Page 527 - Encyclopedia of Business and Finance

eobf_M 7/5/06 3:15 PM Page 504

Marketing Research

more than $1.1 billion on online market research, a 16 of the marketing system; it signals the presence of poten-
percent increase over 2004. The advantages of online tial problems or opportunities. This is an essential element
research are self-evident: There is no need for data entry in the control of a business’s marketing programs. The
or interviews, and responses are collected automatically, data sources for performance-monitoring research include
saving time and money while eliminating coding errors interrogation of respondents, secondary data, and obser-
and interviewer bias. Also, respondents may feel more vation.
comfortable in answering sensitive questions with their
anonymity ensured. Ultimately, the Internet, if used prop-
THE MARKETING RESEARCH
erly, can provide the quickest path to valuable insight into
PROCESS
a customer’s mind.
The marketing research process is comprised of a series of
steps called the research process. To conduct a research
TYPES OF MARKETING RESEARCH project effectively, it is important to anticipate all the steps
Marketing research can be classified as exploratory and recognize their interdependence.
research, conclusive research, and performance-monitor-
ing research. The stage in the decision-making process for Need for Information. The first step in the research
which the information is needed determines the type of process is establishing the need for marketing research
research required. information. The researcher must thoroughly understand
why the information is needed. The manager is responsi-
Exploratory Research. Exploratory research is appropriate ble for explaining the situation surrounding the request
for the early stages of the decision-making process. This for information and establishing that the research infor-
research is usually designed to provide a preliminary inves- mation will assist in the decision-making process. Estab-
tigation of the situation with a minimum expenditure of lishing the need for research information is a critical and
cost and time. A variety of approaches to this research are difficult phase of the research process. Too often the
used, including use of secondary data sources, observa- importance of this initial step is overlooked, which results
tion, interviews with experts, and case histories. in research findings that are not decision-oriented.

Conclusive Research. Conclusive research provides infor- Research Objectives. Once the need for research informa-
mation that helps the manager evaluate and select a course tion has been clearly defined, the researcher must specify
of action. This involves clearly defined research objectives the objectives of the proposed research and develop a spe-
and information needs. Some approaches to this research cific list of information needs. Research objectives answer
include surveys, experiments, observations, and simula- the question “Why is this project being conducted?” The
tion. Conclusive research can be subclassified into descrip- answer could be as broad as the determination of the
tive research and causal research. amount of effort needed to increase the company’s market
Descriptive research, as its name suggests, is designed share by 5 percent or as specific as the determination of
to describe something—for example, the characteristics of the most preferred of five moisturizers by women in
consumers of a certain product; the degree to which the southern California. Only when the researcher knows the
use of a product varies with age, income, or sex; or the problem that management wants to solve can the research
number of people who saw a specific television commer- project be designed to provide the pertinent information.
cial. The difficult part of establishing research objectives is
Causal research is designed to gather evidence regard- the conflict that often exists between the value of informa-
ing the cause-and-effect relationships that exist in the tion and the research budget. Because each piece of infor-
marketing system. For example, if a company reduces the mation has some cost associated with it, whether it is the
price of a product and then unit sales of the product cost of the account manager’s travel expenses or the cost of
increase, causal research would show whether this effect having an outside agency perform a telephone survey, each
was due to the price reduction or some other reason. piece must be evaluated in terms of its value with respect
Causal research must be designed in such a way that the to the needed decision.
evidence regarding causality is clear. The main sources of
data for causal research are interrogating respondents Research Design and Data Sources. The next step in the
through surveys and conducting experiments. research process is to design the formal research project
and identify the appropriate sources of data for the study.
Performance-Monitoring Research. Performance-moni- A research design is the framework that specifies the type
toring research provides information regarding the status of information to be collected, the sources of the data, and

504 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION