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MARKETING MANAGEMENT
UNIT – V
MARKETING RESEARCH & TRENDS IN MARKETING
Marketing Information System – Research Process – Concepts and applications : Product –
Advertising – Promotion – Consumer Behaviour – Retail research – Customer driven
organizations - Cause related marketing - Ethics in marketing –Online marketing trends.
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Table of Contents
5.1 Marketing Information System .................................................................................................... 3
5.1.1 Meaning................................................................................................................................. 3
5.1.2 Definition .............................................................................................................................. 3
5.1.3 Characteristics of MIS ........................................................................................................... 3
5.1.4 Importance of MIS ................................................................................................................ 4
5.1.5 Scope of MIS ......................................................................................................................... 5
5.1.6 Components of a Marketing information system .................................................................. 5
5.1.7 Difference between Marketing Research and Marketing Information System ..................... 9
5.2 Marketing Research ................................................................................................................... 10
5.2.1 Meaning.............................................................................................................................. 10
5.2.2 Definition ............................................................................................................................ 10
5.2.3 Characteristics of Marketing Research ............................................................................... 10
5.2.4 Importance of Marketing Research ..................................................................................... 11
5.2.5 Marketing Research Process ............................................................................................... 13
5.2.6 Data Sources and Collection in Marketing Research .......................................................... 15
5.3 Product Research ....................................................................................................................... 21
5.3.1 Importance of product Research ........................................................................................ 21
5.3.2 Product Research in New Product Development ................................................................ 22
5.4 Advertising and Promotion Research ........................................................................................ 23
5.4.1 Purpose of Advertising and sales promotion....................................................................... 23
5.4.2 Importance of Advertising Research ................................................................................... 25
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5.4.3 Process of Advertising Research ......................................................................................... 26
5.5 Consumer Behaviour Research: Consumer Research ................................................................ 28
5.5.1 Consumer Research Process ............................................................................................... 29
5.6 Retail Research .......................................................................................................................... 30
5.6.1 Components of Retail Research .......................................................................................... 31
5.6.2 Developing a Methodology for Retail Research ................................................................. 31
5.6.3 Research Process in Retail .................................................................................................. 32
5.7 Customer Driven Organization .................................................................................................. 33
5.7.1 Introduction ......................................................................................................................... 33
5.7.2 Characteristics of Customer-Driven Organisations............................................................. 33
5.7.3 Elements of Customer-Driven Organisations ..................................................................... 34
5.7.4 Strategies of Customer Driven Organisation ...................................................................... 35
5.7.5 Stages in Customer Driven Organisation ............................................................................ 36
5.8 Cause-Related Marketing........................................................................................................... 37
5.8.1 Objectives of Cause Related Marketing .............................................................................. 37
5.8.2 Types of cause related Marketing ....................................................................................... 38
5.8.3 Cause Related Marketing in India ....................................................................................... 39
5.9 Ethics In Marketing.................................................................................................................... 40
5.9.1 Introduction ........................................................................................................................ 40
5.9.2 Ethical Norms and values for Marketers ............................................................................. 41
5.10 Online Marketing ..................................................................................................................... 42
5.10.1 Introduction ....................................................................................................................... 42
5.10.2 Objectives of Online Marketing ........................................................................................ 42
5.10.3 Online Marketing Trends and Techniques ........................................................................ 43
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5.1 Marketing Information System
5.1.1 Meaning
A system that analyzes and assesses marketing information, gathered continuously from
sources inside and outside an organization. Timely marketing information provides a basis for
decisions such as product development or improvement, pricing, packaging, distribution, media
selection, and promotion. See also market information system.
Marketing information systems is an integrated combination of information, information
processing and analysis, equipment and tools (i.e., software and hardware) and information
specialists who analyze and interpret the collected information and provide it to decision-makers to
serve their analysis, planning and control needs.
Gathered continuously from sources inside and outside an organization, with analysis and
assessment of marketing information by this type of computerized system. Product development or
improvement, pricing, packaging, distribution, media selection, and promotion succeed or fail
based on the timely delivery and the worth of this information.
5.1.2 Definition
According to Cundiff, Still and Govoni, "Marketing information system is an organized set
of procedures, information handling routines and reporting techniques designed to provide the
information required for making marketing decision".
According to K. Cox and K. Gonod, "MIS is a set of procedures and methods for the
regular and planned collection, analysis and presentation of information in making marketing
decisions".
5.1.3 Characteristics of MIS
Inter Related Components: Marketing information system is a set of inter-related components.
They consist of people, equipment, and procedures. Computer hardware, software, and information
communication technology are used to design
and deliver it. '
Processing: Marketing information system collects, processes, analysis, stores, retrieves, and
disseminates information for decision marketing and control. Its output consists of various reports.
Timeliness: Marketing information system provides the right information to the right people at the
right time. Information if received late has no use.
Accuracy: Marketing information system provides accurate and reliable information. Past and
present information are more accurate than future forecasts. It also provides complete information.
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Consistency: Market information system provides consistent information. All data are based on
same definition, assumptions, and time period.
Accessibility: Market information system is easily accessible. The information is properly secured.
But it is easily available to authorized persons. Information communication technology has
facilitated accessibility. It also avoids information overload.
Future Oriented: MIS is future oriented. It anticipates the problems and provides a solution to
solve these problems.
Use of Computers and Statistical Tools: MIS is operated with the help of computers and analyst
uses various statistical and quantitative decision-making tools to provide the solution for a defined
problem.
5.1.4 Importance of MIS
In order to make good marketing decisions, marketing managers require high quality
information about the market. Poor information never led to a successful marketing decision
except by sheer chance. There are numerous methods of marketing research ranging from educated
guesswork to hard facts. One needs to be aware of the assumptions and limitations in order to
know when to use a particular one and how to interpret and apply the generated information. Some
of the importance of MIS is as follows:
Help Understand Customer's Needs and Wants: The marketing research process is only one of
the sources of information for the MIS. It is worth remembering that it is all the sources of
information which contribute to the MIS which help us understand our customer's needs and
Help Assessing Needs of Customers: An MIS has to meet the needs of its customers (users) and,
to do that; those needs must be assessed first. Identifying what information managers would like to
have? Identifying the information they actually need? Identifying what information is feasible to
offer them?
Capture Interaction Between Firm and Customers: It has employed the database to capture the
interactions between a firm and its customers at each point of time and utilizes the data analysis to
search for patterns in these interactions.
Attracts Potential Customers: It provides the most attractive potential customers besides
providing clues in customizing the products, pricing and promotions of a product.
Helps Assessing Customer's Buying Behavior: When utilized in the proper manner, the database
marketing could provide insights into the customer's buying behavior across the product
categories, so that the companies could devise their program and plans to the "whole customer",
then the customer can be seen only through the narrow view of their own products and brands.
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5.1.5 Scope of MIS
Market Monitoring: During the use of market research and marketing intelligence activities, MIS
can enable the identification of emerging market segments, and the monitoring of the market
environment for changes in consumer behavior, competitor activities, new technologies, economic
conditions and governmental policies.
Strategy Development: MIS provides the information necessary to develop a marketing strategy.
It supports strategy development for new products, product positioning, marketing
communications (advertising, public relations, and sales promotion), pricing, personal selling,
distribution, customer service and partrierships and alliances. MIS provides the foundation for the
development of information system-dependent e-commerce strategies.
Strategy Implementation: MIS provides support for product launches, enables the coordination
of marketing strategies, and is an integral part of sales force automation (SFA), customer
relationship management (CRM), and customer service systems implementations. MIS enables
decision makers to more effectively manage the sales force as well as customer relationships.
Some customer management software companies are extending their CRM applications to include
partner relationship management (PRM) capabilities. This has become increasingly important as
many marketers are choosing to outsource important marketing functions and form strategic
alliances to address new markets.
Functional Integration: MIS enables the coordination of activities within the marketing
department and between marketing and other organizational functions such as engineering,
production, product management, finance, manufacturing, logistics, and customer service.
Support management and decision making: MIS are intended to support management decision
making.
Wider application: MIS are not simply system limited to management. It also includes
operational, sales and marketing process – oriented systems. Which serves in daily operational
activities
5.1.6 Components of a Marketing information system
A marketing information system (MIS) is intended to bring together disparate items of data
into a coherent body of information. An MIS is, as will shortly be seen, more than raw data or
information suitable for the purposes of decision making. An MIS also provides methods for
interpreting the information the MIS provides. Moreover, as Kotler's1 definition says, an MIS is
more than a system of data collection or a set of information technologies:
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"A marketing information system is 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,
implementation, and control".
Figure 9.1 illustrates the major components of an MIS, the environmental factors monitored by the
system and the types of marketing decision which the MIS seeks to underpin.
The marketing information systems and its subsystems
The explanation of this model of an MIS begins with a description of each of its four main
constituent parts: the internal reporting systems, marketing research system, marketing intelligence
system and marketing models. It is suggested that whilst the MIS varies in its degree of
sophistication - with many in the industrialised countries being computerised and few in the
developing countries being so - a fully fledged MIS should have these components, the methods
(and technologies) of collection, storing, retrieving and processing data notwithstanding.
Internal reporting systems: All enterprises which have been in operation for any period of time
nave a wealth of information. However, this information often remains under-utilised because it is
compartmentalised, either in the form of an individual entrepreneur or in the functional
departments of larger businesses. That is, information is usually categorised according to its nature
so that there are, for example, financial, production, manpower, marketing, stockholding and
logistical data. Often the entrepreneur, or various personnel working in the functional departments
holding these pieces of data, do not see how it could help decision makers in other functional
areas. Similarly, decision makers can fail to appreciate how information from other functional
areas might help them and therefore do not request it.
The internal records that are of immediate value to marketing decisions are: orders received,
stockholdings and sales invoices. These are but a few of the internal records that can be used by
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marketing managers, but even this small set of records is capable of generating a great deal of
information. Below, is a list of some of the information that can be derived from sales invoices.
Product type, size and pack type by territory
pack type by type of account
lume of sale by industry
By comparing orders received with invoices an enterprise can establish the extent to which it is
providing an acceptable level of customer service. In the same way, comparing stockholding
records with orders received helps an enterprise ascertain whether its stocks are in line with current
demand patterns.
Marketing research systems: The general topic of marketing research has been the prime '
subject of the textbook and only a little more needs to be added here. Marketing research is a
proactive search for information. That is, the enterprise which commissions these studies does so
to solve a perceived marketing problem. In many cases, data is collected in a purposeful way to
address a well-defined problem (or a problem which can be defined and solved within the course
of the study). The other form of marketing research centres not around a specific marketing
problem but is an attempt to continuously monitor the marketing environment. These monitoring
or tracking exercises are continuous marketing research studies, often involving panels of farmers,
consumers or distributors from which the same data is collected at regular intervals. Whilst the ad
hoc study and continuous marketing research differs in the orientation, yet they are both proactive.
Marketing intelligence systems: Whereas marketing research is focused, market intelligence is
not. A marketing intelligence system is a set of procedures and data sources used by marketing
managers to sift information from the environment that they can use in their decision making. This
scanning of the economic and business environment can be undertaken in a variety of ways,
including2
Unfocused
scanning
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The manager, by virtue of what he/she reads, hears and watches exposes him/herself
to information that may prove useful. Whilst the behaviour is unfocused and the
manager has no specific purpose in mind, it is not unintentional
Semifocused
scanning
Again, the manager is not in search of particular pieces of information that he/she is
actively searching but does narrow the range of media that is scanned. For instance,
the manager may focus more on economic and business publications, broadcasts etc.
and pay less attention to political, scientific or technological media.
Informal
search
This describes the situation where a fairly limited and unstructured attempt is made
to obtain information for a specific purpose. For example, the marketing manager of
a firm considering entering the business of importing frozen fish from a
neighbouring country may make informal inquiries as to prices and demand levels of
frozen and fresh fish. There would be little structure to this search with the manager
making inquiries with traders he/she happens to encounter as well as with other ad
hoc contacts in ministries, international aid agencies, with trade associations,
importers/exporters etc.
Formal
search
This is a purposeful search after information in some systematic way. The
information will be required to address a specific issue. Whilst this sort of activity
may seem to share the characteristics of marketing research it is carried out by the
manager him/herself rather than a professional researcher. Moreover, the scope of
the search is likely to be narrow in scope and far less intensive than marketing
research
Marketing intelligence is the province of entrepreneurs and senior managers within an
agribusiness. It involves them in scanning newspaper trade magazines, business journals and
reports, economic forecasts and other media. In addition it involves management in talking to
producers, suppliers and customers, as well as to competitors. Nonetheless, it is a largely informal
process of observing and conversing.
Some enterprises will approach marketing intelligence gathering in a more deliberate
fashion and will train its sales force, after-sales personnel and district/area managers to take
cognisance of competitors' actions, customer complaints and requests and distributor problems.
Enterprises with vision will also encourage intermediaries, such as collectors, retailers, traders and
other middlemen to be proactive in conveying market intelligence back to them.
Marketing models: Within the MIS there has to be the means of interpreting information in
order to give direction to decision. These models may be computerized or may not. Typical tools
are:
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ls
These and similar mathematical, statistical, econometric and financial models are the
analytical subsystem of the MIS. A relatively modest investment in a desktop computer is enough
to allow an enterprise to automate the analysis of its data. Some of the models used are stochastic,
i.e. those containing a probabilistic element whereas others are deterministic models where chance
plays no part. Brand switching models are stochastic since these express brand choices in
probabilities whereas linear programming is deterministic in that the relationships between
variables are expressed in exact mathematical terms.
5.1.7 Difference between Marketing Research and Marketing Information System
Basis
Distinction
I) Nature
2) Aim
3) Use
4) Focus
5) Use of
Computer
6) Dependence
of
Marketing Research
Management
System
Information
It lays stress on external
information.
M.R. is concerned with solving of
problems.
M.R. operates in fragmented intermittent fashion project
on a to project basis.
M.R. lays focus on past
information.
M.R. is not computerised
base.
MIS uses both types of data
external
data.
internal and
MIS is concerned with
and
their problems
preventing
MIS
always work on a
solutions.
continuous basis.
MIS is more concerned
for future.
MIS is totally
computerised based.
One source of
information information
system.
Mincludes
market
I other
research.
S
input into a marketing
tttttt
subsystems,
5.1.8 Limitations of MIS
Installing the Software is Expensive: The cost incurred in setting-up the software and hardware
requirements have made the database marketing expensive in Its establishment.
Requires New Set of Skills: The database often demands new skills and organisations from new
analytical and decision-making skills in sales and marketing to a revamped information system
organisation that could support the entirely new class of users.
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beside
s
Depends on Database: The database marketing depends on the data quality. While the
observational data is powerful, the corrupted observational data could be 'powerful misleading'.
The quality also depends on the quality of analysis and the extent to which the databases are
linked.
Not Preferred: Till now, the database marketing has been primarily used as a tactical tool. MIS
may lead to less reliable and less secure data. MIS system may become slow, large, and hard to
manage.
5.2 Marketing Research
5.2.1 Meaning
Marketing research is defined as the objective and formal process of systematically obtaining,
analysing and interpreting data for actionable decision making in marketing. Marketing research is
a systematic and objective study of problems pertaining to the marketing of goods and services. It
may be emphasised that it is not restricted to any particular area of marketing, but is applicable to
all its phases and aspects.
5.2.2 Definition
The American Marketing Association (AMA) has defined marketing research as,
"Marketing research is the function which links the consumer, customer, and public to the
marketer through information used to identify and define marketing opportunities and problems,
generate, refine, and evaluate marketing actions; monitor marketing performance, and improve
understanding of market as a process".
According to Philip Kotler, "Marketing research is the systematic design, collection,
analysis, and reporting of data relevant to a specific marketing situation facing an organisation".
According to Palmer, "Marketing research is about researching the whole of a company's
marketing process".
5.2.3 Characteristics of Marketing Research
Function of Marketing Management: Marketing research operations help the marketing
executives to keep abreast with the environmental changes by providing right information on
dynamic environments to facilitate decision-making. The information generated through marketing
research can be used to determine most appropriate marketing mix. Thus, marketing research is a
well recognised and very important function of marketing management.
Integrated Effort: A teamwork or group effort is needed for carrying out marketing research
activities in any organisation. Research objectives are set by planning executives and data
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requirement for the accomplishment of these objectives are determined by the data analyst. The
data processor should know the nature and location of available data to retrieve and process it at
the desired time. Thus, marketing research is an integrated effort.
Systems Approach: Marketing research involves a number of activities, viz., collection,
recording, tabulating, analyzing and interpretation of information. Each of these activities is
performed by some experts who are supervised by marketing management executives. Thus,
marketing research constitutes a systems approach froni start to finish.
Inter-Disciplinary Process: Marketing researcher collects vast amount of information from
various disciplines, viz; economics, sociology, psychology, etc., and uses various statistical and
mathematical techniques to process this information. Psychological and sociological information is
used to study consumer behaviour. Thus, marketing research is based on inter-disciplinary
approach.
Imperfect Science: Studies in marketing research are never exact as it deals with unpredictable
and dynamic human behaviour. The results are always uncertain with certain amount of risk. Thus,
marketing research is based on scientific method and can be termed as science but it cannot be
designated as perfect like other social science, i.e., it is an imperfect science.
Indispensable for the New Product Introduction: Before introducing a new product, the market
research is used to find out suitable avenues and place of the new products. It reveals the various
opportunities of new markets and reveals the methods to reach the markets.
Market-Orientation: The objective of marketing research is to enable the firms to produce the
goods and services acceptable to the customers. It sees that the goods and services must reach the
market easily, quickly, cheaply and profitably. The right course. of action to approach and sustain
the market is possible with suitable marketing research .
5.2.4 Importance of Marketing Research
Marketing research, being as the profound tool for marketing planning, has key importance as
given below:
Decision-making Tool: Marketing research is useful for taking marketing management decision.
It provides necessary information and data in analysed and processed forms for making marketing
decisions. With advanced technology, higher production functions and an increasing marketing
complex, market research has become an indispensable tool for taking appropriate decisions.
Management Planning: Marketing research is used for management planning. It deals with
marketing opportunities,i.e., those opportunities which are viable to be exploited by management.
Thus, marketing management can assess the resources that will be useful for the business.
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Problem-Solving: Starting from problem identification to formulation of alternative solutions, and
evaluating the alternatives in every area of marketing management, is the problem-solving action
of marketing research.
Control Technique: Marketing research is used as a control technique of marketing management
to find out the weaknesses and shortcoming of the management decisions to re-orient the planning
and performance techniques.
Large-Scale Production: Marketing research helps large-scale production by providing suitable
decisions to be undertaken by the producers to exploit the existing production resources to meet
the growing markets. The resources of production and market potentials are properly assessed by
marketing research.
Complex Market: The advancement of science and technology and the standard of living of
consumers necessitate closer touch with the growing markets. The size and specialisation within
the busine.ss unit and the intervention of numerous middlemen between the manufacturer and
customers created a wide communication gap.
Pattern of Consumption: The pattern of consumption is to be assessed by the marketing
management. The study of buyers' behaviour, attitudes and capacity to purchase is very important
in marketing research. The purchasing power of a consumer depends upon his disposable personal
income. Thus, the total purchasing power of a country or geographical area can be assessed by the
disposable income of the place.
Market Complex: The marketing activities are influenced by several internal and external
environments. Internal environment includes price, promotion, and production and place
(distribution), whereas the external environment includes economic, sociological, political, legal
and government motives.
Suitable Marketing Operations: Marketing operations decide production functions, and
marketing operations can be better decided by the findings of marketing research.
Pricing: In marketing management, pricing is not arbitrary for follow up action of competitors. It
has to be judiciously fixed which is done effectively with the study of various marketing variables.
Marketing Strategy: Marketing management has to lay down appropriate marketing strategies to
meet competition to pursue growth in market and to attain organisational objectives.
Distribution: Marketing research helps the members of the channel of distribution to fon'nulate
suitable policies an programmes to solve their problems.
Sales Promotion: Marketing research can decide suitable media of sales promotion after a study
of the various channel of promotion. The costs and benefits of advertising, personal selling and
wide publicity should be studied to decide the most appropriate media of sales promotion.
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5.2.5 Marketing Research Process
Identifying and Defining Research Problem: The 'initial step in the research process is the
identification of the problem or opportunity. A research problem refers to some difficulty which a
researcher experiences in the context of either a theoretical or conceptual situation and wants a
solution for it. A research problem exists when the individual or the group having one or more
desired outcomes are confronted with two or more courses of action that have some but not equal
efficiency for the desired objectives and are in doubt about which course of action is best.
Extensive Literature Survey: Once the problem is formulated, the next step is to write down a
brief summary. For this the researcher should undertake extensive literature survey connected with
the problem. For this purpose, the abstracting and indexing journals and published or unpublished
bibliographies are the first place to go to. Academic journals, conference proceedings, government
reports, books etc., must be taped depending on the nature of the problem.
Formulation of Hypoiheses: Now the researcher should state in clear terms the working
hypothesis or hypothesis. Working hypothesis is tentative assumption made in order to draw out
and test its logical or empirical consequences. As such the manner in which research hypothesis
are developed is particularly important since they provide the focal point for research. Hypothesis
should be very specific and limited to the piece of research in hand because it has to be tested. The
role of the hypothesis is to guide the researcher by delimiting the area of research and to keep him
on the right track.
Preparing the Research Design: Research design is the conceptual structure within which
research should be conducted. A research design specifies the methods and procedures for
conducting a particular study. The researcher should specify the approach he intends to use with
respect to the proposed study. The function of research design is to provide for the collection of
relevant evidence with minimal expenditure of effort, time and money. Research designs can be
grouped into three categories - exploratory research, descriptive research and causal research.
Exploratory Research: An exploratory research focuses on the discovery of ideas and is generally
based on secondary data. It is preliminary investigation, which does not have a rigid design.
Descriptive Research: A descriptive study is undertaken when the researcher wants to know the
characteristics a certain groups such as age, sex, educational level, income, occupation, etc.
Causal Research: A causal research is undertaken when the researcher is interested in knowing
the cause and effec relationship between two or more variables.
