUs, and then a sample is taken of the second-stage units. This process continues until the selection of the final sampling units. It may be noted that at each stage of sampling, a sample can be selected with or without stratification. An illustration would make the concept of multi-stage sampling clear. Suppose a sample of 5000 urban households from all over the country is to be selected. In such a case, the first stage sample may involve the selection of districts. Suppose 25 districts out of say 500 districts are selected. The second stage may involve the selection of cities, say four from each district. Finally, 50 households from each selected city may be chosen. Thus, one would have a sample of 5000 urban households, arrived at in three stages. It is obvious that the final sampling unit is the household. In the absence of multi-stage sampling of this type, the process of the selection of 5000 urban households from all over the country would be extremely difficult. Besides, such a sample would be very thinly spread over the entire country and if personal interviews are to be conducted for collecting information, it would be an extremely costly affair. In view of these considerations a sampling from a widely spread population is generally based on multi-stage. The number of stages in a multi-stage sampling varies depending on convenience and the availability of suitable sampling frames at different stages. Often, one or more stages can be further included in order to reduce cost. Thus, in our earlier example, the final stage of sampling comprised 50 households from each of the four selected cities. Since this would involve the selection of households all over the city, it would turn out to be quite expensive and time consuming if personal interviews are to be conducted. In such a case, it may be advisable to select two wards or localities in each of the four selected cities and then to select 25 households from each of the 2 selected wards or localities. Thus, the cost of interviewing as also the time in carrying out the survey could be reduced considerably. It will be seen that an additional stage comprising wards or localities has been introduced here. Thus the sample has become a four-stage sample 1st stage districts 2nd stage cities 3rd stage localities 4th stage households
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From the preceding discussion it should be clear that a multi-stage sample results in the concentration of fieldwork. This in turn, leads to saving time, labor and money. There is another advantage in its use. Where a suitable sampling frame covering the entire population is not available, a multi-stage sample can be used. (7) MULTI-PHASE SAMPLING A multi phase sample should not be confused with a multi-stage sample The former involves a design where some information is collected from the entire sample and additional information is collected from only a part of the original sample Suppose a survey is undertaken to determine the nature and extent of health facilities available in a city and the general opinion of the people. In the first phase a general questionnaire can be sent out to ascertain who amongst the respondents had at one time or other used the hospital services. Then, in the second stage, a comprehensive questionnaire may be sent to only these respondents to ascertain what they feel about the medical facilities in the hospitals. This is a two-phase or double sampling. The main point of distinction between a multi-stage and a multi-phase sampling is that in the former each successive stage has a different unit of sample whereas in the latter the unit of sample remains unchanged though additional information is obtained from a sub-sample. The main advantage of a multi-phase sampling is that it effects economy in time, money and effort. In our earlier example, if a detailed questionnaire is sent out to a large sample comprising individuals, they would not be able to provide the necessary information. Second, more time will be required. Finally, it will be far more expensive to carry out the survey, especially when personal interviews are involved. (8) REPLICATED SAMPLING Replicated sampling implies a sample design in which "two or more sub-samples are drawn and processed completely independent of each other" It was first introduced by Mahalnobis" in 1936, who used the term inter-penetrating sub-samples. In replicated sampling, several random sub-samples are selected from the population instead of one full sample. All the sub-samples have the same design and each one of them is a selfcontained sample of the population. For example, take the case of a random sample of 10 households. This sample may be divided into, say, 10 equal sub-samples to be assigned to 10 interviewers. Thus, each interviewer may be required to collect information from 10 households. A replicated sample is particularly chosen on account of the convenience it affords in the calculation of standard error. In many complex sample designs, the calculation of standard error becomes too laborious. Selecting a replicated sample design can considerably reduce this difficulty. However, in modem times when computers are being increasingly used, the ease in calculating standard error has made it somewhat less important. Apart from this advantage, there are certain other advantages of replicated sampling. First, if the size of a sample is too large, it may be advisable to split it up into two or more sub-samples. One sub-sample may be used to get the advanced results of the survey. Second, replicated sampling can indicate the non-sampling errors. However, replicated sampling would not be helpful in undertaking a detailed investigation of bias as the numbers in the separate sub-samples tend to be small Further, such samples do not reveal
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any systematic errors that may be more or less common to all interviewers and the compensating errors which cancel each other out over an interviewer's assignment. Apart from the above limitations, replicated samples have other disadvantages If personal interviews are to be conducted, replicated samples turn out to be costlier Likewise, tabulation costs would be higher than in the case of a single large sample Finally, replicated samples are more complex to administer. (9) SEQUENTIAL SAMPLING In sequential sampling, a number of samples n1, n2, n3nx are randomly drawn from the population It is not at all necessary that each sample should be of the same size Generally, the first sample is the largest, the second is smaller than the first, the third is smaller than the second, and so on A sequential sampling is resorted mainly to bring down the cost and hence the smallest possible sample is used The desired statistics from first sample, ni, are computed and evaluated If these statistics do not satisfy the criteria laid down, a second sample is drawn The results of the first and second samples are added and the statistics are recomputed This process is continued until the specified criteria are satisfied The criteria are usually a minimum significance level, a minimum cluster size, or a minimum confidence interval The main advantage of sequential sampling is that it obviates the need for determining a fixed sample size before the commencement of the survey Suppose a firm is to decide whether a new product is to be introduced in the market or not It feels that if it is able to acquire 15 per cent market share in a country within a year, it should introduce the new product Further, it feels that if a market share of 10 per cent in a few test markets is achieved, it would be possible to acquire a 15 per cent market share in the country, say, within a period of six months Now, when the firm has undertaken test marketing, it actually achieved far more than 10 per cent, say, 20 per cent, of the market share and that too within three months of test marketing The firm may be sure to achieve the 15 per cent national market share within one year even though it may not be possible for it to accurately forecast the test market share at the end of four months
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(1) CONVENIENCE SAMPLING In convenience sampling, the convenience of the researcher is given importance while selecting the sample. The researcher as per his convenience decides inclusion of units in the sample. The items that are easily accessible or easily measurable are included in the sample. Specific plan/system/method is not used for the selection of items in sample. As a result bias is likely to enter into the sample selected. Interviewing respondents on the street or at the bus stop or at the railway station are the examples of convenience sampling. In this sense, convenience sampling is also called accidental sampling, as the respondents in the sample are included merely on account of their being available on the spot where the survey work is in progress. Convenience sampling is more suitable in exploratory research, where the focus is mainly on getting new ideas and insights into a given problem. Advantages of Convenience Sampling (a) It is profitably used in pre-testing of questionnaires (b) It keeps the researcher free of tension. (c) It allows the respondents to answer questions in leisure. Disadvantages of Convenience Sampling (a) Sampling could be non-representative of the population e.g., students living in college town may not represent sample of student community. (b) Problem of element of chance (c) It cannot rule out bias of respondents. (2) QUOTA SAMPLING Quota sampling is quite frequently used in marketing research. It involves the fixation of certain quotas, which are to be fulfilled by the interviewers Suppose in a certain territory we want to conduct a survey of households Their total number is 2,00,000 It is required that a sample of 1 per cent, i.e. 2000 households are to be covered We may fix certain controls which can be either independent or inter-related These controls are shown in the following tables A sample of 2000 households has been chosen, subject to the condition that 1200 of these should be from rural areas and 800 from the urban areas of the territory Likewise, of the 2000 households, the rich households should number 150, the middle class ones 650 and the remaining 1200 should be Independent Controls Rural Urban Total 1200 800 2000 Rural 100 400 700 1200 Rich Middle class Poor Total Inter-related Controls Urban 50 250 500 800 150 650 1200 2000 Total 150 650 1200 2000
Rich Middle class Poor Total
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from the poor class These are independent quota controls The second table shows the inter-related quota controls As can be seen, inter-related quota controls allow less freedom of selection of the units than that available in the case of independent controls There are certain advantages in both the schemes Independent controls are much simpler, especially from the viewpoint of interviewers They are also likely to be cheaper as interviewers may cover their quotas within a small geographical area In view of this, independent controls may affect the representativeness of the quota sampling Interrelated quota controls are more representative though such controls may involve more time and effort on the part of interviewers Also, they may be costlier than independent quota controls In view of the non-random element of quota sampling, it has been severely criticized especially by statisticians, who consider it theoretically weak and unsound There are points both in favor of and against quota sampling These are given below Advantages of quota sampling (a) It is economical as traveling costs can be reduced An interviewer need not travel all over a town to track down pre-selected respondents However, if numerous controls are employed in a quota sample, it will become more expensive though it will have less selection bias (b) It is administratively convenient The labor of selecting a random sample can be avoided by using quota sampling Also, the problem of non-contacts and call-backs can be dispensed with altogether (c) When the field work is to be done quickly, perhaps in order to minimize memory errors, quota sampling is most appropriate and feasible (d) It is independent of the existence of sampling frames Wherever a suitable sampling frame is not available, quota sampling is perhaps the only choice available Limitations of Quota sampling 1 Since quota sampling is not based on random selection, it is not possible to calculate estimates of standard errors for the sample results 2 It may not be possible to get a 'representative' sample within the quota as the selection depends entirely on the mood and convenience of the interviewers 3 Since too much latitude is given to the interviewers, the quality of work suffers if they are not competent 4 It may be extremely difficult to supervise the control and field investigation under quota sampling (3) JUDGEMENT SAMPLING The main characteristic of judgment sampling is that units or elements in the population are purposively selected It is because of this that judgment samples are also called purposive samples Since the process of selection is not based on the random method, a judgment sample is considered to be non-probability sampling Occasionally it may be desirable to use judgment sampling Thus, an expert may be asked to select a sample of 'representative' business firms The reliability of such a sample would depend upon the judgment of the expert The quota sample, discussed earlier, is in a way a judgment sample where the actual selection of units within the earlier fixed quota depends on the interviewer
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It may be noted that when a small sample of a few units is to be selected, a judgment sample may be more suitable as the errors of judgment are likely to be less than the random errors of a probability sample 16 However, when a large sample is to be selected, the element of bias in the selection could be quite large m the case of a judgment sample Further, it may be costlier than the random sampling (4) MASTER SAMPLES A master sample is one from which repeated sub-samples can be taken as and when required from the same area or population This was first used in the United States when the US Master sample of agriculture was taken In this sampling, the rural area of over 3000 US counties was divided into segments of about four farms each "After selecting a systematic sample of 1/8 of the segments, the materials were duplicated and made available, with instruction, at low cost" The crucial point to note in respect of master samples is that "the actual sample for each new survey is not selected directly from the entire population but from a frame of segments and dwellings that was selected earlier from the entire population " The utility of the samples is limited to a relatively short period for there may be changes in the population which would distort the representative character of the master samples In view of this, master samples should be relatively permanent, say, dwellings rather than individuals or household which frequently undergo changes on account of births, deaths and migration The main advantage of master samples is that they can be expeditiously selected on account of their simplicity Another advantage is that they are economical, because the same master frame is used for drawing samples for several surveys, as a result of which the cost incurred on the preparation of the master frame is spread over these surveys. Further, on account of this economy in each survey, one can initially spend more to create a good master frame. Thus, economy may lead to improved quality in the listing. (5) PANEL SAMPLES Panel samples are frequently used in marketing research. In panel samples, the same units or elements are measured on subsequent occasions. To give an example: Suppose that one is interested in knowing the change in the consumption pattern of households. A sample of households is drawn. These households are contacted to gather information on the pattern of consumption, subsequently, say after a period of six months, the same households are approached once again and the necessary information on their consumption is obtained. A comparison of the results of the two sets of data would indicate whether there has been any change, and, if so, to what extent. In fact, the information is collected on a more or less continuous basis with the help of panel samples. Panel samples are extremely convenient and economical and the cost of drawing a second sample is not incurred. But the main limitation of such samples is that it may be difficult to sustain the interest of individuals included in the panel for a long period. Many respondents on the panel may refuse to be interviewed twice or may give poor answers. In either case the quality of the survey will suffer. Another limiting factor in panel samples is that there may be bias on account of the continued participation in the panel. It is felt that the individual is conditioned to some extent by the fact that data on purchases are reported. In such a case the purchase behavior of panel members may become different from others not covered by the panel. Furthermore, panel samples may turn out to be more expensive while locating the same sample of respondents after a lapse of,
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say, a year, when some of them might have migrated to other areas. This would involve travel costs in addition to being difficult. CHARACTERISTICS OF A GOOD SAMPLE DESIGN Kish mentions that a good sample design requires the judicious balancing of four broad criteria goal orientation, measurability, practicality and economy. Goal orientation This suggests that a sample design "should be oriented to the research objectives, tailored to the survey design, and fitted to the survey conditions" If this is done, it should influence the choice of the population, the measurement as also the procedure of choosing a sample Measurability A sample design should enable the computation of valid estimates of its sampling variability Normally, this variability is expressed in the form of standard errors in surveys However, this is possible only in the case of probability sampling In non-probability samples, such as a quota sample, it is not possible to know the degree of precision of the survey results Practicality This implies that the sample design can be followed properly in the survey, as envisaged earlier It is necessary that complete, correct, practical and clear instructions should be given to the interviewer so that no mistakes are made in the selection of sampling units and the final selection in the field is not different from the original sample design Practicality also refers to simplicity of the design, i.e. it should be capable of being understood and followed in actual operation of the field work Economy Finally, economy implies that the objectives of the survey should be achieved with minimum cost and effort Survey objectives are generally spelt out in terms of precision, i.e. the inverse of the variance of survey estimates For a given degree of precision, the sample design should give the minimum cost Alternatively, for a given per unit cost, the sample design should achieve maximum precision (minimum variance) It may be pointed out that these four criteria come into conflict with each other in most of the cases, and the researcher should carefully balance the conflicting criteria so that he is able to select a really good sample design As there is no unique method or procedure by which one can select a good sample, one has to compare several sample designs that can be used in a survey This means that one has to weigh the pros and cons, the strong and weak points of various sample designs in respect of these four criteria, before selecting the best possible one METHODS OF DETERMINING SAMPLE SIZE There are six methods of determining sample size in market research 1. Unaided Judgment When no specific method is used to determine sample size it is called unaided judgment. Such approach when used to arrive at sample size gives no explicit considerations to either the likely precision of the sample results or the cost of obtaining them (characteristics in which client should have interest). It is an approach to be avoided 2. All-You-Can-Afford - In this method, a budget for the project is set by some (generally unspecified) process and after the estimated fixed costs of designing the project, preparing a questionnaire (if required), analyzing the data & preparing the report are deducted, the
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remainder of the budget is allocated to sampling Dividing this remaining amount by the estimated cost per sampling gives the sample size This method concentrates on the cost of the information and is not concerned about its value Although cost always has to be considered in any systematic approach to sample size determination, one also needs to give consideration to how much the information provided by the sample will be worth. This approach produces sample sizes that are larger than required as well as sizes that are smaller than optimal 3. Required Size Per Cell - This method of determining sample size can be housed on simple random, stratified random, purposive and quota samples For example, In a study of attitudes with respect to fast food establishments in a local marketing area it was decided that information was desired for two occupational groups and for each of the four age groups This resulted in 2x4 =-8 sample cells. A sample size of 30 was needed per cell for the types of statistical analyses that were to be conducted. The overall sample size was therefore 8 x 30 = 240. 4 Use of Bayesian Statistical Model - The Bayesian model involves finding the difference between the expected value of the information to be provided by the sample size and cost of sample. This difference is known as expected net gain from sampling (ENG) The sample size with the largest positive ENG is chosen. The procedure for finding the optimal value of n or the size of sample under this approach is as under: 1. Find the expected value of the sample information (EVSI) for every possible n 2. Also workout reasonably approximated cost of taking a sample of every possible n, 3. Compare the EVSI and the cost of the sample for every possible n. In other words, workout the expected net gain (ENG) for every possible n as stated below: For a given sample size (n): (EVSI) - (Cost of sample) = (ENG) 4. From above step the optimal sample size, that value of n, which maximizes the difference between the EVSI and the cost of the sample, can be determined The computation of EVSI for every possible n and then comparing the same with the respective cost is often a very cumbersome task and is generally feasible with mechanized or computer help. Hence, this approach although being theoretically optimal is rarely used in practice. 5. Use of Traditional Statistical Model - The formula for traditional statistical model depends upon the type of sample to be taken and it always incorporates three common variables an estimate of the variance in the population from which the sample is to be drawn the error from sampling that the researcher will allow the desired level of confidence that the actual sampling error will be within the allowable limits The statistical models for simple random sampling include estimation of means and estimation of proportion
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SAMPLING ERRORS Whatever kind of sample is taken and whatever the sample size there will always be error arising from the sampling process. The extent of such error may be defined as the difference between a sample result, and the result that would have been achieved by undertaking a complete census. Such errors arise because particular types of cases are under-represented or over-represented in the sample compared with the population as a whole. If, for example, the cases are individual consumers, then the under- or over- representation of the sexes, ages or social classes will affect the measurement (and, more importantly, the estimates made from them) of a large number of variables. Lack of representation in the appropriate quantities may be a product of two factors: systematic error (or bias) and random error (or variance). Systematic error Bias arises when the sampling procedures used bring about over- or under- representation of types of cases in the sample, which is mostly in the same direction. This may happen because: the selection procedures are not random, the selection is made from a list that does not cover the population, or uses a procedure that excludes certain groups, non-respondents are not a cross-section of the population. If the selection procedures are not random then it means that human judgement has entered into the selection process. For example, interviewers may be asked to choose respondents at some geographical location or to select households in specified streets. The result is likely to be that certain kinds of people or households or organizations are excluded from the sample. Thus choosing respondents in a shopping centre will miss out people who seldom or never go shopping; the selection of households by an interviewer may result in the omission of flats at the tops of stairs. If the Electoral Register is used to select adults aged 16 or over, then, as indicated earlier, 16 and 17 year-olds and many of the 18 year-olds will be missing from the list and will be underrepresented in the final sample. The use of telephone directories will under represent certain social groups less likely to be in the telephone book (or those who are ex-directory). Duplication in lists, for example in the Yellow Pages, may result in some over-representation. If we try to estimate sales of soap from a sample of private households, then all users in institutions of various kinds will be excluded. Non-response is a problem for both censuses and samples. For censuses it means that the enumeration will be incomplete. If large numbers are missing, it would be inappropriate to treat those successfully contacted as a representative sample'. For samples, it means that estimates made from the sample will he biased if non-respondents are not themselves representative of the population. If they are representative, then non-response is not so much of a problem; but it may still mean that analyses are made on the basis of too small a sample. Whatever the reason for the systematic error, the effect will be that all samples that could be drawn from a population will tend to result in the same direction of over- or under-representation. The average of all these samples will then not be the same as the real population average or proportion. Thus if we took lots of samples using a procedure that tended to omit working mothers with young children, then all the samples will manifest such under-representation rather than some over-representing them and some under-representing them so that the average of all samples was very close to the real population proportion. 117
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Systematic errors cannot be reduced simply by increasing the sample size. If certain kinds of people are not being selected, cannot be contacted or are not responding, it will not be 'solved' by taking a bigger sample. Indeed, some kinds of errors -will increase with more interviewers, more questionnaires and greater data-processing requirements. All the researcher can do is minimize the likelihood of bias by using appropriate sample designs. Biases for some variables can be checked, for example against Census data or data from other sources. Sometimes attempts are made to discover the characteristics of non-responders, for example by sending out interviewers to nonrespondents to a postal survey, taking 'late' responders as typical of non-responders, or gaining demographic data from the results of another survey that the non-responders have taken part in. Random error If we took a number of random, unbiased samples from the same population there will almost certainly be a degree of fluctuation from one sample to another. Over a large number of samples such errors will tend to cancel out, so that the average of such samples will be close to the real population value However, we usually take only one sample, and even a sample that has used unbiased selection procedures will seldom be exactly representative of the population from which it was drawn. Each sample will, in short, exhibit a degree of error. Such error is often called 'sampling error', 'hut it would he clearer to think of it as 'random sampling error' to distinguish it from bias (which some statisticians and some textbooks, confusingly, categorize as 'non-sampling' error). Unlike bias, which affects the general sample composition and relates to each variable being measured in unknown ways, random sampling error will differ from variable to variable. The reason for this is that the extent of such error will depend on two factors: the size of the sample - the bigger the sample, the less the random sampling error (but by a declining amount), the variability in the population for that particular variable - a sample used to estimate a variable that varies widely in the population will show more random sampling error than for a variable that does not. These two factors are used as a basis for calculating the likely degree of variability in a sample of a given size for a particular variable. This, in turn, is used as an input for establishing with a specified probability the range of accuracy of sample estimates, or that sample findings are only random sampling fluctuations from a population of cases in which the findings are untrue. NON-SAMPLING ERRORS Not all errors in a piece of research are a result of the sampling process Certain kinds of error may arise even if a complete census is taken. There are four main categories of such error: response errors, interviewer errors, non-response errors, processing errors. Where research is based on asking people questions then response errors may arise where, for one reason or another, respondents give wrong answers. This may be through dishonesty, forgetfulness, faulty memories. unwillingness or misunderstanding of the questions being asked. Many of these errors arise as a result of poor or inadequate questionnaire design putting it the
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other way round, the potential for such errors to arise can be minimized by careful design of question-wording, question formulation and questionnaire layout. In interview surveys, whether face-to-face or by telephone, interviewers may themselves misunderstand questions or the instructions for filling them in. they may be dishonest, inaccurate, make mistakes or ask questions in a non-standard fashion. Interviewer training, along with field supervision and control can, to a large extent, remove the likelihood of such errors, but they will never be entirely eliminated, and there is always the potential for systematic differences between the results obtained by different interviewers. In nearly all research there will be missing cases, but in survey research there will always be a degree of non-response because some people will refuse to he interviewed or to complete a questionnaire, some will be ineligible because they turn out not to be part of the survey population, some will terminate the interview or refuse to answer some of the questions, and some will be non-contactable, for example, because they have moved away, died, or are on holiday at the time of the survey. Even where a census is attempted, it will often remain incomplete. The extent of non-response will vary considerably according to the type of research, the topic of the research, and, where based on face-to-face interviews, on the experience and training of the interviewers. Calculating the amount of non-response can be confusing since some researchers will, for example, take the proportion of refusals in the sample drawn, others will take refusals and non-contacts as a proportion of those found eligible, and so on. Processing errors can arise back at the office, particularly at the stage of entering answers to questions onto a computerized database via a keyboard and screen. Agencies sometimes validate these entries by, in effect, entering them twice, and the computer checks to see if the two entries are identical. Alternatively, some agencies check samples of the entries. It is possible, in addition, to apply range checks and logical checks. There are, then, a number of sources of non-sampling error, and it is important to bear these in mind when interpreting survey results, whether based on a sample or not. The crucial point is that such errors can arise even if a census is taken. Total survey error Any research that is based on addressing questions to people and recording their answers risks error resulting from the respondents themselves and from interviewers where these are used in addition to those kinds of error that arise in any research from data handling, and from inadequacies of sampling. Total survey error is the addition of all these sources of error, both sampling and non-sampling It is difficult to estimate what the total survey error is in any one survey, and it will tend to vary from question to question. What is certainly true is that the error that results from random sampling fluctuations - which is the only kind of error that is taken into account when confidence intervals are calculated or tests are made against the null hypothesis accounts for only a very small proportion of the total survey error. Errors of various kinds can always be reduced by spending more money, for example, on more interviewer training and supervision, on random sampling techniques, on pilot testing or on getting a higher response rate. However, the reduction in error has to be traded off against the extra cost involved. Furthermore errors are often interrelated so that attempts to reduce one kind of error may actually increase another, for example, minimizing the non-response errors by persuading more reluctant respondents may well increase response error Non-sampling errors tend
