Marketing research: Definition, Nature, Process, Objectives, Importance.

Marketing research: Definition, Nature, Process, Objectives, Importance.

Hey friends, We are going to learn following topics:

1.Meaning & Definition of Marketing Research.

2. Nature of Marketing Research.

3. Objectives of Marketing Research.

4. Process of Marketing Research.

5. Importance of Marketing Research.

6. Areas in Marketing Research.

Hello friends, we have studied about the most vital topic in Business in this article 👉 What is Marketing: Definition, Nature, Functions, Importance. According to Philip Kotlar," Marketing is human activity directed at satisfying needs and wants through exchange processes". We saw that Marketing is identifying consumer needs & wants, and putting efforts to satisfy them effectively & profitably. So, in that, when you'll read functions of Marketing, the first one in  will be Marketing research. That means it is important in Marketing.

If you see the definition above, it focuses on satisfying needs & wants, and identifying those needs & wants is the key here. There comes the concept of Marketing research. Let's see the Meaning & Definition of Marketing research.

1. Meaning & Definition Of Marketing research

Let's see couple of Definition of Marketing research. 

According to American Marketing Association (AMA), “Marketing Research is the systematic gathering, recording and analyzing of data about problems relating to the marketing of goods and services.” 

According to Philip Kotler,“Marketing research is a systematic problem analysis, model building and fact finding for the purpose of improved decision making and control in the marketing of goods and services.”

Both the above definitions tell us that Marketing research is a problem oriented concept, that means it always have a problem to solve. For that, marketer has to make a design, collect data, analyze data and finally making research based decisions. 

Now let's move on to Nature of Marketing research.

2. Nature Of Marketing research

Following are points which explains Nature of Marketing research :

1) Function of Marketing.

A market consists of many components like Customers, Suppliers, Competitors, Distributors etc. Marketing research collects data about all these components and interprets them which help managers in effective decision making. Which leads to achieve Marketing objectives. So, Marketing research is a vital function of Marketing.

2) Interdisciplinary Concept.

Marketing research involves collection of data from different disciplines like Psychology (consumers perception, behaviour etc.),  Sociology (Consumer's income, culture, society etc.), Economics (Demand, Supply, competition, economy etc.).

It also uses Statistical & Mathematical techniques to analyze Market data. Therefore, Marketing research is an Interdisciplinary concept.

3) Vital for new product development.

Marketing research helps management to keep an eye on consumer's needs & wants. These valuable information aids management to develop new products according to the need. Therefore, for new product development, Marketing research is vital.

4) Market orientation.

Marketing research is also very important for market orientation. When we launch any new product in the marker, it is called market orientation. For that, Marketing research provides valuable information like consumer perception, supply system in market, competitors data etc. 

5) Continuous process.

Today's business environment has a feature that it changes rapidly. Consumer thinking, style, perception, wants, technologies are changing and marketers need to be quick in observing the change and evolving their business. 

Regular Marketing research helps management to know about the changes and to make strategies to cope up with those changes. So, it's a Continuous process.

6) Integrated effort.

For fulfilling the objectives of Marketing research, there has to be integrated efforts from the organization. To decide the research problem, sample design, types of information required, contribution from all departments is required.

7) Systems approach.

Each activities in Marketing research like Data gathering, organising, interpretation, analysis is performed by some experts in those areas. Therefore, it constitutes systems approach.

Now, let's study the Objectives of Marketing research.

3. Objectives Of Marketing research

1) Identify new markets.

Marketing research helps marketers to find new markets. Through Marketing research, management get to know about consumers, their unfulfilled needs & wants, which leads to new creative ideas. 

2) Hold market share.

This is another vital objective of Marketing research. When company will continuously monitor customer's perception, expectations, attitude then they will be able to cope up with the changes. This will hold the market share because customers will get vaule from the company continuously.

3) To decrease overall cost.

Marketing research helps the company to estimate the cost, where to focus, ways to reduce wastages. All these information will aid management to decrease overall marketing cost of organization.

4) Future sales estimation.

Companies can also conduct Marketing research to analyze the product performance, product demand, feasibility of product, customers satisfaction, competition in that industry. This can help to anticipate the future demand & sale of product, which will lead to better budgeting, production strategies, performance etc.

5) Study self strengths and weaknesses. (Internal environment analysis).

Marketing research provides analyzed data about market requirements, product performance, customer perception, market positioning, customer expectations. According to this data, companies can analyze self strengths and weaknesses. Marketing research also helps to find solutions of weaknesses.

6) External environment analysis

Just like self strengths and weaknesses, Marketing research also aids in analyzing external opportunities and threats. Companies can make strategies to utilize those opportunities and to counter all kind of threats in the external environment.

7) To make price policy.

Marketing research provides information about customer attitude, price elasticity, price prevailing, economic conditions in the market, laws of government etc. Data about customer background, culture, income level, standard of living, are necessary for effective pricing policy.