Determining Sample Design: All the items under consideration in any field of inquiry constitute a
'universe' a 'population'. A complete enumeration of all the items in the 'population' is known as a
census inquiry. In such a inquiry when all the items are covered no element of chance is left and
highest accuracy is obtained. But in practice this may not be true. This type of inquiry involves a
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great deal of time, money and energy, not only this; census inquiry is not possible in practice under
many circumstances.
Collecting the Data: The next step is to determine the sources of data to be used. The researcher
has to decide whether he has to collect primary data or depend exclusively on secondary data.
Sometimes, the research study is based on both secondary and primary data. The primary data are
those, which are collected afresh and for the first time, and thus happen to be original in character.
The secondary data, on the other hand, are those which have already been collected by someone
else and which have already been passed through the statistical process.
Execution of the Project: The researcher should see that the project is executed in a systematic
manner and in time. If the survey is to be conducted by means of stnictured questionnaires, data
can be readily machine-processed. In such a situation, questions as well as the possible answers
may be coded. If the data are to be collected through interviews, arrangements should be made for
proper selection and training of the interviewers. The training may be given with the help of
instruction manuals, which explain clearly the job of the interviewers at each step. Occasional field
checks should be made to ensure that the interviewer~ are doing their assigned job sincerely and
efficiently.
Analysis of Data: After the data have been collected, the researcher turns to the task of analysing
them. The analysis of data requires a number of closely related operations such as establishment of
categories, the application of these categories to raw data through coding, tabulation and then
drawing statistical inferences. Researcher should classify the raw data into some purposeful and
usable categories.
Coding operation is usually done at this stage through which the categories of data are transformed
into symbols that may be tabulated and counted.
Editing is the procedure that improves the quality of the data for coding. With coding the stage is
ready for tabulation.
Tabulation is a part of the Technical procedure where in the classified data are put in the form of
tables.
Analysis work after tabulation is generally based on the computation of various percentages,
coefficients, etc., by applying various well-defined statistical formulae.
Testing of Hypothesis: After analysing the data the researcher has to test the hypothesis, various
tests, such as Chi- square test, t-test, F-test, have been developed by statisticians for the purpose.
The hypothesis may be tested through the use of one or more of such tests, depending upon the
nature and object of research inquiry. Hypothesis testing will result in either accepting the
hypothesis or in rejecting it. If the researcher had no hypothesis to start with, generalisations
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established on the basis of data may be stated as hypothesis to be tested by subsequent researches
in times to come.
Generalisation and Interpretation: If a hypothesis is tested and upheld several times, it may be
possible for the researcher to arrive at generalisation, i.e., to build a theory. If the researcher had no
hypothesis to start with, he might seek to explain his findings on the basis of some theory. It is
known as interpretation. The process of interpretation may quite often trigger off new questions,
which in turn may lead to further researches.
Preparation of the Report or the Thesis: Report writing needs some skill, which can be
developed with practice. There should be objectivity, coherence, clarity in the presentation of
report. Report should be written in a concise and objective style in simple language avoiding vague
expressions such as 'it seems,' 'there may be', and the like.
5.2.6 Data Sources and Collection in Marketing Research
Data collection is the process to gather information about the relevant topic of research, which is
being done by researcher. Data collection is a term used to describe a process of preparing and
collecting data, for example, as part of a process improvement or similar project. The purpose of
data collection is to obtain information to keep on record, to make decisions about important
issues, to pass information on to others.
While deciding about the method of data collection to be used for the study the- researcher should
keep in mind two types of data viz, primary data and secondary data. The researcher would have to
decide which sort of data he would be using for his study. The method of collecting primary and
secondary data differ since primary data are to be originally collected while in case of secondary
data the nature of data collection work is merely that of compilation. Any statistical data can be
classified under two categories depending upon the sources utilised:
1)
Primary sources of data, and .
2)
Secondary sources of data.
Primary Sources of Data
A primary source is a publication in which the data are published by the same authority which
gather and analyse them. The primary data are those, which are collected afresh and for first time
and thus happen to be original in character. Primary sources are original sources from which the
researcher directly collects data that have not been previously collected. Primary sources enable
the researcher to get as close as possible to what actually happened and is hands on. A primary
source reflects the individual viewpoint of a participant or observer.
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Methods of Collecting Primary Data
There are several methods of collecting primary data, the important ones are as follows:
Survey Method/Research; Surveys represent. one of the most common types of quantitative, social
science research. In survey research, the researcher selects a sample of respondents from a
population and administers a standardised questionnaire to them. The questionnaire, or survey, can
be a written document that is completed by the person being surveyed, an online questionnaire, a
face to face interview, or a telephone interview. Using surveys, it is possible to collect data from
large or small populations. Various survey methods are as follows:
i)Interview method: Interview is a conversation between two or more people where
question are asked by the interviewer to obtain information from the interviewee. The interview
method of collecting data involves presentation of oral-verbal stimuli and reply in terms of oralverbal responses. This method can be used through personal interviews and, if possible, through
telephone interviews.
ii) Questionnaire method: The questionnaire is a data collection instrument. It is a list
of questions to be asked from the respondents. A questionnaire is a method of obtaining specific
information about a defined problem so that the data, after analysis and interpretation, results in a
better appreciation of the problem. A questionnaire form, which has to be completed by an
interviewer, is often referred as schedule. .
iii) Schedules: Schedule is an instrument in research, which is most frequently used in
collecting field data especially where the survey method is employed. It is used in indirect
interview. It contains questions and blank tables, which are to be filled in by the investigators
themselves after getting information from the respondents. Outwardly schedule and questionnaire
appear to be the same but there is some difference between the two. Schedule is used in direct
interview and direct observation and is filled in by the research work himself.
Observation Method: Observation is an activity of a person which senses and assimilates the
knowledge of the phenomenon or the recording of data using instrument. It can also be referred as
datum collected during this activity. The observation method is the most commonly used method
especially in studies relating to behavioural sciences. In a way we all observe things around us, but
this sort of observation is not scientific observation. Observation becomes a scientific tool and the
method of data collection for the researcher, when it serves a formulated research purpose, is
systematically planned and recorded and is subjected to checks and controls on validity and
reliability. Under the observation method, the information is sought by way of investigator's own
direct observation without asking from the respondent.
3. Other methods: There are a number of other methods for collection of data which are described
as below:
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i) Warranty Cards: Warranty cards are usually postal sized cards, which are used by
dealers of consumer durables to collect information regarding their products. The information
sought is printed in the form of questions on the 'warranty cards' which is placed inside the
package along with the product with a request to the consumer to fill in the card and post it back to
the dealer.
ii) Distributor or Store Audits: Distributor or store audits are performed by
distributors as well as manufacturers through their sales men at regular intervals. Distributors get
the retail stores audited through salesmen and use such information to estimate market size, market
share, and seasonal purchasing pattern. The data in such audits are obtained not by questioning but
by observation.
iii) Pantry Audits: Pantry audit technique is used to estimate consumption of the basket
of goods at the consumer level. In this type of audit, the investigator collects an inventory of types,
quantities and prices of commodities consumed. Thus, in pantry audit data are recorded from the
examination of consumer's pantry.
iv) Mechanical Devices: The use of mechanical devices has been widely made to collect
information by way of indirect means. Eye camera, Pupilo-rnetric camera, Psycho-galvanometer,
Motion picture camera and Audiometer are the principal devices so far developed and commonly
used by modem big business houses, mostly in the developed world for the purpose of collecting
the required information.
v)Content Analysis: Content analysis consists of analysing the content of documentary
materials such as books, magazines, newspapers and the contents of all other verbal materials,
which can be either spoken or printed. The analysis of content is a central activity whenever one is
concerned with the study of the nature of the verbal materials. The analysis may be at a relatively
simple level or may be a subtle one. It is at a subtle level when researcher makes a study of that
attitude, say of press towards education by future writers.
vi) Simulation: Another source from where data is generated is through the use of
simulation. A sophisticated set of mathematical formula are used to simulate or imitate a real life
situation. By changing one variable in the equation, it is possible to determine the effect on the
other variables in the equation. The simulation design is conclusive research, i.e., secondary
research in nature. Simulation is a quantitative research technique.
vii) Panel: This form of data collection method is nowadays increasingly used for
syndicated research. A panel is a group of study units (households, retail stores, organisations) that
exist over time and from which data is collected on a regular interval of time. For example,
members of a consumer panel might maintain purchase diaries in which consumers record every
purchase in a particular product class. Measurement of this nature provides longitudinal data and
permits analysis of changes in behaviour and/or attitudes.
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viii)Focus Groups: Focus groups originate from sociology studies. They have been
extensively used in marketing research. Focus group studies are generally conducted to evaluate
the potential of a new product idea or concept. A focus group comprises several persons, who are
led by a trained moderator. The moderator's task is to lead the team in generating and exchanging
ideas on a particular issue. The process starts by issuing a topic for discussion among participants
by the moderator. In such discussions, the moderator's role will be to silently watch the
proceedings and ensure that the discussion is going on as expected.
Secondary Sources of Data
A secondary source is a publication, reporting the data which have been gathered by other
authorities and for which others are responsible. The secondary data are those which have been
collected by someone else and which have already been passed through statistical process. These
are sources containing data which have been collected and compiled for another purpose. The
secondary sources consists of readily compendia and already compiled statistical statements and
reports whose data may be used by researchers for their studies e.g., census reports, annual reports
and financial statements of companies.
Methods of Collecting Secondary Data
In most of the studies the investigator finds it impracticable to collect first-hand information on all
related issues and as such he makes use of the data collected by others. There is a vast amount of
published information from which statistical studies may be made and fresh statistics are
constantly in a state of production. The sources of secondary data can broadly be classified under
two heads:
1) Internal Secondary Data: Data that originate within the firm for which the rpsearch is
being conducted are internal data. They may be adapted for the marketing research purposes. They
may be formal data and informal data. Formal data are available on a regularly scheduled basis,
such as monthly, quarterly or annually in a form that allows comparisons through time. Informal
data report basic marketing knowledge and are available on a non-recurring basis. Sale's analysis
and invoicing are considered important sources of internal secondary data.
Sales Analysis: Sales analysis is an important tool of marketing research. It is the first step in the
marketing research program and acts as a basis for the development of further marketing research.
It reveals the current operating problems in the marketing area where the scope for marketing
research can be adequately explored in smaller organisations, sales analysis is an important source
of marketing information. It provides a major share of the factors for marketing research.
Invoice Analysis: Company invoices have been a very useful source of information. A copy of an
invoice is preserved and information from it may be punched, tabulated, processed and
summarised to provide suitable information to the researcher. The invoice data may be classified
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according to customer, nature of product, region and area. The invoice record may be of immense
use provided it has been used with precaution and scientifically.
Accounting Records: The basis for accounting records concerned with sales is the sales invoice.
The usual sales invoice has a sizable amount of information on it, which generally includes name
of customer, location of customer, items ordered, quantities ordered, quantities shipped, dollar
extensions, back orders, discounts allowed and date. In addition, the invoice often contains
information on sales territory, sales representative and warehouse of shipment. ' This information,
when supplemented by data on costs and industry and product classification, as well as from sales
calls, provides the basis for a comprehensive analysis of sales by product, customer, industry,
geographic area, sales territory, and sales representative, as well as the profitability of each sales
category.