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to be pervasive, not well-behaved and do not decrease - indeed may increase - with the size of the sample. It is sometimes even difficult to see whether they cause under- or over-estimation of population characteristics. There is, in addition, the paradox that the more efficient the sample design is in controlling random sampling fluctuations, the more important in proportion become bias and non-sampling error. CONTROLLING NON-SAMPLING ERRORS In practice, market research agencies make all reasonable attempts, within the limits imposed by cost and time constraints, to minimize or at least measure the impact or make some estimate of non-sampling errors and of bias in the sampling procedure. Thus, as far as response errors are concerned, agencies may: pilot-test questionnaires in order to check for misunderstandings of questions, analyse tendencies to overclaim or underclaim for certain kinds of consumer behaviour, for example, the tendency to underclaim the consumption of alcohol, or to overclaim television watching, use aided-recall techniques (prompted lists) to help respondents remember products that they may have purchased and forgotten about, or radio programs that they forgot they had listened to, use questioning techniques that minimize the effort respondents need to make. To minimize interviewer error, agencies will often: set rigorous training standards for interviewers, monitor the process of interviewing by doing 'back checks' - calling or telephoning respondents who have already been interviewed to check that the interview was carried out properly, or sending supervisors to accompany interviewers on a regular sample basis, computer analyses may be made of questionnaire errors to identify' interviewers who may need retraining or reminding of particular points. To minimize errors resulting from non-response, agencies do one or more- of several things: for interview surveys interviewers may be asked to make a specified number of callbacks if the respondent was not at home on the first call Three or four such callbacks may be made, ideally at different times and days of the week interviewers may make an appointment by telephone with the respondent. self-completing questionnaires may be left where no contact has been made monetary incentives or gifts may sometimes help to improve the response rate, interviewers may get a 'foot-in-the-door' by having respondents comply with some small request before presenting them with the larger survey, non-respondents to a postal survey may be sent interviewers to persuade respondents to complete the questionnaire, or they may be sent further reminders. Processing errors will be minimized by careful editing and checking of the questionnaires in addition to the use of data entry validation procedures. Market research agencies will try to minimize bias by using carefully constructed sample designs that use random procedures wherever possible, or by imposing restrictions on interviewer choices where it is not. These sample designs were described earlier. Biases will still remain, however, and sometimes these are known. Thus it may be known that there are too many women in the
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sample, or too few men aged 20-24, compared with known population proportions. Many agencies will make corrections to the data to adjust for these biases by 'weighting' them. In the real world of market research agencies and their clients it is unfortunately true that many clients do not understand or lack interest in the basics of sampling. In consequence many clients do not ask for estimates of bias or calculations of random sampling error. At the same time the agencies feel that to produce calculations, for example of confidence intervals for a large number of variables will only add confusion and perhaps distrust of the data. In consequence, sampling errors are often quietly ignored, and the estimates given are taken to be the 'truth'. Agencies will instead try to assure their clients that the occurrence and impact of non-sampling errors have been minimized by: demonstrating that the procedures for the collection, analysis and reporting of the results are 'respectable', meticulous and thorough, showing that the research design features are such as to minimize sources of error within the parameters set by time and cost, emphasizing the extent of quality control checks that will uncover, correct and minimize the occurrence of 'mistakes', making corrections to the resulting data so that known biases are adjusted for. Beyond these assurances, clients are sometimes given some indication of the extent of random sampling error that remains. Clients may be given 'read-off tables for groups of products or types of variable, based on the 'average' variability for that group or type, given a particular sample size. Important Sampling Distributions Some important sampling distributions, which are commonly used, are: 1. Sampling distribution of mean: Sampling distribution of mean refers to the probability distribution of all the possible means of random samples of a given size that we take from a population. If samples are taken from a normal population, N ( , ), the sampling distribution of mean would also be normal with mean x = and standard deviation = / n , where is the mean of the population, is the standard deviation of the population and n means the number of items in a sample. But when samplings from a population which is not normal (may be positively or negatively skewed), even then, as per the central limit theorem, the sampling distribution of mean tends quite closer to the normal distribution, provided the number of sample items is large i.e., more than 30. In case we want 'o reduce the sampling distribution of mean to unit normal distribution i.e., N (0, 1), we can & x write the normal variate z = for the sampling distribution of mean. This characteristic of v/ n the sampling distribution of mean is very useful in several decision situations for accepting or rejection of hypotheses. (2) Sampling distribution of proportion: Like sampling distribution of mean, we can as well have a sampling distribution of proportion. This happens in case of statistics of attributes. Assume that we have worked out the proportion of defective parts in large number of samples, each with say 100 items, that have been taken from an infinite population and plot a probability distribution of the said proportions, we obtain what is known as the sampling distribution of proportion. Usually the statistics of attributes correspond to the conditions of a binomial distribution that tends to become normal distribution as n becomes larger and larger. If p represents the proportion of defectives i.e., of successes and q the proportion of non-defectives
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i.e., of failures (or q == 1 p) and if p is treated as a random variable, then the sampling pq distribution of proportion of successes has a mean = p with standard deviation = n where n is the sample size. Presuming the binomial distribution approximating the normal distribution for large n, the normal variate of the sampling distribution of proportion px - p z = p q where px is the sample proportion of successes, can be used for testing of n hypotheses. 3. Student's t-distribution: When population standard deviation ( ) is not known and the sample is of a small size (i.e., n 30), we use t distribution for the sampling distribution of mean and workout t variable as: n X- m t= 1 ( X i - X )2 s s where i.e., the sample standard deviation, t-distribution is also i= n- 1 n symmetrical and is very close to the distribution of standard normal variate, z, except for small values of n. The variable t differs from z in the sense that we use sample standard deviation ( s) in the calculation of t, whereas we use standard deviation of population ( ,) in the calculation of z. There is a different t distribution for every possible sample size i.e., for different degrees of freedom. The degrees of freedom for a sample of size n is n - 1. As the sample size gets larger, the shape of the t distribution becomes approximately equal to the normal distribution. In fact for sample sizes of more than 30, the t distribution is so close to the normal distribution that we can use the normal to approximate the t-distribution. But when n is small, the t-distribution is far from normal but when n , t-distribution is identical with normal distribution. The t-distribution tables are available which give the values of t for different degrees of freedom at various levels of significance. The table value of t for given degrees of freedom at a certain level of significance is compared with the calculated value of t from the sample data, and if the latter exceeds, we infer that the null hypothesis cannot be accepted. 4. F distribution: If ( s1)2 and ( s2)2 are the variances of two independent samples of size n1 and n2 respectively taken from two independent normal populations, having the same variance, 2 2 2 ( s n1) = ( s n2 ) , the ratio F= ( s1)2 /( s2)2, where ( s s1) 2 = ( X 1i - X 1) and n1 - 1 2 2 ( X 2i - X 2) has an F distribution with n1 1 and n2 1 degrees of s s 2) = ( n2 - 1 freedom. F ratio is computed in a way that the larger variance is always in the numerator. Tables have been prepared for F distribution that give value of F for various values of degrees of freedom for larger as well as smaller variances. The calculated value of F from the sample data is compared with the corresponding table value of F and if the former exceeds the latter, then we infer that the null hypothesis of the variances being equal cannot be accepted. 5. Chi-square ( 2) distribution: Chi-square distribution is encountered when we deal with collections of values that involve adding up squares. Variances of samples require us to add a collection of squared quantities and thus have distributions that are related to chi-square distribution. If we take each one of a collection of sample variances, divide them by the known population variance and multiply these quotients by (n 1), where n means the number of
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items in the sample, we shall obtain a chi-square distribution. Thus,
( ) ( n - 1)
2 ss
s2 p
would have
the same distribution as chi-square distribution with (n - 1) degrees of freedom. Chi-square distribution tat not symmetrical and all the values arc positive. One must know the degrees of freedom for using chi-square distribution. This distribution may also be used for judging the significance of difference between observed and expected frequencies and also as a test of goodness of fit. The generalized shape of 2 distribution depends upon the degree of freedom and the 2 value is worked out as under: g =
2 k
( Oi - Ei )
Ei
i=1
Tables are there that give the value of 2 for given degree of freedom which may be used with calculated value of 2 for relevant degree of freedom at a desired level of significance for testing hypotheses.
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Prof. Hemant Kombrabail MARKETING INFORMATION SYSTEM (MIS)
MEANING OF MARKETING INFORMATION SYSTEM (MIS) Companies in India and across the world have been forced recognize and acknowledge - the rising power of customers (across all classes) and the emerging new generation of competitors. This rise in customer power has gained prominence especially in the post-liberalization scenario, which is triggered by the extensive deregulation and the general import duty reduction, leading to cutthroat competition. Given this scenario, it is no wonder that firms are faced with the task of building up a database of customers (existing and potential), enhance their product/service offerings continuously, understand their customers' perceptions of its product and services vis - a - vis that of their competitors and also to innovate (product and service mix) regularly so as to be able to set them apart from the rest of the pack. This is no easy job because data may be available in plenty but it has to be sorted and resorted so to ensure that this data reaches the people who need the information for decision-making. Thus has begun the age of information explosion with marketing decision makers and also the other managers having learned that they need certain kinds of information during regular intervals of time in order to deal with recurring decisions. Marketing information system (MIS) is of recent origin and supports marketing decision-making and marketing planning. It facilitates quick marketing decision-making and thereby raises marketing excellence. However, MIS is not a substitute for, but an aid to rational decisionmaking. Even after collecting all required information, the decisions are to be made by marketing executives. Information is those cues that make managerial decisions scientific. In brief, MIS is an essential support system for developing marketing decisions, plans and strategies. Marketing information includes all facts, estimates, opinions and other data used in marketing decision-making. A lot of information is generated regularly from within the organization and also from external sources. Such information can be collected purposefully for planning business activities and for decision-making. Information is useful to top and middle level management for planning and control of marketing activities. The marketing manager takes marketing decisions in the light of the information supplied through MIS. He is like a pilot on the flight desk controlling aircraft as per the information available through instrument panels. Such information system provides updated and varied type of information in an uninterrupted manner to a business organization. In fact, information is the glue that holds organization together. Every organization needs efficient MIS to effectively manage the information collected. In business organizations, marketing information managers are appointed and are responsible for creation and dissemination of marketing information throughout the organization. The meaning of MIS can be made clear with the help of a simple example of a pilot of an aircraft. When a pilot is at the controls of his aircraft, he is constantly monitoring its (aircraft's) performance in relation to air speed/ light and altitude, engine revolutions so that the, flight can continue safely towards a destination. The task of piloting the plane centers on his receiving information through the instrument panels on his flight deck. He takes decisions and sees that the plane moves towards the destination quickly and safely. In many ways managing business or marketing activity is like piloting an aircraft. In order to achieve marketing objective, correct decisions must be taken and correct decision-making is possible only when reliable, up-to-date
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and adequate information is made available regularly and promptly. This suggests the meaning and significance (importance) of MIS. It may also be noted that information has no value until managers use the information collected to make better marketing decisions. For this the information gathered through MIS/marketing intelligence/ marketing research should be distributed promptly to the right marketing managers at the right time. Developments in information technology have brought a revolution in information distribution. In many companies, marketing managers have direct access to the information network at any time and from virtually any location. This is due to advances in computers, software and telecommunication. For the purpose of decision-making, marketers generally require three types of information Information for the Purpose of Control: In order to ensure effective control, marketers are interested in having access to weekly sales reports (on sales territories, product-wise etc.), salesexpense ratios, warehouse inventory reports, etc. Such information will enable the marketer to know what is happening, what has happened in the past or what changes may be required to be taken in the future. Information for Planning Purpose: This will include economic and sales forecasts, understanding demographic profiles, estimating social and political shifts Information for an ad-hoc Study: This could be information being sought for one-time decisions or study like - whether a proposed new product is to be introduced? What sort of an advertisement should for used for a national campaign and so on. The latter two types of information involve research. If the reports are not fed into the formal information system and is basically in the possession of the person who was originally seeking the information, then this may lead to another problem, i.e. another group or department may be seeking this type of information but in the absence of a formal filing of the research report, may be unaware that such a study has already been conducted. This reiterates the fact that an effective Marketing Information System must be such that it is able to identify, manage and disperse all the above-mentioned three types of information. Moreover, the information systems will also have an impact on the location and methods of Marketing Research. It is to be noted that the Marketing Information System is spoken to be as the same u& Management Information System. This is because the systems are quite similar with the only distinction that the former system applies to a system dedicated to the marketing branch of management, while the latter refers to the whole spectrum of management. As mentioned earlier MIS can also be termed as an extension of the scope of Marketing Research. A more limited meaning of a MIS is that of a computerized network which stores and supplies management information. This means that the co-ordinated efforts of MIS and Marketing Research will enable the management to take better decisions by supplying data and analytical operation facilities to the Marketing Research and thereby relieving the latter from routine data and reports.
