The primary objectives of marketing research
Market research is ‘the process of collecting, analysing and presenting useful information about consumers’ whilst marketing research takes a wider perspective incorporating the elements of the marketing mix and the wider marketing environment including competitor and supplier/distributive environments.
The Internet has the ability to impact upon the research process at each of these four levels through speed and access to information. For example:
- Micro-environment – Organisations may be able to source superior goods or services at better prices from a wider range of potential suppliers than before, due to the Internet’s geographic reach. Alternatively competitor data may be accessed through www.companieshouse.gov.uk or retrieval systems such as FAME, specialising in the accounts of individual companies.
- Macro-environment – The Internet provides rapid dissemination of information on social trends, economic data or political and legal issues through public and private web sites such as www.hmrc.gov.uk or www.mintel.co.uk
- Customer research – The internet can provide real-time feedback, opinions, interests and attitudes via online surveys offered by established research agencies like GFK (www.gfk.com) and MORI (www.ipsos-mori.com) or emerging online survey software developers. With the growing adoption of the internet and other digital devices, there has been a developing shift by leading agencies away from traditional channels towards online methods of primary research. E-MORI for example, targets e-mail groups on specific discussion themes and then analyses the responses. A précis of the responses is disseminated along with the next topic to be researched. Of course, secondary sources on the Internet also provide valuable customer insight, especially syndicated data such as those offered by Experian in specific industry sectors such as financials services.
- The Marketing Mix – Whilst the debate continues over the usefulness of ‘The Mix’ as a model for marketers in the online world, it still provides a useful focus for analysis. The Internet can be used for research purposes to get feedback on a new concept such as a new design of vehicle. With regard to pricing, dynamic pricing software can be used to analyse instant customer sensitivity to price changes, up or down. Testing and analysis of different promotional offers can be carried out at greater speed and with grater tracking precision of the customer.
The primary objectives of marketing research are to enhance the quality of the decision making of marketing managers. It can reduce business risk through the acquisition of relevant data and information.
Baines and Chansarkar (2002) emphasise the important of linking marketing research activity to the marketing concept, which places the customer at the centre of our activities. Nowadays, marketing decision makers draw upon whole battery of research tools, particularly from social sciences such as psychology and sociology, to provide a greater insight into what goes on inside the mind of the treasured consumer to shape their purchasing habits. The primary objectives of marketing research are to enhance the quality of the decision making of marketing managers. It can reduce business risk through the acquisition of relevant data and information. The Internet has revolutionised the availability of data but it still only becomes information when it is applied by the manager to a specific problem. The importance of marketing research is greater when organisations venture into uncharted territories such as revolutionary new product or service launches or market diversification where limited prior knowledge exists. Venturing into overseas markets is a typical example of this. The Internet provides almost instant access to international information through government web sites like UK Trade and Invest (www.ukti.gov.uk). For many Internet entrepreneurs, quality information for planning was scarce, and what was available tended to be hyped up and unreliable. Consequently, organisations often relied heavily on intuition and entrepreneurial flair than a systematic approach to research in the dot.com adolescence period. This is not always a bad thing, particularly for SMEs where they have a closer relationship with their stockholders, at least in theory. The results from marketing research are not always heeded either, as in the well-documented case with Sony and Walkman where the research findings indicated that it would not be a success. Undeterred by this, and guided by business instinct, the Chairman, Akio Morita went ahead and launched the product, and the rest as they say is history.
Marketing Research usually involves a trade-off between (i) Cost (ii) Speed and (iii) Accuracy. In theory the more you spend on research, the more accurate or representative the information generated will be.
The main determinants of research activity are as follows:
- Budget constraints
- Depth of information required
- Availability of the information
- How quickly is the information needed?
- Access to a relevant ‘population’
Decision makers have to consider the likelihood of making poor decisions without marketing research and balance this against the extent to which the research adds value and the costs associated with carrying it out. An organisation needs to make an informed guess when putting mathematical values against the decision chances. Rather than providing a specific answer, the model may give a useful indication of the cost and benefits of research. In addition, marketers have to decide when it is sensible to draw the line under the information search as there comes a point when the chances of unearthing any more useful information are slim. At this point it is rarely worthwhile spending further time and resources when the most relevant information has probably been collected already. An obvious example is when a search engine generates six figure hits in 0.34 seconds but the likelihood of finding something relevant after the first one hundred results diminishes quickly. Gourvenny (2003) explores the concept of ‘Nodal Points’ emanating from William Gibsons’s book, Idoru, in terms of Internet searches. In simple terms, better results emerge when you cannot go any further with your original query (Nodal Point 1) and then you search again refining your keywords, terms or spellings until you are halted again (Nodal Point 2) and so on. It should become apparent fairly quickly what the most productive and relevant keywords are on the subject.
Strength of online marketing research
- Speed of accessing information-both primary and secondary.
- Cost effective.
- An effective tool for carrying out exploratory research.
- No geographic boundaries.
- Information available online is evolving rapidly.
- Online surveys are more convenient.
- Search engines have generally become faster and efficient in generating relevant results.
- Multimedia formats, e.g. video provide opportunities for concept testing online.
Weaknesses of online marketing research
- Doubts are being cast upon the validity and integrity of data.
- Potential online respondents may be difficult to reach, as many change e-mail addresses or have separate home and business e-mail.
- More quantitative research.
- Unable to record important clues from body language and eye contact.
- Self-selecting respondents can be unrepresentative of the target population and produce bias.