2) External Secondary Data: The second form of secondary data is external sources which
are generally published and are available in different forms and from different sources. Although
external secondary data may be obtained from different sources, some of the sources are given
here.
Libraries: Researchers first attend libraries to fmd out relevant data pertaining to research. They
provide many sources where suitable data may be obtained. Public libraries, colleges and
University libraries contain a large amount of business information, which provides sources to
other data. Management books, theses, management journals and other publications can be
consulted in these libraries. Management institutes, research institutes, banks, insurance
companies, public utility companies and manufacturing units have maintained adequate libraries.
Literature: A great amount of secondary data is available from literature, particularly on
marketing subjects. With the development of marketing researches in different countries, new and
interesting facts are coming into the picture, which are available in various publications.
Consultations of this literature may provide proper guidance pertaining to publication, which can
be used from time to time.,
Periodicals: Business periodicals published fortnightly, monthly, quarterly, semi annually and
annually are often consulted by the marketing executives and researchers to plan and design their
marketing research. Periodicals on economics, finance, trade, transport, industry, labour and
management are being prepared by the Government as well as by the non-government agencies.
Journals of the marketing association, management association, research agencies, advertising
agencies and other related periodicals are becoming very common in India and abroad.
Census and Registration Data: Census and registration data have become very comprehensive
sources of marketing research. Previously, these were concentrated only to one population census,
but it now extends to many areas. Census and registration data includes Census of Population,
Census of Agriculture, Census of Cattle, Census of Trade, Census of Transport, Census ofIndustry,
Census of Banking and Finance etc.
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Trade Associations: Trade associations may be an excellent source of data pertaining to an
industry. The trade association of one industry may exchange data with the trade association of
another industry, and within one industry a firm may exchange data with another firm with the
help of trade association of the industry.
Government Departments: Different government departments have different data, which are not
available in libraries. But these are very useful for understanding various aspects of the economy.
The researchers can utilise them for the purposes of their research. Information and data pertaining
to agriculture, industry, trade, transport, banking and finance can be obtained from the respective
ministries of the Government of India.
Private Sources: Private sources include varied sources available in the form of books,
monographs, bulletins, journals, commercial reports and so on. They are priced and publicly
circulated. Some of the sources include extensive original research and some summarise the
research findings of other person. Many of them are statements of facts and opinions. The All
India Management Association, the Indian Marketing Association, Commerce Pvt. Ltd., Capital,
the Economic Times and Financial Express etc. are important private institutions which supply
suitable information and data to the public in the form of journals, books and newspapers.
Commercial Data: There are several institutions and companies, which purchase and sell
marketing information and data. Some of these companies are solely engaged in marketing
research. They collect information and data directly from field surveys. Some such companies
collect and process the secondary data and supply them to their subscribers.
Financial Data: The financial data of reputed concerns are available in several magazines,
newspapers, journals and in summary of statistics. The Directorate of Income Tax publishes
information pertaining to taxes and income ranges. Such information and data are useful to
forecast the market potential of a particular product. Private institutions such as the Economic
Times of India, Commerce Private Ltd. etc. are publishing assets and investment- wise data of
several large companies. The market researchers are indirectly benefited by such data and
information.
International Organisations: International organisations such as the International Monetary
Fund, the World Bank, the United Nations Organisation, the Asian Bank, the African Bank,
Foreign embassies etc. publish several useful statistics, which can be used by researchers. The
statistics may relate to the population problem, trade, institutions, culture, agriculture, regional
festivals, superstitions, education, consumption, transportation, forestry, manufacturing and so on.
There are several other publications such as the World Almanac, Thomas Register etc., which
publish much useful information for marketing researchers.
Volumes of Statistics: There are several private and public organisations, which prepare a
summary of statistics. In India, the Indian Statistical Institute publishes the Statistical Abstract.
Commerce Pvt. Ltd., the Times of India Ltd. and the Financial Express compile directories of
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different subjects. The Government of India publishes the economic survey of India wherein
statistics relating to every field of economic activities are compiled in a suitable form.
Advertising Agencies: Advertising agencies have proved to be very useful sources of marketing
research. Recently, a large number of agencies have come into the findings of the advertising
researches for their clients. Advertising agencies sometimes, publish reviews, resumes and tests of
marketing researches. The consumers' behaviour,consumption pattern and demographic features
are generally revealed by these agencies.
Other Sources: There are several other sources of marketing researches. Individuals conduct their
own researches, which may be purchased by other institutions. Marketing associations,
management associations and individual business houses have been conducting marketing
researches for other researches. There are" a large number of researches organisations in foreign
countries, which are selling their research findings to organisations requiring knowing the outcome
of their researches.
5.3 Product Research
Product research is concerned with the design, development, and testing of new products as
well as improvement of the existing once. It also examines whether the quality of a new product
conforms to the desires attributes. In addition it analyses the product mix in comparison with the
competitive products. Further, in case of durable consumer products and technical products,
product research is concerned with the analysis of the after-sales servicing. It may be emphasised
that the product research is concerned with every stage of product life cycle as introduction,
growth) maturity and decline. In a changing market, staying competitive often requires the
development of new products. As consumers' tastes and needs change products must also change.
Developing new products, however, is a risky and costly venture. Experts estimate that eight-out bf
ten new products fail. With such formidable odds, it pays to be informed and prepared to meet the
challenges of introducing a new product.
5.3.1 Importance of product Research
Product research is important as it offers the following advantages:
1) Product research helps to explain the features of the product.
2) It helps to simplify the product line.
3) It enables a manufacturer to develop new products with good market demand in the existing
product line.
4)Product research brings best sales returns.
5) It widens market for the product and also creates goodwill for the product and its manufacturer.
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6) It facilitates appropriate price fixation of the product.
7)Product research brings to the limelight the different uses of the product-fer effective publicity
for sales promotion.
8)It facilitates modification and renovation of existing products so as to make them highly
competitive and agreeable to consumers.
9)It enables a manufacturer to introduce attractive package and brand name to the product for
sales promotion.
5.3.2 Product Research in New Product Development
The new product development process has at least six stages. In each stage, information about the
market and consumers is needed to support critical decisions about the product. The list below
outlines the stages of product development, information needed at each stage, and research
techniques that may be helpful:
1) Opportunity Identification: To start, the individual should seek holes in the market that might
be opportunities. At this, stage, the following information gathering techniques are useful - focus
groups, consumer surveys, analysis of customer suggestions and complaints, brainstorming,
industry research (size of market, consumption patterns), and analysis of competitors' products.
From the beginning, remember that the customers are an important source of information. Make
them a part of the product development team by listening to their suggestions and complaints.
2) Concept Screening: Next, the individual will move from generating ideas to test ideas. In
concept screening, one car describe the 'product idea to potential customers and ask, "Would any
individual buy this product?" If consumers do not like the idea of the product, the physical product
will probably not do well either. Concept screening allows for the(evaluation of winners and losers
early in product development before substantial resources are committed to a product's
development. At this stage, focus groups and consumer surveys are useful research methods. Be
sure to conduct research in the product's target market so that the results accurately reflect the
potential consumers,
3) Marketing Strategy Development: Next, individual will set a plan for the marketing mix (the
four Ps):
i)Product: Define the product in terms of varieties, quality, design, features, brand, packaging,
sizes, service, and warranties.
ii) Price: Develop a pricing strategy. Consider how any individual will use list price, discounts,
allowances, payment periods, and credit terms.
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iii) Place: How will the products get to the customers? Which channels will any individual use
(retail, wholesale food service)? Consider the best locations to reach the target market. Also
consider transportation, inventory, and storage.
iv) Promotion: How will individual use the following - sales promotion (coupons, allowances,
discounts), advertising salespeople, public relations?
4) Product Development: At this stage, using the information individual has collected and the
decisions made about the 4 Ps, an individual will design and create the physical product, as well as
its packaging, name, logo, and advertising. Research at this stage usually involves repeated cycles
of product improvement and testing. Product testing includes: both physical performance (e.g.,
shelf stability) and consumer reactions. Some research techniques useful at this stage are surveys,
tasting panels, and in-home placement testing.
5) Market Testing: This stage is a last check on the product before it enters the market. At this
point, product performance tests are complete. Market testing aims to evaluate Advertising,
Awareness, and Usage (AAU) of the product in test markets. The techniques used include
simulated store testing and controlled test marketing. Some marketing research firms offer AAU
studies.
6)
Product Introduction: As individual introduce, the product to the market, individuals
should test the distribution of the product. Is the product getting on the shelves? Is it getting a
favorable presentation on the shelves? Again, evaluating advertising, awareness, and usage is
important.
.
5.4 Advertising and Promotion Research
Every year companies spend huge sums of money for creating ads and buying media time
and space. They hope that these marketing communication efforts and expenditures would benefit
their businesses by influencing consumer choices. Too much of money is at risk and advertisers
need to have very good information about who their customers are, what they want and like, and
where they spend their media time. Research is needed to furnish the information that drives
marketing and advertising decision-making. Without reliable information, in today's highly
competitive market conditions, use of guesswork or intuition alone may prove to be an invitation
to failure.
Advertising and promotion research is a subset of marketing research. It systematically
gathers and analyses information to help develop or evaluate advertising strategies, individual ads,
or whole advertising campaigns. The advertiser needs to know how consumers perceive its
products or services, what are their views about the competition, and what image of the brand or
the company would be more appropriate to build.
5.4.1 Purpose of Advertising and sales promotion
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1)Advertising Strategy Research: It is used to determine the product positioning, to assist in the
selection of the target markets, advertising messages, or media vehicles. Advertising strategy is
developed by carefully blending the elements of the creative mix. The mix elements are:'
i)Target Audience: The major purpose of conducting 'target audience research' is to develop a
precise profile of a brand's target market and consumers. It is critically important to know which
customers can be classified as the primary users of the product category and then carefully study
their geographic, demographic, psychographic, and behavioral characteristics. The research may
reveal which are the most potential market segments and target them to achieve advertising
objectives. This is particularly true while introducing a new product. Companies may have budget
constraints and may prefer to launch the product in a phased manner instead of attacking all
geographic areas at the same time.
ii) Product and its Positioning: To develop an effective 'positioning strategy' for the brand, the
advertiser needs to know "how consumers perceive their brands and those of the competitors'.
They also need information on what qualities, features, or benefits associated with the product or
service lead to initial purchases and, ultimately, to brand loyalty. '
iii) Communications Media: 'Communications media research' help develop media strategies and
select media vehicles from among the different media class and type (T.V., newspapers,
magazines, radio, outdoor, etc.) Ad agencies subscribe to syndicated research services such as
NRS and IRS that monitor and publish information on the reach, audience profiles and
effectiveness of different media vehicles.
iv) Advertising Message-Element: Advertisers undertake research to study and identify what
consumers' likes and dislikes are with respect to brands or products and hope to find the big idea
and develop promising advertising messages. Researchers use concept testing to determine which
'message-element' option is most likely to prove successful.
2)Creative Concept Research: It is used to assess the extent of the target audience's
acceptance of different creative ideas at the concept development stage. Creative specialists
prepare several tentative ad concepts in the form of rough copy platform, or the storyboard.
Researchers conduct focus groups in. The agency's developmental lab, which combine intensive
qualitative interviews with quantitative techniques. A discussion leader moderates the conversation
and each group views the roughs (copy platform, storyboard or animatic. The reactions of these
groups are measured, videotaped, and observed by researchers behind a one-way mirror. This
helps in identifying the most promising creative concept among the ones that have been seen and
discussed by the focus groups.
3)Pre-Testing and Post-Testing: Pre-testing of ads is done to diagnose any possible
communication problems before beginning an ad campaign. Post-testing of ads helps advertisers to
evaluate the campaign results. Advertisers use pre tests and post-tests to ensure that advertising
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money is used wisely to achieve the predetermined objectives. Testing can help in judging the
effectiveness of the advertising strategy or medium.
Pre-testing is used to increase the likelihood of creating the most effective advertising messages.
Advertisers are often interested in concurrent testing to assess the audience response while the ad
campaign is under way. Post-testing (also called ad tracking) is important to evaluate the success,
or otherwise, of an individual ad or the whole campaign after it has run.
By using pre-testing, advertisers can sharpen their decisions about a number of advertising
variables. Many of these can be post-tested as well. These variables can be put in terms of the five
Ms:
i)Merchandise: Advertisers may pre-test a number of factors related to the product or
service, such as how effectively the advertising communicates the features and benefits, which
benefits are most important and persuasive to consumers, or how good is the package design. This
information also helps in determining how effectively the advertising positions the brand.
ii) Markets: The information gained from pre-testing advertising strategy or particular ads with
various audience groups in a target market may furnish information which may necessitate altering
the strategy or modify the ad or commercial. In post-testing, the campaign's success in influencing
the target audience can be assessed by measuring the levels of product or service awareness, liking
and sales results.
iii) Motives: Advertisers are most certainly interested in creating the most compelling
advertising messages to address the consumers' motives. Pre-testing helps identify and appeal to
the powerful needs and wants of the audience members and post-testing reveals how successful
they were.
iv) Messages: Pre-testing can help in identifying the most effective and ineffective commercials
and ads. It can help determine the consumer's point of view about what a message says and how
persuasive it is. Pre-testing can be done for headline, body copy, illustration, or the total message
concept and guide the improvement in ads or commercials. By using research, the advertiser can
determine to what extent the ad or commercial was seen, remembered, Comprehended and
believed.
v)
Media: The media is becoming increasingly expensive and the largest share of advertising
budget is spent on media buying. Advertisers today demand more accountability. Pre-testing can
influence decisions concerning classes of media, media sub-classes, specific media vehicles, media
units of space or time, media budgets and media scheduling, etc. After the completion of an ad
campaign, post-testing can determine how effectively the chosen media mix could communicate
the desired message with the target audience.
5.4.2 Importance of Advertising Research
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1)
Indicates Chances: Advertising research indicates chances for items and market
development, an organisation can then make a decision around the creation, revenue and creation
plans immediately after identifying the market potential.
2)
Provides a Basis for Sound Decision: It provides a basis for sound, current market led
decision by providing details to cut back uncertainty.
3)
Facilitate Customers or Industry: Advertising and market research enables an
organization to match their items or providers to the necessities in the customers or industry.
4)
Ensure Effectiveness: Advertising research helps advertising to be tested throughout a
campaigns growth or prior to start to ensure its effectiveness, and right after kick-off to measure
the results in the media used.
5)
Piloting the Plan before Launching: Advertising research also allows product or service
ideas to become tested without expenditures of lunching in your marketplace; this has generally
been a change in service, solution, or style.
6)
Delivers Goal Explanation: Advertising research also delivers goal explanation for results
and failure in the market.
7)
Asses Advertisement Ability: Asses an ad's ability to create awareness, generate leads,
and increase conversion.
8)
Pinpoint Weak Elements: Pinpoint weak elements within an ad and tells how to improve
its performance. It also indicates which creative elements and content appeal to different target
segments.
9)
Identify Elements of an Integrated Ad Campaign: Advertising research identifies
elements that can be part of an integrated ad campaign using different media ..
10)
Provide a Framework: Advertising research provides' a framework for the creative/design
team, allowing them to create effective ads.
5.4.3 Process of Advertising Research
Advertising research is an ongoing process. The advertising research process is similar to the
market research process in that they both follow a sequence of steps. Designing, planning,
conducting, and analyzing of a successful advertising research is consisted of three main stages:
1) Identify Advertising Problems: This step consists of following sub steps:
i)The first research process is to discuss and identify advertising problems. Advertising problems
may come from ad campaigns or ad strategies.
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ii) In this step, the problem statement should be written in order to identify what types of
information are really needed, why information is needed, and how it will be used.
2)Justify Research Needs: This step consist of following sub steps:
i)Not all situations that research is worth conducting. The question is in which situation research
should be conducted to solve advertising problems?
ii) The appropriateness of conducting research can be evaluated through "a cost value analysis,"
which means that the value of information acquisition to help in the decision-making process
exceeds the cost of information acquisition.
3) Specify Informational Needs: This step consist of following sub steps:
i)The last process is to identify informational needs that best help a decision maker evaluates the
strengths and weaknesses of the ad campaigns or ad strategies.
ii) The advertising campaigns will be evaluated in two aspects such as communication of the main
idea (believability and relevance) and audiences' reactions to the ad campaigns (attitude and
purchase intention).
4)Identify the Appropriate Type of Research: This process is to select the appropriate type of
research that meets informational needs and provides desired information. Two types of research is
used: quantitative and qualitative.
i) Quantitative Research: Quantitative research is used when generalization to a larger population
is crucial, when statistical information is needed, when statistical analysis of the data is required.
Three types of quantitative research are: survey, observation, and physiological research.
ii) Qualitative Research: Qualitative research is used when in-depth information (e.g., consumers'
feelings and/or beliefs) is needed and when information cannot be obtained through closed-ended
questions. The most frequently used is focus group research.
5)Determine Sampling Method: This process is to specify how sample will be selected. The
determination of sampling methods depends upon the objective of research, the need for
generalisbility, and the research budget. Two types of sampling methods can be used: random and
nonrandom samplings.
i) Random Sample: A random sample is a sample in which each individual has an equal chance to
be selected for inclusion in the study.
ii) Nonrandom Sample: A nonrandom sample is a sample -in which individuals are not selected by
chance. They are selected by purpose and convenience.
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6) Determine Data Collection Method: Four major methods for collecting data in quantitative
research are: interviews, mail, telephone, and electronic survey. Two major methods for collecting
data in qualitative research are face-to-face interviews and focus group discussions.
7) Data Investigation: Data investigation required to analyze the quantitative and qualitative data:
i) Quantitative data requires data coding, interpreting, and analyzing.
ii) Qualitative data require "synthesis," which is similar to the process of putting little pieces of
information together and come up with the main conclusion.
8)Decision Making: This last step is to use the research findings to help in the decision-making
process, help evaluate the advertising campaigns problem, and evaluate the strengths and
weaknesses of each campaign
5.5 Consumer Behaviour Research: Consumer Research
The marketing concept states that, to be successful, a company must understand the needs
of specific groups of consumer (target markets) and then satisfy these needs more effectively lhan
the competitors. Marketers who have a thorough understanding of the consumer decision-making
process are likely to design products, establish prices, select distribution outlets, and design
promotional messages that will favourably influence consumer purchase decisions.
The field of consumer research developed as an extension of the field of marketing
research. Just as the findings of marketing research are used to improve managerial decisionmaking, so too are the findings of• consumer research. Studying consumer behaviour, in all its
ramifications, enables marketers to predict how consumers will react to promotional messages and
to understand why they make the purchase decisions they do. Marketers realise that the more they
know about their target consumers' decision-making process, the more likely they are to design
marketing strategies and promotional messages that will favorably influence these consumers.
Savvy marketers recognise that consumer research is a unique subset of marketing research, which
merits the use of specialized research methods to collect customer data. Consumer research
enables marketers to study and understand consumers' needs and wants, and how they make
consumption decisions.
Consumer research is a form of applied sociology that concentrates on understanding the
preferences, attitudes, and behavior of consumers in a market-based economy, and it aims to
understand the effects and comparative success of marketing campaigns. The consumer research
focuses more on the data collection and relationship building and strengthening between the
contacted consumer and the company.
Consumer research includes following points as well:
1)
Determining demographics of existing and potential users,
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2)
Identifying customer needs and product expectation levels,
3)
Identifying factors influencing purchase decisions, and
4)
Ascertaining the level of customer satisfaction.
Consumer research can also prove helpful if one wants to explore business opportunities in new
markets. Consumer research can be conducted by two methods, primary research or secondary
research.
1) Primary Research: It is the actual conduct of studies and production of data. Primary research
is costly and time consuming but the data is specific to the product of service being evaluated.
Primary research refers to information that is directly collected from the source. Another simple
method of primary research would be to directly talk to customers and get their feedback. Primary
research can be both qualitative and quantitative.
2) Secondary Research: Secondary research is any information marketer may use but which has
not been specifically collected for the current marketing research. This includes published sources
of data, periodicals, newspaper reports, and nowadays, the internet. It is sometimes possible to do a
lot of good secondary research and get useful information. But making research typically requires
a lot of current data which is not available from secondary sources.
5.5.1 Consumer Research Process
The consumer research process involves the following steps as illustrated in figure 5.3:
1) Defining the Research Problem and Developing Objectives: The consumer research process
starts with identification of management problem or an opportunity, on the basis of which the
research problem and objectives are formulated. A management problem/opportunity relates to
decisions management has to take and research problem looks at the information needed to
facilitate that decision. A proper understanding of the management problem and what information
is needed from the research is extremely important. Without properly laid-out research objectives,
the purpose of the research cannot be achieved. Only after agreeing on objectives, should the next
step be taken.
2) Exploratory Research and Analysis/Secondary Data Collection: After defining the research
problem and clearly stating the objectives of the research, the next step is to collect the relevant
information from the available sources of information. This form of secondary data collection is
called exploratory research. Explorer or secondary research involves the collection and analysis of
any published data for a purpose other than the current one. Secondary sources of information can
either be external or internal to the organisation. Internet, books, magazines, journals, published
research and studies, commercial surveys, national statistics issued by government, industry
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publications and research published by market research agencies, and audits are some examples of
external sources of information while accounting and sales reports; and internal audits are some
example of internal sources of information.
3)Designing the Conclusive Primary Research: Conclusive research involves collecting data
from the primary source of information, i.e., consumers, retailers, etc., or from some other
company. Here the data is unreported and unpublished, and is directly collected by the researcher
from the primary source. Before starting with this kind of data collection, a research plan has to be
chalked-out. A quantitative research study consists of a research design, the data collection
methods and instruments to be used, and the sample design. Three basic designs are used in
quantitative research: observation, experimentation (in a laboratory or in the field, such as in a
retail store), or survey (i.e., by questioning people). In selecting the appropriate research format for
a qualitative study, the researcher has to take into consideration the purpose of the study and the
types of data needed. The key data collection techniques for qualitative studies are depth
interviews, focus groups, discussion guides, projective techniques, and metaphor analysis.
4)Data Collection, Analysis, and Findings: The fmal step in consumer research process is to
collect data, analyse, and prepare a final report based on the fmdings. A good report should not
only be highly focused but also easy to understand by the intended reader. This can be done
through simple pictorial representations (flowcharts, figures, graphs) to facilitate understanding. In
qualitative research, the moderator or test administrator usually analyses the responses received. In
quantitative research, the researcher supervises the analysis: Open-ended responses are first coded
and quantified (i.e., converted into numerical scores); then all of the responses are tabulated and
analysed using sophisticated analytical programs that correlate the data by selected variables and
cluster the data by 'selected demographic characteristics.
5.6 Retail Research
Retail research measures industry and market trends, helping to provide insight and
information for the development of new retail formats and offering. Research is carried-out at the
retail level for concept testing, business feasibility analysis, identification of the right product mix,
studying the target group profile, analysing consumer behaviour, etc. Commissioning a new retail
project, the process starts with the identification.of the basic theme, arriving at the right retail
format, identifying the right customer profile and getting the right product mix if a proposition has
to be created in an area of choice that has not been firmed-up. There are also times when the
organisation has firmed-up the basic proposition, but the details of the elements are researched and
tested.
A crucial area of any Retail research campaign is the element of understanding the customers. In
its simplest form, this service can be used as an effective method of capturing and cross-analysing
complete ranges within each relevant retailer, highlighting gaps for development opportunities.
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5.6.1 Components of Retail Research
The components of retail research are:
1)Quantitative Survey: This studies target demographic groups by mapping target segments. By
mapping the current market according to behavioural and need based segments, the survey helps to
ascertain the right profile to target. This means understanding:
i)Current shopping patterns. That is, which demographic group shows higher frequency of
shopping as well as spend, which feels the need for a retail experience, etc.,
ii) The size of the segment,
iii) The means used currently to satisfy this need, and
iv) The core/peripheral targets and their respective sizes.
A quantitative survey is also done to assess the viability of a retail business by determining the
concept's appeal and measuring how that translates into potential. This involves understanding the
motivators and barriers and profiling the core target group where its appeal is the maximum, which
gives an indicator of likely frequency of visits/spends, etc.
2)Qualitative Research: Qualitative research is .also done while re-defining an existing
proposition by involving focus groups among the target audience. While developing a product mix,
the focus groups among the target segments identified are. treated as lead segments for studying
product preferences. This is done by:
i) Identifying the most promising positioning/product proposition in the core target.
ii) Getting cues on ambience, shopping needs, styling, must-haves, Don'ts, and so on.
iii) Conducting a negative check (a check for possible deterrents) on the preferred initiative among
the secondary target/areas to strengthen, in order' to attract the peripheral target.
3)Research Design: This comprises the clear objectives of the study: the nature and sources of
data, sample quota size, questionnaire design, analysis methodology, etc.
5.6.2 Developing a Methodology for Retail Research
Research techniques are based on 'customer decision paths', the processes through which, the
customer goes -leaving home, shopping and returning home. The shopping experience begins as
soon as the shopper plans the trip. While some prepare a shopping list, others work from memory.
Many thoughts go through the consumer's mind before he even reaches his destination, influencing
where he chooses to shop.
These include:
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1)
Proximity to the store, whether it is easy to get there or not,
2)
Availability of goods at the store,
3)
Cost/pricing of goods,
4)
How to carry the goods when at the store, and
5)
Parking space.
5.6.3 Research Process in Retail
Marketing research in retailing entails the collection and analysis of information relating to
specific issues or problems facing a retailer. At farsighted firms, marketing research is just one
element in a thorough retail information system. At other firms, marketing research may be the
only type of information gathering and processing that is done. The marketing research process
embodies a series of activities. The use of this process lets a retailer do research systematically not haphazardly - and make better decisions. Each activity is done sequentially. Thus, secondary
data are not examined until after an issue or problem is defined. Primary data are generated only if
secondary data do not yield enough information for a decision. The stages in the research process
are given below:
1)Define Issue or Problem to be Researched: Issue (problem) definition involves a clear
statement of the topic to be studied. What information does the retailer want to obtain in order to
make a decision? Without clearly understanding the topic to be researched, potentially irrelevant
and confusing data could be collected. As retailers today operate in a highly volatile environment
governed by various macro-environmental factors they need to constantly assess their relative
position and identify the various problem areas or opportunities they need to work upon in order to
sustain themselves competitively in the market. The managers need to analyse the changing
dynamics of business, and to evolve a strategy to adapt to the changes taking place in the external
environment.
2)Examine the Secondary Data: After the research issue (problem) has been defined, secondary
data sources are examined. Secondary data are those that have been gathered for purposes other
than addressing the issue or problem currently under study. Secondary data may be internal (such
as company records) or external (suchas government reports and trade publications). Secondary
data are published data that have already been collected for some other purpose. Secondary data
may be internal to the organisation, such as sales reports and receipts, or external, such as
government reports or privately circulated reports. Trillions of pieces of data are available; thus,
the acquisition cost in terms of dollars and time can be very high if the process is not well planned.
To cut down on acquisition time, a manager should retrieve only secondary data that are relevant
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to the specific retail problem. Fortunately, the finding and storage of secondary data are fairly
inexpensive when compared to the primary data collection process. .
3)Generating Primary Data: Primary data are those collected to address the specific issue or
problem under study. This type of data may be generated via surveys, observations, experiments
and simulation. Primary data are collected during the course of doing experiments in an
experimental research but in case we do research of the descriptive type. and perform surveys,
whether sample surveys or census surveys, we can obtain primary data either through observation
or through direct communication with respondents in one form or another or through personal
interviews.
4) Data Analysis: Once the data have been collected, they must be analyzed. Generally speaking,
data are subject to a number of statistical tests. The statistics yield an estimate of how the overall
population will respond to a given situation. Remember that the more current the research is, the
better its predictability will be for the general population under study. After the data have been
collected, the researcher turns to the task of analysing them. The analysis of data requires a number
of closely related operations such as establishment of categories, the application of these categories
to raw data through coding, tabulation and then drawing statistical inferences.
5)Recommend and Implement Findings: The last phase in the research process is to make
recommendations based on the interpretation of the data. The easiest way to understand the
process, the statistics, and ultimately the data is to take course work or workshops in statistics and
research methodologies and then practice, practice, practice. Sometimes secondary data are relied
on; other times, primary data are crucial. Still other times, both are important.
5.7 Customer Driven Organization
5.7.1 Introduction
Customer-driven marketing involves seeing the products or services from the customer's
perspective and communicating the messages in the customer's language. This approach goes
beyond traditional concepts of branding and positioning, which are driven by the marketer, to
getting an outside-in perspective and designing a marketing strategy that is driven by the
customer's needs. The key to obtaining an outside-in perspective lies in conducting beneath-thesurface customer and employee research.
Organisations that understand the key role of customers in their success are known as
customer-driven organisations. In a customer-driven organisation, decisions are made based on the
knowledge of customer needs and expectations, and on the impact of those decisions on the
organisation-customer relationship.
5.7.2 Characteristics of Customer-Driven Organisations
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Certain characteristics of customer-driven organizations are as follows:
1) Value-added Service Organization: Customer-driven organizations realize that a quality
market offering (tangible or intangible) delivered at a fair price or at a reasonable cost is the
starting point for building service success that will lead to value-added service satisfaction and
future partnerships.
2) Quality Striving Process: Customer-driven organizations know that it is the process of striving
for quality, not the attainment of a specific quality goal that produces services satisfaction. (As the
saying goes, it is the journey, not the destination).
3)Interaction Oriented: Customer-driven organisations know all their customers and treat every
interaction as' a customer service opportunity, a chance for both parties to benefit. The leaders
know that information is gold and that they never have enough information about their customers,
internal or external. They also realise that improvement must be a continuous process, since
customer needs and expectations constantly change.
4) Expectation Focused: Customer-driven organizations focus on managing expectations through
managing moments of truth. They think in terms of the effects of their actions on the customer,
rather than on their jobs, tasks, procedures, and costs. They aim to create value-added partnerships
that benefit all parties.
5) Internal Marketing: Customer-driven organizations understand that service must happen on
the inside before it can happen with external customers.
6) Self Directed: Customer-driven organizations develop self-directed leadership skills rather than
job descriptions. They believe that the role of leaders is to help the support staff shine, so they can
help the service staff shine, so they can help the customer shine.
7)Information Based: Customer-driven individuals and organisations know how to manage
change through continually acquiring information that helps them to uncover trends and changes in
customer expectations. They realise that they must use the information to anticipate and
proactively manage change, rather than reacting to the surprise of change.
5.7.3 Elements of Customer-Driven Organisations
A totally customer focused organisation must meet the following imperatives:
1)Create a customer-keeping vision in everyone in the organisation.
2)Establish the voice of the customer in every organisation decision. Become close and
communicative with the customers.
3)Study, adopt, or adapt methods of the leaders from every kind of organisation in products or
services.
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4)Employees must believe that the customer is their number-one job. Managers must demonstrate
this in all their activities and lead by example.
5)Break-down barriers between and within organisations that inhibit serving the customer. This
should happen through the adoption of the policies and proper application of the continuous
process improvement methodologies.
6)Develop and use performance and effectiveness measures. They must be tied to customer
satisfaction measurements. Other organisations can be benchmarked to identify useful measures.
7)Customer-driven organisations are also recognised by:
i) Reliability: The ability to provide what was promised, dependably, and accurately.
ii) Assurance: The knowledge and courtesy of employees, and their ability to convey trust and
confidence.
iii) Tangibles: Facilities and equipment, and the appearance of personnel.
iv) Empathy: The degree of caring and individual attention provided to customers.
v) Responsiveness: The willingness to help customers and provide prompt service.
5.7.4 Strategies of Customer Driven Organisation
A customer driven organisation always relies on its business strategy to give the best
customer experience by employing the right tactics. The strategies of a customer driven
organization are as follows: .
1)Customer and Business Intelligence Strategy: A customer driven organisation might have
Customer and business intelligence as its strategy for which it needs to use data mining, database
marketing and decision support. These tactics help understand the customer and provides value to
the organisation.
'
2)Branding and Marketing Strategy: A customer driven organization also has its branding and
marketing strategy in place for which it needs regular brand assessment and development. Because
of these tactics the organisation builds the right expectations for the customers from the brand.
3)Online Interactivity Strategy: Through its online interactivity, these organisations provide
websites that prove very compelling to use and are very practical. The website of Dell is such an
example. For such a strategy, the organisation needs to design a really effective website and
develop the supporting web solutions.
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4)Marketing Approach: The customer driven organisation also needs to have a marketing
approach through email, web or phone. For this to happen it needs completely co-ordinated
channels and operations such that it can reach the customer through these channels.
5)Real Time Knowledge Transfer Approach: Finally the organisation needs real time
knowledge transfer between employees and customers such that it promotes the organisations
products by themselves. In such real time knowledge transfer customers get to research and
interact about upcoming products and services thereby increasing the sales ratio for the
organisation. This is especially true for fmancial organisations.
5.7.5 Stages in Customer Driven Organisation
Being customer driven is much like motherhood and apple pie; it is hard to argue against,
However, many firms - indeed, most firms - are not really customer driven, if their actions offer
any indication. Too many firms take their customers for granted and make only superficial efforts
to satisfy them. For a firm to become truly customer driven, a major shift in corporate philosophy
must exist. Such a change in orientation usually results from a gradual, evolutionary process, It
appears there are atleast three stages through which a firm must pass to become truly customer
driven as:
1)Bliss: There is an old adage that "ignOl•.e'is bliss". Many firms are blissful, indeed. The
management of the "blissful" firm feels it produces a good product because it often has a good
finished-product quality-control program. It has reasonable warranties and tries to treat its
customers fairly. Very often the firm will have a lenient return or exchange policy for its products.
After all, the blissful firm wants to" keep its customers satisfied: The blissful firm often has a
customer service department that handles customer complaints. So what is wrong with the blissful
firm? The problem is that this firm is in a reactive, status quo mode. It uses its customer service
department to react to customer complaints, most likely without realising that typically fewer than
5 per cent of dissatisfied customers actually complain to the company itself. The blissful firm does
not understand that the cost of acquiring a new customer can be as much as five times the cost of
keeping an existing one. The blissful firm is comfortable with its current operation and has not
established an environment for continual innovation and improvements.
2) Awareness: The second level in the transition toward customer orientation is aware that
customer satisfaction is important. An aware firm has all of the characteristics of a blissful firm,
but is more proactive. Whereas both blissful and aware firms say that customers are important,
aware firms actually implement practices that indicate they mean it. Aware firms have customer
service departments, as do blissful firms, but aware firms will open customer service departments
for extended hours to make it easier for customers to use the service. They provide toll-free
calling; they may have a bilingual customer service staff.
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3)Commitment: Committed firms realise that achieving customer satisfaction cannot result from
just doing the traditional things better. Good product quality, warranties, and customer surveys can
help, but they are inadequate without something more. That "something" is changing the customer
from a target to a partner. As a partner, the customer is actually involved in a firm's decisionmaking processes at many levels in the organisation. Committed firms recognise that customers
are a valuable asset and a source of innovation. Therefore, committed firms actively develop
mechanisms for customer involvement comprehensively throughout the firm. Committed firms
operate under a philosophy of Total Customer Integration (TCI). The TCI orientation is a natural
subset of Total Quality Management (TQM), which among other things emphasises the
development of systems to determine customer requirements. In fact, one of the seven criteria for
the Malcolm Baldrige National Quality Award emphasises customer satisfaction. The fundamental
philosophy that drives a TCI approach is that customers are not a target for the firm's marketing
efforts, but instead are partners with whom a firm must work to enhance the delivered value of
products or services. This philosophy, which takes a long-term view, considers customers valuable
assets. Thus, customer retention is atleast as important as acquiring new customers, if not more so.
TCI clearly implies that the primary segmentation criterion used in marketing strategies should be
to distinguish current customers from new customers.
5.8 Cause-Related Marketing
Cause marketing or cause-related marketing refers to a type of marketing involving the
cooperative efforts of a "for profit" business and a non-profit organisation for mutual benefit. The
term is sometimes used more broadly and generally to refer to any type of marketing effort for
social and other charitable causes, including in-house marketing efforts by nonprofit organizations.
Cause marketing differs from corporate giving (philanthropy) as the latter generally involves a
specific donation that is tax deductible, while cause marketing is a marketing relationship
generally not based on a donation.
According to Thompson, "Cause-Related Marketing can be defined as a strategic positioning and
marketing tool which links a company or brand to a relevant social cause or issue for mutual
benefit".
According to the Foundation Center, "Cause-Related Marketing (CRM) is the public association of
a for-profit company with a non-profit organization, intended to promote the company's product or
service and to raise money for the non-profit".
5.8.1 Objectives of Cause Related Marketing
Objectives of cause-related marketing are as follows:
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I) Increase Sales: It is one of the most fundamental reasons for participating in cause marketing
activities.
2)Enhancing Corporate Stature: Due to association with a respected cause/organisation a
company may get a better corporate image, improved national visibility and communications
toward social responsibility with the public.
3)Thwarting Negative publicity: The use of CRM as a response to negative publicity can be an
effective weapon.
4)Customer Pacification: When companies are threatened by a boycott on their products
CRMlcan act as one part of a more extensive program to calm down the group who are
accountable for the boycott.
5)Facilitating Market Entry: Companies entering a market and at the same time use CRM
to/smooth the progress of penetration is one objective that is quite common.
6)Increase the Level of Trade Merchandising Activity for the Brand(s) Prototed:
Improvements/in the number of reorders, sell-through and similar measures are important
objectives for a large quantity of companies involved in CRM.
5.8.2 Types of cause related Marketing
1)
Broad-based Programme: It is the simplest program. Both existing and new consumers
are targeted and firms donate a certain amount of each sold product. The only action required from
the consumer is the purchasing of the product and there are no limits of how big amount that is
donated. When using broad-based CRM programs leveraging activities are needed. These could
include advertising, packaging information and sales information.
2) Limited CRM Program: It is a limited version of the broad-based which also targets all kinds
of consumers. The main difference between broad-based and the limited CRM program is that
firms donate a certain amount of each sold product but only to a maximum sum. In some cases
they also offer to donate a minimum sum to increase the credibility. As in the broad-based program
the only required action from the consumer is purchasing the product. Leveraging activities are
also the same as in the broad-based program.
3)Market-Focused Programme: It targets new types of consumers. There might be an additional
requirement from the consumer besides purchasing the product, i.e., submitting coupons. The
financial commitment can be either unlimited or capped and an amount is donated for alt sales of a
specific product. Since this program targets a specific market the promotion needs to be adapted to
that market and also in some cases informative sales promotion is needed.
4)Replacement Program: It replaces the ordinary sponsoring with sales based giving. All types,
of consumers are targeted. The requirements from the consumers are similar to the market-focused
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program where also a second action may be needed. As in the limited CRM program the financial
commitment is also capped which means there will be a limit of how much money that will be
donated. Both advertising and information on the package are required leverage activities, i.e., 'By
purchasing this product you have donated a certain amount to a specific cause'. Additional sales
promotions are also commonly used in this program.
5)Multi-Phase Programme: It targets all kinds of consumers, both new and existing. Here the
consumers have to purchase a product and an additional action is required. It could be submitting
coupons or mail in a barcode but the big advantage with this program is that not 'all customers will
make this extra effort and still the company's gain in consumers' trust will be the same as if there
were no extra requirement. The financial commitment can be either unlimited or capped and an
amount is donated for all sales of a specific product. Advertising and information of packages are
essential and should inform the consumer of the extra activity that is needed. This can also be
complemented with different types of sales promotions.
5.8.3 Cause Related Marketing in India
Some of the major examples of cause related marketing in India are as follows:
1)Tata Group: The company's philanthropic activities can be dated to as early as 1892. They have
run Endowment Schemes to provide higher education for deserving Indians. Over 3,500 Tata
scholarships have been awarded. JRD Tata institutionalised CSR in the 1970s and decided that the
group shall be mindful of its social and moral responsibilities to the consumers, employees,
shareholders, society, and the local community for all its major companies.
In July 2002, Tata Steel presented the first corporate sustainability report, which would serve as a
benchmark and a confidence-builder for other Tata companies. It also has formed group resource
under the TCCI (Tata Council for Community Initiatives) on corporate sustainability and a strategy
to assist other Tata companies on corporate social responsibility. The group resource on corporate
sustainability would work on developing a Tata model using technical inputs from the UNDP.
The Tatas have spent n.5 billion on social services - the highest by any corporate house in the
country during 2001 and 2002. The thrust area was rural development, which included community
health, basic education and vocational training. It also spends on basic infrastructure and disburses
money through various charitable trusts and relief and reconstruction societies.
2)Infosys: Formed in 1981 by N.R. Narayana Murthy, Infosys follows a socially responsible and
sustainable path in conducting business. Even during the boom time of the 1990s when the stock
prices of IT companies were skyrocketing, the company believed in sharing the wealth with the
community and its employees. This practice of the company stems from the personal belief of
Narayana Murthy to give back to the society more than what it gave him. It also substantiates the
role and motivation of the CEO and the top management in making the company a responsible
corporate citizen. Infosys has won many awards such as Best Employers to Work for in India,
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Golden Peacock Award for Excellence in Corporate Governance in the Global Category by the
World Council for Corporate Governance, London and Corporate Citizenship Award by The
Economic Times. According to a recent report, Infosys spends about Rs. 50 million on social
activities.
3)AV Birla Group: The AV Birla group's initiatives are channeled through The Aditya Birla
Center for Community Initiatives and Rural Development spearheaded by Rajashree Birla (wife of
Aditya Birla). All the Group companies are dedicated to social development. Hinda1co a group
company has won the FICCI-SEDF Social Responsiveness Awards 2001 instituted by FICCI
Socio Economic Development Foundation (a constructive partnership between Businessworld,
ICICI Communities, Partners in Change and KPMG). The activities of the group include
innovative projects involving the development of rural youth and employment generation;
education and training and health care projects; helping the disable people; social causes like
widow remarriages; dowry-less marriages; and women empowerment programs. Also the group
undertakes sponsorship of the arts and Indian culture, which are need based. The Birla Academy of
Art and Culture set-up in 1962 in Kolkata treasures art works and exquisite exhibits and has
evolved into one of India's premier institutions for art and culture. The A V Birla group also offers
scholarships to students from IITs, IIMs, and BITS (Pilani) to nurture tomorrow's leader as late
Aditya Vikram Birla, believed in people power and their potential to become leaders. Only the best
are selected for the coveted award and are called "The Aditya Birla scholars".
5.9 Ethics In Marketing
5.9.1 Introduction
Ethics is a set of standards, or a code, or value system, worked out from human reason and
experience, by which free human actions are determined as ultimately right or wrong, good or evil.
Business ethics are generally coming to know what is right
or wrong in the workplace and doing what is right - this is in regard to the effects of
products/services and relationships with stakeholders.
According to Webster, "Ethics is the discipline dealing with that which is good and bad and with
moral duty and obligations".
Ethics refers to right and wrong conduct of individuals and institutions of which they are a part.
Personal ethics and formal codes of conduct provide a basis for deciding what is right or wrong in
a given situation. Ethical standards for a profession are based on society'S standards, and most
industries have developed a code of behaviours that are compatible with society's standards.
Professions in the country owe much of their public regard to standards of conduct established by
professional organisations.
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Marketing is the process of planning and executing the conception,. Pricing, promotion, and
distribution of ideas, goods, and services to create exchanges that satisfy individual and
organisationsl goods. Now the question arises why should marketers worry about ethics? What
role do the moral-values play in an economic system? Is it the need of the hour to be ethical while
marketing? Is it the competitive pressure/legal laws which force them to consider ethics in
marketing or they have realised that in the changing climate of consumerism, they have to adopt
ethical view to understand and meet the need of 21st Century customers
5.9.2 Ethical Norms and values for Marketers
1)Responsibility of the Marketer: Marketers must accept responsibility for the consequences of
their activities and make every effort to ensure that their decisions, recommendations and actions
function to identify, serve and satisfy all relevant publics: customers, organisations and society.
2)Honesty, Integrity and Quality: These are far more important than quick profits.
3)Rights and Duties in the Marketing Exchange Process: Participants should be able to expect
that products and services are safe and fit for intended uses; that communications about offered
products and services are not deceptive; that all parties intend to discharge their obligations,
financial and otherwise, in good faith; and that appropriate internal methods exist for equitable
adjustment and/or redress of grievances concerning purchases.
4)Organisational Relationships: Marketers should be aware of how their behaviour influences
the behaviour of others in organisational relationships. They should not demand, encourage or
apply coercion to encourage unethical behaviour in their relationships with others.
5)Conduct Business so as to Build Long-term Loyalty: When one gets a customer, he wants to
keep that customer and builds a sales relationship that can not only last for years, but also create a
stream of referral business.
6)Avoiding Harmful Marketing: This means doing work for which they are appropriately trained
"experienced so that they can actively add value to their organisations and customers. It also means
adhering to all applicable laws and regulations and embodying high ethical standards in the
choices they make.
7)Marketers Must Foster Trust in the Marketing System: This means that products are
appropriate for their intended and promoted uses. It requires that marketing communications about
goods and services are not intentionally deceptive or misleading. It suggests building relationships
that provide for the equitable adjustment and/or redress of customer grievances. It implies striving
for good faith and fair dealing so as to contribute toward the efficacy of the exchange process.
8)Marketers Must Embrace, Communicate and Practice the Fundamental Ethical Values: It
will improve consumer confidence in the integrity of the marketing exchange system. These basic
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values are intentionally aspiration and include honesty, responsibility, fairness, respect, openness
and citizenship.
5.10 Online Marketing
5.10.1 Introduction
Online marketing is also known as virtual/ interactive/internet marketing or e-marketing. It
is the fastest-growing form of direct marketing. Recent technological advances have created a
digital age. Widespread use of the Internet is having a dramatic impact on both buyers and the
marketers who serve them. The Internet, a vast public web of computer networks, connects users
of all types all around the world to each other and to an amazingly large information repository.
The Web has fundamentally changed customers' notions of convenience, speed, price, product
information, and service. As a result, it has given marketers a whole new way to create value for
customers and build relationships with them. Marketing over internet is direct, low in cost,
interactive and two-directional, personalised, up-to-date, targeted, less intrusive, and less
commercial. The Internet has brought many unique benefits to marketing, one of which being
lower costs for the distribution of information and media to a global audience. The interactive
nature of Internet marketing, both in terms of providing instant response and eliciting response, is a
unique quality of the medium. E-marketing is sometimes considered to have a broader scope since
it refers to digital media such as web, e-mail and wireless media, but also includes management of
digital customer data and electronic customer relationship management systems (E-CRM systems).
Online marketing ties together creative and technical aspects of the Internet, including design,
development, advertising, and sales. Virtual marketing does not simply entail building or
promoting a website, nor does it mean placing a banner ad
5.10.2 Objectives of Online Marketing
Online marketing can serve several purposes:
1)Actual Sales of Products: Products are ordered, sale and purchase online through internet.
Many sites like amazon.com eBay involve in actual/sales of products.
2)Promotion/Advertising: Customers can be quite effectively targeted in many situations because
-of the context that they, themselves, have sought out. For example, when a consumer searches for
a specific term in a search engine, "banner" or link to a firm selling products in that area can be
displayed. Print and television advertisements can also feature the firm's web address, thus
inexpensively drawing in those who would like additional information.
3)Customer Service: The sites may contain information for those who no longer have their
manuals handy and, for electronic products, provide updated drivers and software patches.
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4)Market Research: Data can be collected relatively inexpensively on.the Net. However, the
response rates are likely to be very unrepresentative and recent research shows that it is very
difficult to get consumers to read instructions. This one of the reasons why the quality of data
collected online is often suspected.
5.10.3 Online Marketing Trends and Techniques
There are various techniques and method to online marketing and advertising in its current trends.
It is important know about each method so that one can compare the results:
1)E-Mail Marketing: The primary reason many people use the internet is to send and receive email messages. With millions of people online and the numbers substantially increasing each year,
it is little wonder that marketing communicators have turned to
e-mail as a viable advertising
medium. E-mail advertising is simply the use of the internet for sending commercial messages.
However, as with any other advertising medium, there is no such thing as a single type of email
message; rather, e-mail messages appear in many forms, ranging from pure-text documents to
more sophisticated versions that use all the audio-video powers of the internet.
2)Blogs Marketing: Blogs refers to the fact that certain people, who have gained enough
experience or researchers choose to make their study, ideas, thoughts, reactions and dilemmas
public, by writing either a weblog accessible to everybody or one with restricted access, .set for
confidential issues. Blogs are seen as an authentic, uncensored way of expressing our ego and get
to their final version, ready to be published, a frequent and chronological one, of personal
reflections and favourite web links. It is in this context that products and brands are sometimes
discussed. It is here where companies can endeavour to further enhance the equity of their brands
and perhaps even to generate additional business. Much of the appeal of blogs is that a company
can communicate directly with prospective customers, who in. turn can become active
communicators through their own posted comments.
3)Article Marketing: Article marketing has been used by professionals for nearly as long as mass
print has been available. In paper-print form (as opposed to online forms), article marketing is
utilised commonly by business owners as a means of obtaining free press space. Article marketing
is a type of advertising in which businesses write short articles related to their respective industry.
These articles are made available for distribution and publication in the marketplace. Well- written
content articles released for free distribution have the potential of increasing the authoring
business' credibility within its market as well as attracting new clients.
4)Buzz Marketing: Marketing buzz or simply buzz - a term used in word-of-mouth marketing - is
the interaction of consumers and users of a product or service which serves to amplify the original
marketing message, a vague but positive association, excitement, or anticipation about a product or
service. Examples of products with strong marketing buzz upon introduction were Harry Potter,
the Volkswagen New Beetle, Pokemon, Beanie Babies, and the Blair Witch Project. Buzz
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marketing is a marketing technique consisting, as its name suggests, of making a noise around a
new product or offer. Similar to Viral Marketing, it differs from it in the control of the content of
the advertising message. Buzz marketing activities are designed to get consumers talking about a
product or service. Buzz fosters mystery,stimulates questions, surprises audiences and exploits
consumption contexts to generate the desired behaviour.
5)Viral Marketing: Viral marketing, viral advertising, or marketing buzz are buzzwords referring
to marketing techniques that use pre-existing social networks and other technologies to produce
increases in brand awareness or to achieve other marketing objectives (such as product sales)
through self-replicating viral processes. Viral marketing and buzz marketing are similar concepts,
the latter focusing particularly on the creation of an atmosphere of excitement or "buzz" about a
new product, often within a specific social group. Viral marketing is another form of word-ofmouth, or "word-of- mouse", that encourages consumers to pass along company-developed
products and services or audio, video, or written information to others online. It can be word-ofmouth delivered or enhanced by the network effects of the Internet. Viral promotions may take the
form of video clips, interactive flash games, advergames, ebooks, brandable software, images, or
even text messages.
6)Rich Media Advertising: This opens the door for these kinds of ads that require more
processing capability - and provide the first glimpse of what filmed commercials on the web would
be like. This newer form of virtual advertising includes pop-up ads, interstitials, superstitials, and
now even video advertisements. There has been a natural progression, in other words, from the
relatively dull and inanimate form of banner advertising to the attention-gaining, albeit annoying,
animated form of virtual advertising. These rich media formats might even be. compared to the
low-budget ads on cable T.V. that use fast-talking salespeople, elevated noise levels, and dynamic
movements to gain viewers' attention.
7)Display or Banner Ads: The most popular advertising format in the internet's short advertising
history has been the static advertisement known as a display, or banner, ad. This format can be
considered analogous to a static print ad in a magazine or newspaper. Banner ads are a staple of
internet advertising. These are typically small, static ads placed in frequently visited Websites.
Banner ads on the internet are ubiquitous. Click-Through Rates (CTRs) to banner ads are very low,
averaging less than 0.3 per cent. Banner ads for B2B companies receive somewhat higher CTRs
than do those for B2C companies.
8)RSS Marketing: RSS stands for Really Simple Syndication and it may be difficult to
conceptualize in the beginning. RSS works by RSS feeds which needs to be generated by website.
People can subscribe to these RSS feeds and can view the content of the website via their RSS
reader. By this people are enabled to receive the content directly on their desktop. This method is
quite new as compared to others and has become really popular following spam issues in email
marketing. RSS technology represents a format especially created to broadcast the latest news or
reports. RSS technology brings forth a radical change in the way people can access information.
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Some believe that RSS is the future trend in accessing information, since ,it has already raised a lot
of questions concerning the future of traditional mass media.
9)Forum Marketing: Forum is a place where people gather and discuss their problems, strategies
etc. There are many forums on the web that you can join and participate in discussions. Most of the
forums allow a link back to the website in the signature text which would appear below the post
you make. Again a good traffic builder.
10)Search Engine Optlmlsation Marketing: There is a much loved saying among the interactive
advertising community that "If you are not on Google, the business does not exist". Although this
statement is true to an extent, there is much more to SEO than simply submitting the website to
Google Search Engine. The ultimate goal of SEO is to increase the quality or volume of traffic to
websites via search engines. SEO is founded on the theory that the higher a site appears in a search
results list, the more likely that website will be selected by searchers.
11)Social Media Marketing: It is the new kid on the block as far as interactive advertising is
concerned, but it is increasing exponentially in popularity. Popular networking sites including
Myspace, Facebook, and Twitter are social media most commonly used for socialisation and
connecting friends, relatives, and employees. Social media marketing is Particularly attractive to
marketers simply because it encourages a high degree of interaction with consumers and is
relatively inexpensive. Social media offers a venue for word-of-mouth communication for the new
decade that allows consumers to share their experiences with the product with thousands of people
in an instant.
12)Smart Advertisements on Web: In order to back a marketing system based on Internet, the
pay-per-click network (PPC) was brought into play, and the one developed by Google is a good
case in point. The text models on the right side of the main slide of the application entail two
changes in the traditional relationship between editors and advertisers: the latter pay only when
advertisements are on and the viewers click on them; the paid research networks draw a distinction
between advertisers and editors (advertisers no longer get space on the editor's site in exchange of
payment for key words).
13)Mobile Marketing: Mobile services with their unique capabilities and opportunities were
exclusively "bundled" within the mobile operators' technology network, a "walled garden"
controlled by the mobile operators with limited access provided to others. Mobile marketing offers
an important means for building up cooperation relationships, since specialists in mobile marketing
use SMS text messages and MMS multimedia messages to get to their users by means of one of
the most personal devices, namely the mobile phone. For almost a century, phones and voice
transmissions were connected to networks. Nowadays, service providers can convert voice calls in
small collections of data, which are later sent on the Internet, offering the same phone experience
as traditional phone operators did, with no further investment in infrastructure. Given the
circumstances, the Internet will be our new phone, setting up a vast field for further business.
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