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(1) "A set of procedures and methods for the regular and planned collection, analysis and presentation of information in making marketing decisions. Cox and Good (2) "A continuing and interacting structure of people, equipment and procedures to gather, sort, analyze, evaluate, and distribute pertinent, timely and accurate information for use by marketing decision-makers to improve their marketing planning, execution, and control. Philip Kotler (3) "Marketing information system (MIS) is an ongoing, organized set of procedures and methods design to generate, analyze, disseminate, store, and retrieve information for use in making marketing decisions." William Stanton (4) "Marketing information system (MIS) consists of people and/or equipment organized to provide for the continuous, orderly collection and exchange of information both internal and external needed in a firms decision making activities." George Kress FUNCTIONS OF MARKETING INFORMATION SYSTEM: (1) Assembling of information or relevant marketing data through internal and external sources Such data act as raw material of MIS (2) Processing of information viz. editing, tabulating and summarizing the data collected for the purpose of ready reference and critical analysis In short/ MIS decides the information needs of the organization and generate and process such information on a continuing basis (3) Analyzing the data collected which is essential for drawing conclusions for decisionmaking (4) Storing of data collected viz. filing and indexing of information collected so that it can be made available for use when required (5) Evaluating the data viz. finding out accuracy and reliability of the data collected (6) Disseminating relevant information to decision-makers - Marketing Managers (7) Updating the information collected periodically by discarding outdated data and incorporating new data available (8) Introducing updated information technology in the collection / processing and storing of the information collected CHARACTERISTICS OF MIS: (1) Continuously operated process: Information is a skilled human accomplishment MIS is a consciously developed technique for the flow of information to the company. It operates continuously. Regular inflow of information acts as a feedback in decision-making. It is an ongoing process as new information is added to the old one in a continuous manner. The information supplied by the MIS should be relevant and pertinent. (2) Operates with speed and accuracy. Electronically operated data processing technique can be used to collect and process new information. Computers are now used for raising the efficiency of MIS. This brings speed and accuracy in the MIS and indirectly in the decisionmaking process. (3) Needs cooperation of departments and executives: Close cooperation and understanding among functional departments, executives and specialists (computer expert programmer and system analyst) are essential for purposeful collection and utilization of the market information. Information collection is important but its actual use in the decision-
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making process is more important. For this, cooperation of departments and executives is essential. (4) Facilitates prompt and correct decision-making: MIS provides updated information on various aspects of marketing to managers/ executives. As a result, managers are aware of new marketing developments taking place. They are also in a position to take prompt decisions from time to time due to the feedback provided by MIS. It acts as a data bank for the benefit of marketing managers. MIS stands between the marketing environment and marketing decision maker. Marketing data flow from the environment to the MIS. The data is processed and converted into marketing information flow, which goes to the marketer for decisionmaking. (5) Future-oriented: MIS provides information about possible future problems and their solutions through appropriate marketing decisions. It acts as a preventive mechanism in marketing management and offers guidance to marketing executives. (6) Provides continuous information on marketing developments: MIS collects and provides information on marketing to concerned executives. It goes to right people at the right time. In other words, it provides right information at the right time to right people for decision-making. As a result, decision-making process becomes reasonably accurate and quick. MIS usually provides three types of information to marketing managers. The information could be recurrent (information supplied on a periodic basis), monitoring (information obtained from regular scanning of certain sources) and requested (information sought by a marketing manager (7) Acts as a link between external environment and internal resources: It provides updated information about external marketing situation and facilitates suitable adjustment in the internal resources to face the overall situation effectively. (8) Operates in a systematic manner: MIS operates in a rational and systematic manner. This is necessary for quick reference to required information. Proper system in the collection and storing of information is necessary as varied type of information is now easily available. Such information needs to be stored after due classification, etc. In brief, MIS needs wellprepared operational system for raising its utility and efficiency. (9) Uses modern technologies: Revolutionary changes are taking place in information technology. New techniques and machines are available for collection, processing and storage of information. Required information is made available to marketing executives promptly. MIS is now becoming costly and also needs the services of technically qualified staff (software experts). MIS is now based on advanced technology. It is a computer-based method of data collection, processing and storage. Due to the use of computers updated information is provided to executives easily and quickly. OBJECTIVES OF MARKETING INFORMATION SYSTEM Marketing information system is a scientific method of collecting information, arranging them in order and reporting to suit and feed the organization with information. 1. To gather data and information needed by the organization 2. To supply and maintain the flow of information periodically and continuously. 3. To provide pertinent and relevant data needed by the executives. Hence Marketing Information System must provide: 1. Desired Information to the Executives: This is possible only by assessing the actual needs of the executive. Analysis of each executive's decision-making responsibilities should clarify his or her marketing information requirements; thereby identifying the information outputs that the marketing information system should provide him or her. The composite of the marketing
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information requirements for entire organization thus identifies the variety and nature of specific information output that the marketing information system should provide.' 2. Supply Needed Information: It is not dumping information that is not needed or irrelevant. It is to supply needed information 'Each executive wants complete and accurate information received on a timely basis yet not provided (routinely) in overwhelmingly and confusingly large quantities. It is ironic that while organizations generate increasingly massive volumes of data, many executives continue to voice complaints that available information is too incomplete and not sufficiently relevant or timely to use as a basis for marketing decisions. The marketing information system should have the built-in capability of extracting from the data bank timely items of information relevant for each executive's use in decision-making. FACTORS JUSTIFYING THE NEED OF MARKETING INFORMATION SYSTEM: The following points justify the need as well as importance of MIS: 1. Need of correct decision-making: MIS is needed for correct decision-making by marketing managers. They understand current market situation with the help of such information. If the information is reliable, the manager can take the final decision quickly and with confidence. Decisions relating to products, prices, sales promotion measures, channels of distribution, etc. can be taken by collecting and using the marketing information in a purposeful manner. This is natural as correct view of total marketing environment is possible only through accurate MIS. 2. Need of promptness in decision-making: In the present aggressive marketing system, quick marketing decisions are necessary. Time factor is important in decision-making and all decisions must be taken quickly as delayed decisions are costly and troublesome to a firm. Delayed decisions means not taking the benefit of promising marketing opportunities. Support of reliable and updated information is essential for such quick decision-making. MIS provides regular feedback, which is a must for decision-making in the present ever-changing business environment. A marketing manager can now collect required information while working at a home office, in a hotel room or an airplane with the use of a laptop computer and phone. He can obtain information from company databases or from outside information services. He can analyze the information with the help of statistical packages and models; draw conclusions and communicate decisions through electronic communications. 3. Growth of consumerism and growing consumer expectations: Consumerism is a growing force in modern marketing. Consumers are now conscious and oppose their exploitation. Their resistance is always harmful to marketing companies. It is, therefore, necessary to study their expectations. For this, MIS is needed. In addition, needs and expectations of consumers require careful consideration in marketing planning and decisionmaking. Information about the needs and grievances of consumers is available through MIS. 4. Complex nature of marketing system: Marketing system has become complex due to market competition, availability of substitutes, government controls and growth of consumerism. Long term planning and correct decision-making are required to face the challenges of current marketing environment. For this, accurate information about complex marketing environment is required. This is possible through MIS. 5. Growing market competition: Marketing is, now/ highly competitive with different varieties of products. Competition may be due to price, quality and sales promotion techniques. A marketing manager needs accurate and updated information about market
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competition and policies of competitors. It is through MIS that information regarding market competition can be collected, analyzed and used while taking marketing decisions. 6. Information explosion: There is information explosion in the business world due to the use of new techniques of information collection and dissemination. A firm may not require all information available from different sources. It is necessary to find out precisely the information needs of the enterprise and sources that can supply such information. Accordingly, MIS should be organized. 7. Rapid developments in information technology: Fast changes are taking place in the field of information technology. Computers, internet, e-commerce, fax, e-mail and other instruments are used extensively for managing huge information easily, quickly and economically. A business firm needs efficient MIS in order to use latest information in marketing management. In short, information serves as the lifeblood of modem marketing management. Lower level management needs operational information for taking operational decisions while top-level management needs strategic information for taking strategic policy decisions. There is a flood of information (information explosion) knocking at the door of the management and management has to use such information for its survival, stability and growth. Marketing executives need market information (feedback) for correct decisionmaking. Even marketing activities are now becoming complex and broader in scope. These activities can be conducted in an orderly manner with the support of good MIS. In brief, MIS is needed for dealing with new marketing problems and challenges effectively. DESIGNING MARKETING INFORMATION SYSTEM MIS involves collection, processing, storing, evaluating and supplying information to marketing mangers for decision-making. A firm needs suitable organizational structure for managing MIS. Every business unit has to design its own MIS as per its needs - present and future. Attention should be given to the following aspects/points while designing MIS: (1) Identify precisely the information needs: The firm has to find out its information needs i.e. the type of information that it requires for taking marketing decisions. There is information revolution in the business world. However, all information is not useful to all enterprises. It is necessary to identify the information needs so as to collect, arrange and store the required information properly. (2) Identify the sources of required information: The required information for the enterprise can be collected from different internal and external sources. The sources that can supply required information easily and economically are to be identified for actual use in the information collection process. (3) Estimate the expenditure required on MIS: In this stage, the firm has to estimate the cost of collecting and processing the required information. There should be cost-benefit analysis of MIS. It is a non-productive service activity. Expenditure is required in order to collect, arrange, process and store the required information. Such expenditure should be minimum as far as possible. At the same time, required information should be collected and made available for decision-making. (4) Collection of information: After deciding the information required and its sources, the next step is to collect the information from the sources selected. For this, suitable department with necessary facilities, infrastructure and expert staff should be established. The department has to collect and store the information systematically in computers, files, etc. This will enable the MIS department to supply information to other departments when required.
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(5) Processing of information: The next step is data processing in which data are arranged properly for quick analysis by departments. The updating of data is also necessary in order to supply latest information to concerned departments. This facilitates reasonably accurate decision-making by departments. (6) Creation of information/data bank: With the completion of the steps noted above, there will be an information bank within the organization. It will have information required by all departments. The information will be properly processed, arranged and stored for ready reference. MIS department will maintain effective communication with all other departments so that information will be supplied to them quickly as per their need for decision-making. PRECAUTIONS IN USING MIS 1. The firm should not put too much emphasis only on a computerized information system and lose sight of the importance of human processors. 2. Efforts should be made to ensure the quality of data and not accept all computer output as gospel because there is an old adage which goes as - "garbage in -garbage out". 3. Specific care be exercised that computer outputs should not be voluminous so as to discourage use by marketing decision makers. 4. The Marketing Information should be flexible enough to be adjusted according to the specific use by decision makers and serve all levels of management. 5. When newly establishing and developing a Marketing Information System rather than making it very sophisticated at the outset itself, it will help if improvising is done by stages. 6. Executives and managers wanting Marketing Information should be properly trained and also communicate the type of information being sought. SOURCES OF MARKETING INFORMATION SYSTEM: In MIS, information is collected, arranged, stored and made available to departments and managers for decision-making. Information is the base of MIS. Such information is collected from different sources, which include internal and external. Internal Sources of Information: (1) Old statistical records of the company. (2) Sales invoices and sales statistics (3) Sales-force reports (4) Sales Analysis (5) Production statistics (6) Profit and Loss statements (7) Operating Ratios (a) Gross Margin ratios (b) Expense Ratios (c) Net Profit Ratios (8) Departmental budgets and reports (9) Old research reports and surveys (10) Periodical progress reports (11) Directors' reports and committee reports.
