Module 2. Consumer behaviour and market intelligence

Lesson 11


11.1 Introduction

In today’s modern era, when tastes and preferences are fast changing and the sellers’ markets being converted to buyers’ markets, it is very important to assess the needs and preferences of a customer. The marketing research plays a very important role in identifying the needs of customers and fulfilling them in best possible way.

The American Marketing Association has defined Marketing Research as the function that links the consumer, customer and public to the marketer through information i.e. the information used to identify and define marketing opportunities and problems, generate, refine and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. It is a systematic problem analysis, model building and fact finding for the purpose of important decision making and control in the marketing of goods and services.

Marketing research is based on scientific methods and a well-planned and systematic process which implies that it needs planning at all the stages. It is sometimes defined as the application of scientific method in the solution of marketing problems. Marketing research is an essential tool for strategic market planning and decision making. It helps a firm in identifying the market opportunities and constraints, in developing and implementing marketing strategies, and in evaluating the effectiveness of marketing plans. It facilitates the decision making regarding various marketing mix decisions related to product, price, promotion and physical distribution.

11.2 Uses of Marketing Research

The main purpose of the marketing research is to link the consumer to the marketer by providing information that can be used in making marketing decisions. The main uses of marketing research are found in

· Identification of market opportunities and problems

· Evaluating potential marketing decisions

· Monitor market and marketing performance

· Improve marketing process

11.3 Steps in Marketing Research Process

The broad steps in the marketing research process are listed and explained below:

Identification and formulation of the marketing research problem

Developing the research objectives

Selecting a research design

Identifying the information needs and the data sources

Methods of data collection

Developing a sampling plan

Design the data collection forms

Collection of data

Analysis of data

Preparation of final report and presentation of results

11.3.1 Identification and formulation of the marketing research problem

The first and the most important step in the marketing research process relates to identification and formulation of the marketing research problem. The researcher needs to properly identify the research problem. A marketing research problem for a particular firm may be declining sale of full cream milk in a particular market. The formulation of the research problem involves identification of relevant researchable isues with respect to the selected problem. An entrepreneur starting a dairy business would be facing many types of questions like

· Should I start a dairy business?

· What should be the optimum size of plant?

· Which location would be best for the business?

· Which value added products can be suitable for a given level of milk production?

· How the firm can create awareness and publicity for the health advantages of its products?

· Which media mix will create the optimum results?

These questions may be answered with the help of marketing research by proper identification and formulation of research problem.

11.3.2 Developing the research objectives

The research objectives are related to problem definition and are specifically set to provide the information necessary to solve the problem. For example, the objectives for the problem selected above (declining sale of full cream milk) may be, to study the trend in sale of full cream milk and other variants like toned and double toned milk available in a particular market, to study the change in consumption pattern of households for all types of milk served by the selected market, and to ascertain the reasons for decline in sale.

11.3.3 Selecting a research design

Every research has its own requirements and needs a specific research design. There are basically three types of categories which are referred to as research designs: exploratory research, descriptive research and causal research. Exploratory research design is applied when little is known about the problem. For example, the studies on consumer tastes and preferences for probiotic dairy products are particularly lacking in different parts of India It may serve as a base for future studies. The descriptive research design refers to a set of methods and procedures that describe marketing variables. Descriptive studies answer the who, what, where, when and how types of questions. These studies may describe consumer attitude towards a particular product or service, intentions and behavior or the number of competitors and their marketing strategies. The causal research helps us to identify the causes and effects. These studies answer the questions related to why.

11.3.4 Identifying the information needs and the data sources

The researcher needs to identify information required and the sources of information. There are generally two sources of data: secondary (data already collected, may be published/unpublished) and primary (first hand information collected specifically for the problem in hand). The researcher must scan the secondary data sources first and collect the already available data. For secondary data, the researchers can rely on the statistical publications published by various research agencies and the websites. The sources of these data are Department of Agriculture & Cooperation, Department of Animal Husbandry, Dairying and Fisheries, National Sample Survey Organization, Census of India etc. The primary data will be collected according to the requirement of the study from a representative sample.