8) To have competitive advantage.

Marketing research helps organization to find new markets, hold market share, to reduce cost, to anticipate future demand, to analyze internal and external environment. All these benefits of Marketing research lead to better performance than competitors, which is a competitive advantage to the company.

9) To improve quality.

If company gets competitive advantage with the help of Marketing research, that doesn't mean to sit down and enjoy. Companies have keep an eye on environmental changes, technological changes and improve themselves according to the situation.

4. Process Of Marketing research

1) Problem recognition.

The first step in any research is always deciding research problem. Generally, a research problem chosen by the company relates to any current situation they are facing. Companies also conduct Marketing research on a problem which may arise in future or a past problem like last year sales, reduction in market share etc.

2) Research design.

The second step is to prepare a research design which consists of a full plan of action of the overall research. It will act like a blueprint of future actions. A research design is important because it will guide you during the research.

3) Sample design.

After preparing the research design, next step is to prepare sample design. A sample design consists of type of people from which the company will collect data. This depends on the type and objectives of research.

4) Data collection method.

After preparing sample design, the next step in Marketing research is to plan data collection methods. There are many data collection methods available, they are as follows:

• Interviews.

• Observation.

• Group discussions.

• Surveys.

Choosing appropriate data collection depends on kind of research the company does, type of sample, type of problem etc.

5) Data collection.

Now, the fifth step is collection of data from that sample. This step is very vital for the success of the whole Marketing research process. Because the research report and decision making will depend on the data collected. 

6) Interpretation & analysis.

After collection of data, the process moves on to interpret and analyze the collected data. This step is also vital because after analyzing the data, the research report will be made. This step requires more professional people who can analyze, observe and make decisions based on analysis.

7) Research report.

After all the steps, the seventh step is about preparing research report. The report should include all the necessary information about the research problem, research design, data collection, analyzing and the solutions to the research problem.

8) Follow up.

So, we have reached to the last step in process of Marketing research. Every research, when completed by the company, should be reviewed to check its accuracy. This step is called follow up. It is important as any mistake in above seven steps can be identified and may be rectified here. Otherwise it will lead to bad decision making.

5. Importance Of Marketing research

1) Demand forecasting.

The first importance of Marketing research is thay it provides information about the possible demand in future. Demand forecasting is very helpful because companies can prepare themselves according to estimated situation.

2) Consumer perception.

This is also and vital point which tells the importance of Marketing research. Through this research company can study the customers perception and thinking, which will help for effective market positioning, targeting, and performance.

3) Gain new customers.

Marketing research helps business organizations to study consumer needs & wants, their perception, competitors data which helps to find new potential customers and convert them to permanent customer. It also helps in retaining those customers which is necessary in long term success.

4) Aids in launching new products.

When companies studies the environment of their target market, competition, consumer thinking and much more, then these information helps them to make appropriate strategies about launching any new product. The introduction stage of the product is vital for its long term survival and success.

5) Reduces risk.

Can you imagine about manufacturing bikes without studying any information about it? I think the answer will be "No". But why? 

Because there is Risk factor. You will not invest you money in machines, factory area, material without knowing the customer, market, competitors. So, Marketing research helps to thoroughly understand the market components which automatically lowers the risk factor.

6) Economical & efficiency.

Marketing research provides information about market, consumer, competitors, self strength, opportunities, threats etc. With the help of these, company can bring efficiency in their operation. 

The data provided by Marketing research also help to find the areas where company is wasting their efforts and funds. So, it also economical as it reduce the wastages in marketing.

7) Helps in Pricing decision.

To make decisions about price of products, companies have to study many price determining factors like cost of making product, profit margin, consumer factors, prevailing price in market, government laws, etc. So, Marketing research aids management to have all these knowledge and to make effective pricing strategy.

8) Helps in distribution of product.

Marketing research also useful for efficient distribution process as companies get to know about the industry, transportation services, cost of transportation, new opportunities in distribution etc.

9) Effective promotion strategy.

This is another valuable point among all other points in Importance of Marketing research. When company understand the consumer's mind, it allows them to make effective promotion strategies to capture the mind of customers.

6. Areas In Marketing research

Areas in Marketing research means in which areas business organizations generally conduct Marketing research. Following are some areas in Marketing research:

1) Product research.

Product research is conducted to solve product related problems like product design, features, potential new products, competitors products etc.

2) Sales & Market research.

This kind of research is done to study the Market potential, Market competition, Market shares of competitors, sales analysis, movement of products in market etc.

3) Promotion research.

This research is helpful to determine promotion strategy of your products. The business organization will be able to study all the areas by which they can make more effective communication strategy with the consumers.

4) Business economics & Corporate research.

This research help the company to study the business economics aspects like demand forecasting, financial areas, bank related studies, corporate trends & opportunities.

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