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External Sources of Information: (1) (2) (3) (4) (5) (6) (7) (8) (9) Trade journals and periodicals Business press i.e. Economic Times, Financial Express, etc Census reports and other government publications on business, finance, marketing, exports, etc. Publications of trade associations, chambers of commerce and other agencies concerned with finance, trade, commerce and industry Publications of RBI/ financial institutions, term lending institutions and government departments Publications and survey reports of IMF, World Bank, WTO, FAO/ etc. Published survey reports and statistical data Special reports, surveys etc. conducted by marketing research agencies, magazines, advertising agencies etc. Publications of stock exchanges, commodity exchanges and export promotion councils
(10) Daily press, reports and information. (11) Marketing Research (12) Syndicated services ADVANTAGES / BENEFITS OF MIS (1) Provides updated and timely information for decision-making: MIS provides information about various aspects of marketing. Information acts as a feedback and facilitates correct decision-making by marketing managers. Likely problems are solved at the initial stage through suitable preventive measures. Thus, MIS facilitates effective decision making by marketing executives. It acts as the lifeblood of modern marketing management. (2) Facilitates monitoring of marketing operations: Data on different aspects of marketing can be collected and stored through MIS. This facilitates easy and effective monitoring of the performance of products, markets, sales-force and so on. Thus, continuous monitoring of marketing operations is possible through MIS. (3) Raises efficiency of decision-making: Integrated and updated marketing information may not be available easily and quickly in large companies with many departments. However, separate arrangement can be made for collection, evaluation and storage of such information on sound principles through efficient MIS. Thus/! MIS is beneficial as it raises the efficiency of decision-making process in marketing. (4) Facilitates quick reference: Easy and quick reference to old information is possible due to MIS. Computers are now used for easy accessibility of MIS. Quick reference to old information is possible due to modem computer techniques. Thus, the use of computers facilitates easy reference to old records and this raises the utility of MIS. (5) Provides information on changing marketing environment: MIS provides regular information to marketers about changing marketing environment much before it actually takes
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place. Managers can forecast the future trends with the scrutiny of updated information. This enables managers to prepare marketing plans and strategies for the future period. (6) Promotes marketing excellence: MIS leads to marketing excellence. It is rightly said that to manage a business well is to manage its future and to manage the future is to manage information. Marketing decisions will be prompt and reasonably accurate when they are based on dependable information. Thus/ MIS gives the benefit in the form of marketing excellence. (7) Facilitates tapping of marketing opportunities: MIS facilitates tapping of promising marketing opportunities and effective defense against marketing problems and threats likely to develop in the near future. Both benefits bring stability and prosperity to business. (8) Provides market intelligence: MIS acts as marketing intelligence wing of a marketing firm. It provides information about new marketing trends likely to develop in future. Such trends may be related to price trends, consumer expectations, extent of market competition, new products likely to enter the market and so on. This information is useful for long term marketing planning. The advantages (noted above) suggest the importance of MIS. No marketing organization can function effectively without the support of appropriate information system. The information system should cover every aspect of marketing - the consumer, the market, the competition and the environment. The marketing excellence of a firm has a direct ^ relationship with the MIS operated by it. Marketing excellence is the net result of correct marketing decisions and correct decisions are possible only when updated and reliable information is supplied promptly by the information system created within the organization. This briefly suggests the importance of MIS in business/marketing management. COMPONENTS OF MARKETING INFORMATION SYSTEM: The components of MIS are as noted and explained below: (1) Internal marketing information. (2) Marketing intelligence. (3) Marketing research. (4) Market information analysis. (1) Internal Marketing Information: This component of MIS provides information from within the organization itself i.e., through the accounting system on sales, inventories, cost, cash flows, accounts receivable etc. and old records. Data on sales, turnover, costs, cash flows, accounts receivable and payable, etc. provide information required for marketing decision making. All such records are available within the firm and hence these sources are rightly called internal sources of marketing information. Reference to any old information is possible quickly if the available information is already stored systematically through computer techniques. Marketing managers use this internal source fully as the information is available easily and quickly. Even current marketing information is easily available. For easy availability of internal information, filing and record keeping system must be efficient. (2) Marketing Intelligence: The second component of MIS is the marketing intelligence. This component provides information on external marketing environment. Here, information is collected from external sources. This component of MIS provides information regarding current marketing environment and changing conditions in the market. Such information is easily available through census data, weekly and monthly reports on markets and market news published
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in magazines and trade journals, commercial press, reports of trade associations and chambers of commerce, annual reports of companies and so on. Even reports of salesmen are useful to study current market trend. Professional market research agencies publish information on various aspects of marketing and market trends. Information available from these sources may not be useful in the present form. It is necessary to evaluate and arrange the information in a proper order. This enables the marketing executives to draw conclusions and frame marketing policies accordingly. Market intelligence acts as a mirror of marketing environment and facilitates appropriate decision-making on marketing. (3) Marketing Research: Marketing research is one more component of MIS. In this component, specific marketing problem of the firm is selected for investigation. Data regarding the problem are collected, tabulated, analyzed and conclusions are drawn. In addition, suitable policy measures are recommended in order to solve the problem. Marketing research as a component of MIS provides information but such information is specific and useful for one specific purpose. MR and MIS are closely related functions. Both provide updated information for decision-making by marketing executives. However, MIS and MR are not substitutes of each other. (4) Market Information Analysis: Information gathered by the company's marketing intelligence and marketing research systems often requires more detailed analysis. Sometimes, managers may require more help to use the information to their marketing problems. This help may include advanced statistical analysis. With support from market information analysis managers can make better marketing mix decisions, design sales territories and sales-call plans, select site for retail outlets and forecast new product sales. ROLE OF MIS IN MODERN BUSINESS: (1) Essential supplement of business management: The role of MIS in the overall business management is universally accepted. It is an essential supplement of business management. It performs various functions and offers useful services and this proves its constructive role in the modern business management. (2) Helps in decision-making: Reliable information about all aspects of business is available through MIS. This suggests that MIS plays an important role in planning and decisionmaking. (3) Provides feedback: MIS provides feedback and this suggests its supportive role in business management. Managers at all levels need information. They analyze information, draw conclusions and take reasonably correct decisions. This suggests crucial role of MIS in the management of business. (4) Provides accurate and timely information: It is rightly observed that modern business cannot function efficiently, if the information system at its disposal fails to provide accurate and timely information. This suggests the importance of information network, which serves as a key resource in business management. (5) Provides information on business environment: Business activities are to be adjusted as per the changes in the business environment. MIS provides information about changes in the environmental factors and enables managers to take appropriate decision to adjust business activities as per the need. This is how MIS plays a supportive role in decision-making and follow-up measures in business management.
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Marian Harper Jr. has rightly suggested the importance of MIS. According to him "To manage a business well is to manage its future, and to manage future is to manage information". Thus, information management (collection, processing, tabulation, storage and easy reference) is an integral aspect of total business management. Policies, plans and decisions for .the future period can be designed accurately with the help of MIS. This suggests the role of information system in modern business. Correct understanding of total marketing environment is necessary for success, progress and prosperity of business. This is possible through MIS. Business can be made competitive as well as consumer-oriented by using the available market information in an intelligent manner. In brief, information serves as the life & blood of modern business. MIS plays a positive role in modern dynamic, competitive and global business. ESSENTIAL REQUIREMENTS OF A GOOD MARKETING INFORMATION SYSTEM (1) MIS should be Unified and Centralized: Trn1 MIS introduced should be managed as a single entity even when the information collected and stored may be varied one. There may be different information components in every MIS but the components should be integrated for reference purpose. It should operate as one unit. The MIS of the firm should be at the central office. The chief of MIS must operate as the consultant, coordinator and controller of all information components of the MIS. The operating departments of the firm should be free to use the information but the information management should be centralized. (2) MIS should be a Decision Support System: MIS is expected to play an important role in making marketing management more efficient accurate and result-oriented. It should offer guidance to marketing managers in the decision-making process. The MIS should act as decision support system. For this, information should be supplied quickly and the information supplied should be up-to-date. The MIS should help the marketing manager in the selection of right policy for the benefit of the whole organization. The MIS should not act merely as a data bank. It should accept more positive role and participate in the decision-making process in a meaningful manner. (3) MIS should be Quick and Accurate: The MIS should be user-oriented and also quick. The information flow should be done accurately and also with speed. This is necessary as there is information flood in the field of business world. In addition, information should be made available quickly to managers. Information must move with speed as information supplied late to the department is not useful in the decision making process. Even marketing opportunities are lost. This clearly suggests that MIS should be accurate and should move/operate with speed within the organization. (4) MIS should be Economical: MIS should be economical as far as possible. This means the expenditure on running the system should be minimum as the system is not directly productive. It is a service and supporting function. For such economy in the MIS/ the principle of selectivity should be introduced in the collection/ processing, storing and supplying information system. The cost of MIS should not exceed its value. The expenditure of MIS should be minimum as far as possible. However, cost reduction should not be at the cost of quality and reliability of information. (5) MIS should be Selective: MIS should collect information that is absolutely essential and useful in decision-making process. MIS should not be viewed as a mere courier service department. It should sort out the information that is really useful to the firm. This is essential when there is information flood due to the use of electronic media of communication. Thus information needs of the organization should be assessed and the MIS should operate accordingly. This avoids wastage of time and money.
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(6) MIS should be compatible with the Culture of the Firm: MIS should be adjusted with the culture and level of sophistication attained by the business organization. The MIS required by a large firm would be different as compared to one required in a small firm even when both have to maintain their own MIS. The MIS should be intelligible to the people who have to use the system frequently. After all. MIS is a means and not the end in self. In brief, the management should set up a MIS that will cater to the needs of an organization and also offer operational convenience. (7) MIS should provide updated Information: It is necessary to use new techniques for speed and accuracy in the MIS. Computers, microfilms, etc. should be used for raising the efficiency of MIS. Communication technology is making rapid progress in recent years. It is desirable to improve the MIS by using the latest available techniques. Such updating of MIS is useful for future marketing planning and also for quick, correct and relevant marketing decisions. Thus, in-built updating arrangement should be incorporated in a good MIS. (8) MIS should be Flexible: The MIS introduced in an organization should be elastic or adjustable. It should not be rigid. When the system is flexible, new changes can be incorporated easily, quickly and smoothly. Moreover, modern techniques can be introduced for raising the efficiency and accuracy of the system. In brief, flexibility is one essential requisite of a good MIS. (9) MIS should use New Techniques: Along with information explosion, information technology is also making rapid progress. New machines, methods and techniques are being introduced in the collection, processing and storage of information. New techniques bring speed, updating and accuracy in the MIS. Managers can use the MIS to the fullest extent only when the latest techniques such as computer technology and internet service are used in MIS itself. (10) MIS should be Future-oriented: The MIS should be forward looking. It should be future oriented. It should consider the future information needs of the firm and adjust/readjust its management accordingly. The decisions are to be taken for the future period. For this, the MIS should be future oriented and not the past oriented. A SIMPLE MODEL OF MIS Person needing Information Statistical Models
MIS Facilitator Database Analytic System
Marketing Mix Models
Computerized Search Capabilities
Internal Data Invoice data Sales data Inventory data Payroll data
External Data Government data 135 Commercial data
Adhoc Research
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The model is inclusive of a facilitator, a database along with analytic software and the capability to incorporate both continuous (internal and external) as well as one time or ad-hoc data apart from providing computerized information searches. "MIS facilitator" is the person(s) or the equipment through which the desired information can be obtained. This could be a microcomputer or personal computer or a librarian located in the decision makers office. The "database" refers to the actual database accessible through the MIS. This will be inclusive of the usual or routine internal data of the firm as well as the external data regularly flowing into the firm. The database is also able to provide computerized searches through both government agencies as well as commercial firms. The "analytic system" refers to the general software packages that can be used to adjust or supplement to the basic data. These may comprise of statistical tools like the regression and analysis of variance models and also marketing mix models. The latter could involve procedures for separating sales data into different criteria based on the requirement of different decision makers such as sales - customerwise / territorywise / productwise etc. The MIS should be able to acknowledge the existence as well as locate where or in which departments / units of the firm have made use of ad-hoc studies. A very important element in a MIS is that the system must allow for the timely disbursement of the desired information to the decision makers. The "database" refers to the actual database accessible through the MIS. This will be inclusive of the usual or routine internal data of the firm as well as the external data regularly flowing into the firm. The database is also able to provide computerized searches through both government agencies as well as commercial firms. The "analytic system" refers to the general software packages that can be used to adjust or supplement to the basic data. These may comprise of statistical tools like the regression and analysis of variance models and also marketing mix models. The latter could involve procedures for separating sales data into different criteria based on the requirement of different decision makers such as sales - customerwise / territorywise / productwise etc. The MIS should be able to acknowledge the existence as well as locate where or in which departments / units of the firm have made use of ad-hoc studies. A very important element in a MIS is that the system must allow for the timely disbursement of the desired information to the decision makers.
