Marketing research is “the process or set of processes that links the producers, customers, and end users 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 marketing as a process. Market research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications.”
It is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal of marketing research is to identify and assess how changing elements of the marketing mix impacts customer behavior. The term is commonly interchanged with market research; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while market research is concerned specifically about marketing processes.
The purpose of marketing research (MR) is to provide management with relevant, accurate, reliable, valid, and up to date market information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that market research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment.
Managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumers. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers’ response to marketing programs cannot be predicted reliably or accurately. Ongoing market research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers.
Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of market research in managerial decision making is explained further using the framework of the DECIDE model.
Evidence for commercial research being gathered informally dates to the medieval period. In 1380, the German textile manufacturer, Johann Fugger, travelled from Augsburg to Graben in order to gather information on the international textile industry. He exchanged detailed letters on trade conditions in relevant areas. Although, this type of information would have been termed “commercial intelligence” at the time, it created a precedent for the systemic collection of marketing information.
During the European age of discovery, industrial houses began to import exotic, luxury goods – calico cloth from India, porcelain, silk and tea from China, spices from India and South-East Asia and tobacco, sugar, rum and coffee from the New World. International traders began to demand information that could be used for marketing decisions. During this period, Daniel Defoe, a London merchant, published information on trade and economic resources of England and Scotland. Defoe was a prolific publisher and among his many publications are titles devoted to the state of trade including; Trade of Britain Stated, (1707); Trade of Scotland with France, (1713) and The Trade to India Critically and Calmly Considered, (1720) – all of which provided merchants and traders with important information on which to base business decisions.
Until the late 18th-century, European and North-American economies were characteristic by local production and consumption. Produce, household goods and tools were produced by local artisans or farmers with exchange taking place in local markets or fairs. Under these conditions, the need for marketing research information was minimal. However, the rise of mass-production following the industrial revolution, combined with improved transportation systems of the early 19th-century, led to the creation of national markets and ultimately, stimulated the need for more detailed information about customers, competitors, distribution systems and market communications.
By the 19th-century, manufacturers were exploring ways to understand the different market needs and behaviors of groups of consumers. A study of the German book trade found examples of both product differentiation and market segmentation as early as the 1820s. From the 1880s, German toy manufacturers were producing models of tin toys for specific geographic markets; London omnibuses and ambulances destined for the British market; French postal delivery vans for Continental Europe and American locomotives intended for sale in America. Such activities suggest that sufficient market information was collected to support detailed market segmentation.
TO BE CONTINUED….