11.3.5 Methods of data collection

While secondary data is relatively easy to access, the access to primary data may be much more complex. But both have their own merits and demerits. The primary data may be collected through observation method, personal interview, telephonic interview and mail survey. These methods vary in terms of the accuracy of the response, control, cost involved, time taken and response rate. The choice of an appropriate method will depend upon the duration of the study, resources available and depth of information required.

11.3.6 Developing a sampling plan

This involves selection of appropriate sampling technique (method of selecting a sample from a given population), defining the sampling unit (from whom the data would be collected) and specifying the size of sample (number of units to be selected). There are two types of sampling techniques: probabilistic and non-probabilistic sampling techniques. The probabilistic sampling techniques assign some probability to selection of each and every unit in the population, whereas non-probabilistic techniques utilize researchers’ subjective judgment in selection of units from the population. The case study method, which involves studying only few cases (minimum one) for a study, can also be used in various marketing research studies.

11.3.7 Design the data collection forms

The design of data collection forms, which are used to ask and record information gathered in marketing research projects is very important and critical to the success of the project. Generally the information is recorded in standardized forms called as questionnaires. Utmost care must be taken to design the questionnaires which elicit information from the respondents. The language of the questions should be simple and understandable. The questions should not be repetitive (one question should occur once) and sequenced properly. The questionnaire should not be very lengthy.

11.3.8 Collection of data

Data collection is very important because the findings and interpretations of the study will depend upon the data collected. The errors during data collection cannot be fixed even by the most appropriate analytical methods. The data collection should be done by the trained executives. The good marketing researchers must be aware of the errors that may occur during the data collection and should implement accepted methods to control these errors.

11.3.9 Analysis of data

Once the data is collected, data analysis is used to convert the raw data into meaningful results. Data analysis involves entering the data into computer, inspecting the data for errors and applying suitable statistical tests and analysis. The first step in the data analysis is cleaning of data, which is the process for checking and verifying that the raw data have been correctly fed to the computer package from the data collection forms. Now, many advanced and user friendly software are available in the market for data analysis. Some commonly used are SPSS, SYSTAT, SAS, E-views etc. One can generate desirable output and reports with the help of this software.

11.3.10 Preparation of final report and presentation of results

This is the last step in the marketing research process. It is the final report which properly communicates the study results to the client. So, the research report should be well-organized and properly written. Though there are standard segments for a research report in the literature, yet the organization may vary according the requirement of the client. Sometimes, the client may even ask the researcher to present the results before a group. The presentation should be effective and include the salient findings of the study.

11.4 Market Research Agencies in India

Marketing Research is being used extensively by professionals for smooth functioning and improved decision making. Many research and consultancy organizations/private concerns are playing important role in this regard, some of these working in the area of food and dairy sector are listed below:

a. IMARC Group

b. AC-Nielson


d. Q&Q

e. eSurveysPro.com


11.5 Users of Marketing Research

1. Producers

  • Assessing the product potential of dairy products
  • Substitutes available
  • Market structure
  • Market share

2. Consumers

  • Awareness to various innovative and healthy products
  • Assessing market scenario

3. Government

  • Policy formulation
  • Creating support network e.g. database development and management required for research
  • Operational and planning problems of business and industry

4. Business Organizations

  • Demand forecasting
  • Market planning
  • Marketing mix decisions

11.6 Examples of Market Research Studies in Dairy Sector


Marketing Research Studies

Identification of market opportunities and problems

  • Estimating demand for novel dairy foods like millet based drinks, herbal ghee, probiotic curd etc
  • Forecasting the demand and market potential for dairy products
  • Segmenting the market for dairy products
  • Competitors’ analysis

Evaluating potential marketing decisions

  • Assessing the impact of change in marketing mix strategies on the sales
  • New product prototype testing
  • Effectiveness of distribution system

Monitor market and marketing performance

  • Customer satisfaction studies
  • Employee satisfaction studies
  • Distributor satisfaction studies

Improve marketing process

  • Differences in consumer behavior
  • The impact of long term advertising on consumer choice
  • Use of IT in marketing of dairy products
  • Effectiveness of e-marketing

Last modified: Wednesday, 29 August 2012, 10:40 AM