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RELATIONSHIP BETWEEN MIS AND MR: Marketing information system is closely connected with marketing research. In fact, it is one of the sub-systems included within the scope of MIS. Thus, marketing research is one component of MIS. MR conducts studies on specific marketing problems and reports its findings to marketing management. Such studies are undertaken by qualified persons within the company or by an outside agency. Marketing ' research offers information and guidance to marketing managers while dealing with specific marketing problems and difficulties. Marketing research needs detailed information from different internal sources, which can be used easily and conveniently through the MIS. Problems relating to consumer behavior, product or brand preferences, advertising awareness, sales promotion, etc. can be studied with the help of information available through MIS. In brief, MIS provides data required for different marketing research projects. The basic objectives of MIS and MR are identical. Both offer information to marketing executives and enable them to take quick and correct marketing decisions. Both are interrelated. Large-scale manufacturing/marketing companies maintain up-to-date MIS and also maintain independent marketing research department. In addition, both supply ready reference regarding marketing activities and facilitate correct decision-making in the marketing field. MR and MIS are closely related functions. The basic purpose of both is to collect relevant information in order to facilitate marketing ^decisions quickly and correctly. Both these functions offer guidance to marketing managers in the conduct of their marketing activities. However, MR generates information but MIS concentrates on the storage and flow of information to marketing managers for decision-making. Both the functions are interrelated as both the functions aim at making marketing decisions more effective. In this sense, it is said that MIS is a computer-based extension of MR. MR is one vital component of MIS. It provides properly processed information on a specific marketing problem and guides the marketing manager in finalizing plan to deal with such problem. The information supplied by the MIS is of a general nature and needs to be analyzed properly for drawing conclusions and for using the information for taking decisions regarding marketing activities. This purpose is achieved through MR. Similarly, both functions are treated as important functions for promoting sales, for promoting consumer satisfaction and finally for effective planning and decision-making in the field of marketing. Thus MIS and MR are closely interrelated and complementary concepts. MR is some sort of marketing information system without any responsibility of decision-making. MR and MIS are supporting functions as both deal with the management of information. In addition, they offer guidance to marketing managers in the conduct of their marketing activities. Along with this, there are some basic points, which indicate the difference between MR and MIS. For example, the job of MIS is to supply marketing information whereas MR is concerned with problem analysis. MR uses marketing information but its purpose is problem solving through appropriate marketing decisions. These points of difference between MR and MIS are as noted below:
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Dimension Meaning
Marketing Research (MR) MR is "the systematic gathering, recording and analyzing of data relating to the marketing of goods and services". MR is a narrow concept as MR is one of the components of MIS MR provides precise and properly analyzed information regarding a specific marketing problem with a view to solving that problem The purpose of M.R. is to study a specific marketing problem in depth and to solve it quickly and also in a satisfactory manner MR collects information relating to specific marketing problem under investigation MR is conducted on problem by problem or project by project basis with each project having a starting and ending point It is a non-computer based system. However, computers may be used while tabulating data or while analyzing the information collected. MR is more past-oriented Every company may or may not maintain MR department In M.R. data collection is not continuous but only as per the research projects undertaken. In MR external sources such as surveys and census reports are used for data collection
Nature of concept Information provided Purpose
Coverage
Operational method Use of computer
Type of orientation Organizational structure Frequency of data collection Sources of data used
Marketing Information System (MIS) MIS is "a set of procedures and methods used for the regular and planned analysis and presentation of information for marketing decision making" MIS is a broad concept. Its purpose is to collect information on all aspects of business MIS provides information on various aspects of marketing in order to frame marketing policies and marketing decisions. The purpose of MIS is to provide relevant and reliable information to all departments and facilitate quick and reasonably correct decisionmaking MIS collects information on various aspects of marketing such as products, consumer needs, market competition and sales MIS is a continuous system and information is collected, analyzed used and also stored in a regular and continuous manner. MIS is a computer based process as computer technology is extensively used while collecting, analyzing and storing the information collected MIS is more future-oriented Companies must always make arrangements for the collection and storage of information through MIS In MIS data are collected regularly on different marketing aspects in which the firm interested. In MIS external as well as internal sources (past records, documents, etc.) are used for data collection.
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MARKETING DECISION SUPPORT SYSTEM The introduction of computers has facilitated the setting up of MDSS (Marketing Decision Support System). Such system comprises of collection, storage, analysis and reporting of marketing data. The difference between MIS and MDSS is that whereas the former is centralized, the latter is decentralized and allows marketing managers to interact directly with the database. The systems are generally computerized with one or more models built in. CHARACTERISTICS OF A GOOD MDSS A good MDSS should have the following characteristics 1.Interactive. The process of interaction with the MDSS should be simple and direct. With just a few commands the user should be able to obtain the results immediately. There should be no need for a programmer in between. 2. Flexible. A good MDSS should be flexible. It should be able to present the available data in either discrete or aggregate form. It should satisfy the information needs of the managers in different hierarchical levels and functions. 3. Discovery oriented, The MDSS should not only assist managers in solving the existing problems but should also help them to probe for trends and ask new questions. The managers should be able to discover new patterns and be able to act on them using the MDSS. 4. User friendly. The MDSS should be user friendly. It should be easy for the managers to learn and use the system. It should not take hours just to figure out what is going on. Most MDSS packages ere menu driven and are easy to operate. MDSS has the following components: (a) Database (data sources, data management) (b) Display (c) Statistical analysis (d) Modeling.
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ATTITUDE MEASUREMENT
MEANING OF ATTITUDE Attitude means "settled behaviour indicating opinion." Attitude is a subjective and personal matter. Opinion of a person is the verbal expression of attitude. Attitude is also readiness to response. Many researchers admit that attitude involves some acceptance or rejection of an issue or subject matter under study. When an individual responds to a social or business issue, it indicates an attempt to provide evaluation, which may be in favour or against.
DEFINITION OF ATTITUDE
Attitude has been defined by Gene F. Summers as a predisposition to respond to an idea or object. In marketing, this refers to the consumers predisposition about the product or . If it is favorable, then the consumer is likely to purchase the product or service Attitudes about products or services are composed of three elements Beliefs such as the products strength or the economy of the product or service Emotional feelings such as likes or dislikes Readiness to respond to the product or service i.e. to buy it These three elements combine together to form an image of the product or service in the mind of the consumer. When the car manufacturer, the movie producer or the insurance company refers to the company's image, they are referring to some genera! averages of many individuals attitudes towards the company MEANING OF MEASUREMENT Measurement is "the assignment of numbers to characteristics of objects, persons, states or events, according to rules." What is measured is not the object, person, state or event but some characteristic of it. People are not measured, only their age, height, weight, etc. are measured. The term number given in the definition of measurement are used as symbols to represent certain characteristics of the object and it does not mean addition, subtraction, division or multiplication. One important aspect of measurement is the creation of the rules. These rules specify how the numbers are to be assigned to the characteristics to be measured e.g., "Bata increased its market share by three percentage points during the last year" is understood by those who know the measurement rule that is being applied. Those who are not familiar with the rule will not understand what has been measured. The market share can be based on units sold or sales turnover in rupees or any other rules. Measurement in physical sciences like physics, chemistry and biology is easy because they have physical reality to measure. Behavioural scientists like marketing researchers cannot see or feel attitudes, perceptions, brand loyalty etc. Hence they must attach numbers in the measurement process. A chemist can exactly know the chemical content in an antibiotic capsule whereas the market researcher can only obtain a good measure of intention to purchase.
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PROCESS OF MEASUREMENT (1) Determine the constructs of interest: Constructs refer to constructions. Constructs do not have tangible reality e.g. we cannot see consumer satisfaction but we can indirectly observe it asking a series of questions. Other constructs are: brand loyalty, heavy users, competition etc. (2) Establish the constructs areas: A construct must identify its conceptual boundaries e.g., marketing orientation identifies and satisfies customer needs. It concentrates on the means by which an organisation can achieve its goals while satisfying those needs. (3) Setting operational definitions: An operational definition indicates what observable attributes of the construct will be measured and the process that will be used to attach numbers to those attributes. An example of operational definitions in a bank can be constructed as: customer satisfaction, operational efficiency, marketing information systems, marketing efforts etc. (4) Collect data to test measures: At this stage data is collected from the target population. Collecting relevant and dependable data will ensure that the researcher is on the right track with operational measures. (5) Retain relevant data: Having collected the data the researcher has to decide which data to keep and which one to reject. It is a relative exercise. Data thus retained will be of use only now. If any delay is caused, data can become obsolete. (6) Establish validity of data: An important exercise for the researcher would be to determine validity of data. Marketing research is a financial proposition. In order to succeed in correctly measuring attitude it is important that the data are valid and reliable. (7) Prepare research report: When the researcher has successfully developed measures that are reliable and valid, he is now ready to prepare research report which will help to achieve the objectives of research study. The researcher has to check cause and effect relationship, test hypothesis, answer research questions and describe the extent to which a population behaves in a specific manner. In this way the research report will highlight the results of the research. ATTITUDE MEASUREMENT Attitude measurement is also commonly referred to as scaling. The measurement techniques can be divided into 1. Non-Disguised, Non-Structured Techniques 2. Non-Disguised, Structured Techniques 3. Disguised, Non-Structured Techniques 4. Disguised, Structured Techniques
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The following diagram will illustrate the different methods and techniques of measuring attitude Attitude Measurement
Non-Disguised, Non-Structured Techniques Focused Group Discussion
Non-Disguised, Structured Techniques Nominal Scale Ordinal Scale Interval Scale Ratio Scale Constant Sum Scale Thurstone Scale Likert Scale Semantic Differential Scale Multidimensional Scale
Disguised, Structured Techniques
Disguised, Non-Structured Techniques Word Association Story Completion Sentence Completion Thematic Appreciation Tests Cartoon / Bubble Method Third Person Techniques Fantasy Scenario Personification
Depth Interview
Minigroups
Role-playing
NON-DISGUISED, NON-STRUCTURED TECHNIQUES The essence of these methods is that the purpose of the interview is not a secret and that there is no fixed structure for conducting the interview. Qualitative Research 142
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The most common method of obtaining information about the behavior, attitudes and other characteristics of people is to ask them. However it is not always possible or desirable to use direct questioning to obtain information. People may be either unwilling or unable to give answers to questions they consider to be an invasion of their privacy, that adversely affect their self-perception or prestige, that are embarrassing that concern motivations that they do not fully understand or cannot verbalize, or for other reasons. Therefore additional approaches to obtaining such information may be necessary, Marketing researchers frequently use depth interviews, Focused Group Interviews, Mini-group Interviews and Projective techniques when direct questioning is impractical, more costly, or less accurate. These techniques generally referred to as Qualitative research. A. Depth interviews Individual depth interviews typically require 30-45 minutes. The interviewer does not have a specific set of pre-specified questions that must be asked according to the order imposed by a questionnaire. Instead, there is freedom to create questions, to probe those responses that appear relevant and generally to try to develop the best set of data in any way practical. However the interviewer must follow one rule; one must not consciously try to affect the content of the answers given by the respondents. The respondent. The respondent must feel free to reply to the various questions, probes, and other, subtler, ways of encouraging responses in the manner deemed most appropriate. Subject of interest is discussed in detail. There is no fixed pattern for eliciting information from the respondents. Generally conducted by highly trained interviewers. They must be thorough in probing the respondents. The interviewee is asked about the subject of his choice, coffee, for example. and an attempt is made to explore the respondents' attitudes in depth by probing extensively into any other areas which may come up. Interviewers have a general series of topics that they will introduce - perhaps such topics as coffee or sleep, and will introduce them from time to time if the respondent does not bring them up. Tone of the interview is permissive and the respondent's allowed to talk as much as he likes. The interviewer must not influence the answers of the respondent. The interpretation of the answers is very subjective and knowledge of human behavior is required to analyze the information received. Individual depth interviews uses three questioning techniques namely: 1. Laddering involves having respondents identify attributes that distinguish brands by asking questions. Each distinguishing attribute is then probed to determine why it is important or meaningful. These reasons are then probed to determine why it is important, and so forth. The purpose is to uncover the network of meanings associated with the product, brand, or concept. 2. Hidden-issue questioning focuses on individual respondents feelings about sensitive issues. Analysis on focus on common underlying themes across respondents. These themes can then be used to guide advertising development 3. Symbolic questioning requires respondents to describe the opposites of the product / activity of interest or a specific attribute of the product / activity.
