4. Marketing Research

In many ways the foundation of marketing rests with marketing research (основу маркетингу становить маркетингове дослідження) since (оскільки) nearly all tactical decisions require (вимагають, потребують) some amount of research. However, research does not have to be elaborate (складний, детально розроблений) to be effective. Sometimes small efforts, such as doing a quick search on the Internet, will provide the needed information.

The knowledge gained from research helps marketers make more informed decisions. Market research does this by giving marketers a picture of what is occurring (or likely to occur) and offering alternatives from which choices can be made. For instance, good research may suggest multiple options for introducing new products or entering new markets. In most cases marketing decisions prove less risky (though they are never risk free!) when the marketer can select from more than one option.

However, as sophisticated as research is today, marketers are cautioned not to use marketing research as the only tool for making marketing decisions. It may prove costly for the results of marketing studies to be the lone reason why decisions are made. Rather, smart marketing decisions require the use of knowledge gained from many areas, including management’s own judgment of what is best. But being cautious with how research is used should not diminish the need for conducting research that aids marketing decisions. As noted, research should help support decisions in all key marketing areas.

Note that we use the terms “marketing research” and “market research” interchangeably. Many feel there is a distinct difference with “marketing research” covering a broader array of research efforts associated with marketing decisions while “market research” is specific to understanding nuances of a particular market. For the purpose of this tutorial we treat these as the same.

a) Doing Market Research Right

While undertaking research is important for gaining knowledge and aids marketing decision-making, marketers must understand its limitations. Almost all types of research, whether it is for business, medical science, government, etc., contain the risk that results may be wrong. There are many reasons why errors occur, however, one key reason can be traced to the controls in place (or not) when data collection occurs. If research is collected without the necessary controls to insure it is done correctly, relying on results to make decisions could prove problematic if not disastrous. Thousands of examples exist of firms using faulty research to make decisions, including many dot-com companies that failed between 1999 and 2002.

Since many research studies are really only snapshots(моменти) of something that is bigger, making sure research is done right is critical. For instance, many companies survey a small percentage of their customers (called a sample) to see how satisfied they are with the company’s efforts. But, unless the company only has a few customers, the chances of surveying (дослідження, вивчення) everyone (called a census) is unlikely, and even if they could talk to everyone there is still a chance the information is not totally accurate (e.g., customers may make errors when they fill out the survey).

Seeking a high-level of relevant results requires instituting strict controls on how the information is collected. Many of these controls use a scientific approach meaning a research project becomes highly structured and is not very flexible once a study is underway. For instance, for research involving a sample of a large population of customers, certain controls must be in place to define how many are in the sample as well as how the research is carried out (e.g., research design should be the same for all).

The trade-off (компроміс) for getting more relevant results is the increase in cost and time needed to carryout the research. So a big decision for marketers, when it comes to doing research, is to determine the balance between relevancy of the information obtained and the costs involved to carry out the research.

Good market research is produced when results of the research are strong indicators of what is happening now or might happen in the future. This means the results are relevant (відповідають) to a situation. Being relevant does not mean it is 100% correct (remember there is always risk). Instead, being relevant means the probability is high that the research results reflect what is actually happening or what will happen.

b) Categories of Market Research

There are numerous reasons why marketers seek to conduct (проводити) research but, in general, these fall into three categories.

Describe What is Happening (Descriptive Research)

The focus of descriptive research is to provide an accurate description and/or explanation for something that is occurring (відбувається). For example, what age group is buying a particular brand, what is a product’s market share in a specific geographic region, how many competitors does a company face, etc. This type of research is by far the most popular form of market research. But to be considered useful it must be conducted correctly, which means the marketer must adhere (дотримуватися) to a strict set of research requirements to capture (щоб отримати) relevant results.

Examine Something That is Mostly Unknown (Exploratory Research)

The exploratory approach attempts to discover general information about some topic that is not well understood by the marketer. For instance, a marketer knows about a new Internet technology for marketing a product but the marketer doesn’t know much about the technology. When gaining insight on an issue (розуміння проблеми) is the primary goal, exploratory research is used. The basic difference between exploratory and descriptive research is in the research design. Exploratory research follows a format that is less structured and more flexible than descriptive research. This approach works well when the marketer doesn’t have an understanding of the topic or the topic is new, and it is hard to pinpoint (точно визначати, виділяти) the research direction. The downside, however, is the results may not be as useful in aiding a marketing decision. So why use it? In addition to offering the marketer basic information on a topic, exploratory research may also provide direction for a more formal research effort. For instance, exploratory research may indicate who the key decision makers are in a particular market thus enabling a more structured descriptive study to be targeted to this group.

See How Something Affects Something Else (Causal Research)

In this form of research the marketer tries to determine if one variable affects another variable. In essence, the marketer is conducting an experiment. To be effective the design of causal research is highly structured and controlled so that other factors do not affect those being studied. Marketers use this approach to test marketing scenarios such as what might happen to product sales if changes are made to a product’s design. If causal research is performed well the marketer may be able to use results to forecast (спрогнозувати) what might happen if the changes are made.