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Individual depth interviews have been found to generate more and higher quality ideas on a per respondent basis than either focus or mini-groups. They are particularly appropriate when: 1. Detailed probes of an individual's behavior, attitude or needs is required; 2. The subject matter under discussion is likely to be of a highly confidential nature (e. g. personal investment) 3. The subject matter is of an emotionally charged or embarrassing nature 4. Certain strong, socially acceptable norms exist (e.g. baby feeding) and the need to conform in a group discussion may influence responses 5. Where highly detailed understanding of complicated behavior or decision-making pattern (e.g. planning the family holiday) are required or the interviews are with professional people or with people on the subject of their jobs (e.g. finance directors) B. Focus group discussions (F.G.Ds) The standard focus group interview in the United States involves 8 and 12 individuals and lasts about 2 hours. Normally each group is designed to reflect the characteristics of a particular market segment. The respondents are selected according to the relevant sampling plan and meet at a central location that generally has facility for taping and/or filming the interviews. In Europe, focus groups tend to consist of 6 to 8 respondents, vary in length from 1.5 to 4 hours and are often conducted in the home of the recruiter. Otherwise the interviews are similar. The discussion itself is led by a moderator. The moderator attempts to progress through three stages during the interview {1) Establish rapport with the group, structure the rules of group interaction, and set objectives (2) Provoke intense discussion in the relevant areas (3) Summarize the groups responses to determine the extent of agreement. In general either the moderator or a second person prepares a summary of each session after analyzing the session's transcript Focus Group Interviews can be applied to: 1. Basic- need studies for product idea creation, 2. New product idea or concept exploration, 3. Product positioning studies. 4. Advertising and communications research. 5. Background studies on consumer's frames or reference, 6. Establishment of consumer vocabulary as a preliminary step in questionnaire development 7. Determination of attitudes and behavior Advantages 1. Each individual is able to expand and refine their opinions in the interaction with the other members. This process provides more detailed and accurate information than could be derived from each separately. 2. A group interview situation is generally more exciting and offers more stimulation to the participants than the standard depth interviews 3. The security of being in a crowd encourages some members to speak out when they otherwise would not. 4. As the questions raised by the moderator are addressed to the entire group rather than an individual the answer contains a degree of spontaneity that is not produced by other techniques. 5. Focus groups can be used successfully with children over five. They are also very useful with adults in developing countries where literacy rates are low and survey research is difficult.
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6. A final major advantage of focus groups is that executives often observe the interview (from behind mirrors) or watch films of the interview. Disadvantages 1. Since focus group interviews last 1.5 to 3 hours and take place at a central location, securing cooperation from a random sample is difficult. 2. Those who attend group interviews and actively participate in them are likely to be different in many respects from those who do not. 3. There are chances that participants may go along with the popular opinion (group think) instead of expressing their own which may be contrary to the popular opinions 4. The presence of a one-way mirror and / or an observer has been found to distort participant's responses. 5. The moderator can introduce serious biases in the interview by shifting topics too rapidly verbally or nonverbally encouraging certain answers, failing to cover specific areas and so forth 6. Focus groups are expensive on a per respondent basis. C. Mini-groups Mini-groups consist of a moderator and 4 - 5 respondents rather than the 8 to 12 used in most focus groups. They are used when the issue being investigated requires more extensive probing than is possible in a larger group. Mini-groups do not allow the collection of a confidential or highly sensitive data as might be possible in an individual depth interview. However, they do allow the researcher to obtain substantially depth of response on the topics that are covered. Further the intimacy of the small group often allows discussion of quite sensitive issues. The advantages and disadvantages of mini-groups are similar to those of standard focus groups, but on a smaller scale In principle these interviews are the same as the previous ones, excepting that they are conducted in groups rather than for individuals This method is therefore less expensive and less time consuming than the depth interviews This method is advantageous because it gives excellent leads to consumer attitudes that no other method can give Another advantage of this method is that each respondent receives stimulation for responding from his / her group members and so the interviewer need not prompt the interviewee to answer The disadvantage here is that one or two members could dominate in the group and others might not get a chance to answer This would again make it an individual effort
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DISGUISED, NON-STRUCTURED TECHNIQUES The essence of these methods is that the interviewee either does not know that his attitude is being studied or does not know for which company the survey is being done or sometimes he does not know both. It involves using various vague stimuli to which the respondent is asked to respond In doing so, it is believed that the respondent reveals several elements of his / her attitude that he would not have revealed in the face of direct questions. These tests are not difficult to administer because they are like games played with the respondents Generally, respondents seem to enjoy the exercise Projective Techniques Projective technique is based on the theory that the description of vague objects requires interpretation and this can only be based on the individuals own background, attitudes, and values The more vague or ambiguous the object to be described the more one must reveal of oneself in order to complete the description The following general categories of projective techniques are described - association, completion, construction and expression I. Word Association Techniques Association techniques require the subject to respond to the presentation of a stimulus with the first things that come to mind. The word association technique requires the respondent to give the first word or thought that comes to mind after researcher presents a word or phrase. In free association only the first word or thought is required. In successive word association, the respondent is asked to give a series of words or thoughts that occur after hearing a given word The respondent is generally read a number of relatively neutral terms to establish the technique Then the words of interest to the researcher are presented, each separated by several neutral terms The order of presentation of the key words is randomized to prevent any position or order bias from affecting the results The most common approach to analyzing the resulting data is to analyze the frequency with a particular word or category of words given in the response to the word of interest to the researcher. Word association techniques are used in testing potential brand names and occasionally for measuring attitudes about particular products, product attributes, brands, packages or advertisements. o One of the oldest and simplest projection techniques o Respondents are presented with a number or different words. one at a time. After each word. they are asked to give the first word that comes to mind. o The assumption here is that through free words, the respondents will indicate their inner feelings about the subject o Responses are timed (the time limit is usually 5 seconds) so that those responses that respondents "reason out are identified and taken into account in the analysis. o The usual way of constructing such a tests is to choose many stimulating and neutral words. The words are read out to the respondent one at a time, and the interviewer essentially records the "first word" association by the respondent. o Respondents should not be asked to write their responses because then the interviewer will not know if the responses were spontaneous or whether the respondent took time to think out the responses.
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o An example of such a test is: the word oatmeal. The first response is "athletes". This means that the respondent feels that the product is more suited for sportspersons. More words on the same topic will reveal more about the respondent's attitude about the product o While analyzing the results of words-association tests, responses are arranged along such lines as favorableunfavorable and "pleasant-unpleasant". II. Completion Techniques This technique requires the respondent to complete an incomplete stimulus. Two types of completion are of interest to marketing researchers- sentence completion and story completion. A. Sentence Completion as the name implies, requires the respondent to complete a sentence In most sentence completion tests the respondents are asked to complete the sentence with a phrase. Generally they are told to use the first thought that comes to their mind or "anything that makes sense". Because the individual is not required directly to associate himself or herself with the answer conscious or subconscious defenses are more likely to be relaxed and allow a more revealing answer.

The respondent is given a number of incomplete sentences and asked to complete them. The rule here too, is that respondent must fill in the first thought that comes to mind. Responses are timed. Here the interviewer gets more information than the word association technique. However, it is difficult to disguise the motive of the study from the respondent who is usually able to diagnose the investigators purpose of study For example A man who reads Sportstar is ____________ The sentence can be worded in first or third person. No evidence suggests that one of these approaches could be better than the other.
B. Story Completion is an expanded form of sentence completion. As the name suggests part of a story is told and the respondent is asked to complete it. Respondents are given a half completed story. This is enough to draw their attention to a particular issue, but the ending is left vague, so that responses can be varied. This technique is very versatile and has numerous applications to marketing problems. The findings about products/services give companies inputs to determine advertising and promotional themes and product characteristics III. Construction Techniques This technique requires the respondent to produce or construct something, generally a story, dialogue, or description They are similar to completion techniques except that less or no initial structure is provided. A. Cartoon Technique Here cartoons of one or more people, in a particular situation, are provided to the respondents. One or more of the characters in the cartoon are shown with a sentence in bubble form above their heads and one of the others is shown with a blank bubble that the respondent is to fill in. (Instead of having the bubble show replies or comments, it can be drawn to indicate the unspoken thoughts of one or more of the characters) This device allows the respondent to avoid any restraints that might be felt against having even a .cartoon character speak as opposed to think certain thoughts
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B. Third Person Techniques This allows the respondent to project attitudes onto some vague third person This third person is generally an average women;" a neighbor, the guys where you work", most doctors or the like Thus instead of asking the respondent why he or she did something or what he or she thinks about something the researcher asks what friends, neighbors or the average person thinks about the issue C. Thematic Appreciation Test Another useful construction technique, involves using pictures to elicit stories. These pictures are usually relatively vague so that the respondent must use his or her imagination to describe what is occurring in the situation. Here the respondent is shown about 20-30 ambiguous pictures and he is asked to spin stones about them. The interviewer may ask questions to help the respondent to think For example "what is happening here? makes the answer focused towards an action Or which one is the aggressor makes the respondent think about the picture as one of aggression The reason that respondents must be asked such prompting questions is that the pictures are very abstract and general and as such are open to very broad and irreverent interpretations So some amount of focus is needed to channel respondents thinking. Each subject in the picture is a medium through which the respondent projects his/her feelings, ideas, emotions and attitudes The respondent attributes these feelings to the characters because he sees in the picture something related to himself. Responses differ widely and analysis depends upon the ambiguity of the picture, the extent to which the respondent is able to guess the conclusions and the vagueness of the support questions asked by the interviewer D. Fantasy Scenario It requires the respondent to make up a fantasy about the products or brands E. Personification The respondent is asked to create a personality for the brands or the products IV. Expressive Techniques Role-playing is the only expressive technique utilized to any extent by marketing researchers. In role-playing the consumer is asked to assume the role or behavior of an object or another person, such as a sales representative for a particular department store. The role-playing customer can then be asked to try to sell a given product to a number of different consumers who raise varied objections The means by which the role player attempts to overcome the objections can reveal a great deal about his or her attitudes. Another version of the technique involves studying the roleplayers attitude on the typee of people who should shop in the store in question. Limitations As projective techniques generally require personal interviews with highly trained interviewers and interpreters to evaluate the responses, they tend to be very expensive. Small sample sizes can increase the probability of substantial sampling error. The reliance on small samples often has been accompanied by non-profitability selection procedures. Some of the projective techniques require the respondents to engage in behavior that may well be strange to them; this is particularly true for techniques such as role-plays. Thus there is reason enough to believe that there might be an error in the findings. Measurement is also a serious issue with respect to projective techniques. The possibility of interpreter bias is obvious.
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Benfits They can uncover information not available through direct questioning or observation. They are particularly useful in the exploratory stages of research They can generate hypotheses for further testing and provide attribute lists and terms for more structured techniques such as the semantic differential. The results of projective techniques can be used directly for decision- making DISGUISED, STRUCTURED TECHNIQUES The basic premise underlying such tests is that the respondents will reveal their attitudes by the extent to which their answers to the objective questions vary from the correct answers. Respondents are given questions that they are unable to correctly. Thus, they are forced to guess the answers. The direction and extent of these guessing errors is assumed to reveal their attitudes on the subject. Individuals tend to gather information that supports their supports their attitudes and therefore the kind and extent of information individuals possess on a given subject indicate something of their attitude. e.g. Do cornflakes cost more or less per bowl than cereals? Or How much do you think it costs for hot cereal alone in an bowl of cereal served for breakfast? NON-DISGUISED, STRUCTUREDTECHNIQUES (SCALING TECHNIQUES / SCALES OF MEASUREMENT) The non-structured techniques for attitude studies are primarily of value in exploratory studies where the researcher is looking for the salient attributes of given products and the important factors surrounding purchase decisions as seen by the consumer. Structured techniques can provide a more objective measurement system, one that is more compatible to a scale or yardstick. The term scaling has been applied to the efforts to measure attitudes objectively. Measurement consists of assigning numbers to characteristics of objects or events so as to reflect some aspect of reality. The objective should be to assign numbers so that the properties of the numbers are the same as the properties of the objects or events that we are measuring. This implies we have different kinds of numbers e.g., in a class a student may be identified by his roll number, which is different from his score on the final examination and this is different from his final rank in the class. Common scales of measurement are: (1) Nominal Scale Under nominal scale there is no numerical sanctity. Numbers are used only as labels e.g., if we want to categorize male and female respondents, nominal scale can be used as 1 for male and 2 for female. Alternatively, females can be labeled as 1 and males as 2 and it would be a valid nominal scale. Other variables that are covered by nominal scale are: religion, languages (written and spoken), education, user/non-user category, reading habits, brand preference etc. It is important to mention that variables needing statistical computations like mean and standard deviation cannot be done through nominal scale.
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(2) Ordinal Scale They are the simplest and most widely used attitude measuring scales in marketing research They serve to rank respondents/ responses according to some characteristic viz. age of students or favorability to a brand They do not measure the degree of favorability of different rankings. All the scale tells is that the individual has more , less or same amount of characteristic being measured. A set of data is said to be ordinal if the values / observations belonging to it can be ranked (put in order) to have a rating attached. You can count and order but not measure ordinal data. The categories for an ordinal set of data have a natural order. Suppose a group of people were asked to taste varieties of biscuits and classify them on a rating scale of 1 to 5 where 1 would correspond to strongly dislike and 5 would be strongly like. A rating 3 indicates more enjoyment than 2. Such data is ordinal. However the distinction between neighboring points on the scale is not necessarily the same. For instance, the difference in enjoyment expressed by giving a rating of 2 rather than 1 may be much less than the difference in enjoyment expressed by giving a rating of 4 rather than 3. Ordinal scale is ranking scale. It possesses the characteristics of numerical scale and also indicates the order e.g., there are five executives who are to be ranked as per their annual income such as.
If the executive with the highest income is given No. 1 and the next to it as No. 2 and so on, the following order will be determined
The above example is numerical that dealt with the annual income of executives. Ordinal scale can also be used to find out attributes of a certain product e.g., coffee. Respondents can be asked questions on attributes like color, flavor, aroma, appearance etc. on a five-point scale:
By asking respondents about their level of acceptability, it is possible to give ranks. Individual rankings can be combined in order to get collective ranking of the group.
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(3) Interval Scale Interval scale is also known as ratio-scaled data. This method can be used to compute the commonly used statistical measures such as arithmetic mean, standard deviation and Pearson correlation coefficient. The attitude of respondents is measured on a scale of 1 to 5 or 1 to 7 or 1 to 10. For example, when a consumer is asked about brand preference on a scale of 1 to 7, it is called interval scale. It is possible to compute average rating given by all the respondents and also standard deviation. They separate individuals or items by rank order but measure the distance between rank positions in equal units. Such a scale permits the researcher to say that the position 4 is above position 3 on the scale, and also the distance from position 5 to 4 is same as from 4 to 3. Such a scale however does not permit conclusions that position 6 is twice as strong as position 3 because no zero position has been established An interval scale is a scale of measurement where the distance between any two adjacent units of measurement (or intervals) is the same but the zero point is arbitrary. Scores on an interval scale can be added or subtracted but cannot be meaningfully multiplied or divided e.g. the time interval between the starts of years 2001 and 2002 is the same as that between 2003 and 2004, namely 365 days The zero point year 1 AD, is arbitrary as time did not begin then. Other examples of Interval series include the heights of tides, and the measurement of longitude.
(4) Ratio Scale Ratio scale enjoys the advantages of all the three methods discussed earlier. In addition it possesses the concept of absolute zero or origin. This makes ratio scale superior to all other methods. Ratio scale commonly uses physical dimensions like weight height, distance, money value and population counts. Equal ratio on the ratio scale indicates the equal ratio among the elements being measured e.g. 9 kg and 45 kg are in the ratio of 1 : 5. If we convert kilogram into grams, the same ratio will be obtained. Therefore, 9,000 grams and 45,000 grams have the same ratio of 1 : 5. It thus suggests that one can change over from one unit of measurement to another by using the relevant conversion factor. Only ratio scale provides the advantage of converting from one unit of measurement to another. (5) TheConstant Sum Scale The constant sum scale requires the respondent to divide a constant sum, generally 10 or 100, among two or more objects or attributes in order to reflect the respondents relative preference for each object, the importance of the attribute or the degree to which an object contains each attribute. The constant sum scale can be used in two cases 1. For two objects at a time (paired comparison) or 2. More than two objects at a time (quadric comparison) When rank order / ordinal data is used the researcher has no way of knowing the characteristic which is of overwhelming importance or of knowing a characteristic which is not of much
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importance compared to other characteristic. This can be explained with the following example: Suppose a sample of respondents from the target market is requested to rank order several automobile characteristics with 1 being more important. Assume the individual ranks are similar and produce the following median ranks for each attribute: Price 1 Economy 2 Dependability 3 Safety 4 Comfort 5 Style 6 A constant sum measure of the importance of the same attributes could be obtained from the following procedure - Divide 100 points among the characteristics listed so that the division will reflect how important each characteristic is to your selection of a new automobile. Price Economy Dependability Safety Comfort Style Total
100
All the responses to the constant sum scale would be consistent with the rank order results just described.
A disadvantage could be that occassionally individuals may misassign poibts such that the total is more than or less than 100. This can be adhusted by dividing each point allocation by the actual taotal and multiplying it by 100. (6) Thurstone Scale Thurstone and Chave in their book "The Measurement of Attitude" have advocated a technique in attitude measurement. They emphasized collection of large number of statements relating to the subject matter of inquiry. These statements can be collected through personal experience, secondary data and discussion with knowledgeable people. The statements should indicate both favourable and unfavourable attitude. The number of statements should be reasonably large to accommodate diversified attitude. Thurstone and Chive have given five criteria to select the statements. They are: (i) The statements should be brief. (ii) Feasibility to accept or reject the statement in keeping with the attitude of the respondent. (iii) Acceptance or rejection should be based on reasoning. (iv) Ambiguous statements should be avoided. (v) Statements should include attitude variables that are measurable.
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The procedure is as follows 1. Collect a large number (as many as possible, perhaps 100) of statements related to the attitude in question 2. Have a number of judges ( 20) sort the statements independently into 11 piles that vary from the most favorable through neutral to most unfavorable statements. 3. Study the frequency distribution of the ratings for each statement and eliminate those statements that the different judges have assigned to a number of different piles. 4. Determine the scale value of each of the remaining statements that is the number of the pile in which the median of the distribution lies. 5. Select one or two statements from each of the eleven piles for the final scale. 6. Separate cards are given to the respondents who are asked to sort these statements into a number of intervals. Each respondent is given 11 cards, the first card having letter A, the second B and so on. The first card with letter A represents most unfavourable attitude and the last card with letter K represents most favourable attitude. The middle card with letter F is neutral neither representing favourable nor unfavourable attitude about the subject or event as shown below:
The advantage of this method is that it is easier to identify the neutral position since there are odd number pf parameters. The disavantages of this system are 1. Not widely used in marketing research because of the time consumed during preparation itself 2. The ratings may be influenced by the Judges personal attitude 3. Different individuals can obtain exactly the same score from agreeing with quite different terms 4. It does not obtain the intensity of agreement with the ratings. (7) Semantic Differential Scale This scale was developed by Osgood. This scale is commonly used to compare brands, determine the effectiveness of advertising, attitude change, evaluation of company image etc. Semantic differential scale is bipolar one indicating attraction or repulsion from an object. While framing semantic differential scale it is necessary to consider several factors. A scale is balanced when either side of the indifferent cue has an equal number of cues e.g. determining quality of service in a club the following cues can be considered:
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o The unique dharateristic of semantic differential scale is the use of bipolar scales to rate any product company or concept of interest. o Facilitates comaprison of competitive items o Each scale consists of two opposing adjectives separated by a continuum of seven segments, as seen above o Respondents are given a group of these scales and asked to check the segment that represents the degree of their opinion of the subject in question o It is best used for image descriptive purposes and is not recommended for overall attitude studies o The method is easy and fast to administer, but it is also sensitive to small differences in attitude, highly versatile, reliable and generally valid o The advantage of this method is its simplicity while producing results comparable with those of the more complex scaling methods (8) Multidimensional Scaling This is a data reduction technique. Basically it aims at opening up the hidden structure of a set of data. It helps us to represent the proximities between objects as in a map. Proximities mean any set of numbers indicating similarity or differences between pair of objects whereas objects mean things or events. Multidimensional scaling (MDS) attempts to map the objects in a multidimensional space in such a way that it reveals degree of similarity or dissimilarity among them. Consider for instance that a student seeking admission in medicine offered by some universities has to consider two dimensions viz., prestigious course and practical content, which can be shown as:
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The student has compared the medical course in ten different universities A to J. Vertical dimension shows practical content of the medical course whereas horizontal dimension indicates relative prestige of the course. The points that are close to one another show similarity and the points that are wide apart indicate that the student has seen medical courses offered by various universities differently on the basis of two dimensions viz./ prestigious course and practical content.
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TYBMS

Prof. Hemant Kombrabail

MEANING OF MARKETING RESEARCH

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TYBMS (11) To know the company's expected share of the market.

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TYBMS GROWING IMPORTANCE OF MARKETING RESEARCH:

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TYBMS Relevance of MR under Globalization:

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METHODS OF CONDUCTING MARKETING RESEARCH

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TYBMS Evaluation of Secondary Data

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TYBMS ADVANTAGES/MERITS OF PUBLISHED DATA:

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TYBMS FIELD INVESTIGATION/SURVEY METHOD

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Time and Cost involved

Type of data that is collected/used

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TYBMS MERITS OF MAIL SURVEY:

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TYBMS LIMITATIONS OF MAIL SURVEY: