mk0013 PDF

MK 0013
Marketing Research
Contents
Unit 1
Introduction to Marketing Research 1
Unit 2
Applications of Marketing Research 22
Unit 3
Marketing Information System 41
Unit 4
Research Process and Design 64
Unit 5
Sources and Collection of Marketing Data 82
Unit 6
Qualitative vs Quantitative Research Techniques 104 69
Unit 7
Market Research Techniques 126
Unit 8
Measurement and Scalling Techniques 149
Edition: Spring 2010
BKID B1223 10
th
June 2010
Unit 9
Sampling 174
Unit 10
Data Processing and Analysis 198
Unit 11
Hypothesis Testing 218
Unit 12
Using Statistical Package for the Social Sciences 235
Unit 13
Presentation of Research Results 252
Unit 14
Ethics in Marketing Research 277
Unit 15
Marketing Research in Indian Context 296
Acknowledgements, References &
Suggested Readings 313

Dean
Directorate of Distance Education
Sikkim Manipal University
Board of Studies
Chairman Mr. Pankaj Khanna
HOD Management & Commerce Director
SMU DDE HR, Fidelity Mutual Fund
Additional Registrar Mr. Shankar Jagannathan
SMU DDE Former Group Treasurer
Wipro Technologies Limited
Controller of Examination Mr. Abraham Mathew
SMU DDE Chief Financial Officer
Infosys BPO, Bangalore
Dr. T. V. Narasimha Rao Ms. Sadhna Dash
Adjunct Faculty & Advisor Ex-Senior Manager, HR
SMU DDE Microsoft India Corporation (Pvt.) Ltd.
Prof. K. V. Varambally
Director, Manipal Institute of
Management, Manipal
Content Preparation Team Content Review:
Content Writing Vimala Parthasarathy
Dr. S. L. Gupta Assistant Professor
Birla Inst. of Technology, Noida Campus SMU DDE
Dr. U. Bhojanna Instructional Designing
R.N.S. Institute of Technology Mr. Sharad Chaurasia
Bangalore Excel Books, New Delhi 110 028
Content Editing: Language Editing:
Ms. Shailley Nigam Ms. Neelam Singh
Excel Books Editor, Excel Books
New Delhi 110 028 New Delhi 110 028
Edition : Spring 2010
Printed : June 2010
This book is a distance education module comprising of collection of learning
material for our students.
All right reserved. No part of this work may be reproduced in any form by any
means without permission in writing from Sikkim Manipal University of Health,
Medical and Technological Sciences, Gangtok, Sikkim.
Printed and Published on behalf of Sikkim Manipal University of Health, Medical and
Technological Sciences, Gangtok, Sikkim by Mr. Rajkumar Mascreen, GM, Manipal
Universal Learning Pvt. Ltd., Manipal 576 104. Printed at Manipal Press Limited,
Manipal.

SUBJECT INTRODUCTION
Marketing Research (MK 0013)
This courseware comprises 15 units
Unit 1: Introduction to Marketing Research
Explains market research, Defines marketing research, Distinguishes
between market and marketing research, Describes importance, objective
and limitation of marketing research.
Unit 2: Applications of Marketing Research
Explains market potential, Describes techniques of sales forecasting,
Defines customer profiling, Explains price testing.
Unit 3: Marketing Information System
Explains information system, Describes marketing information system,
Defines value of information, Explains significance of marketing information.
Unit 4: Research Process and Design
Explains research process, Describes various steps in research process,
Defines research design, Explains research design types.
Unit 5: Sources and Collection of Marketing Data
Explains data collection criteria, Sources of secondary data, Describes
limitations of secondary data, Explains primary data collection
methodologies.
Unit 6: Qualitative vs. Quantitative Research Techniques
Explains qualitative research methods, Describes qualitative research
applications, Explains quantitative research, Analyzes various methods of
quantitative research.
Unit 7: Market Research Techniques
Describes national readership survey, Defines consumer panels, Describes
test marketing, Explains marketing and retail store audit, Defines database
marketing.
Unit 8: Measurement and Scalling Techniques
Explains measurement concept, Defines attitude measurement, Describes
various attitude measurement scales.
Unit 9: Sampling
Explains sampling, Defines various sampling terms, Describes sampling
process, Analyzes sample size, Explains various type of errors.
Unit 10: Data Processing and Analysis
Explains various steps involved in data processing, Measurement of central
tendency, Describes dispersion measurement, Explains bivariate and
multivariate analysis.
Unit 11: Hypothesis Testing
Describes various steps involved in hypothesis testing, Explains errors in
hypothesis testing, Defines test of significance, Describes students
T-distribution.
Unit 12: Using Statistical Package for the Social Sciences
Explains SPSS, Describes highlights of previous versions of SPSS, SPSS
use as a marketing research tool.
Unit 13: Presentation of Research Results
Explains report writing concept, Describes components of report, Describes
style and layout of report, Defines research report writer
Unit 14: Ethics in Marketing Research
Explains ethical theories, Describes ethics in marketing research, Defines
client ethics, Explains field service ethics.
Unit 15: Marketing Research in Indian Context
Explains growing factor of marketing research in India, Describes various
problems faced by Indian researchers, Describes challenges of marketing
research in India.
Objectives of studying the subject
After studying this subject, you should be able to:
become well versed with various terminologies, aspects, issues and
measurements used in Marketing Research.
develop a research design on your own.
conduct a marketing research as per the expectations of the client.
rectify the errors in research calculations.
conclude and interpret various research finings.
In addition to studying the units in this theory SLM (MK 0013), you are
expected to practice concepts of Business Statistics and Mathematics which
will be very helpful in understanding the subject.

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Marketing Research Unit 1
Sikkim Manipal University Page No. 1
Unit 1 Introduction to Marketing Research
Structure
1.1 Introduction
Objectives
1.2 Market Research
1.3 Types of Research
1.4 Marketing Research
1.5 Market Research vs Marketing Research
1.6 Nature of Marketing Research
1.7 Scope of Marketing Research
1.8 Characteristics of Marketing Research
1.9 Objectives of Marketing Research
1.10 Importance of Marketing Research
1.11 Limitations of Marketing Research
1.12 Prominent Research Agencies in India
Problems with MR in India
Trends in MR in India
1.13 Summary
1.14 Terminal Questions
1.15 Answers

1.1 Introduction
We all know that marketing is the process of planning and executing the
conception, pricing, promotion and distribution of ideas, goods and services
to create exchanges that satisfy customers and organizational objectives.
From this, you can very obviously conclude that the role of the customer and
his relationship to the product remains the central point of concern for all the
organizations. This makes research to be imperative for a company to know
what type of products or services would be profitable to introduce in the
market. You would also note that every company wants to know if it has
been able to satisfy customer needs and whether any changes need to be
made in the packaging, delivery or the product itself. This enables a
company to formulate a viable marketing plan or measure the success of its
existing plan. For all these reasons, the companies use marketing research.
This introductory unit on marketing research familiarizes you with the
concepts of market and marketing research and various concepts of
marketing research. It also explains marketing research as a systematic and
objective identification, collection, analysis, and dissemination of information
for the purpose of assisting management in decision making related to the
identification and solution of problems and opportunities in marketing.

Objectives
After studying this unit, you should be able to:
Explain market research, marketing research and the difference
between them
Discuss various types of research
Examine the nature and scope of marketing research
Define the characteristics of marketing research
Explain the objectives, importance and limitations of marketing research
Elucidate upon prominent research agencies in India

1.2 Market Research
Market research is an organized effort to gather information about markets
or customers. It is a very important component of business strategy. You
must note that market research is used for discovering what people want,
need, or believe. It can also involve discovering how they act. The market
research process may involve defining the problem and research objectives,
developing the research plan, collecting the information, analysing the
information and presenting the findings. Once that research is completed, it
can be used to determine how to market your product.
Questionnaires and focus group discussion surveys are some of the
instruments that you might conveniently use for market research.

Self Assessment Questions
1. Market research is done to gather information about ___________ or
__________.
2. Market research is used for discovering what people ___________or
___________.

1.3 Types of Research
Research can be of following types:
Exploratory research
Descriptive research
Applied research
Conceptual research
Causal research
Historical research
Ex-post Facto research
Action research
Evaluation research
Library research
Exploratory Research: Preliminary investigation is called exploratory
research. Table 1.1 discusses it in detail.
Table 1.1: Exploratory Research
Description Example
carried out at the very
beginning when the problem
is not clear or is vague.
all possible reasons which
are obvious are eliminated,
thereby directing the
research to proceed further
with limited options.
Sales decline in a company may be due to:
Inefficient service
Improper price
Inefficient sales force
Ineffective promotion
Improper quality
The research executives must examine such
questions to identify the most useful avenues
for further research.
Expert surveys, focus groups, case studies and observation methods are
used to conduct the exploratory survey.
Descriptive Research: Descriptive research is a fact finding investigation.
Table 1.2 discusses it further.

Table 1.2: Descriptive Research
Description Example
definite conclusions can be
arrived at, but it does not
establish a cause and
effect relationship.
deals with demographic
characteristics of the
consumer
1. There are three types of players who will
decide the usage of TV:
(a) Television manufacturers,
(b) Broadcasting agency of the programme,
(c) Viewers.
Therefore, research pertaining to any one of
the following can be conducted:
(a) The manufacturer can come out with
facilities which will make the television
more user-friendly. Some of the facilities
are Remote control, Child lock, Different
models for different income groups,
Internet compatibility, Wall mounting etc.
(b) Broadcasting agencies can come out
with programmes, which can suit
different age groups and income.
deals with specific
predictions
2. Sales of a company's product during the
next three years, i.e., forecasting.
estimates the proportion of
population who behave in
a certain way.
3. Why do middle income groups go to Food
World to buy their products?
Applied Research: Applied research aims at finding a solution for an
immediate problem faced by any business organization. Table 1.3 discusses
it further.
Table 1.3: Applied Research
Description Example
deals with real life situations
has a practical problem-solving
emphasis
brings out many new facts.
Why have sales decreased during the
last quarter?
Use of fibre glass body for cars instead
of metal
Develop a new market for the product.
Market research is an example of applied research.
Pure/Fundamental Research or Basic Research: Gathering knowledge
for knowledge's sake is known as basic research. Table 1.4 discusses it
further.

Table 1.4: Basic Research
Description Example
not directly involved with practical
problems
does not have any commercial
potential
no intention to apply this research
in practice
Theory of Relativity (by Einstein)
Studies conducted by Tata Institute of
Fundamental Research
Conceptual Research: This is generally used by philosophers. Table 1.5
discusses it further.
Table 1.5: Conceptual Research
Description Example
not directly involved with practical
problems
does not have any commercial
potential
no intention to apply this research
in practice
Theory of Relativity (by Einstein)
Studies conducted by Tata Institute of
Fundamental Research
It is related to some abstract idea or theory. In this type of research, the
researcher should collect the data to prove or disprove his hypothesis. The
various ideologies or 'isms' are examples of conceptual research.
Causal Research: Table 1.6 discusses causal research.
Table 1.6: Causal Research
Description Example
Determines the cause and effect
relationship between the two
variables.
Effect of advertisement on sales
Historical Research: The name itself indicates the meaning of the
research. Table 1.7 discusses it further.
Table 1.7: Historical Research
Description Example
Studies past records and data.
Calculates the future trends and
development of the organisation or
market.
No direct observation
Depend on the conclusions or
inferences drawn in the past.
Investors in the share market study
the past records or prices of shares
which he/she intends to buy.
Crime branch police/CBI officers
study the past records or the history
of the criminals and terrorists in order
to arrive at some conclusions.
There are however, certain shortcomings of Historical Research:
Reliability and adequacy information is subjective and open to question.
Accuracy of measurement of events is doubtful.
Verification of records are difficult.
Ex-post Facto Research: Ex-post facto literally means "from what is done
afterwards". In this research, a variable "A" is observed. Thereafter, the
researcher tries to find a causal variable "B" which caused "A". It is quite
possible that "B" might not have been caused "A". Table 1.8 discusses it
further.
Table 1.8: Ex-post Facto Research
Description Example
empirical research
examines the relationship between independent and
dependent variable
researcher has no control over an independent variable
researcher can only report "what has happened" and
"what is happening"
Effect of
advertisement
on sales
Action Research: In action research, a target sample is selected from
among the population. Samples are distributed to selected samples and
feedback is obtained from the respondent. This method is most common for
industrial products, where a trial is a must before regular usage of the
product. Table 1.9 discusses it further.
Table 1.9: Action Research
Description Example
undertaken by direct
action.
Conducted to solve a
problem
Test marketing a product is an example of action
research. Initially, the geographical location is
identified.
Evaluation Research: This is an example of applied research. Table 1.10
Table 1.10: Evaluation Research
Description Example
conducted to find out how well a
planned programme is implemented.
evaluates the performance or
assessment of a project.
Rural Employment Programme
Evaluation
Success of Midday Meal
Programme.
Library Research: This is done to gather secondary data. Table 1.11
Table 1.11: Library Research
Description Example
includes notes from the past data
or review of the reports already
conducted saves manpower and
time
Review report about what happened
and how.

Activity 1:
An Indian company dealing in pesticides hires a qualified business
management graduate to expand its marketing activities. Most of the
current employees of the company are qualified chemists with science
background. During their first review meeting, the management graduate
says that the company should be involved in market research to get a
better perspective of the problem on hand. On hearing this, one of the
science graduates laughs and says There is no such thing as marketing
or business research, research is confined to science alone. What would
be your response?
3. The generic goal of most evaluations is to provide _____________ to a
variety of audiences.
4. Action research is conducted to ____________a problem.
5. In historical research ___________ of records is difficult.

1.4 Marketing Research
Marketing Research (MR) is the systematic problem analysis, model
building and fact finding method for the purpose of improved decision-
making, with a view to control the marketing of goods and services.
You can use marketing research for studying problems, techniques and
other aspects of marketing and related decision-making and their
implementation. You can also study an economic unit in respect of its
various constituents such as consumers, buyers and sellers. MR studies
their response pattern towards price, promotion, purchasing power and
loyalty towards specific brands and similar other marketing activities. It also
tries to determine the contribution of other relevant factors such as habits,
customs and preferences to decision-making.
The American Marketing Association defined MR as the function which links
the consumer, customer and public to the marketer through information
information used to identify and define marketing opportunities and
problems, refine and evaluate marketing actions, monitor marketing
performance and improve understanding of marketing as a process.
Marketing research specifies the information required to address these
issues, design the method for collecting information, manages and
implements the data collection process, analyses the result and
communicates the findings and their implications.
All the above definitions of marketing research emphasise the need for
evaluating the problem and information in a more comprehensive and
exhaustive manner. You can say that marketing research is a systematic
and objective process of identifying and formulating the marketing
problems, setting research objectives and methods for collecting,
editing, coding, tabulating, evaluating, analysing, interpreting the data
in order to find justified solutions for these problems.
6. Marketing research is a ___________and ____________ process.
7. MR helps in _____________ and __________ the marketing problems.
8. MR aids the researchers in _____________ research objectives.

1.5 Market Research vs Marketing Research
For many people, market research and marketing research might be
synonymous. But for you as a specialist, market research means research
into a specific market, and thus is a very narrow concept. 'Marketing
research on the other hand is much broader. It not only includes 'market'
research, but also areas such as research into new products, or modes of
distribution such as via the Internet.
Marketing the research is an inclusive term, which embraces research
activities carried on with the management of marketing work. It includes
various subsidiary types of research such as:
Market analysis, which is a study of the size, location, nature and
characteristics of markets.
Sales analysis or research, which is largely an analysis of sales data.
Consumer research of which Motivation Research is a type which is
concerned chiefly with the discovery and analysis of consumer attitude,
reaction and preference.
Advertising research, which is carried on chiefly as an aid to the
management advertising work.
Packaging research, etc.
9. ____________ is a study of the size, location, nature and
characteristics of markets.
10. ___________ is a research concerned with the discovery and analysis
of consumer attitude, reaction and preference.
11. As compared with marketing research market research is very
_______________ term.

1.6 Nature of Marketing Research
We have already discussed that MR is systematic and objective in nature.
Apart from these, the main characteristic features that characterize the
nature of MR are:
Applied/Problem solving research
Often based on cost-benefit analysis
Vital for implementation of marketing concept
Value of information declines with time
Dynamic (ongoing)
Marketing research is one of the principal tools for answering questions
because it:
Links the consumer, customer, and public to the market through
information used to identify and define marketing
Generates, refines, and evaluates marketing actions
Monitors marketing performance
Underlines the understanding of marketing as a process

12. Under MR, the value of information ___________ with time.
13. Marketing Research __________, ________ and _________
marketing actions.

1.7 Scope of Marketing Research
Marketing research provides the right information at the right time in the
right place and to the right person which is important in decision-making.
It helps the decision maker in various ways. Analysing it, you will find two
major reasons
1. The Increased Complexity of Business Environment: The study of
complexity of business environment can be studied in four parts:
Technology changes
Research and development
Product changes
Information technology changes
The Technological Changes: The technological changes consist of
factors related to knowledge applied and the materials and machined
uses in the production of goods and services. These changes have an
impact on the business of an organisation. In India, we know that the
state of technological development varies among different sectors of the
industry.
Research and Development: The breathtaking rate of technology
change racing through all types of industry is due in large part to
increasing expenditures for research and development. Despite the
engagement of few firms in research and development and that too in a
few areas, the impact of these expenditures are felt by all. Not only
products and supporting operations are becoming more complex but the
life cycles of products are also being shortened.
Product Changes: Technological advances resulting partly from
research and development, partly from growing customer sophistication,
have resulted in the third cause of complexity product changes. While
the marketing manager of yesteryear had greater chances of his or her
product ideas becoming marketable, todays manager needs to deal with
an enormously high product mortality rate.
The Information Technology Changes: The changes in Information
Technology (I.T.) have profound impact upon the complexity of
management and organizations. The marketing manager knows that the
ability to obtain, store, process, retrieve, and display the right information
for the right decision is vital.
2. Increased Complexity of Decision Maker: You must have noticed that
In the past, marketing managers have tended to solve problems as
isolated situations, independent of other operations of the company,
everything seems to be complicated when it comes to decision making.
For this reason, marketing research comes to recluse. For example, if a
T.V. manufacturer noted a sales decline and traced it to lack of
aggressive effort by sales officers, the problem was assumed to be a
sales management problem. Marketing research can help solve this.
The other scopes of marketing research are as follows:
Research relating to markets:
To find out market potential for existing products
Sales research-forecasting
Finding and analysing market trends
Research relating to products:
Comparative study of competitors products
Identify multiple uses for existing products
Test marketing of products
Product line research
Packaging of products
Consumer grievances
Research related to promotion:
Measure effectiveness of advertisement
Analyse effectiveness of salesmen
Media selection studies
Study patterns of competitors pricing
Motivational studies
Research related to distribution:
Design and locate outlets
Handling operation
Transportation
Storage
Research on pricing:
Cost analysis
Margin analysis
Price analysis
Demand analysis
14. Research relating to markets may be done to find out market ______
for existing products.
15. The technological changes consist of factors related to ________
applied and the ___________ uses in the production of goods and
services.
16. Analysing consumer grievances is a part of research related to
______________.

1.8 Characteristics of Marketing Research
First, marketing research is systematic. Thus systematic planning is
required at all the stages of the marketing research process. The
procedures followed at each stage are methodologically sound, well
documented, and, as much as possible, planned in advance. Marketing
research uses the scientific method in that data are collected and analyzed
to test prior notions or hypotheses.
Marketing research is unbiased. It attempts to provide accurate information
that reflects a true state of affairs. It should be conducted impartially. While
research is always influenced by the researcher's research philosophy, it
should be free from the personal or political biases of the researcher or the
management. Research which is motivated by personal or political gain
involves a breach of professional standards. Such research is deliberately
biased so as to result in predetermined findings. The motto of every
researcher should be, "Find it and tell it like it is."
Marketing research involves the identification, collection, analysis, and
dissemination of information. Each phase of this process is important. We
identify or define the marketing research problem or opportunity and then
determine what information is needed to investigate it, and inferences are
drawn. Finally, the findings, implications and recommendations are provided
in a format that allows the information to be used for management decision
making and to be acted upon directly. It should be emphasized that
marketing research is conducted to assist management in decision making
and is not: a means or an end in itself. The lesson elaborates on this
definition by classifying different types of marketing research.
17. Research which is motivated by personal or political gain involves a
breach of ___________ standards.
18. __________ planning is required at all the stages of the marketing
research process.

1.9 Objectives of Marketing Research
Marketing research and motivational research are considered crucial and
their results assist in more than one way, in taking business decisions.
Various objectives of marketing research are:
Academic Objectives: The academic object of marketing research is the
acquisition of knowledge to gain awareness about a phenomenon or to
achieve new insights into it. You must be knowing yourself that it is the thirst
for knowledge coupled with curiosity that is the guiding force behind a rich
variety of research work, independent of any material incentive.
Utilitarian Objectives: The primary goal of marketing research is to
understand the marketing culture, marketing environment and marketing
decision process and thereby gain a greater measure of marketing control.
Marketing Research
may be used to determine the frequency with which a certain thing
occurs or with which it is associated with something else.
helps in testing a hypothesis or a casual relationship between variables
to determine the cause and effect impacts.
helps in providing information regarding manufacturers, retailers,
suppliers of all kinds of services.
helps in providing solutions of marketing problems of Business and
Industry.
promotes better decision-making
is the basis for innovation
identifies the problem areas
helps in forecasting, which is very useful for managers
helps in formulation of policies and strategies
helps in the development of new products or in modifying existing
products and in understanding the competitive environment
helps in the optimal utilization of resources
helps in identifying marketing opportunities and constraints
helps in evaluating marketing plans.
Activity 2:
Marketing research is generally conceded to be essential for
manufactures, but is it of any real value to retailers and service
organizations? Why?
19. _____________ is the basis for innovation.
20. The primary goal of marketing research is to understand the marketing
_________, marketing _____________ and marketing ____________.
21. MR helps in formulation of ______________ and ___________.

1.10 Importance of Marketing Research
With the change from a sellers market to buyers market, it was deemed
necessary to acquire information on the needs, preferences and
evaluation of the consumer.
The most relevant requirement was to ensure that the right product reaches
the right person at the right place at the right price. Besides, it was also
necessary to get feedback from the customers as to whether they are
getting optimum satisfaction and thus continue to make changes in the
marketing mix so that consumers remain loyal to the product. In turn, the
whole task requires entrepreneurial flair and skill which ultimately calls for
marketing research.
Thus, marketing research is a very useful tool in enhancing the decision-
making ability of the marketer in the dynamic environment of today.
Marketing Research is the function that links the consumer with the
organization through information. It involves systematic and objective
search for and analysis of information that can be used for evolving some
marketing decisions. Here, you should note that any research study must
clearly state the issues being investigated. It must apply a systematic and
formal procedure in collection and analysis of information. It must
communicate the study findings in a manner which could help in arriving at
some marketing decisions.
The various importance of marketing research are:
Marketing research serves two major functions;
i) It provides information for decision making, and
ii) develops new knowledge.
The use of information gathered by the marketing research reduces the
risks involved in decision-making.
It influences decisions such as pricing of the product, scale of
advertising, etc.
The information collected directly affects the planning of the product.
Market research is put to substantial use by firms that produce branded
products and are in competition with other brands to know and maintain
the popularity of their products among consumers.
22. Marketing research serves two major functions, viz. providing
_________ and developing _______________.
23. The information collected directly affects the ________ of the product.

1.11 Limitations of Marketing Research
The various limitations of marketing research are:
MR is not an Exact Science: Results obtained through marketing research
are not very accurate compared to physical sciences. MR is carried in the
open market place where there are so many variables acting upon the
research settings. It is not possible to control as these can be done in a
laboratory. If, for example, a company wants to measure the advertising
effectiveness and conduct an experiment in certain markets, it assumes that
conditions will remain the same, during the experimental period. If
competitors change their strategy during this period, then the experimental
results will be affected.
Complex in Nature: MR is carried out on consumers/dealers/retailers who
are human beings. Human beings have the tendency to behave artificially,
when they know that they are being observed. Validity of the data collected,
conclusions, observations might undergo a change. This aspect of human
behaviour might distort MR results. Human beings are the centre for any MR
study and hence complex in nature.
Inexperienced Research Staff: Well trained and well directed personnel
can alone improve the quality of research. In the absence of well
experienced personnel, research is likely to be unreliable. Tactfulness is
required to collect information. Lack of experience will pose constraints.
Unfortunately availability of trained man power is limited.
Limitation of Time: MR generally takes a long time to conduct. The time by
which the results are presented, there may be a change in the market
situation or competitors might enter the market, peoples tastes and
preferences might change. The time gap significantly affects the
implementation of results.
Subjectivity: Subjectivity is an important limitation in MR. It is very difficult
to verify the research results. Verification is the main characteristic of
physical science, which is missing in MR. Also, it is not possible to repeat
the same project on the same group of entities or respondents. Even if we
do so, the results will be different.
Time Frame: At times, the top management may hold certain pre-conceived
opinion on the outcome. They may put pressure on the researcher to come
out with a particular type of research report to support their belief. The
management might thrust its opinion to influence research findings.
Decision-Making: This is always influenced by various factors internal
and external, to the organisation. The internal factors may ensure research
is not taken seriously. The external factors could include inability to consider
all factors influencing the study.
24. Results obtained through marketing research are not very accurate
compared to ___________ .
25. Subjectivity is an important ___________ in MR.
26. Validity of the __________, ___________ and __________ might
undergo a change.

1.12 Prominent Research Agencies in India
There are numerous specialized agencies engaged in conducting marketing
research covering different segments of markets, both actual and potential.
They have experts for conducting specialized research. These research
agencies can be assigned the projects by concerned parties such as
government departments and corporate units. On the basis of their findings,
they prepare research reports for their clients.
In India, some marketing research agencies are Lintas India Ltd, Indian
Market Research Bureau, Hindustan Thompson Associates Ltd, MARG and
ORG.
1.12.1 Problems with MR in India
Marketing research in India is clearly at a point where it is set to become
indispensable if the liberalization of the economy and expansion of
consumer choice, which has become palpable in the recent years, is going
to continue. With the opening of the Indian economy, the markets have
gradually become buyers' markets. In India, market research is essentially
used as a reactive tool, it is in the static stage; whereas, I feel that MR
should serve as a proactive tool, helping corporations optimize their
functioning by bringing research into all marketing efforts, by integrating it
into the long and short term marketing strategies and by involving the
operational staff who actually carry out the work that can use informed
research results. Market research often ends up being used as an isolated
tool that gives a narrow picture of the past without giving a holistic view and
an insight into the future.
The need of the hour are MR professionals who are true managers -
managers who have to facilitate a radical change in the way market
research is looked upon today; very often as an activity done by a separate
cell and an end in itself. I see myself, as an MR professional, using research
as an actionable tool, incorporating cutting edge methodologies, getting the
needed results while saving time and money. I want to turn it into a dynamic
instrument, use it to feel the pulse of the market, make probabilistic
predictions abut the market through sophisticated tools and ultimately get
involved in product innovation and strategic planning.

1.12.2 Trends in MR in India
Marketing Research in India gives statistics which lessens the risk of market
investment. The analysis of the market is important to undertake any
marketing procedures. In India,
marketing research has been slightly less primitive marketing.
though there is quite a substantial bunch of companies providing MR
services, many more conduct such researches in-house also.
marketing research is still generally only confined to the basic aspects of
market research such as market size, which product/brand is selling,
who is buying and media planning like targeting right media for
advertising.
generally undertaken to discover where customers are willing to pay
more for a service.
has helped in the market to find out trends in gross domestic product
(GDP), projections for GDP, whole sale price index (WPI), etc.

Activity 3:
Collect the details of 5 specialised marketing research agencies and
find out how they conduct the researches for their clients.

27. Agencies engaged in conducting marketing research cover both
___________ and __________ segments of markets.
28. Research agencies prepare research reports for their clients on the
basis of their _____________.

1.13 Summary
Marketing research organization could be internal or external. It could be
handled by marketing department itself or by separate department
constituted for this purpose. There may not be a single form of organization
suitable to all types of business operations. They may be organized on the
basis of product, function or geography. External organization includes ad
agencies and association of various trades, government, etc.

Glossary
Market Research: Organized effort to gather information about markets or
customers.
Marketing Research: Systematic gathering, recording, and analysis of data
about issues relating to marketing products and services.
Customer: Current or potential buyer or user of the products of an
individual or organization.
Cost Analysis: Breaking down the costs of some operation and reporting
on each factor separately.
Demand Analysis: Study of sales generated by a good or service to
determine the reasons for its success or failure, and how its sales
performance can be improved
Product Line: A set of related products sold by a single company.

1. Explain descriptive research and causal research. Are these two types
of researches related?
2. What are the problems related with marketing research?
3. Marketing research provides great help in decision-making. Discuss.
4. Marketing Research links the consumer with the organization through
information. How and why?

1.15 Answers
Answers to self assessment questions
1. markets, customers
2. want, need, believe
3. useful feedback
4. solve
5. verification
6. systematic, objective
7. identifying, formulating
8. setting
9. Market analysis
10. Motivation Research
11. narrow
12. declines
13. generates, refines, evaluates
14. potential
15. knowledge, materials and machines
16. products
17. professional
18. Systematic
19. Research
20. culture, environment, decision process
21. policies, strategies
22. information, new knowledge
23. planning
24. physical sciences.
25. limitation
26. data collected, conclusions, observations
27 actual, potential
28. research findings

Answers to Terminal Questions
1. Refer to section 1.3 Discuss the definition and characteristics.
2. Refer to section 1.11 Conclude from the limitations of MR.
3. Refer to section 1.7 Marketing research provides the right information
at the right time in the right place and to the right person.
4. Refer to section 1.10 Elucidate upon MRs importance.
Mini-case
Mr. Ravi completed his basic degree in science from India and proceeded to
the US to do Masters degree in food technology. After completing the same,
he joined a Ready to eat food manufacturing company in Dubai. The
company distributed its manufactured goods through big retailer chains and
enjoyed a great reputation.
After working for 10 years, Mr. Ravi wanted to return to his motherland and
wanted to set up a unit in his native Chennai. He had been toying with an
idea of setting up a factory, where, ready to eat products could be
manufactured. During his earlier visits, he made enquires with known people
to ascertain whether his intention to set up a ready to eat product would
find customers. His initial data gathering gave a positive indication.
He was told that with changing demography and lifestyles in sunrise sectors
like IT, BT most families had couples at work. Time was a major constraint.
Hence his ready to eat food would find acceptance. All this information
was gathered by word of mouth.
His close friends informed him of a foreign company to have started this
business and appeared to be doing well. This did not bother Mr. Ravi, since
he knew that he could meet the taste of Indian customer better than any
multinational. On the contrary, Mr. Ravi was glad that this new foreign
company was doing well, which was an encouraging signal.
Even though ready to eat food was popular abroad, and word of
appreciation yielded positive, Mr. Ravi still wanted to ascertain the feasibility
of setting the project.
Question
Will the tradition-bound Indian society accept a ready to eat food? What
should Mr Ravi do to find out the feasibility of his venture in India? Why?
Hint: Discuss about the benefits of MR and relate them with the case.
Unit 2 Applications of Marketing Research
Structure
2.1 Introduction
Objectives
2.2 Assessing Market Potential
2.3 Sales Forecasting
Steps in Sales Forecasting
Role of Sales Forecasting in Marketing Decisions
Sales Forecasting Methods
2.4 Customer Profiling
2.5 Product Research
2.6 New Product Research
2.7 Price Testing
2.8 Assessing Promotion Effectiveness
2.9 Summary
2.11 Answers

2.1 Introduction
In the previous unit, you came to know about the marketing research and
other aspects of market research. In this unit you will study about the
applications of marketing research.
You will also learn that the scope of marketing research stretches from the
identification of a consumer's wants and needs to the evaluation of
consumer satisfaction. It includes research in respect of consumers,
product, sales forecasting. Product research addresses itself to the
questions associated with the products of the company and its competitors.
Product research aims at finding out the product image which will be
compatible with the self-image of consumers and to ascertain whether the
former really fits into the latter or not. Consumer research aims at
understanding the consumers, both current and potential and the level of
satisfaction expected and derived by them from a companys products.

Objectives
Explain market potential
Describe techniques of sales forecasting
Define customer profiling
Explain price testing

2.2 Assessing Market Potential
Market potential has been defined as the maximum demand response
possible for a given group of customers within a well defined geographic
area for a given product or service over a specified period of time under
well-defined competitive and environmental conditions. Knowledge of
market potential allows us to better allocate the resources we spend on
such marketing inputs as advertising, number of salespersons or outlets.
There are a variety of methods which you can use for the actual estimation
of market potential, we will limit our discussion to three of them, namely the
chain ratio, the market build-up method and the weighted factor index.
The chain ratio method is sometimes referred to as the top-down
approach. It begins with the entire population of interest, then multiplies by a
succession of factors to arrive at a smaller, more likely estimate of
customers or sales. The factors used may be percentages, probabilities or
rupee amounts.
The market build-up method also referred to as the bottom-up approach
requires that we divide the market into identifiable segments, then make
separate estimates of potential sales to each segment.
The weighted factor index method is used primarily by marketers of
consumer goods to measure the relative market potential of a region or
territorythat is the potential as a percentage of the total potential of all such
regions or territories.
1. Chain ratio method begins with the ___________ of interest and ends at
a ___________, more likely estimate of customers or sales.
2. Market build-up method also referred to as the ___________ approach.

2.3 Sales Forecasting
Sales forecasting can be explained as the prediction of the future sales of a
particular product over a specific period of time based on past performance
of the product, consumer spending patterns, inflation rates, market trends,
unemployment, and interest rates. From this you, may very rightfully say
that sales forecasts help the marketer to develop a marketing budget,
allocate marketing resources, and monitor the competition and the product
environment.
2.3.1 Steps in Sales Forecasting
You should adopt following steps while forecasting sales:
Defining the objectives to be achieved.
Dividing various products into homogeneous groups.
Analysing the importance of various factors to be studied for sales
forecasting.
Selecting the method.
Collecting and analysing the related information.
Drawing conclusions from the analysis made.
Implementing the decisions taken.
Reviewing and revising the sales forecasting from time to time.
2.3.2 Role of Sales Forecasting in Marketing Decisions
The role of marketing research in sales forecasting has increased due to
demand seasonality. The immortal law of marketing is dead. For example,
marketers of Woodland shoes and casual wear are now pulling up their
socks to bring up demands during the lean months. Across a range of
marketstelevisions, refrigerators, footwear, garments, paints etc.,
companies are increasingly latching onto a new truthconsumers are no
longer buying during specific seasons in the year. As a result, footwear
sales in lean months is 40 per cent of sales, up from 25 per cent in the early
nineties.
Refrigerator sales too have come out of cold storage during the lean
months. So why is demand seasonality gradually disappearing from Indian
markets. It is surprising then to see that even though consumer-buying is
changing track, marketers are largely in a wait-and-watch mode.
In many categories like black and white TVs, mopeds, cassette recorders,
nearly 50 per cent of the sales occur in rural markets. Yet, companies did
not have any distribution network to reach out to these exterior markets.
Most of the sales would happen at the end of the harvest season in local
markets or annual fairs organized by companies.
Since harvesting was a once-a-year event, rural folks would undertake big
purchases only around that time. So it did not make any sense to set up
elaborate retail networking throughout the year. It was a highly seasonal
economy. With rural income accounting for 70 per cent of the total national
income, it was not surprising that seasonality was a strong factor.
But that is changing now. Gradually, there has been a shift from one crop to
two crop agriculture. So there are two income streams within the year now.
As a result buying is also gradually happening throughout the year as per a
study conducted by the Centre for Media Studies.
How can companies benefit from the changing cycle of season? To take an
example, consumer durable marketers estimate that anything between
three to five per cent of the retail price of a unit can be saved if the sales are
spread evenly throughout the year.
To ensure that these benefits accrue, they can make three fundamental
changes. One, have specific products for the off season; two, optimise
media spends during the lean months and three, extend distribution to
seasonal markets.
2.3.3 Sales Forecasting Methods
An organisation can suffer huge losses due to faulty sales forecasting.
Faulty sales forecast may arise due to incorrect information or faulty
reasoning. But sales forecasting done on scientific lines proves very useful.
The following are the specific tools which are used for sales:
Barometer
Indicators
Economic model
Correlations and Regression
Barometric techniques
During the change of cyclical variations, i.e. prosperity decline, depression
recovery, the index number may indicate the change in business activity.
Since it helps to make sales forecasts for the future conditions of business it
is called business barometer. If the indices of productions, prices trade,
bank clearance, etc., are expressed graphically the curve thus obtained
shows a trend of long period and seasonal movements. These index
numbers may be combined together into a composite index. Now this
composite or general index would reveal the future conditions of trade and
industry, i.e. it will be an indicator. If the barometers show a fair chance of
rising or improvement, then this will lead to an increase in the national
income and expenditure after a lag of some time. These lead lag periods
may cause some advance signals for better changes in time to come.
Lead lag series: In this series, the lapse of time in between the movement
of one service and that of general business conditions is determined. Again,
the turning point also can be determined in advance which will be a good aid
for business affairs. From the graph it is seen that the crest point of leading
series is higher than that of coincident series while the same for the lagging
series is still later. National product, general consumption, index of
wholesale prices, index of consumer prices, stock and share prices, volume
of bank deposits, volume of agricultural product these quantities are
converted into relatives having a certain base period, then the relatives are
weighed. The average is calculated, which is the barometer. These
barometers guide industrialists and businessmen to take future decisions.
Indicators
From the office of National Bureau of Economic Researcher (NBER) of
U.S.A. indicators like lead indicator, coincident indicator and lag indicator
have been selected.
Coincident Indicators: These indicators move together either positively or
negatively; no lead time or lag time is involved. For example, index of
wholesale prices, index of industrial production, etc.
Lag Indicators: After a time lag, these indicators react. For example,
payment of dividends, price of equity share, etc.
Economic models
It is possible to express economic activity by mathematical equations. Such
analytical expression is known as an econometric model that states in detail
and in quantitative terms the way in which the various aspects of the
economy are interrelated. A few examples are:
1. National income (Y) in t period is equal to the total consumption (C),
investment, expenditure (I) and the government expenditure (G) of the
period
Y
t
= C
t
+I
t
+ G
t

2. Consumption expenditure (C) is again equal to certain minimum
expenditure (A
0
) plus a ratio of income (Y) less tax paid (T) during t
period
C
t
= A
0
+a(Y
t
-T
t
), 0<a<I.
Correlations
Measures of correlation show the reliable prediction of variables. According
to Tippett the effect of correlation is to reduce the range of uncertainty of our
prediction. The prediction based on correlation analysis will be more reliable
and near to unity.
Regression equations can be used for prediction. The regression equation
of Y on X is
Y = a + bX
For a certain value of X, we can estimate the corresponding value of Y.
Again from the regression of X on Y (X=A+bY), we can also predict the
value of X from a certain value of Y.
3. ___________ indicators move together.
4. Sales forecasting is a ___________ process.
5. ___________ in a period is equal to the total consumption, investment,
expenditure and the government expenditure of the period.

2.4 Customer Profiling
Understanding the customer is one of the most important tenets of any
business. Now, you can no longer simply choose a populous area in which
to set up shop, and then hope to compete.
Customer profiling is one of the most effective tools for determining where
and how to conduct your business. If you have a grasp on what type of
people are most likely to purchase your products or services, you can seek
out the location and the marketing plans that give you the best opportunity
to reach those people.
Concept of Consumer Research: Consumer research is the methodology
used to study consumer behaviour. It helps the marketer to predict how
consumers would react to promotional messages and to understand why
they made a particular purchase decision. It helps in formulating marketing
strategies, analysing the marketing mix and understanding the factors which
influence the decision-making.
The marketing concept is built upon the assumption that marketers have to
first identify consumer needs and then develop products and services to
satisfy customer needs. Consumer research offers a set of diverse methods
to identify such needs.
The research provides the basis for the development of new product and
service concepts to meet target consumer needs. Many of the applications
of consumer research are designed to help a marketer make specific
marketing decisions concerning product, price promotion and distribution.
Importance of Consumer Research: Consumer research is undertaken on
a variety of issues. For example the M.B.A. Research Agency conducts
periodical surveys of consumer behaviour. These surveys are classified
under various groups and sub-groups. The most common consumer
research studies relate to the determination of consumer characteristics,
measurement of market potential and consumer motivation.
In India, consumer research is not yet well developed as in the advanced
countries. Some of the important reasons attributed for this condition
include, the stage of Indias development, the lack of stiff competition and
the scarcity of supply as a result of which the sellers do not have much
difficulty in selling their goods and services. According to a 1994 survey, the
most frequent use of consumer research in India is in the area of consumer
buying behaviour. Other important applications of consumer research
according to the survey are found in the fields of motivation, brand
preference, brand attributes and customer satisfaction. But the success of
consumer research depends upon the co-operation of the public.
Unprofessional or unethical consumer research practices may seriously
affect publics willingness to cooperate in research surveys.
Characteristics of a Good Consumer Research: A good consumer
research is characterised as follows:
Scientific method: Effective consumer research uses the principles of
the scientific method-careful observation formulation of hypotheses
prediction and testing of consumer behaviour.
Research creativity: At its best consumer research develops innovative
ways to solve a problem related to consumer satisfaction.
Multiple method: Competent researchers can adopt various methods
for solving a problem. They also recognise the desirability of gathering
information from multiple sources to give greater confidence.
Value and cost of information: Competent researchers show concern
for estimating the value of information against its cost. Value/cost helps
the research department determine which research projects to conduct,
which research designs to use and whether to gather more information
after the initial results are available. Research costs are typically easy to
quantify while the value is harder to anticipate. The value depends on
the reliability and validity of the research findings and managements
willingness to accept and act on its findings.
Ethical marketing: Most of the consumer research benefits both the
sponsoring company and its consumers. Through consumer research
companies learn more about consumers needs and are able to supply
more satisfying products and services. However, the misuse of
marketing research can also harm or annoy consumers.
Consumer Research Process: The consumer research process is a set of
operations which aids the researcher in systematic gathering, recording and
analysis of data to help solve decision-making problems. The process
provides the researcher with an orderly means to investigate problems: It is
not a static and highly structured framework. Given the diversity of
management problems and their corresponding information requirements,
the sequence must be considered as topics of concern to the researcher
rather than a strict step-by-step procedure to be followed in all cases.
Sequence of Steps in Consumer Research: Each consumer problem is
different from the other and hence requires a special emphasis and different
approach. Since every consumer research problem is unique in some ways
the research procedure has to be typically customer-oriented. Nonetheless,
there is a sequence of steps called the consumer research process that can
be followed when designing the research project. Figure 2.1 shows the
relationship among the stages in the research process.
Formulate consumer research problem
List out research objectives
Determine research design
Design data collection methods and forms
Analyse and interpret the data
Prepare the research report
Figure 2.1: Stages in the Consumer Research Process
Formulate consumer research problem: One of the most valuable
roles consumer research can play is, helping to define the problem to be
solved. Only when the problem is carefully and precisely defined can
research be designed to provide pertinent information. Part of the
process of problem definition includes specifying the objectives of the
specific research project that might be undertaken.
List out research objectives: After identification of research problem,
researcher should make a list of research objectives which are
considered for research purpose.
Determine research design: The sources of information for a study and
the research design go hand in hand. They both depend on how much is
known about the problem. If relatively little is known about the
phenomenon to be investigated, exploratory research will be warranted.
If on the other hand, the problem is precisely and unambiguously
formulated, descriptive or causal research is needed.
Design data collection method and forms: It begins by determining if
the information needed is already available as secondary data, either
within the firm or from an outside source. If not, information will have to
be generated by means of a surveyor in an experiment. While
considering the sources of research information, it will be necessary to
determine exactly how and by whom the information will be collected.
Analyse and interpret data: First of all research data collection forms
must be scanned to be sure that they are complete and consistent and
that the instructions are followed. This process is called editing. Once
the forms have been edited, they must be coded. Coding involves
assigning numbers to each of the answers so that they may be
analysed. The final step in analysing the data is tabulation. This refers to
the orderly arrangement of data in a table or other summary format
achieved by counting the frequency of responses to each question. It is
also common to classify the data against other variables. Apart from
these, statistical tests are also applied to analyse and interpret data.
Prepare the research report: The research report is the document
submitted to management that summarises the research results and
conclusions. It is all that the research executives will see of the research
effort and it becomes the standard by which that research is judged.
Thus, it is imperative that the research report be clear and accurate. For
it is the formalised presentation of the conclusions of the study.

Activity 1:
What are the goals of sales forecasting, and why more and more
organization concentrate on this? Explain.

6. Marketers have to first _______ and then _____ products and services.
7. Consumer research helps to ___________ the problem to be solved.
8. Consumer research is the methodology used to study ___________.

2.5 Product Research
One of the major application areas of marketing research is product
research. A large number of companies spend substantial amount of funds
in R&D activities related to new product development. As profit margins
decline on their established products, organisations rely on new products to
sustain their overall profitability.
Product research is the development of a product line which meets the
needs of a certain group of consumers. The essence of any firms new
product policy is the identification of those product opportunities which
should generate, over a given period, the greatest return on investment in
relation to risk involved.
Procedures used in product research include the following eight steps:
Developing an overall product strategy based on market needs, industry
structure and corporate resources.
Developing a flow of new product ideas from a variety of sources.
Develop procedures to screen on a preliminary basis.
Develop procedures for final reasoning.
Develop product specifications with regard to optimum product.
Product testing.
Test marketing.
Commercialisation, including supervision of the product.
Developing a Product Strategy: Consumption systems are a useful
concept in helping to develop a meaningful product strategy. Products are
used with other products, labour and machines and hence form a part of the
system. Innovation through integration of the system is a common measure.
A product should fulfil these needs so opportunities for new products should
be exploited because of the change in the environment. A firms product
strategy in terms of sales volume, type and number of competitors, technical
opportunity, patent opportunity, raw material, production load, similarity to
major business effects on present product and so forth.
Developing New Product Ideas: The actual source of product ideas are
many and varied. The value of each will differ substantially from company to
company. Suggestions and complaints from customers are a major source.
The following are the potential sources of ideas:
Company staff, company records, including research and development
Channels of distribution, especially with respect to product modification
Competitors
Government agencies
Miscellaneous, including trade associations, advertising agencies, trade
magazines, marketing research agencies, commercial laboratories,
consultants and so on.
Preliminary Screening of Product Ideas: It is necessary to have a
preliminary screening device which is fairly routine and economical. The first
step is usually to determine whether the product idea meets the criteria
stated in the companys strategy statements. If it does not, it is eliminated.
However, provision is usually made to set aside, for further screening, any
ideas that seem particularly powerful.
Final Screening: Those products which serve the preliminary screening are
ready for a final check. This screening varies in complexity depending on
how obvious the decision is. A new idea may not go through the entire final
screening process if it is obvious that the product could never produce the
required return on investment.
Developing Product Specification: The set of product attributes which are
optimum for the market segments, to which the product may appeal must
be determined. The optimum must take into account the characteristic of
competitive products. Consumers describe, what they want in terms of
product benefits, functions and effects. These must be translated into
ingredients, design characteristics, performance criteria and even
manufacturing procedures. Therefore, the relative importance of individual
attributes will be determined.
Product Testing: It is the way of determining whether potential customers
have understood the idea behind the product and how they evaluate the
product attributes. On the basis of up-to-date information the marketer is
now in a position to undertake a research which provides him insights into
whether he has been successful in developing the desired product.
Test Marketing: It is the procedure by which a company attempts to launch
a new product marketing plan by introducing it on a miniature basis before
committing the product to the entire market. Here the basic assumption is
that the test market results are projectable to the entire market so that
potential buyers may rationalise the desire to buy.
The product research decision itself is really a result of a collection of
decisions, for example, what class of product, what type of brand, what
design, what quantity, in what place, from whom, at what price, by what
method of payment and so on.
One of the tasks of marketing is to communicate with the potential buyer in
such a way that not only does he become aware of the existence of a
product or service offered, but develops such a sufficiently strong and
favourable attitude that he will go through the buying decision process with a
greater degree of confidence. Uncertainty and delay in making buying
decisions is often the result of a conflict between rational economic motive
and non-rational external and internal stimuli. The so called impulse buying
is more frequently found, where there is no anxiety with comparatively
inexpensive, frequently purchased products, for example, where non-
rational external stimuli like packaging, promotion, display, etc., have a
major influence.
Commercialisation: The following points fall under this category:
1. Product Life Cycle: Products pass through a life cycle comprising an
introductory period, a growth stage, maturity and decline. Each of these
stages requires a different set of strategies and tactics, if the firm is to
cope successfully with the problems of the particular stage.
2. Package Testing: Packaging has become increasingly important as a
result of the increase in self-service. Packaging materials, design,
colour, size, illustration, brand names and associated symbols, copy and
layout may affect to a very considerable extent a potential buyers
perception of a product. Packaging has assumed such importance today
that packaging research has become an indispensable part of product
research.
3. Display: Advertising and communication must be directed towards
stimulating favourable trade opinion and feelings about a company as
well as favourable customer attitude towards product price, quality,
delivery, sales and technical services. Concepts derived from the clinical
research and findings of sociologists, psychologists and anthropologists
may be used to determine why people buy particular products or
services and lead to advertising which appeals to needs, wants and
desires.
9. Product research is the development of a ___________ which meets
the needs of a certain group of consumers.
10. ___________ covers product life cycle, package testing and display.
11. ___________ is the procedure by which a company attempts to launch
a new product marketing plan by introducing it on a miniature basis
before committing the product to the entire market.
2.6 New Product Research
While analysing a new product, you should always consider:
Marketing
Product Life
Required Input
Future Planning
Financial Appraisal
Marketing: It includes a study of all the aspects of the relationship of the
product with its market:
Examine the product thoroughly; find out its main features and whether
any additional features can be added.
Consider the performance characteristics and limitations of the product.
Take the help of an expert opinion for understanding the ideal
performance level.
Consider the market in which the product is to be sold.
Find out a suitable distribution network for the product.
Assess the competition and the extent of the inter-product rivalry.
Train the sales-force, enabling the team to sell the new product.
Assess the services in addition to manufacturing and selling.
Product Life: All product lines have a definite life and it is important to
obtain some idea about the life span of a new product. The effective life of a
product should be taken into consideration. Product life cycles are not easy
to estimate and are largely dependent on the forecasters own judgment. It is
necessary for you to have a knowledge of competitors activity and about
potential customers.
Required Input: The following input requirements are felt in case of new
product research. Researchers should try to estimate:
Staff requirements for the new product.
Sales and market forecast for the purpose.
May have to consult personnel department.
Estimation of capital and plant requirement.
Raw material and components required for the product.
Future Planning: It is necessary for researchers to estimate the future
effect the product will have on the company. The following points need to be
considered:
Effect on companys growth.
Compatibility with companys growth intentions.
Effect on competitors plans and policies.
Future of customers and end-users.
Financial Appraisal: It is necessary to make a financial appraisal while
developing and launching a new product. There are three widely used
methods payback, return on investment and discounted cash and
flow. The payback method is merely to ascertain how quickly gross
investment can be recovered out of gross profit before charging tax and
depreciation. ROI method is basically the return on gross investment
represented by the profit before tax but after depreciation. The discounted
cash flow is a more recent method of investment appraisal. There are two
variants in this approach. In the yield method, the total cash flow resulting
from the new product is calculated after allowing for tax and grants. This
cash flow is discounted at an arbitrary rate of interest. In the net present
value method the net present value of the investment is computed.

Activity 2:
What you think customer profile would help for better sales
promotions or launch a new product into the market.

12. While analysing a new product, we should always consider _________,
___________ , ___________ , ___________ and financial appraisal.
13. ___________ , ___________ and ___________ are the main methods
of financial appraisal.
14. Cash flow is discounted at an ___________ rate of interest.

2.7 Price Testing
Pricing testing reveals the quantity demanded at various level of price. It
gives an idea about the behaviour of the competitors, the market share,
dealers attitude, etc., factors affecting determination of prices are examined
thoroughly. The extent of competition, return on investment, channel of
distribution and government control are the various factors that affect
determination of prices. Companies adopt different pricing policies to
procure the maximum market share. Pricing research involves prediction of
the quantity demanded at various prices, prediction of competitors behavior
and prediction of external and other variables.
15. ___________ reveals the quantity demanded at various level of price.
16. ___________ involves prediction of the quantity demanded at various
prices, prediction of competitors behavior and prediction of external
and other variables.

2.8 Assessing Promotion Effectiveness
Creating effective promotion with customers is the most important aspect
in marketing since it helps in attracting and maintaining prospective and
present customers.
We all know the importance of marketing an investment for generating and
maintaining profit Finding, getting, and retaining business costs money. As a
result, you need to compare the return on investment (ROI) with your
promotional expenditure. However, this can be quite problematic.
Moreover, promotional tactics are not considered as an exact science.
Because of this, there is no way for someone to measure exactly the
achievement of the advertising campaign. To take a simple example, the
investment in an advertising campaign is easy to establish, but calculating
the results is imprecise because so many other factors impact sales. To
overcome the problem, many companies are looking at activities that can be
measured more precisely, such as direct marketing and online advertising
where response rates are easily measured. This helps a lot in assessing
promotional effectiveness.
It is found that despite the existence of cultural differences at an ethnic level,
culture does not appear to have a significant impact on consumer responses
to sales promotion.

17. To assess its effectiveness, we must calculate the ___________ of our
promotional expenditure.
18. Marketing as an investment is important for ___________ and
___________ profit.

2.9 Summary
Marketing research can make valuable contribution to the determination of a
segment. There are innumerable products and services offered in the
markets. These products are consumed by different individuals, households
at different rates.
Instead of aiming at the market as whole, if marketing efforts are directed
towards selected market segments, the available resources can be utilised
to the optimum.
Glossary
Market Potential: Estimated maximum total sales revenue of all suppliers
of a product in a market during a certain period.
Sales Forecasting: Process of estimating what your businesss sales are
going to be in the future.
Consumer Research: Marketing research that yields information about the
motives and needs of different classes of consumers
Ethical Marketing: An honest and factual representation of a product,
delivered in a framework of cultural and social values for the consumer.
Product Research: Marketing research that yields information about
desired characteristics of the product or service.

1. What do you mean by sales forecasting? What are their effects in
marketing research?
2. Do you think customer research is important? If yes, why?.
3. Describe consumer research process in detail.
4. What do you mean by test marketing?
5. Why will you recommend price testing?
2.11 Answers
Answers to Self Assessment Questions
1. entire population, smaller
2. bottom-up
3. Coincident
4. stepwise
5. National income
6. identify consumer needs, develop
7. define
8. consumer behaviour
9. product line
10. Commercialisation
11. Test Marketing
12. marketing, product life, required input, future planning
13. payback, return on investment and discounted cash & flow
14. arbitrary
15. Pricing testing
16. Pricing research
17. ROI
18. generating, maintaining
1. Refer to 2.3 After defining sales forecasting, discuss the role of sales
forecasting in marketing decisions.
2. Refer to 2.4 Discuss importance of customer research
3. Refer to 2.4 Clearly discussed in the subsection
4. Refer to 2.5 Clearly discussed in the subsection.
5. Refer to 2.7 Discuss the importance of price testing.
Mini-case
The companys Bangalore-based appliance division launched a microwave
oven under the name Electron. It sells in Chandigarh and Bangalore in the
hope of attracting people with its price an affordable Rs. 9,995. That is
around Rs. 4,000 lower than the next cheapest product.
It was a brave shot to take. The market for this product has been so sticky
that most marketers say they know better than to stake their future here. So,
what has motivated IFB Industries, a company known for looking hard
before it leaps, to launch a microwave oven?
The product was aimed at double income families earning over Rs 10,000 a
month. Where the wife was Modern and Educated and in an age group 25-
35 willing to adopt convenient cooking practices. There were an estimated
1.5 million households in India that fit this description and not only in the
metros. By the last week of August, 1996 the product had to be taken to all
metros and Class I towns. The market was placed at a dismal 25,000 units
in 1995 with North inexplicably accounting for 80% of sales.
Electrons entry plan was conceived in 1994, as the companys second foray
into home appliances the launch of its well known fully automatic washing
machine. While the microwave oven was being discussed, Madhya
Pradesh-based Microwin, which was selling an indigenously designed
microwave oven under its corporate name, became sick and went up for
sale. IFB took it over in 1995.
Is there potential in microwave ovens? Of course, said IFB management,
that outlined IFBs offers as an advanced machine at an affordable price.
Pricing ought to get the product moving. Also, status purchases happening
IFB had to just cut down on features relative to other offerings to keep
prices low.
IFB was sure that the rising number of double income nuclear families will
work to give the category its due. The company is using door-to-door
campaigns and demonstrations to convert households to the technology.
Direct mail will be employed besides advertising (Ad. Budget
Rs. 2 crore).
Major competitors to IFB were Kelvinator & BPL. BPL has backed its
product by sales promotion. But, the biggest competition is from National
which comes in through smuggled route.
Question
Given the profile of the target market, plan a research study to determine
the acceptance of oven by double income families in Class-I cities.
Hint: Use the cultural yet modern mindset of the target customers as the
factor to determine the success of Electron and develop the study based on
it.
Unit 3 Marketing Information System
Structure
3.1 Introduction
Objectives
3.2 Marketing and Information
3.3 Marketing Information System
3.4 Marketing Decision Support System
Components of a Marketing Decision Support System
Characteristics of a Marketing Decision Support System
Levels of Marketing Decision Support System
Types of Marketing Decision Support System
3.5 Internal Record Systems
3.6 Marketing Intelligence
3.7 Significance of Marketing Information in Market Research
3.8 Quality and Quantity of Market Information
3.9 Value of Information
3.10 Types of Market Information
3.11 Summary
3.13 Answers

3.1 Introduction
The primary function of information is to increase the knowledge or reduce
the uncertainty of the user. There are many pieces of information, which
might be useful and in one or the other way influence the recipients
response in a given situation. Some information might arise from personal
observation; others may be derived from conversation with others and from
committee meetings. In general, we can say that information provides
relevant details in a time-frame about the state of affairs which gives a
greater degree of predictability.
In this unit you also learn how internet and latest technology affect the
traditional system. What are the benefits of information system in market
and for the purpose of marketing research.
Objectives
Explain information system
Describe marketing information system
Define value of information
Explain significance of marketing information

3.2 Marketing and Information
You must have noticed that the information needs, in terms of its quality,
and quantity are different at different levels of marketing. This is indicated in
the Figure 3.1.

Figure 3.1
The terms, data and information are often interchangeable when referring
to two distinct concepts. Data are raw facts in isolation which when placed in
meaningful context by data processing operations allows inferences to be
drawn. Such meaningful data is information.
The basic purpose of capturing and processing data is to produce
information. Although data are key ingredients, not all data produce
relevant and timely information. There is an unlimited amount of data from
sources both internal and external to the organisation. No data processing
method guarantees that data will be processed in accordance with the
needs of the user. These needs must be determined in a context somewhat
distinct from the data processing method used.

1. Data are ____________ facts in isolation.
2. The basic purpose of capturing and processing data is to ___________.

3.3 Marketing Information System
A Marketing Information System (MkIS) consists of people, equipment, and
procedures to gather, sort, analyze, evaluate, and distribute needed, timely
and accurate information to marketing decision makers. MkIS distributes
information to managers in the right form and at the right time to help them
make better marketing decisions. Figure 3.2 illustrates an MkIS.

Figure 3.2: Marketing Information System
Activities or functions of marketing information systems
Activities or functions of marketing information systems are:
Assessing Information Needs
Developing Information
Internal records
Procedures to gather and analyze information for marketing
decision-making. Information Analysis
Distributing Information
Marketing information systems integrate the information flow required by
many marketing activities. Marketing information systems provide
information for:
Internet/intranet websites and services make an interactive marketing
process possible where customers can become partners in creating,
marketing, purchasing, and improving products and services.
Sales force automation systems use mobile computing and Internet
technologies to automate many information processing activities for
sales support and management.
Other marketing systems assist marketing managers in product
planning, pricing, and other product management decisions, advertising
and sales promotion strategies, and market research and forecasting.
Interactive marketing
The explosive growth of internet technologies has had a major impact on the
marketing function. The term interactive marketing has been coined to
describe a type of marketing that is based on using the internet, intranets,
and extranets to establish two-way interaction between a business and its
customers or potential customers. The goal of interactive marketing is to
enable a company to profitably use those networks to attract and keep
customers who will become partners with the business in creating,
purchasing, and improving products and services.
Customers are not passive participants, but are actively engaged in a
network-enabled proactive and interactive process.
Encourages customers to become involved in product development,
delivery, and service issues.
Enabled by various Internet technologies, including chat and discussion
groups, web forms and questionnaires, and e-mail correspondence.
Expected outcomes are a rich mixture of vital marketing data, new
product ideas, volume sales and strong customer relationships.
Sales force automation
Increasingly, computers and networks are providing the basis for sales force
automation.
In many companies, the sales force is being outfitted with notebook
computers that connect them to Web browsers, and sales contact
management software that connect them to marketing websites on the
Internet, extranets, and their company intranets. Characteristics of sales
force automation include:
Increases the personal productivity of salespeople.
Dramatically speeds up the capture and analysis of sales data from the
field to marketing managers at company headquarters.
Allows marketing and sales management to improve the delivery of
information and the support they provide to their salespeople.
Many companies view sales force automation as a way to gain a
strategic advantage in sales productivity and marketing responsiveness.
Customer Relationship Management (CRM)
By keeping the customer in the center of all the processes, a state of the art
CRM will fulfill several goals. First, it should enhance customer experience
by delivering a personalized service no matter which interaction channel is
chosen. Second, it will assist the employees to bring a better service,
providing them with a broad and consolidated view on customer profile and
relationship. Third, it helps the management to capture and analyze
customer behavior, to provide metrics for customer segmentation and
further supplies input for Decision Support Systems. Customer care and
handling processes are systematized and marketing budgets can be
optimally allocated to target specific groups. On the long term CRM will
allow to maximize the customer life time value of each relationship where
relationship is not the sum of punctual sales of poorly related products
anymore but turns to the delivery of a consistent value proposition
accompanying the customer in every stage of his life.
Activity 1:
How marketing information system beneficial for marketing research?
3. A Marketing Information System consists of __________, ________ and
___________.
4. MKIS distributes information to managers in the right _________ and at
the right ___________.
5. The activities of marketing information systems include _________.
information needs, ___________ information and ________ information.

3.4 Marketing Decision Support System
Decision Support Systems (DSS) are a specific class of computerized
information systems that supports business and organizational decision-
making activities.
The main purpose of MDSS is to combine marketing data from various
sources into a single database, which can be accessed quickly by the
managers. MDSS is more powerful than MIS.
Typical information that a MDSS might gather and present would be:
An inventory of all of your current information,
Comparative sales figures between one week and the next,
Projected revenue figures based on new product sales assumptions,
The consequences of different decision alternatives, given past
experience in a context that is described.
3.4.1 Components of a Marketing Decision Support System

Figure 3.3: Components of MDSS
As shown in Figure 3.3, the components of decision support system include:
Database
Report and display
Analysis
Models
Database is a collection of data organized to service many applications at
the same time by storing and managing data so that they appear to be in
one location.
A marketing database contains information on customers and their
characteristics. A database helps the marketer predict the future
preferences of the customers from the past data.
Contents of database
Contents of databases are:
Identification of each customer through code.
Name of the organisation.
Address and postal code, e-mail ID.
Time-period when the transaction was carried out.
Amount in rupees (volume of transaction).
Benefits of data base marketing
Retention of the customer: It should be remembered that an
organization needs to spend five times more to acquire a new customer,
compared to retaining an existing customer. Generally, it is an accepted
fact that 20% of the customers are responsible for 80% of the business.
Therefore, maintaining an excellent relationship with customer becomes
imperative.
Estimate the value for lifetime of a customer: Each customer when
valued is an asset to the organisation. If a cell phone subscriber pays
Rs. 300 per month, he is worth 2.5 lakh rupees assuming he continues
with the same service-provider for 30 to 40 years.
Report and display: Report consists of tables, charts, graphs and other
graphic displays. It also consists of other important inferences of a particular
product, company, market, etc.
Analysis: Calculations such as average, percentage changes, seasonal
changes, statistical procedure used are all parts of analysis.
Models: Models represent the assumptions and how it really works. For
example, how brand sales responds to changes in marketing mix. Strategy
models are used to test alternative marketing programme. Models help in
setting objectives.
3.4.2 Characteristics of a Marketing Decision Support System
A good MDSS should have the following characteristics:
Interactive: The process of interaction with the MDSS should be simple
and direct. With just a few commands the user should be able to obtain
the results immediately. There should be no need for a programmer in
between.
Flexible: A good MDSS should be flexible. It should be able to present
the available data in either discrete or aggregate form. It should satisfy
the information needs of the managers in different hierarchical levels
and functions.
Discovery oriented: The MDSS should not only assist managers in
solving the existing problems but should also help them to probe for
trends and ask new questions. The managers should be able to discover
new patterns and be able to act on them using the MDSS.
User friendly: The MDSS should be user friendly. It should be easy for
the managers to learn and use the system. It should not take hours just
to figure out what is going on. Most MDSS packages are menu driven
and are easy to operate.
3.4.3 Levels of Marketing Decision Support System
There are three levels of MDSS:
1. Level 1: Data Management: Data management is a process of data
acquisition, storage and retrieval. This consists of Tools, Database,
Database Management System (DBMS), Query facilities, Report writers,
Document and image management system.
2. Level 2: Data Analysis: Data analysis involves, finding and analyzing
relationships between variables. It comprises basic data analysis tools,
spreadsheet, what-if analysis, goal seeking analysis, graphical tools,
statistical tools, etc.
3. Level 3: Decision Analysis: Decision analysis is a procedure of
prioritization and choice among various alternatives. It addresses both
qualitative and quantitative issues. For example, sales growth, market
share, market position, customer satisfaction, etc.

3.4.4 Types of Marketing Decision Support System
The various types of MDSS are:
Model-driven MDSS
Data-driven MDSS
Communications-driven MDSS
Document-driven MDSS
A model-driven MDSS emphasizes access to and manipulation of financial,
optimization and/or simulation models. It analyses what-if analysis, goal
seeking analysis and sensitivity analysis.
In general, a data-driven MDSS emphasizes access to and manipulation
of a time-series of internal company data and sometimes external and real-
time data. Simple file systems accessed by query and retrieval tools provide
the most elementary level of functionality.
Communications-driven MDSS use network and communications
technologies to facilitate decision-relevant collaboration and
communication. In these systems, communication technologies are the
dominant architectural component. Tools used include groupware, video
conferencing and computer-based bulletin boards.
A document-driven MDSS uses computer storage and processing
technologies to provide document retrieval and analysis.
Knowledge-driven DSS can suggest or recommend actions to managers.
These DSS are person-computer systems with specialized problem-solving
expertise. The expertise consists of knowledge about a particular domain,
understanding of problems within that domain, and skill at solving some of
these problems. These systems have been called suggestion DSS and
knowledge-based DSS.
Apart from these, world wide web and internet provided a technology
platform for further extending the capabilities and deployment of
computerized decision support. Power (1998), defined a Web-based
decision support system as a computerized system that delivers decision
support information or decision support tools to a manager or business
analyst using a Internet Explorer.
Activity 2:
If you are a research manager from a telecom organization. What are
your sources of collecting information from market?
6. MDSS is a coordinated collection of ____________, __________,
___________and __________ with supporting software and hardware.
7. _________, ___________, __________ and __________ are the
components of decision support system.
8. Database_________ and ____________customer information.
9. A model-driven MDSS emphasizes access to and manipulation of
__________, ___________ and/or simulation models
10. A data-driven MDSS emphasizes __________ and _______ a time-
series of data.
11. The purpose of data mining is to identify __________,__________
data.

3.5 Internal Record Systems
You would have noted that all enterprises which have been in operation for
any period of time have a wealth of information. Nevertheless, this
information may remain under-utilised because it is compartmentalised,
either in the form of an individual entrepreneur or in the functional
departments of larger businesses. This makes it imperative for various
organizations to maintain an efficient and adequate internal record system.
Information is usually classified into various categories depending upon its
nature so that there are, financial, production, manpower, marketing,
stockholding and logistical data. Often the entrepreneur, or other personnel
working in the functional departments holding unrecorded 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 just some of the internal records that marketing managers use,
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
Product type, size and pack type by type of account
Product type, size and pack type by industry
Product type, size and pack type by customer
Average value and/or volume of sale by territory
Average value and/or volume of sale by type of account
Average value and/or volume of sale by industry
Average value and/or volume of sale by sales person
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.
12. Information is usually classified into various categories depending upon
its ______________.
13. The internal records that are of immediate value to marketing decisions
______________, _____________ and ________________.

3.6 Marketing Intelligence
A marketing intelligence system provides the information relevant to a
companys markets, gathered and analyzed specifically for the purpose of
accurate and confident decision-making in determining market opportunity,
market penetration strategy, and market development metrics. Market
intelligence is necessary when entering a foreign market.
This scanning of the economic and business environment can be
undertaken in many ways like
Formal search
Informal search
Unfocused scanning
Semi-focused scanning
Under formal search, 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. The scope of such a search is likely to be narrow in
scope and far less intensive than marketing research.
Informal search 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.
Unfocused scanning highlights 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.
Semi-focused scanning states that 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.
If an organisation wants to be close to the market it needs to fully
understand it, including the roles that the competitors and customers play
there. Certain interpretations are that can be made in market intelligence
include:
Market and customer orientation promote external focus
Identification of new opportunities e.g. identify new trends before our
markets and competitors
Early warning of competitor moves enable counter measures
Minimizing investment risks detect threats and trends early on
Better customer interaction inherit intensified customer market view
Better market selection & positioning understand where your offer fits
and discover untapped or under-served potential
Quicker, more efficient and cost-effective information avoid duplication
of report acquisitions and expensive consultant work
14. _____________ search describes the situation where a fairly limited
and unstructured attempt is made to obtain information for a specific
purpose.
15. _____________ states that 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.

3.7 Significance of Marketing Information in Market Research
Information is defined as meaningful data, which is needed by the
managers for taking correct and accurate decisions. Information is recorded
experience that is useful for decision-making In other words it consists of
that recorded experience which will reduce the level of uncertainty in making
a decision. The emphasis in marketing is on the identification and
satisfaction of customer needs. In order to determine customer needs
and to implement marketing strategies and programs aimed at satisfying
these need, marketing managers need information. They need information
about customers, Competitors, and other forces in the market place. As the
firms become national and international in scope, the need for information
on large and more distant markets has increased.
The task of marketing research is to provide the information useful for
decision-making with following characteristics.
Relevant: refers to the pertinence and applicability of information to the
decision and is the single most important characteristic.
Accurate: refers to the degree to which information reflects reality.
Accuracy should be judged as a relative criterion in terms of the specific
decision at hand.
Current: degree to which information reflects events in the relevant time
period, past and present.
Sufficient: Information must be complete and/or detailed enough to
allow a decision to be made.
Decisions carry out for information unavailable at any price. Unless the
information collected does not lead the manager to change or modify his
decision, the information has no value. Information is useful in cases
i) where one is unsure of what is to be done
ii) where extreme values, for example, huge profits or losses are involved.
By collecting the information, the management is reducing the chance of
making a wrong decision. A question is how much information should be
collected in a given situation? As the collection of information involves a
cost, it is necessary to ensure that the benefit from information is more than
the cost involved in its collection.
Marketing information system is a continuing and interacting structure of
people, equipment, and procedures designed to gather, sort, analyse,
evaluate, and distribute needed, timely, and accurate information to
marketing decision makers.
Assessing information needs: Organisations are supposed to assess the
information needs in view of the changes occuring inside and outside the
organisation.
The MkIS increases the number of options available to decision-makers and
supports every element of marketing strategy. MkIS affects marketings
interfaces with customers, suppliers and other partners. The primary
benefits of the MkIS impact in the areas of functional integration, market
monitoring, strategy development, and strategy implementation.
Market Monitoring: Through the use of market research and marketing
intelligence activities the MkIS 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. There are three major
sources of market information. The first is syndicated data published by
market research companies and industry associations. Company-
sponsored primary research is another option. It is much more
focused since you ask specific questions of respondents within your
markets. But, it is considerably more expensive and time consuming.
Perhaps the best data available are your own customers behavior
captured from web site viewing, Point of Sale (POS) transactions, and
systematic feed back from the sales force.
Strategy Development: The MkIS provides the information necessary
to develop 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 partnerships and alliances. The MkIS
provides the foundation for the development information system-
dependent e-commerce strategies.
Strategy Implementation: The MkIS 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.
The MkIS enables decision-makers to more effectively manage the sales
force as well as customer relationships. 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: The MkIS 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.
16. Information is defined as ___________ data.
17. The information should be _________,_____________,
__________and ____________.
18. The MkIS increases the number of _____________ available to
decision-makers.

3.8 Quality and Quantity of Market Information
Marketing information is useful only if it can help a marketing manager to
make a decision. In order to be useful, information should be of high quality,
relevant, timely and complete. To be of a high quality, information should
provide a good picture of reality and it should thus be accurate, valid and
reliable. The information should also be relevant in other words, it should
clarify the questions that face the decision maker. Marketing information
should also be timely as outdated information could lead to poor decisions.
For example, if the business intends to launch a new product in winter all
the research regarding the price, packaging, name, logo and so forth should
be conducted well in advance. It is important that the information should
also be complete, which refers to having the right quantity of information.
There should thus be sufficient information about all aspects of the
decisions to be taken.
The degree of efficiency of a marketing information system is an
important factor in the speed and accuracy of a marketing decision-making.
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 marketing managers, but even
this small set of records is capable of generating a great deal of information.
Information systems have to be designed to meet the way in which
managers tend to work.
Below, is a list of some examples of the information that can be derived
from sales invoices.
Product type, size and pack type by territory
Average value and/or volume of sale by territory
Average value and/or volume of sale by type of account
19. The internal records that are of immediate value to marketing decisions
are __________, __________ and ___________.
20. Information systems have to be designed to meet the way in which
managers tend to ___________.

3.9 Value of Information
Information plays a vital role in decision-making. Three aspects of
information is important.
What is information used for?
What influences the use of information?
How to value the information?
Information is required because of two reasons:
we dont know enough of what we are supposed to know
many times what we know, we think it is wrong.
Sometimes some decisions may need very little or no information in
decision-making. Example: Boss asking the subordinate whether he would
like to work extra time for the day, the answer may be yes or no.
Any additional information in this case is not likely to change the decision,
on the other hand, if some one wants to know the information regarding the
price of reliance stock, six months from today, to decide whether to buy or
sell the stock, this information may not be available to all. However there are
situations, where information can improve the probability of making right
decision.
Thus right decision made, is directly related to the value of information.
Example: Suppose a decision maker is faced with two choices, each one of
them seems to be equally likely to be correct, i.e. the probability of right
decision is 50:50. Now, using the experience of the manager, this probability
can be increased to 60:40. Now, by collecting the best available information,
the probability may be increased to 80:20. Hence, the value of information in
this case has helped to increase the chance of making the right decision
from 3 out of 5 to 4 out of 5.
The important point to be remembered is that, unless decision changes
as a result of additional information, such information may have no
value, i.e. if the manager/decision maker is not willing to change his or
her mind based on the data, data collection becomes waste. Example,
Marketing manager has recommended the company to introduce a new
product immediately. Data collection shows that, this may not be the
most opportune time to do it. Still the company goes ahead introducing
the product. In this case, there is no change in the decision, even after
obtaining the information. In this case, the information has no value.
Expected Value of Perfect Information (EVPI)
What is Perfect Information? This is the return that can be got, if there is a
perfect information before a decision is taken. In our example of
shopkeeper selling fruits, if we can remove all uncertainty, by getting
complete and accurate information about the future, such an information is
called perfect information knowing the market in advance. The shopkeeper
can choose the stock to be ordered to maximize his profit. There will be no
losses, either because of over stocking or lost sales. We can compute
expected profit with perfect information as shown in Table 3.1.
Table 3.1: Illustration for Perfect Information
Demand for
fruits in
number of
boxes
Conditional
Profit (Rs) with
perfect
information
Probability that
this sales takes
place
Expected Profit
with perfect
information (Rs)
10 300 0.15 45
11 330 0.20 66
12 360 0.40 144
13 390 0.25 97.50
1.00 352.50
Thus, when the demand is for a particular number of boxes, exactly same
number is ordered and hence there is no loss due to unsold stock or loss of
business due to no stock. Profit is Rs. 352.50/day which is the highest.
If the shopkeeper selling fruits gets a perfect prediction about the future, he
must compare the cost incurred to get the information vs profit additional
made by him an account of receiving the information.
The EVPI serves as an indicator of the maximum value that the decision
maker can have. The formula used to determine the expected value of
information is
EVPI = EV (with perfect information) EV (under conditions of uncertainty).
In our example, the daily profit of the shopkeeper is Rs. 352.50, if he had
perfect information. Otherwise his best profit is Rs. 335.00 (refer to
comparison of profit for various market demand). The difference is
Rs. 17.50/day. This is the maximum amount that the shopkeeper will pay for
the information. Expected value of perfect information is referred as EVPI. If
he pays more than Rs. 17.50, for information, it means he is paying more for
information than it is worth.
The value of information i.e., the benefits could be ascertained by the
following:
Accessibility: the ease and speed with which the particular information
could be obtained. Faster and easier access will have more value as
compared to slow and difficult access.
Comprehensiveness: more complete the information in itself, more
valuable it becomes. This attribute does not refer to the value of
information but refers only to its usefulness.
Accuracy: information if free from any error will have more value than
otherwise.
Timeliness: it takes certain time to generate the information and the
value of the information depends very much on how timely it is made
available to the user manager.
Authenticity: if the information is being generated from a formal
information system, it is authentic and could be measurable.
Free from Bias: the information if free from any bias towards the
preconceived conclusion will have more value than otherwise.
21. If the information is being generated from a formal information system,
it is _____________.
22. The information if free from any bias towards the preconceived
conclusion will have ____________value than otherwise.

3.10 Types of Market Information
Various types of information available in market include:
Quantitative vs Qualitative Information: The difference is shown through
Table 3.2.
Table 3.2: Quantitative vs Qualitative Information
Qualitative Information Quantitative Information
Deals with descriptions. Deals with numbers.
Can be observed but not measured. Can be measured.
Colors, textures, smells, tastes,
appearance, beauty, etc.
Length, height, area, volume,
weight, speed, time, temperature,
humidity, sound levels, cost,
members, ages, etc.
Exact vs Tentative Information: The difference is shown through Table
3.3.
Table 3.3: Exact vs Tentative Information
Exact Information Tentative Information
Deals with perfect revelations Deals with tentative revelations
Can be trusted totally. Can be trusted blindly
What does one prefer eating
(veg/non veg); which type of
restaurants a specific group of
customers like going to, etc.
Will a non vegetarian prefer eating crab
on a visit to Hawaii; would someone
happily married like to date a person if
not married happily, etc.
Primary vs Secondary Information: Primary information helps in
determining the survival of the market. The popular ways to collect primary
data consist of surveys, interviews and focus groups, which shows that
direct relationship between potential customers and the companies.
Secondary research is a means to reprocess and reuse collected
information as an indication for betterments of the service or product. Both
primary and secondary data are useful for businesses but both may differ
from each other in various aspects.
In secondary data, information relates to a past period. Hence, it lacks
aptness and therefore, it has unsatisfactory value. Primary data is more
accommodating as it shows latest information. Secondary data is obtained
from some other organization than the one instantaneously interested with
current research project. Secondary data was collected and analyzed by the
organization to convene the requirements of various research objectives.
Primary data is accumulated by the researcher particularly to meet up the
research objective of the subsisting project.
Activity 3:
Marketing Research is not immediate or an obvious path to finding
solutions to all managerial problems. Suggest.
23. Qualitative information can only be ____________.
24. In secondary data, information relates to a ____________ period.

3.11 Summary
A good marketing information system should determine the various
information needs of the organization. These information can be got from
internal source or from external sources.
Database is a source of information about individuals or organizations.
Database may contain customers purchase history, demographic life style
etc. data base helps to locate potential prospects. When a transaction takes
place certain relationship is developed. Relationship marketing focus on
retention of customer forever.
Marketing information systems support traditional and e-commerce
processes and management of the marketing function. Major types of
marketing information systems include interactive marketing at e-commerce
websites, sales force automation, customer relationship management, sales
management, product management, targeted marketing, advertising and
promotion, and market research. Thus, marketing information systems
assist marketing managers in electronic commerce product development
and customer relationship decisions, as well as in planning advertising and
sales promotion strategies and developing the e-commerce potential of new
and present products, and new channels of distribution.
Glossary
Management Information System: a system or process that provides
information needed to manage organizations effectively.
Marketing Information System: a set of procedures and methods for the
regular, planned collection, analysis and presentation of information for use
in marketing decisions.
Targeted Marketing: a strategic approach to creating a marketing mix for a
specific, targeted market segment and set of buyers.
Decision Support System: a way to model data and make quality
decisions based upon it.
Database: collection of data that is organized so that its contents can easily
be accessed, managed, and updated.
Data Mining: the process of extracting patterns from data.

1. Describe the relation between marketing and information system.
2. Explain the functions of marketing information system.
3. What do you mean by marketing decision support system? Also explain
the various components of MDSS.
4. Describe data-driven MDSS in detail.
5. What do you mean by value of information?

3.13 Answers
1. raw
2. produce information
3. people, equipment, procedures
4. form, time
5. assessing, developing, distributing
6. data, systems, tools, techniques
7. Database, report and display, analysis, models
8. collects, analyzes
9. financial, optimization
10. access to, manipulation of
11. valid, useful
12. nature
13. orders received, stockholdings, sales invoices
14. Informal
15. Semi-focused scanning
16. meaningful
17. relevant, accurate, current, sufficient:
18. options
19. orders received, stockholdings, sales invoices
20. work
21. authentics
22. more
23. observed.
24. past
1. A marketing information system (MIS) is intended to bring together
disparate items of data into a coherent body of information. Link this
with what a marketing manger does and discuss it further.
2. Refer to 3.3 Discuss activities of MkIS.
3. Refer to 3.4 Discuss the constituent parts and their functions.
4. Refer to 3.5 Since good quality data is important for every researcher,
attention must be paid to getting the numbers right. Discuss the topic in
this context.
5. Refer to 3.8 Discuss value on the basis of the benefits of information.
Mini-case
JP Insurance Company has been facing problems related to the operational
and regulatory environment. The company's problems increased after it
acquired the Earnest Insurance Company.
Earnest Insurance Company is based in London, whereas JP Insurance
Company is based in Bangalore, India. JP's problems regarding Earnest are
related to high costs and the lack of flexibility associated with multiple IT
systems and applications.
This can be attributed to a change in JP's organizational structure following
its acquisition of Earnest and the subsequent expansion of JP's operations.
The existing IT department at JP was not able to sufficiently scale its
operations, and failed to effectively meet the changed needs and
requirements of the organization.
Actually, after the acquisition of Earnest Insurance Company, considerable
flexibility was needed by the IT department of JP Insurance Company. But,
due to certain changes that followed the acquisition, the size and operation
levels of the company grew beyond its expectations. Managing this required
a high degree of flexibility of the IT department as well as the other
departments.
Question
What you learn from this case study?
Hint: Discuss in context of the lag in information flow after acquisition.

Unit 4 Research Process and Design
Structure
4.1 Introduction
Objectives
4.2 Research Design
4.3 Need for a Step by Step Process
4.4 Steps in Research Process
4.5 Meaning of Research Design
4.6 Types of Research Design
4.7 Research Design and Marketing Decision Process
4.8 Types of Decision Models
Decision-making under Certainty
Decision-making under Risk
4.9 Choosing a Good Research Design
4.10 Summary
4.12 Answers

4.1 Introduction
In the earlier units, you came to know about the marketing research and
marketing information system. In this unit you will study about the research
process and its design.
In this unit you will learn about the first phase in planning the research
project, which is formulating a research design. Based on causality,
research designs have been divided into four categories of exploratory,
descriptive, causal and experimental designs. While exploratory and
descriptive studies provide information on events and attributes from which
inferences can be drawn, they can only offer tenuous conclusions.
Objectives
Explain research process
Describe various steps in research process
Define research design
Explain research design types
4.2 Research Design
Research design is the framework or plan for a study that is used as a
guide in collecting and analyzing the data it is blueprint that is followed in
completing a study.
Features of research design: Research design
is a plan specifying the sources and types of information relevant to the
research problem.
is a strategy specifying which approach will be used for gathering and
analyzing the data.
also includes the time and cost budgets since most studies are done
under these two constraints.
Need for research design: The various needs of research designs are:
It facilitates the smooth sailing of the various research operations,
thereby making as efficient research as efficient as possible yielding
maximal information with minimal expenditure of effort, time and money.
It gives us a plan in advance of data collection and analysis for our
research project.
It has a great bearing on the reliability of the results arrived at and as
such constitutes the firm foundation of the entire edifice of the research
work.
It helps the researcher to organize his ideas in a form of whereby it will
be possible for him to look for flaws and inadequacies.
1. Research design is a _________ for a study.
2. Research Design is a plan specifying the _________ and types of
_________ relevant to the research problem.

4.3 Need for a Step by Step Process
A researcher is often required to think a few steps ahead, because various
steps in research process are inter-woven into each other and each step will
have some influence over the other steps. In marketing research, even
though our focus is on one particular step, other inter-related steps of
operations are also being looked into simultaneously. As we complete one
activity or operation, our focus naturally shifts from it to the subsequent one,
i.e. the focus is not concentrated exclusively on one single activity or
operation at any particular point of time. The research process provides
systematic, planned approach to the research project and ensures that all
aspects of the research project are consistent with each other.
3. A researcher is often required to think _________.
4. The research process provides _____ approach to the research project.

4.4 Steps in Research Process

Figure 4.1: Steps in Marketing Research Process
Being a systematic inquiry marketing research requires careful planning of
the orderly investigation process. Though it is an over simplification to
assume that all research processes would necessarily follow a given
sequence marketing research often follows a generalised pattern which can
be broken down and studied as sequential stages.
Figure 4.1 gives the stages in the marketing research process. As shown in
the figure, research process begins with the identification. The research task
may clarify a problem or define an opportunity.
Defining the problem
You should first define the problem clearly since it is of crucial importance in
marketing research as in terms of both time and money research is a costly
process. Careful attention to problem definition allows the researcher to set
the proper research objectives which in turn facilitate relevant and economic
data collection.
Statement of research objectives
After clarifying and identifying the research problem, you must make a
formal statement of research objectives. Research objectives may be state
in qualitative or quantitative terms and expressed as research question
statements or hypothesis. For example, the research objective "to find out
the extent to which the sales promotion programmes affected sales" is a
research objective expressed as a statement. A hypothesis on the other
hand is a statement that can be refuted or supported by empirical findings.
Planning the research design
In this stage you must determine the type of sources of information needed,
the data collection methods (surveys or interviews for example), the
sampling methodology and the timing and possible costs of research. The
design chosen may be exploratory, descriptive, quasi-experimental or
experimental design categories which again include a number of alternative
methods.
Planning the sample
Sampling involves procedures that use a small number of items or parts of
the population to make conclusion regarding the whole population. The first
sampling question that needs to be asked is who is to be sampled, which
follow from what is the target population. Defining the population may not be
as simple as it seems.
Data collection
The data collection process follows the formulation of research design
including the sampling plan. Data which can be secondary or primary can be
collected from tools that are classified into two broad categories, the
observation methods and the communication methods.
Data processing and analysis
Data processing begins with the editing of data and coding. Editing involved
inspecting the data collection forms for omission, legibility and consistency
in classification.
Analysis represents the application of logic to the understanding of data
collected about the subject.
Formulating conclusion, preparing and presenting the report
Finally you have to interpret the information for drawing conclusions to be
used in managerial decisions. The research report should effectively
communicate the research findings and need not necessarily include
complicated statements about the technical aspect of the study and
research methods.
5. The first step in marketing research process is _________.
6. Data processing begins with the _________ and _________.
7. Data which can be _________ or _________.

4.5 Meaning of Research Design
A research design is the framework, a blueprint for the research study which
guides the collection and analysis of data. To be effective, a research
design should furnish at least the following details:
A statement of objectives of the study or the research output.
A statement of the data inputs required on the basis of which the
research problem is to be solved.
The methods of analysis which shall be used to treat and analyze the
data inputs.
The objective is to calculate the margin earned on sales when this
discount is offered and compare it with the margin when discount is not
being offered.
The data to be collected over a period of time


Activity 1:
What are the major problems involved in the undertaking of a
marketing research study designed to facilitate the segmentation of a
given market? Explain.

8. A research design should furnish statement of _________ of the study
or the research output.
9. A research design is the framework for the research study which guides
the _________ and _________ of data.

4.6 Types of Research Design
There are four types of research designs which are broadly classified as:
Exploratory Design
Descriptive Design
Causal Design
Experimental Design
Exploratory Research Design: The exploratory research design involves
getting a feel of the situation and emphasises a discovery of ideas and
possible insights that may help in identifying areas of further rigorous study.
For example a food product manufacturer, wanting in introduce a breakfast
cereal may be in knowing the desirable attributes of such a product before
really defining the product concept. The main objective of the exploratory
research is to fine tune the broad problem into specific problem statement
and generate possible hypotheses. It therefore, gives useful direction for
farther research. The exploratory studies are mainly used for:
Providing information to enable a more precise problem definition or
hypothesis formulation.
Establishing research priorities.
Giving the researcher a feel of the problem situation and familiarizing
him with the problem.
Collecting information about possible problems in carrying out research,
using specific collection tools and specific techniques for analysis.
Descriptive Research Design: Descriptive research is used to obtain
information concerning the current status of the phenomena to describe
"what exists" with respect to variables or conditions in a situation. The
methods involved range from the survey which describes the status quo, the
correlation study which investigates the relationship between variables, to
developmental studies which seek to determine changes over time.
Description or inference could be quantitative or qualitative in nature.
Descriptive designs only describe the phenomenon under study attempting
to establish a relationship between factors. The data collected may relate to
the demographically or the behavioural variables of respondents under
study or some situational variables. For example, descriptive research
design could be suited to measure the various attributes of successful sales
people, or evaluate a training programme or a retailing situation.
Causal Design: Causal Research explores the effect of one thing on
another and more specifically, the effect of one variable on another.
The research is used to measure what impact a specific change will have on
existing norms and allows market researchers to predict hypothetical
scenarios upon which a company can base its business plan. For example,
if a clothing company currently sells blue denim jeans, causal research can
measure the impact of the company changing the product design to the
colour white.
Following the research, company bosses will be able to decide whether
changing the colour of the jeans to white would be profitable.
Experimental Design: Experimental design provides a stronger and more
reliable basis for the existence of casual relationship between variables.
Here, your aim as a researcher is to investigate the possible cause-and-
effect relationship by manipulating one independent variable to influence the
other variable(s) in the experimental group, and by controlling the other
relevant variables, and measuring the effects of the manipulation by some
statistical means. By manipulating the independent variable, the researcher
can see if the treatment makes a difference on the subjects.

10. _________ Research explores the effect of one variable on another.
11. The researcher in ________ method does not know what he will find.
12. Descriptive research can be _________ or _________ in nature.

4.7 Research Design and Marketing Decision Process
The management of an industry or an organisation is involved in taking
decisions about the development or expansion of the concern. No doubt the
concern has to face many problems from time to time. The management
has to overcome or solve these problems. These problems may be
regarding the availability of resources, quality of production, costing,
publicity or promotion, etc. For example, for the publicity of goods
produced, the manufacturer or seller may take the help of TV, radio,
newspapers or door-to-door promotion. Many such endless problems are
there. In each of these decision-making problems, there are some common
components. These are:
Course of Action
States of Nature (Events)
Outcomes
Course of Action: Decision-making problems deal with the selection of a
single act from a set of alternative acts. If two or more alternative courses of
action occur in a problem, then making a decision is necessary to select
only one course of action. In the above example of advertising goods
produced, there are so many alternative courses of actions. The final choice
of any one will depend on the pay-off (or money value) of each strategy
under the circumstances.
Let the acts or actions be symbolised by a
1
, a
2
, a
3
, a
4
, ...........; then the
totality of all these actions is known as action space denoted by A. For four
actions a
1
, a
2
, a
3
, a
4
; A = action space = {a
1
, a
2
, a
3
} or A = {A
1
, A
2
, A
3
}. In a
tree diagram the acts or actions are given after the initial fork as shown. As
shown in Figure 4.2, acts may be also be represented in the following matrix
form , i.e., either in row or column way.


(Actions represented in rows) (Actions represented in cloumns)
Figure 4.2
States of Nature (Events): If the outcome of some action (or act) is not
known in advance, then that outcome is uncertain, but is vital for the choice
of any act. When there are many possible outcomes (or states of nature) of
an event, one cannot predict what will happenit is only in terms of
probability that one may forecast.
The various states of nature are outside a firm and, as such, not under their
control, e.g., consumer demand, change of taste, improvement of
technology, etc. These affect the pay-off and, hence, the choice of an act. A
set of states of nature may be represented in any one of the following ways:
S = {S
1
, S
2
, S
3
, ....... S
n
}
or E = {E
1
, E
2
, E
3
.......E
n
}
or =
1 2 3
{ , , ...........}

For example, if a cosmetic product is marketed, it may be highly liked by
customers (outcome
1
) or it may not appeal at all (outcome
2
), or it may
satisfy only a small fraction, say 20% (outcome
3
).
1 2 3
= { , , }
In a tree diagram the places are text to acts. We may also get another act
on the happening of an event as shown in Figure 4.3.

Figure 4.3
In matrix form they may be represented in either of the following two ways
as shown in Figure 4.4.

Figure 4.4
Outcomes
There is an outcome (or consequence) of the combination of each act with
each possible state of nature. This outcome is also known as conditional
value. In a tree diagram, outcomes are placed after events.
In general, if there are m possible actions and n admissible states of nature,
the consequences will be m n in number.
It may be noted here that these consequences may be evaluated in several
ways such as
i) in terms of profit
ii) in terms of cost
iii) in terms of opportunity loss
iv) utility
Consequences of m n in number are shown in Table 4.1 in centre cell in
row and column of a matrix.
Table 4.1: Consequences in Matrix Form

Here outcome O
21
means 2nd row and 1st column and O
ij
means i
th
row and
j
th
column and so on.

Activity 2:
Assume yourself to be the head of an organization that is eyeing on
overseas expansions. What steps will you follow to zero down of the
right mode of entry? Illustrate it through suitable diagram.

13. The three components of decision-making are __________,
__________ and __________.
14. Decision-making problems deal with the selection of a single act from a
set of __________ acts.

4.8 Types of Decision Models
The aim of the decision theory is to guide the decision-maker in choosing
the best course of action. Depending upon the available information about
the occurrence of various states of nature and environment, the decision
models may be classified into the following types:
Decision-making under Certainty
Decision-making under Risk
4.8.1 Decision-making under certainty
In this case the decision-maker can easily select the course of action, as he
presumes that only one state of nature is relevant for his purposes. For
example, suppose a person desires to deposit Rs. 10,000 for a certain
period. Bank deposit gives 12%, Unit Trust of India offers 14% and
Government bonds rate is 11% p.a. All the investments are fully secured.
Then surely investment in Unit Trust of India is the best choice.
4.8.2 Decision-making under risk
Here the decision-maker faces many states of nature. As such, he is
supposed to believe authentic information, knowledge, past experience or
happenings to enable him to allot probability values to the likelihood of
occurrence of each state of nature. Sometimes with reference to past
records, experience or information, probabilities to future events could be
allotted. On the basis of probability distribution of the states of nature, one
may select the best course of action having the highest expected pay-off
value.
The expected value (or expected monetary value, i.e., EMV is widely used
to evaluate the alternative course of action or act). The expected value is
calculated by the following formula for one row only.
P
j
O
ij
= P
1
O
i1
+ P
2
O
12
+ ............ + P
n
O
in

Where P
1
to P
n
indicate the probabilities of states of nature (or events) and
O
ij
the pay-offs of the outcomes due to combination of each event and act.
Activity 3:
Suppose the manufacturer of a particular brand of a desert cooler
decreased the price of his sets by 5%. It was observed that there
was an increase in sales during the succeeding four months as
compared to what the company had prior to price reduction. Has the
price reduction increased the sales? Justify your answer.

15. During decision-making under certainty, the decision-maker can easily
select the __________.
16. During decision-making under risk, the decision-maker has to _______
authentic information, knowledge, past experience or happenings.

4.9 Choosing a Good Research Design
Whatever may be the type of research work and studies, one thing that is
important is that they all meet on the common ground of scientific method
employed by them. One expects scientific research to satisfy the following
criteria:
The purpose of the research should be clearly defined and common
concepts be used.
The research procedure used should be described in sufficient detail in
permit another researcher to repeat the research for further
advancement, keeping the continuity of what has already attained.
The procedural design of the research should be carefully planned to
yield results that are as objectives as possible.
The researcher should report with complete frankness, flaws in
procedural design and estimate their effect upon the findings.
The analysis of data should be sufficiently adequate to reveal its
significance and the methods of analysis used should be appropriate.
The validity and reliability of the data should be checked carefully.
Conclusions should be confined to those justified by the data of the
research and limited to those for which the data provided and adequate
basis.
Greater confidence in research is warranted if the researcher is
experienced, has a good reputation in research and is a person of
integrity.
In other words, you can say the qualities of a good research are:
Good research is systematic: it means that research is structured with
specified steps to be taken in a specified sequence in accordance with
the well defined set of rules. Systematic characteristic of the research
does not rule out creative thinking but it certainly does reject the use of
guessing and intuition in arriving at conclusions.
Good research is logical: This implies that research is guided by the
rules of logical reasoning and the logical process of induction and
deduction are of great value in carrying out research. Induction is the
process of reasoning from a part to the whole whereas deduction is the
process of reasoning from some premise to a conclusion which follows
from that very premise. In fact, logical reasoning makes research more
meaningful in the context of decision making.
Good research is empirical: It implies that research is related basically
to one or more aspects of a real situation and deals with concentrate
data that provides a basis for external validity to research results.
Good research is replicable: This characteristic allows research
results to be verified by replicating the study and thereby building a
sound basis for decisions.
17. The __________ design of the research should be carefully planned to
yield results that are as objectives as possible.
18. Conclusions should be confined to those __________ by the data of
the research.
4.10 Summary
This unit on research design gives an overiew of the research designs and
their application in marketing research. After discussing the meaning and
benefits of a research design, the discussion focusses on the four basic
types of designs namely exploratory, descriptive, quasi-experimental and
experimental. Causality, the relationship between data and conclusions,
forms the basis of this classification. The nature of causality and the need to
measure it has also been discussed.
The major design categories and their applications have been described.
Specific subtypes within the major categories have also been discussed.
Under the descriptive design, panel design, cross sectional design and
focus groups were discussed. The quasi-experimental designs discussed
include after only without control group, before-after without control group
the static group comparison, longitudinal design and multiple time series
designs.
Glossary
Research Process: The ordered set of activities focused on the systematic
collection of information using accepted methods of analysis as a basis for
drawing conclusions and making recommendations.
Data Collection: Systematic gathering of data for a particular purpose from
various sources, including questionnaires, interviews, observation, existing
records, and electronic devices. The process is usually preliminary to
statistical analysis of the data
Research Design: A plan outlining as to how information is to be gathered
for an assessment or evaluation that includes identifying the data gathering
method(s), the instruments to be used/created, how the instruments will be
administered, and how the information will be organized and analysed.
Experimental Design: A branch of statistics that attempts to outline the
way in which experiments should be carried out so the data gathered will
have statistical value.
Focus Group: A marketing research tool in which a small group of people
(typically eight to ten individuals engages in a roundtable discussion of
selected topics of interest in an informal setting.

1. What do you mean by research design? Why is it needed?
2. Explain research process.
3. What will you keep in mind while undertaking a research?
4. Distinguish between Causal and Experimental design.
5. Describe the relation between research design and marketing decision
process.

4.12 Answers
1. framework or plan
2. sources, information
3. a few steps ahead
4. planned
5. defining the problem
6. data editing, coding
7. secondary, primary
8. objectives
9. collection, analysis
10. Causal
11. exploratory
12. quantitative, qualitative
13. Course of Action, States of Nature (Events), Outcomes
14. alternative
15. course of action.
16. believe
17. procedural
18. justified
1. Refer to 4.2 Also explain the need
2. Refer to 4.4 Discuss step by step research process.
3. Refer to 4.9 Base your answer on the qualities of a good research
4. Refer to 4.6 Discuss the basic difference and give examples.
5. Refer to 4.7 Research aims to identify those aspects of the world we
want to understand more clearly. Discuss this with respected to
marketing.
Mini-case
Repatriate Co-op Bank is located in a town with a population of about 2
lakh. Its two main competitors were Bharat Co-operative Bank Textile
Workers Co-op Bank.
The size of all the three banks in terms of number of shareholders, assets,
were more are less the same. Interest offered on S.B and F.D were more or
less the same.
The main services offered by Repatriate Co-op Bank were savings bank,
vehicle and personal loan, mortgage loan, Jewel loan etc. The bank had an
ATM operating 24 hours. The services offered by other two banks were also
similar.
Since services offered by all the three banks were similar, the board of
directors of Repco Bank decided to find, loyalty of current customers to the
bank. The bank also wanted a measure of how customers perceive the
various services offered by the institution.
In the light of the above, the company appointed a leading market research
agency to conduct a survey among 2,000 current customers. The decision
of the bank was that, if this survey indicates anything worthwhile, a similar
survey would be conducted on current non-customers too.
The following was the specific information sought by the bank from the M.R
agency:
1. What percentage of the current bank customers of Repco Bank use the
services of competitors for one or more services?
2. For which service of the competitors does the current customer go?
3. Of the two competitors, who has the largest percentage of Repco Bank
customer as their customers as well?
4. How do the Repco Bank customers perceive the following attributes of
the bank?
a) Locational advantage
b) Quickness
c) Ambiance
d) Convenience of working hours
e) Courtesy of Staff
f) Correctness/Accuracy
g) Use of Technology
h) How important is each of the above to Repco customers?
i) Do the above attributes have any relations with age, education, sex,
annual
j) income, numbers of years of association with Repco Bank?
A mail questionnaire has to be sent to the respondents of Repco Bank,
along with a covering note and reply envelope.

Question
What are the advantages of limiting of survey to just the current customers
of Repco Bank?
Hint: Base your answer on the facts like Surveys are relatively inexpensive,
useful in describing the characteristics of a population, can be administered
from remote locations (using mail, email or telephone) and so on.
Unit 5 Sources and Collection of Marketing Data
Structure
5.1 Introduction
Objectives
5.2 Data and the Research Process
5.3 Secondary Data
5.4 Advantages of Secondary Data
5.5 Limitations of Secondary Data
5.6 Sources of Secondary Data
5.7 Primary Data
5.8 Advantages of Primary Data
5.9 Limitations of Primary Data
5.10 Sources of Primary Data
5.11 Methodology for Collection of Primary Data
Online Surveys
Observation Method
Designing the Questionnaire
5.12 Mail Questionnaire
Advantages of Mail Questionnaire
Limitations of Mail Questionnaire
Additional consideration for the Preparation of Mail Questionnaire
5.13 Summary
5.15 Answers

5.1 Introduction
In the earlier units, you came to know about the research process and
design. In this unit you will study about the data collection and its sources.
You will also learn about the major sources of secondary and primary data
as well as the basic methods of collecting data. Whichever way, the data is
collected, errors of different types creep in. In this unit you will also learn the
important sources of error associated with data collection.
Objectives
Explain data collection criteria
Elucidate upon and use various sources of secondary data
Describe limitations of secondary data
Explain primary data collection methodologies

5.2 Data and the Research Process
Once the research objectives have been defined the next step you must
follow is to identify the nature and type of information needed to achieve
these objectives. Figure 5.1 represents the initial steps in the research
process with emphasis upon the types of data sources and options available
to the researcher. The research objectives define the type and extent of
information needed to achieve the research objectives the data needs are
further clarified by the type of research design chosen as well as by the
nature of research e.g. whether the problem at hand is that of exploratory or
preliminary research or causal and conclusive research and so on.
Types of data
As you have already noted, all data sources available to the researcher can
be classified as either secondary or primary.
Secondary data are already published data collected for purposes
other than the research problem at hand.
Primary data are those generated specifically for the purposes of the
research problem in question.
As the Figure 5.1 shows the major sources of primary data are
respondents, analogous case studies and experiments. The secondary
data on the other hand can be obtained from official government
publication, marketing research agencies and syndicated sources
(which sell the data) and the library sources. Published individual research
projects have not been dealt with separately as they are included the library
source.


Figure 5.1: Data and the Research Process
1. All data sources available to the researcher can be classified as either
or ___________.
2. Major sources of primary data are _________, ________ and _______.

5.3 Secondary Data
As you know that the secondary data is collected by others for another
purpose and saves considerable time and effort in solving the research
problem at hand.
The uses of secondary data can be conveniently arranged into the following
four categories.
Problem recognition: A constant monitoring of secondary data can
provide the impetus for problem recognition. Moreover, exploratory
studies may be initiated to identify future opportunities or weaknesses in
the firms current operations.
Problem clarification: Secondary data can also fruitfully be used to
help clarify the specific problem that we may be facing. Here,
clarification usually means making the decision problem more reachable
by delineating the components of the situation. Another related use of
secondary data is that they can help plan the study design and provide
information to write the research proposal.
Formulation of feasible alternatives: Alternatives must exist before
decision-making can take place. Secondary data are very useful in
generating viable alternatives to solve problems. The multiplicity of data
sources, research approaches and managerial styles usually lead to a
number of possibilities which should be examined by the researcher.
Problem solution: Not only are secondary data helpful in the definition
and development of a problem, they are often sufficient in and of
themselves, to generate a problems solution.
The secondary data can be obtained internally (within the firm) or externally
(from one or more outside agencies). Internal secondary data include
financial accounts, sales and other records maintained by the firm. External
secondary data can be collected from the originating sources or from
secondary sources. For example, the Office of the Economic Adviser,
Government of India, is the originating source for data on wholesale prices.
In contrast, a publication such as the RBI bulletin containing some parts of
the series of wholesale prices, is a secondary source of secondary data. For
example, the Central Statistical Organisation (CSO) brings out statistics of
national income. Syndicated services are provided by certain organisations,
which collect and tabulate marketing information on a continuing basis.
Reports based on such information are sent periodically by these
organisations to clients who are subscribers. In India, some of the agencies
engaged in syndicated research are the Operations Research Group
(ORG), Indian Market Research Beareau (IMRB), Pathfinders: India and
National Council of Applied Economic Research (NCAER).
3. Financial accounts are example of ___________ secondary data.
4. The secondary data can be obtained ___________ or ___________.

5.4 Advantages of Secondary Data
The various advantages of secondary data are:
can be obtained at a relatively low cost.
can be obtained quickly.
enable the researchers to identify the deficiencies in the data and make
primary data collection specific.
useful in the case of exploratory researches as they provide increased
understanding of the problem.
act as a basis for comparison after primary data are collected.
provide for data which cannot obtained by the typical organisation like
census reports.
5. Secondary data is useful in the case of ___________ researches as
they provide increased understanding of the problem.
6. Secondary data act as a basis for comparison after primary data are
___________.

5.5 Limitations of Secondary Data
The limitations of secondary data are:
The available data may not suit the current purpose of research, due to
incompleteness, generalities and so on.
Information may be outdated or obsolete.
The methodology used in collecting the data such as the sample size,
date of the research, etc., may be unknown.
All the findings of a research study may not be made public.
Conflicting data may exist.
It may be difficult to determine the accuracy of the secondary data.

Activity 1:
Study the demand estimation process for an existing product in your
organisation or any other organisation that you are familiar with:
a) What were the sources of secondary data utilized?
b) What specific use of secondary data was made in the study?

7. It may be _________ to determine the accuracy of the secondary data.
8. Secondary data may use ___________ information.
5.6 Sources of Secondary Data
The type of secondary data required to meet research objectives determine
the sources of secondary data. Some of the common and important sources
are:
Government Agencies and Official Publications: The largest single
source of secondary data in macro terms are the' publications by the Union
government. Marketing researches rely heavily on this source of data for
estimating market potential and sales forecasts, determining distribution
penetration and location of intermediate and final outlets, as well as for
defining sales territories and routing schedules. For example, estimates of
income and expenditure patterns become good starting points for estimation
of paying capacity for different products and services.
Census Data: Since 1872, the census of Indias population is being done
once a decade. The next census for which the machinery is already geared
up has been done in our country in 2001. Most of the demographic data are
available through census. For example: household type, sex, race, age,
marital status, etc.
National Sample Survey: This was started in 1950 and collects data about
demographic, social and economic aspects of a household. Unlike a census
which is done once in a decade, this is a continuous ongoing activity
throughout the year.
Population Statistics: Population statistics in India have been collected,
every ten years since 1871-72. Besides forming a basis for most macro
planning estimates, census data in respect of the marketing research
function is the most important source of national population statistics and its
basic characteristics especially demographic and economic. It provides
factual bases for estimation of consumer demand for various goods and
services, by furnishing data on size of population and its distribution by age,
sex, occupation and income levels. Estimates of population density,
distribution, literacy levels, consumption patterns all become important
inputs in distribution decisions, communication decisions and overall
marketing policy.
Statistical Abstract of India: Brought out annually by the Central Statistical
Organisation, this publication contains the statistics of various section of the
Indian economy for the preceding five years. Statewise, statistics for these
economic variables are also furnished periodically.
Estimation of National Product, Savings and Capital Formation: This is
also an annual publication of the Central Statistical Organisation. It
publishes annual estimates, of national income, savings and consumption,
capital formation and expenditure as well as national and public sector
accounts.
Monthly Statistics on the Production of Selected Industries: To bridge
the gap between the census taken and data published, the C.S.O. publishes
monthly statistics relating to production, installed capacity and stock
positions in selected industries. More than 90 industries are included in the
compilation of chosen statistics.
Basic Statistics Relating to Indian Economy: Published annually by the
statistics and survey division of Planning Commission this publication
contains basic indicators on various aspects of economy for the past few
years based on time series.
India, Pocketbook of Economic Information: It is an annual publication of
the Ministry of Finance. Giving particular emphasis on estimates of foreign
financial and international comparisons, it includes statistics on the various
aspects of the national economy.
Trade Statistics: The Department of Commercial Intelligence and Statistics
compiles monthly statistics of commercial intelligence and statistics,
publishes data on import and export of goods in terms of their quantity and
value, classified as received from or sent to centres of consignment. In
addition, this publication provides information on value of foreign trade,
balance of trade, foreign trade with each country and currency area, foreign
trade in groups of commodities with each country and currency area, foreign
trade with selected countries etc.
Other sources of secondary data
Library: The library sources of marketing data include the whole gamut of
publicly circulated material i.e, government documents and reports, books,
periodicals, journals, individuals research project reports and trade
association publications. As the categories noted above are intended for
public circulation, the library represents an easy, economic and efficient
source of secondary data.
Research Agencies and Data Services: The growing demand for
marketing data has brought forth several organisation which collect and sell
standardized data. Also called syndicated sources, these agencies include
the marketing research agencies as well as the data services which in
addition to providing standardized data also undertake specific data
collection research projects. In India, advertising agencies have also
emerged as 'good sources of data on readership media habits, attitudinal
research and other communication related areas.
Internet: In toadys internet savvy world, the largest and argumentably the
least expensive source for secondary data is the World Wide Web. Internet
serves as an extremely popular source for collecting secondary data for
marketing research because almost any data imaginable is readily available
online. Secondary data can be retrieved from thousands of places on the
internet. A lot of business and research organizations list secondary data on
the internet for instant access to marketing researchers. This allows the
latter to have a quick access to information, which consequently, allows
marketing researchers to make faster, more precise decisions.
Activity 2:
List some major secondary sources of information for the following:
a) Market research manager of a tea manufacturing company has
to prepare a comprehensive report on the tea industry as a
whole.
b) M.T.R has several product ideas on ready-to-eat products. It
wishes to convert ideas into products and enter the market.
Before entering, the company needs to find necessary
information to assess the market potential.
c) An MNC wishes to open a showroom in a Metro. The first step
that the company would like to take is to collect the information
about suitability.
d) Number of residential houses less than 10 years old in a given
locality.

9. The largest single source of secondary data in macro terms are the
publications by the ___________.
10. Population statistics in India have been collected, every _______
years.

5.7 Primary Data
Primary data collection begins when a researcher is not able to find the data
required for his research purpose from the secondary sources. Market
researchers are interested in a variety of primary data about demographic/
socioeconomic characteristics, attitudes/opinions/interests, awareness/
knowledge, intentions, motivation, and behavior. There are two basic means
of obtaining primary data depending on the nature of the problem and by the
availability of time and money.
11. Data observed or collected directly from first-hand experience is called
___________ data.
12. Primary data is ___________ data.

5.8 Advantages of Primary Data
Primary sources usually provide more detailed information than the
secondary sources. This is partly because methods of data collection and
the tools used can be tailored more precisely to the informational needs of
the researcher. This also contributes to the flexibility of analysis for the
research purpose at hand.
Terms and units can be more precisely defined and the researcher can
choose the appropriate unit for this purpose with a much greater degree of
fit since he has greater degree of flexibility in choosing the appropriate unit.
In case of secondary data, as the data have been collected for some other
purpose, the researcher may not have much of control over the choice of
units used in the secondary data source.
The user in case of primary data can judge the degree of confidence that he
may place on the data because he has an accurate idea of the tools and
methodology used and their limitations.
In addition to the above general advantages, there are other merits which
characterise the different methods of primary data collection. We shall study
them under the section concerned with tools of data collection. The major
limitations of primary data relates itself to costs in terms of time and money
involved, availability of skilled investigators or interviewers and the errors
that may creep in various stages i.e. sample selection, sample size
selection, tools chosen etc.
13. Primary data can include a ___________ population.
14. Primary data gives a better ___________ view to the researcher about
the topic under consideration.

5.9 Limitations of Primary Data
The primary data collection methods are also subject to three important
types of errors. These are sampling error, non-response error and response
error.
In most direct structured interviews i.e. surveys involving use of
questionnaires, non-response bias is a sizeable error. It may affect
completeness as well as objectivity in data collection as families who cannot
be reached after certain attempts during the day may be significantly
different from those which can be easily contacted. The non-response error
is a serious matter because the direction of the error is generally unknown.
One can assume that the non-response respondents would each have
responded in a given way and therefore can determine the maximum error
due to non-response but it is difficult to measure the magnitude of the error.
One simple way of minimising this error would be to fix up an appointment
before the interview but specially in a country like ours where a large
number of respondents do not have access to the telephone, this may not
be very practicable.
Response error occurs when the value of the reported variable differs from
the actual value of that variable. We world here include errors of both
communication and observation. We have already talked about two reasons
for response error i.e. inability of the respondent to give accurate information
or their unwillingness to give accurate information because of time factor,
prestige factor and invasion of primary factor. Let us now discuss the
sources of response error related to the investigator and the tools used by
him.
Inaccurate Information due to the Investigator: The most common cause
of this type of inaccuracy is cheating by the interviewer. There are a number
of way in which interviewers deliberately obtain inaccurate information and
supply it. If the questionnaire, happens to contain a question that the
investigator finds embarrassing to ask, he may decide to supply his own
answer or supply an inference on what the respondents answer would have
been. In extreme cases reports of interviewees' without ever having
contacted the interviews have been discovered to be submitted. Another in
between situation that is found to exist is that interviewers get their own
friends and associates to fill in the questionnaire or respond to a direct
interview amid list the responses in the names of the people listed in the
sample, thus vitating the entire sampling exercise.
Ambiguity: Ambiguity which is defined as errors made in interpreting
behaviour or words spoken or written is source of error which occurs in both,
communication and observation methods of data collection. All languages
are capable of being ambiguous as the person transmitting information and
the person receiving them are two different people and the interpretation of
the question/behaviour may differ from one person to another.
15. A big limitation of primary data is that it may result in ___________
information.
16. ___________ error occurs when the value of the reported variable
differs from the actual value of that variable.
17. ________ is defined as errors made in interpreting behaviour or words.
5.10 Sources of Primary Data
The major sources of primary data include respondents, analogous case
situations and research experiments.
1. Respondents: Respondents represent by far the most important source
of primary marketing data. Marketing decisions are characterised by the
fact that they always involve in one way or the other, prediction of the
behaviour of the market participants- be it consumer, industrial users,
marketing intermediaries or competitors. The study of respondents
characterises most marketing research situations.
Past behaviour is frequently used as a predictor of future behaviour,
acting on the premise that there is a relatively stable relationship
between past and future behaviour patterns. Information or past
behaviour of respondents is sought on past consumption habits,
exposure and awareness of communication tools, experience of
competitor's vis-a vis the company's products or services etc., in order to
get an idea of the consumption of the product or service.
Attitudes and opinions represents predisposed mental state to act in a
certain way. For example, the statement by a respondent that he
prefers fresh ground coffee to the instant blends, gives a clue to his
likely behaviour when faced with a decision to buy coffee. Attitude
research in marketing has found the greatest use in product designs and
advertising. Both qualitative and quantitative techniques are used to
collect information on attitudes and opinions.
2. Socio-economic characteristics: Whenever in a consumer research
situation there is a basis for the belief that some socio-economic
characteristics like income, education occupational status etc. are
associated with the purchase of a product or service, information is
sought on these characteristics. Study on these types of variables may
help defining the target market more precisely and arriving at more
accurate pricing and promotion decisions.
Life styles are increasingly being used to segment markets reposition
products and targeting positioning strategies wore closely to the
consumer profile. Life style profiles are developed though systematic
study of values attitudes, opinions and interests, as well as by income,
all of which can be elicited from the respondents through communication
methods or a combination of communication and observation methods.
Activity 3:
Are data collection errors resulting from fieldwork largely eliminated by
using telephone interviews instead of personal interviews in the home?
By using shopping centre interviews instead of personal interviews in
the home?

18. The major sources of primary data include ______ , _____ and _____ .
19. Attitudes and opinions represent __________ mental state to act in a
certain way.
20. __________ profiles are developed though systematic study of values
attitudes, opinions, interests, etc.

5.11 Methodology for Collection of Primary Data
Observation and questioning are two broad approaches available for
primary data collection. The major difference between the two approaches is
that in the questioning process, the respondents play an active role because
of their interaction with the researcher.
5.11.1 Online Surveys
When it comes to primary data for market research, or customer
satisfaction, online surveys can be a great way to collect data. Online
surveys ask consumers about their activities, interests, and opinions. This
often sheds light onto which publications or media the target audience reads
or watches, which enables the advertising agency to fine-tune its message.
Steps to Developing a Survey instrument include
Clearly defining objectives and research questions
Developing methodology
Defining sample (or population)
Developing survey protocol
Draft survey instrument (questionnaire)
Develop content Formulate questions Sequence questions
Format Questionnaire
Create Pilot test survey instrument
Revise survey instrument (as needed)
5.11.2 Observation method
In the observation method, only present/current behaviour can be studied.
Therefore, many researchers feel that this is a great disadvantage. A causal
observation could enlighten the researcher to identify the problem. Such as
the length of the queue in front of a food chain, price and advertising activity
of the competitor etc. Observation is the least expensive mode of data
collection.
Example: Suppose a Road Safety Week is observed in a city and the public
is made aware of advance precautions while walking on the road. After one
week, an observer can stand at a street corner and observe the number of
people walking on the footpath and those walking on the road during a given
period of time. This will tell him whether the campaign on safety is
successful or unsuccessful.
Sometimes, observation will be the only method available to the researcher.
Types of observation methods
There are several methods of observation of which any one or a
combination of some of them, could be used by the observer. Some of these
are:
Structured or unstructured method
Disguised or undisguised method
Direct-indirect observation
Human-mechanical observation
1. Structured-Unstructured Observation: Whether the observation
should be structured or unstructured depends on the data needed.
Example 1: A manager of a hotel wants to know how many of his
customers visit the hotel with their families and how many come as
single customers. Here, the observation is structured, since it is clear
what is to be observed. He may instruct his waiters to record this. This
information is required to decide requirements of the chairs and tables
and also the ambience.
Suppose, the manager wants to know how single customers and those
with families behave and what their attitudes are like. This study is
vague, and it needs a non-structured observation.
It is easier to record structured observation than non-structured
observation.
2. Disguised-Undisguised Observation: In disguised observation, the
respondents do not know that they are being observed. In non-disguised
observation, the respondents are well aware that they are being
observed. In disguised observation, observers often pose as shoppers.
They are known as mystery shoppers. They are paid by research
organisations. The main strength of disguised observation is that it
allows for registering the true behaviour of the individuals.
3. Direct-Indirect Observation: In direct observation, the actual behaviour
or phenomenon of interest is observed. In indirect observation, the
results of the consequences of the phenomenon are observed.
Example, a researcher is interested in knowing about the soft drinks
consumption of a student in a hostel room. He may like to observe
empty soft drink bottles dropped into the bin. Similarly, the observer may
seek the permission of the hotel owner to visit the kitchen or stores. He
may carry out a kitchen/stores audit, to find out the consumption of
various brands of spice items being used by the hotel.
4. Human-Mechanical Observation: Most of the studies in marketing
research are based on human observation, wherein trained observers
are required to observe and record their observation. In some cases,
mechanical devices such as eye cameras are used for observation. One
of the major advantages of electrical/mechanical devices is that their
recordings are free from any subjective bias.
Advantages of observation method
1. The original data can be collected at the time of occurrence of the event.
2. Observation is done in natural surroundings. Therefore, the facts
emerge more clearly, whereas in a questionnaire, experiments have
environmental as well as time constraints.
3. Sometimes, the respondents may not like to part with some of the
information. Such information can be obtained by the researcher through
observation.
4. Observation can also be done on those who cannot articulate.
5. Any bias on the part of the researcher is greatly reduced in the
observation method.
5.11.3 Designing the Questionnaire
Questionnaire: A questionnaire is a tool used to collect the data.
Importance of questionnaire in marketing research
To study:
1. Behaviour, past and present
2. Demographic characteristics such as age, sex, income, occupation
3. Attitudes and opinions
4. Level of knowledge.
Characteristics of questionnaire
1. It must be simple. The respondents should be able to understand the
questions
2. It must generate replies that can be easily be recorded by the
interviewer
3. It should be specific, so as to allow the interviewer to keep the interview
to the point
4. It should be well arranged, to facilitate analysis and interpretation
5. It must keep the respondent interested throughout.
Different types of questionnaire
1. Structured and Non-disguised
2. Structured and Disguised
3. Non-structured and Disguised
4. Non-structured and Non-disguised
1. Structured and Non-disguised Questionnaire: Here, questions are
structured so as to obtain the facts. The interviewer will ask the
questions strictly in accordance with the pre-arranged order. For
example: What are the strengths of soap A in comparison with soap B?
Cost is less
Lasts longer
Better fragrance
Produces more lather
Available in more convenient sizes
2. Structured and Disguised Questionnaire: This type of questionnaire
is least used in marketing research. This type of questionnaire is used to
know the peoples attitude, when a direct undisguised question produces
a bias. In this type of questionnaire, what comes out is what does the
respondent know rather than what he feels. Therefore, the endeavour in
this method is to know the respondents attitude.
Currently, the Office of Profit Bill is:
a) In the Lok Sabha for approval.
b) Approved by the Lok Sabha and pending in the Rajya Sabha.
c) Passed by both the Houses, pending the presidential approval.
d) The bill is being passed by the President.
Depending on which answer the respondent chooses, his knowledge on
the subject is classified.
In a disguised type, the respondent is not informed of the purpose of the
questionnaire. Here the purpose is to hide what is expected from the
respondent? Example 1: Tell me your opinion about Mr. Bens healing
effect show conducted at Bangalore? Example 2: What do you think
about the Babri Masjid demolition?
3. Non-structured and Disguised Questionnaire: The main objective is
to conceal the topic of enquiry by using a disguised stimulus. Projective
techniques are examples of non-structured disguised technique. The
techniques involve the use of a vague stimulus, which an individual is
asked to expand or describe or build a story, three common types under
this category are (a) Word association (b) Sentence completion (c) Story
telling.
4. Non-structured and Non-disguised Questionnaire: Here the purpose
of the study is clear, but the responses to the question are open-ended.
Example: How do you feel about the Cyber law currently in practice
and its need for further modification? The initial part of the question is
consistent. After presenting the initial question, the interview becomes
very unstructured as the interviewer probes more deeply. Subsequent
answers by the respondents determine the direction the interviewer
takes next. The question asked by the interviewer varies from person to
person. This method is called the depth interview.
21. Questionnaire should be __________ to answer.
22. The main disadvantage of in-depth interview is that it is __________.
23. In direct observation, the __________ behaviour or phenomenon of
interest is observed.

5.12 Mail Questionnaire
5.12.1 Advantages of Mail Questionnaire
1. Easier to reach a larger number of respondents throughout the country.
2. Since the interviewer is not present face to face, the influence of
interviewer on the respondent is eliminated.
3. Where the questions asked are such that they cannot be answered
immediately, and needs some thinking on the part of the respondent, the
respondent can think over leisurely and give the answer.
4. Saves cost (cheaper than interview).
5. No need to train interviewers.
6. Personal and sensitive questions are well answered.
5.12.2 Limitations of Mail Questionnaire
1. It is not suitable when questions are difficult and complicated. Example:
Do you believe in value price relationship?
2. When the researcher is interested in a spontaneous response, this
method is unsuitable. Because thinking time allowed to the respondent
will influence the answer. Example: Tell me spontaneously, what
comes to your mind if I ask you about cigarette smoking.
3. In case of a mail questionnaire, it is not possible to verify whether the
respondent himself/herself has filled the questionnaire. Example, If the
questionnaire is directed towards the housewife, say, to know her
expenditure on kitchen items, she alone is supposed to answer it.
Instead, if her husband answers the questionnaire, the answer may not
be correct.
4. Any clarification required by the respondent regarding questions is not
possible. Example: Prorated discount, product profile, marginal rate,
etc., may not be understood by the respondents.
5. If the answers are not correct, the researcher cannot probe further.
6. Poor response (30%) Not all reply.
5.12.3 Additional consideration for the Preparation of Mail
Questionnaire
1. It should be shorter than the questionnaire used for a personal interview.
2. The wording should be extremely simple.
3. If a lengthy questionnaire has to be made, first write a letter requesting
the cooperation of the respondents.
4. Provide clear guidance, wherever necessary.
5. Send a pre-addressed and stamped envelope to receive the reply.
Activity 4:
One method of sequencing the question in a questionnaire is to
proceed from general to specific. What is the logical reason behind
this?

24. In mail questionnaires, __________ questions are well answered.
25. If a lengthy questionnaire has to be made, one should first write a letter
requesting the __________ of the respondents.
26. When the researcher is interested in a spontaneous response, mail
questionnaire is __________.

5.13 Summary
In this unit we have discussed the main types of data used for marketing
research in the context of the different research designs that may be
employed. The sources of secondary and primary data have been
discussed. The two basic methods of data collection i.e. through
communication and through observation have. been explained alongwith
their various modification. The unit ends with a discussion of the sources of
error in data collection.
Sometimes, secondary data may not be able to solve the research problem.
In that case researcher need to turn towards primary data. Primary data
may pertain to life style, income, awareness or any other attribute of
individuals or groups. There are two ways of collecting primary data namely.
(a) Observation (b) By questioning the appropriate sample. Observation
method has a limitation i.e, certain attitudes, knowledge, motivation etc
cannot be measured by this method. For this reason, researcher needs to
communicate.
Communication method is classified based on whether it is structured or
disguised. Structured questionnaire is easy to administer. This type is most
suited for descriptive research. If the researcher wants to do exploratory
sturdy, unstructured method is better. In unstructured method questions will
have to be framed based on the answer by the respondent. In disguised
questionnaire, the purpose of research is not disclosed to respondents. This
is done so that the respondents might speak the truth instead of giving some
answer which satisfies the researcher.
Glossary
Primary Data: Data observed or collected directly from first-hand
experience.
Ambiguity: having more than one meaning
Respondent: One who responds
Loaded Questions: A question heavy with meaning or emotional impact

1. What do you mean by data collection? Also explain the various types of
data collection techniques.
2. Describe the various sources of secondary data.
3. Distinguish between primary and secondary data collection.
4. What are the disadvatages of primary data?
5. Explain the methodology of primary data collection.

5.15 Answers
Answers to self assessment questions
1. secondary, primary
2. respondents, analogous case studies, experiments
3. internal
4. internally, externally
5. exploratory
6. collected
7. difficult
8. outdated or obsolete
9. Union government
10. ten
11. primary
12. unprocessed
13. large
14. realistic
15. inaccurate
16. Response
17. Ambiguity
18. respondents, analogous case situations, research experiments
19. predisposed
20. Lifestyle
21. easy
22. time-taking
23. actual
24. personal and sensitive
25. cooperation
26. unsuitable
Answers to terminal questions
1. Refer to 5.2 Data collection is the process of sending data to a central
point from one. or more.
2. Refer to 5.6 Government Agencies and Official Publications, Census
Data, National Sample Survey, Population Statistics, etc.
3. Refer to 5.3, 5.7 Primary data is gathered first hand; secondary data is
gathered from secondary sources.
4. Refer to 5.9 Limitations of primary data.
5. Refer to 5.11 primary data collection.

Mini-case
An autonomous management institute of repute was well-known for the high
quality of the students graduating and entering to the corporate world. The
institutes main mission was to extend this high quality of education to those
who could not undertake a full time college programme. Therefore, the
institute conducted programmes aimed at providing education and training
in several areas of management to working executives. These working
executives attended the programmes either their own (after working hours)
or sponsored by the company where they were working.
The executive development programme had three tiers. The First tier was to
develop supervisory personal, the Second and Third tiers were meant for
middle level and top level executive. The main emphasis of this programme
was to improve trainees managerial, decision-making, human relation skills.
Over a period of time the enrolment to this programme was on the decline.
The institute was at a loss to explain, why such a thing was happening? The
institute was very sure that the many of the doubts raised by the programme
participants were amply cleared and the feedback from the participants was
very positive, with no negatives in the feed back form. Despite this, the
institute could not trace the reason for the declining attendance. The
institute wondered, whether the decline was caused by economic factors or
increased competition from other education providers. Could it be due to
content or structure of the programme, or could it be due to the fact that it
was not properly promoted and not properly targeted at the right level.
Consequently, a major promotion programme was conducted by mailing the
brochures which indicated the content and the structure of the course. The
mailing was done, both for those who attended the past programme and
others (freshers).
Questions
1. What is the research problem?
Hint: Base it on the primary data available in the case.
2. What data should be collected and how this data can be used to answer
the research question?
Hint: Feedback, industry demand, etc.
Unit 6 Qualitative vs Quantitative
Research Techniques
Structure
6.1 Introduction
Objectives
6.2 Qualitative vs Quantitative Research
Quantitative Research
Qualitative Research
6.3 What is Qualitative Research?
6.4 Qualitative Research Methods/Techniques
Depth Interview
Delphi Technique
Focus Group Interview
Projective Techniques
Protocol Analysis
6.5 Latest Techniques of Qualitative Research
6.6 Uses of Qualitative Research
6.7 Quantitative Research Techniques
Observation Research
Experimental Research
6.8 Summary
6.10 Answers

6.1 Introduction
In the earlier units, you came to know about the research process and
sources of data collection. In this unit you will study about the research
techniques.
In this unit you will learn qualitative research is used to analyze those data
which cannot be quantified. Qualitative research is used in exploratory
research. The number of respondents covered in this type of research is
small compared to quantitative research.

Objectives
Explain qualitative research methods
Describe qualitative research applications
Explain quantitative research
Analyze various methods of quantitative research

6.2 Qualitative vs Quantitative Research
These two research methods vary in a number of ways. They vary in terms
of
Measurability criteria
Features
Characteristics

Qualitative Research Quantitative Research
Exploratory or diagnostic in nature
used to understand behaviour and
generate hypothessis
Once hypothesis has been generated, used
to test out hypothesis
No calculation of sample size
possible - size of sample depends
upon dine available to conduct
research, cost, variation in the
population.
Generally a probabilistic approach is used
to calculate sample size, using the sample
size formula.
Sample selected is such that it
represents different sections of the
population
Random selection of respondents to be part
of research work may or may not
represent different population segments,
depending upon the sampling method
utilized.
It is dangerous to generalize
conclusions for the entire
population.
Conclusions are generalized to the
universe, of which the sample purports to
be representative.

Figure 6.1: Market Research
Figure 6.1 explains the importance of Qualitative and Quantitative Research
methods.
6.2.1 Quantitative Research
Measurability: Quantitative data is measurable, for example, size of
market, rate of product usage, etc.
Features:
Data collected is numerical in nature.
Data collection methods are
Mail questionnaire
Personal interview
Telephonic interview
Characteristics:
Sample size used is very large.
Structured questionnaire is used for data collection.
6.2.2 Qualitative Research
Measurability: Not possible or difficult to measure.
Features: It is a kind of exploratory research.
Characteristics:
Unstructured questionnaire is used.
Sample size is usually small
1. ____________ Research is difficult to measure.
2. Random selection of respondents is done under ___________ research
to be part of research work.

6.3 What is Qualitative Research?
Qualitative research could be:
Qualitative research is exploratory or diagnostic in nature.
It involves a small number of people who are not sampled on any
probabilistic basis.
Qualitative research is impressionistic rather than definitive.
Qualitative research is used to generate hypothesis for further research.
Qualitative research is used to get better insights into consumer
behaviour, and to understand underlying behaviour of the consumer in
the buying process.
Through Qualitative research, one can get subtle clues about
products/brands/services, that very few quantitative studies can
replicate.
In Qualitative research, no attempt is made to draw hard and fast
conclusions about facts that emerge.
Qualitative Research is highly subjective in nature, and one would need
trained psychologists and interviewers to conduct the research work and
also for analysis and interpretation of data.
3. Qualitative Research is ___________ in nature.
4. Qualitative Research is used to generate ___________ for further
research.

6.4 Qualitative Research Methods/Techniques
There are five major techniques in qualitative research. They are:
Depth Interview
Delphi Technique
Focus Group
Projective Technique
Protocol Analysis
6.4.1 Depth Interview
Unstructured, direct interview is known as a depth interview. Here the
interviewer will continue to ask probing questions like, What did you mean
by that statement?, Why did you feel this way? and What other reasons
do you have?, etc., until he is satisfied that he has obtained the information
he wants. The unstructured interview is free from restrictions imposed by a
formal list of questions. The interview may be conducted in a casual and
informal manner in which the flow of the conversation determines what
questions are to be asked and the order in which they should be asked.
Advantages of depth interview
Advantages of depth interviews are:
The primary advantage of the depth interview technique is its ability to
discover motivations. Marketing decisions like the choice of product,
methods of selling and advertising appeals, etc., must be decided only
after receiving feedback from consumer.
The second advantage of the depth interview procedure is that it
encourages respondents to express any ideas they have.
The third advantage is that it provides a lot of flexibility to the
interviewer. We have a two-way communication where both interviewer
and the interviewee contribute to the knowledge gained.
Limitations of depth interview:
Limitations of depth interviews are:
There are number of weaknesses in the depth interviewing approach.
First of all, depth interview takes much longer than a typical structured
questionnaire filling. It may lead to respondent fatigue and hence may
lead to biased response.
The second weakness of the depth interview is the lack of systematic
structure for interpretation of the information obtained. This requires a
trained psychoanalyst. It is difficult to find the qualified and trained
people for conducting depth interview.
Another difficulty is that no quantifiable data is obtained in the depth
interviewing process. This means that human judgment is involved in
summarising the findings. Different results will often be obtained by
different people in the same situation. As a result, there is little or no
opportunity for verification. Flexibility on the part of the interviewer is
sometimes a major weakness.
6.4.2 Delphi Technique
This is a process where a group of experts in the field gather together. They
may have to reach a consensus on forecasts. Sometimes, the judgment
may be made by some group members who have strong personalities. In
the Delphi approach, the group members are asked to make individual
judgments about a particular subject, say sales forecast. These judgments
are compiled and returned to the group members, so that they can compare
their previous judgment with those of others. Then they are given an
opportunity to revise their judgments, especially if it differs from the others.
They can say, why their judgment is accurate, even if it differs, from that of
the other group members. After 5 to 6 rounds of interaction, the group
members reach conclusion.
Advantages of delphi technique
Advantages of Delphi techniques are:
Forecasting can be made quickly and inexpensively.
Viewpoints of different sector people are weighed. Example, There may
be policy makers, Entrepreneurs, Executive from industry, Government
officials, etc., view points of all these people are taken into consideration
and weighed appropriately.
If basic data is inadequate or not available, there is no other alternative
to Delphi technique.
Limitations of delphi techniques
Limitations of Delphi techniques are:
Experts opinion and facts may be different.
Good and bad estimates are given equal weightage.
6.4.3 Focus Group Interview
They are the best known and most widely used type of indirect interviews.
Here, a group of people jointly participate in an unstructured indirect
interview conducted by a moderator. The group usually consists of six to ten
people. In general, the selected persons have similar backgrounds. The
moderator attempts to focus the discussion on the problem areas.
Focus groups are used primarily to provide background information and to
generate hypothesis rather than to provide solution to problems. The areas
of application include:
Development of new product concept.
The generation of ideas for improving established products.
Development of creative concepts in advertising.
Advantages of focus group interview
Advantages of focus group Interviews are:
This technique provides more sophisticated data because of the
interaction among different members of the group.
It also offers other benefits of depth interviews and offers in addition the
advantages of saving cost, time and resources during data collection
stage.
Disadvantages of focus group interview
Disadvantages of focus group Interviews are:
As the samples are small and invariably non-probabilistic, extrapolation
of findings is not permitted.
Responses of individual members are not independent, and are
influenced by what others have to say. The results of group interviews
are difficult to quantify since they are unstructured.
The key component of a successful focus group interview is the skill of the
group moderator (interviewer).
6.4.4 Projective Techniques
Projective techniques (Indirect method of gathering information/indirect
interview) are unstructured and involve indirect form of questioning.
In projective techniques, respondents are asked to interpret the behaviour of
users, rather than describe their own behaviour. In interpreting the
behaviour of others, respondents indirectly project their own motivation and
feelings into the situation. Example: Many a time, people do not want to
reveal their true motive for fear of being branded old fashioned. Questions
such as Do you do all household work yourself? The answer may be no,
though the truth is yes. A yes answer may not be given because it may
suggest that the family is not financially sound and cannot afford a maid for
help.
The general categories of projective techniques are:
Word association test
Completion technique
TAT, and
Cartoon test
Word association test
This test consists of presenting a series of stimulus words to the
respondent, who is asked to answer quickly with the first word that comes to
his mind. The respondent, by answering quickly, gives the word that he or
she associates most closely with the stimulus word.
Example: What brand of detergent comes to your mind first, when I mention
washing of an expensive cloth?
Surf
Tide
Key
Ariel
Completion techniques
There are two types of completion techniques and these are:
Sentence completion
Story completion
Sentence Completion: Here the respondents have to finish a set of
incomplete sentences.
Example: Let us make a study dealing with peoples inner feelings towards
software professionals.
Earnings of a software professional ____________.
Being a software professional means ___________.
Working hours for software professional are __________.
Story Completion: A situation is described to a respondent who is asked to
complete the story based on his opinion and attitude. This technique will
reveal the interest of the respondent, but it is difficult to interpret.
The story completion has numerous applications in solving marketing
problem. The most important of which is to provide data to the seller,
recognising the image and feelings people have about the companys
products and services. This method is used before finalising an
advertisement.
Thematic apperception test (TAT)
Definition: TAT is a projective technique. It is used to measure the attitude
and perception of the individual. Some picture cards are shown to
respondents. The respondent is required to tell the story by looking at the
picture. When the subjects start telling the story, the researcher notices the
respondents expression, pauses and emotions to draw the inference.
Administration: TAT is administered to individuals in an atmosphere free
from interruptions. The usual number of cards shown varies between 10 to
14. The original TAT developer Murry recommended the use of 20 cards.
The original TAT consisted of 31 cards divided into three categories viz., for
use with men or women only or for use with subjects of either sex. Of late,
the use of separate set of cards for men and women has been discontinued.
Recording: Murrys original practice was to take notes by hand on the
subjects responses, including his (her) non-verbal behaviours. Research
has indicated, however, that a great deal of significant material is lost when
notes are recorded in this way. As a result, some examiners now use a tape
recorder to record the respondents answers. Another option involves asking
the respondent to write down his (her) answers.
Interpretation: In interpreting responses to the TAT, examiners typically
focus their attention on one of the three areas: the content of the stories that
the respondent tells; the feeling or tone of the stories; or the respondents
behaviour apart from responses. These behaviours may include verbal
remarks (for example, comments about feeling stressed by the situation or
not being a good story teller) as well as non-verbal actions or signs
(blushing, stammering, difficulties in making eye contact with the examiner,
etc.). The story content usually reveals the respondents attitudes, fantasies,
wishes, inner conflicts, and views about the world outside. The respondent
is helped by asking questions such as:
What is happening in the picture?
Why is it happening?
What is your feeling about the character shown in the picture?
Who is right?
Who is the aggressor? Or who is right and who is wrong?

Cartoon test or balloon test
Here a cartoon is shown. The cartoon character belongs to a particular
situation. One or more of balloons include the conversation of the
character, and is left open and the respondent is asked to fill in.
In comparing the cartoon technique with the direct question, let us take the
example of choosing a brand ambassador.

In the above case, with which person would you agree and why?
6.4.5 Protocol Analysis
In this method, people are placed in decision-making situations and asked
to speak about everything that they will consider while making a choice of a
product or services. This is a qualitative research. In this, the researcher will
gain insight into consumers decision-making process. After several people
have given protocols, the researcher will review them and look at the
commonalities such as brands considered, price, etc. Protocol studies are
useful in the following situations, i.e., when the decision-making process is
very long involving several factors. Example, Buying an apartment or a
house or an expensive car.
Activity 1:
Conduct a depth interview with one person to find out his/her feelings
on the purchase and consumption of (a) Packaged fruit juices and
(b) Ice-creams.
5. Thematic Apperception Test (TAT) is a ____________ technique.
6. ______________ Test consists of presenting a series of stimulus words
to the respondent, who is asked to answer quickly with the first word that
comes to his mind.
7. In ___________, people are placed in decision-making situations and
ask them to speak about everything that they will consider while making
a choice of a product or services.
8. By Delphi technique, forecasting can be made ___________and
___________

6.5 Latest Techniques of Qualitative Research
Qualitative Research is taking more and more inputs from psychology, to
develop latest techniques in Qualitative Research. Some of the latest
techniques used are as follows:
Imagery technique
Synectics
Neuro-linguistic programming
Imagery Technique: This technique is used to determine the images of two
competing brands. As an example, readers were asked to describe two
competing magazines.
Magazine 1 was described as young, attractive, bubbling teenager.
Magazine 2 was described as older, less interesting, introvert lady. This
information helped the owner of the magazine to reposition magazine 2.
Synectics: This technique gives the researcher an insight into the intuitive
or emotional impressions of the consumer for either a brand or advertising
campaign, by unleashing the creative side of the consumer. The
respondents are asked to go through a series of games designed to lower
their inhibitions which help in unleashing the child present in every adult.
The basic idea is that creativity works at child level. With this exercise, the
researcher can get original ideas for use in developing advertising
campaign, as also the consumer's real feelings about products.
Neuro-linguistic Programming: This technique provides an insight into the
'Non-verbal Impact' of an advertisement on the target consumer. This is
done by analyzing as to which of the five senses (smell, taste, touch, sight,
aural) a consumer uses to recall an advertisement. As an example, the
Onida advertisement campaign was analyzed using this technique, and it
was able to reveal strong sensory effect of Rasping Voice and Shattering
Glass. The underlying idea behind this technique is that much of the
recording of experience goes on below the surface and outside conscious
awareness. To decode the emotions surrounding the product purchase and
experience, researchers use the NLP technique. NLP techniques are
modeled on techniques used in other fields of psychology (Erieksonian
Hypnosis and Classical Conditioning), and hence only persons trained in the
field of psychology can use this technique.
9. Neuro-linguistic Programming provides an insight into the _________
of an advertisement on the target consumer.
10. ___________ Technique is used to determine the images of two
competing brands.

6.6 Uses of Qualitative Research
The various uses of qualitative research are:
Whenever a company wants to develop new product, or modify existing
product, it would conduct Qualitative Research among target consumers
to understand new emerging consumer needs, or problems which
consumer has with the existing product.
It is used to define the problem areas more fully in marketing research
one normally starts with qualitative research which is validated further by
quantitative research.
It is used to formulate hypothesis for further investigation/quantification.
It is used to obtain large amount of data about beliefs, attitudes, etc. as
data input for developing questionnaires, attitude scales, which would be
used as input for multivariate analysis studies.
It is also used to conduct post-research study i.e., to amplify or explain
same points that emerge from a major study, without having to repeat on
a large scale.
In some areas of marketing research especially understanding of
consumer behaviour, a more flexible approach is required, rather than a
rigid approach as provided by a structured questionnaire hence
qualitative research could be used.
In studies of distribution channels, sales, pricing strategies quantitative
approach is most suitable, whereas in concept development, product
development (needs of 4 consumer), advertising research qualitative
approach is more suitable.
Ultimately, whether one uses a Qualitative Research or Quantitative
Research approach, depends upon the objective of the research work, and
the value of decisions that would be taken from the data generated by the
research work.
11. Whether one uses a Qualitative Research or Quantitative Research
approach, depends upon the ____________ of the research work.
12. Whenever a company wants to develop new product, or modify existing
product, it would conduct __________ Research among target
consumers.

6.7 Quantitative Research Techniques
Quantitative research is most common encountered as part of formal or
conclusive research, but is also sometimes used when conducting
exploratory research. Quantitative research techniques are part of primary
research.
The most common quantitative research techniques include:
Observation technique
Experimentation
Survey technique
6.7.1 Observation research
Observation is one of the methods of collecting data. It is used to get both
past and current information. Instead of asking people questions, as a
survey does, observation depends on watching what people do. Although it
is not possible to observe past behaviour, we may observe the results of
such behaviour. In a way, secondary data reflect the results of the past
behaviour of people as also of past occurrences. In marketing research, the
observational methods are not used frequently. All the same, as it is used
especially in marketing experimentation, a brief discussion is provided here.
The major application of observation as an information collection method
may be classified into categories of the audit, coincidental recording
devices, and a general classification, direct observation.
Nature of observation research
Conditions for use:
Information must be observable or inferable from observable
Behavior must be repetitive frequent, or predictable
Behavior must be of relatively short duration
Methods of observation
There are several methods of observation of which anyone or a combination
of some of them can be used by the observer. Thus, there are structured or
unstructured methods, disguised or undisguised methods, observations
made in a natural setting or laboratory setting, direct-indirect observation, or
human-mechanical observation. These are briefly discussed below.
Structured-unstructured observation: Structured observation is used
when the research problem has been formulated precisely and the
observers have been told specifically what is to be observed. While
structured observations are subject to this limitation. The extent of the
bias may vary to the extent an observation is unstructured.
Disguised-undisguised observation: In the case of disguised
observation, the subjects do not know that they are being observed. In
some cases, the observer may make disguised observation by posing
as one of the shoppers who are being observed. This type of
observation is often preferred because it is feared that people may
behave differently when they know they are being observed. It may be
difficult to completely disguise an observation, though this apart, it poses
an ethical question of its desirability when those who are being observed
are kept in the dark.
Natural and laboratory setting: Another way to classify observations in
on the setting, i.e. natural or laboratory. Sometimes, an experimental
manipulation may be introduced in a field study. Observation in a
laboratory setting, on the other hand, enables the observer to control
extraneous variables which influence the behaviour of people.
Observational studies in laboratory setting have certain advantages over
field studies. They enable the collection of data. Promptly and
economically and in addition, permit the use of more objective
measurements.
Direct-indirect observation: Direct observation of people and how they
behave in situations of interest is a commonly used method of collecting
information. Supermarkets and store managers continually relay on
observation of traffic flows and length of waiting lines to determine
proper location of various lines of products and the number and the
location of the sales people and cash registers. In the case of direct
observation, the event or the behaviour of a person as it occurs. In
contrast, indirect observation implies that some of part behaviour is
observed. In other words, the behaviour itself is not observed, rather its
effects are observed.
Human-mechanical observation: Another way of classifying
observations is whether they are made manually or by machines. Most
of the studies in marketing research based on human observation
wherein trained observers are required to observe and faithfully record
their observations. One of the major advantages of electrical/mechanical
devices is that their recordings are free from subjective bias. As against
this advantage, such observations may be less valid than human
observations. This is because observers power of integration. can lead
to a more valid evaluation of the observation.
Advantages of observation
Avoid problems associated with willingness and ability of respondents to
answer questions.
Some forms of data are gathered more quickly and accurately by
observation
Direct observation technique enables a researcher to record behaviour
as it occurs. In contrast, other techniques record the data mostly
retrospectively on the basis of the respondents report after the event.
Observation is such that it can be used regardless of whether the
respondent is willing to report or not.
Observation is such that it can be used even when it is pertains to those
who are unable to respond such as infants and animals.
Disadvantages
Firstly only the current behaviour of a person or a group of persons can
be observed. The researcher does not learn about motives, attitudes,
intentions, or feelings.
One is not unable to observe the past behaviour nor can one observe a
persons future behaviour because the act of observation takes place in
the present.
Observation does not help us in gauging a persons attitude or opinion
on a certain subject nor his knowledge of the same.
The observational method is very slow and as such, when a large
number of persons are to be contacted; it becomes unsuitable because
of the long required for this purpose.
Activity 2:
Conduct a focus group interview with six people in your organization on
the purchase and consumption of (a) fast food (b) Packaged fruit juices.
Prepare a report based on your result.
6.7.2 Experimental Research
Experimental research is also called experimentation. It is a research
process in which one or more variables are manipulated under conditions
that permit the collection of data that show the effects, if any such variables
in unconfused fashion. Other meaning of experimentation is, it is a process
of manipulating one variable in a controlled environment while holding all
other variables constant in order to establish a casual relationship. This
indicates that the distinction between experimental and non experimental
research may indicates that it is a matter of degree rather than of kind.
Experiments have been the basis for the advancement of knowledge in
most scientific fields. They can be used in marketing when the researcher
has established a hypothesis. Also the researcher must be in a position to
control conditions pertinent to testing the hypothesis. Both these conditions
must be fulfilled before the experiment can actually be started.
All experiments involve three basic components:
The variable manipulated in an experiment is referred to as the
independent variables or test units.
The actual alteration is called the treatment.
The actual variables chosen to measure the subjects response are
known as dependent variable
Survey
The survey technique involves the collection of primary data about subjects,
usually by selecting a representative sample of the population or universe
under study, through the use of a questionnaire. It is a very popular since
many different types of information can be collected, including attitudinal,
motivational, behavioural and perceptive aspects. It allows for
standardization and uniformity both in the questions asked and in the
method of approaching subjects, making it far easier to compare and
contrast answers by respondent group. It also ensures higher reliability than
some other techniques. If properly designed and implemented, surveys can
be an efficient and accurate means of determining information about a given
population.
Survey techniques
There are three basic types of surveys:
Telephone survey
Self-administered survey
In-person interview survey
1. The Telephone Survey: The use of the telephone has been found to be
one of the most inexpensive, quick and efficient ways of surveying
respondents. The ubiquity of telephone ownership as well as the use of
unlisted numbers are factors that must, however, be considered as part
of the sampling frame, where the number of households with phones
approaches 100%.
Telephone surveys also allow for random sampling, allowing for the
extrapolation of characteristics from the sample to the population as a
whole.
Telephone surveys are also known to have a number of limitations. The
length of the survey has to be kept relatively short to less than 15
minutes as longer interviews can result in refusal to participate or
premature termination of the call. The questions themselves must also
be kept quite short and the response options simple, since there can be
no visual aids such as a cue card.
The increasing use of voice mail and answering machines has made
phone surveys more difficult and more costly to undertake. Calls that go
answered receive a busy signal or reach a machine, require callbacks.
Usually, eligible respondents will be contacted a pre-determined number
of times, before they are abandoned in favour of someone else. The
potential for response bias must be considered, however, when
discussing the results of a study that relied on the telephone. The
sample for a telephone survey can be chosen by selecting respondents
from the telephone directory, e.g. by calling every 100th name, through
Random-digit Dialing (RDD) where the last four digits of a telephone
number are chosen randomly for each telephone exchange or prefix (i.e.
first three numbers), or the use of a table of random numbers.
2. The Self-administered Survey: Any survey technique that requires the
respondent to complete the questionnaire him/herself is referred to as a
self-administered survey. The most common ways of distributing these
surveys are through the use of mail, fax, newspapers/magazines, and
increasingly the internet, or through the place of purchase of a good or
service (hotel, restaurant, and store). They can also be distributed in
person, for instance as part of an intercept survey. Depending on the
method of survey administration, there is a number of sampling frame
considerations, such as who can or cannot be reached by fax or
internet, or whether there is a sample bias.
In most forms of self-administered surveys, there is no control over who
actually fills out the questionnaire. Also, the respondent may very well
read part or all of the questionnaire before filling it out, thus potentially
biasing his/her responses. However, one of the most important
disadvantages of self-administered surveys is their low response rate.
3. The In-person Interview Survey: Face-to-face interviews are a direct
communication, primary research collection technique. If relatively
unstructured but in-depth, they tend to be considered as part of
qualitative research. When administered as an intercept survey or door-
to-door, they are usually part of quantitative research.
Application of quantitative research
Quantitative marketing research is a social research method that utilizes
statistical techniques. It typically involves the construction of questionnaires
and scales. Large numbers of people are contacted, usually in a survey.
Marketers use the information so obtained to craft strategies and marketing
plans.
Activity 3:
Select any product and brand of interest to you. Administer each of
the following techniques to five fellow colleagues to develop an idea
of their feelings towards the brand: (a) Word Association Test,
(b) Sentence Completion Test, (c) Cartoon (d) Thematic Apperception
Test.
13. Three basic types of surveys include _________,_________ and survey
____________
14. The survey technique involves the collection of primary data about
subjects through the use of a ___________
15. Quantitative marketing research is a __________ method that utilizes
statistical techniques.

6.8 Summary
The various methods by which information about consumers can be
obtained are broadly classified into two categories Qualitative Research and
Quantitative Research. Qualitative Research may be used to generate
hypothesis for further research, is exploratory in nature and involves a small
number of people who are not sampled on probabilistic basis. Qualitative
research can provide leads and insights which could be of extreme help in
conducting quantitative research. There are various methods of conducting
qualitative research. These are depth interviews, focus groups, observation
and projective techniques like word association test, sentence completion
test, cartoons, thematic apperception test. Qualitative research is
increasingly using inputs from psychology and some; of latest techniques
being used include imagery, synectics and neuro-linguistic programming.
Glossary
Qualitative Research: seeks out the why, not the how of its topic through
the analysis of unstructured information
Quantitative Research: systematic empirical investigation of quantitative
properties and phenomena and their relationships.
Depth Interview: Research technique conducted in person in the field
(rather than in the researcher's office) by a trained interviewer for the
purpose of learning the motivation of consumers in the purchase decision
process
Protocol Analysis: a psychological research method that elicits verbal
reports from research participants.

1. Distinguish between quantitative and qualitative research.
2. Describe projective techniques of qualitative research.
3. What are the benefits and limitations of focus group interviews?
4. Explain latest techniques of qualitative research.
5. What do you mean by survey technique of quantitative research?

6.10 Answers
1. Qualitative
2. Quantitative
3. exploratory or diagnostic
4. hypothesis
5. projective
6. Word Association
7. Protocol Analysis
8. quickly, inexpensively
9. 'Non-verbal Impact'
10. Imagery
11. objective
12. Qualitative
13. telephone survey, self-administered survey, in-person interview
14. questionnaire
15. social research

1. Refer to 6.2 Tabulate the differences to make it easier
2. Refer to 6.4 Discuss various projective techniues
3. Refer to 6.4 List the advantages and disadvantages
4. Refer to 6.5 Discuss Imagery technique, Synectics and Neuro-
linguistic programming
5. Refer to 6.7 Discuss survey method.
Mini-case
Tasty Foods (India) Ltd. is a wholly owned subsidiary of delicious foods, a
giant German based restaurants chain. Tasty food was famous for its
continental cuisine. The chain of restaurants was well spread across
Europe. It was eyeing the Asian continent for a long time. In 1996, it entered
Japan and gained enormous success. The same year it entered Malaysia,
Singapore and made a landmark.
The Asian market was had prove to be lucrative, as the chain had more than
100 restaurants across these countries. The chain thought of entering the
Indian sub-continent, which was supposed to have enormous potential. In
2001, the chain made a survey, and the survey revealed the shocking
information that, most food-lovers were vegetarians. Unfortunately, the
chain was well-known for its non-vegetarian cuisine, especially, Barbecue
and Dover sole. The chain also gathered information that McDonalds and
Tricon groups of restaurants had already set up their operation, but adopted
vegetarian cuisine. The chain was surprised to find that McDonalds, very
well-known for its Hamburgers (Beef) and chicken burgers had adopted
Indian dishes and were running successfully. Moreover, Tricon has set up a
100% pure vegetarian restaurant in Ahmedabad where the majority were
vegetarians.
The chain was in a dilemma. But it finally decided to launch its restaurants in
different metros of the country, with its world famous non-vegetarian cuisine.
The cuisine also contained vegetarian dishes but not many. The restaurant
had a poor response rate in the first six months. The chain incurred a loss of
Rs. 2 crores in this period, and hence thought of closing some of its
restaurants. Then it appointed a well renowned market research agency to
find out what went wrong. Research findings revealed that if the chain
wanted to survive and succeed in the Indian market it had to add vegetarian
dishes to its cuisine.
The main problem was that the cuisine of the chain was predominantly non-
vegetarian, and did not contain many vegetarian dishes. It appealed to the
global headquarters in Germany to solve the problem, by suggesting
vegetarian dishes. The headquarters after consulting the experts advised
the chain to stick to the non-vegetarian cuisine. It also suggested that the
chain might run the restaurants in particular metros where more number of
non-vegetarian food lovers were present and close down rest of the
restaurants. Contrary to this decision, the chain was firm to introduce many
vegetarian cuisine and asked the expert team to find vegetarian dishes
irrespective of its acceptance by customers.
Question
What appropriate data collection would you suggest and the instrument to
be used for this situation?
Hint: Base your answer on the methods and techniques of data collection.
Unit 7 Market Research Techniques
Structure
7.1 Introduction
Objectives
7.2 National Readership Survey
7.3 Retail Store Audits
7.4 Benefits of Audit Technology
7.5 Consumer Panels
7.6 Test Marketing
7.7 Research in Advertising Decisions
7.8 Marketing Audit
Components of Marketing Audit
7.9 DataBase Marketing
7.10 Focus Group Interview
7.11 Summary
7.13 Answers

7.1 Introduction
In the earlier units, you came to know about the data collection methods and
qualitative research technique. In this unit you will study about the new
techniques of marketing research.
Researchers often use more than one research design. They may start with
secondary research to get background information, and then conduct a
focus group (qualitative research design) to explore the issues. Finally they
might do a full nation-wide survey (quantitative research design) in order to
devise specific recommendations for the client.
In this unit you will learn various techniques of market research other than
conventional techniques or research.
Marketing audit
Retail store audit
Advertising research etc.

Objectives
Describe national readership survey
Define consumer panels
Describe test marketing
Explain marketing and retail store audit
Define database marketing

7.2 National Readership Survey
Readership research is a scientific process in which readers perceptions,
attitudes, satisfaction, and expectations about a publication are
quantitatively collected and analyzed for better decision making and offering
of the publication.
The 2009 Round One of the Indian Readership Survey is out, with mixed
trends. Only nine of the top 25 most read publications (including dailies and
periodicals) registered a growth in readership. Depending on how their
publications fared, media houses typically support total readership, or the
other metric, average issue readership.
Segment-wise Readership: This category measures the universe of
readers who reads any publication in a segment. So the universe of readers
who read any English daily, grew 0.47% to 3.1 crore. There are no definitive
trends across categories, but weeklies in all languages, except Malayalam,
registered a drop.
Gainers and Losers: Some of the most read publications also figure in the
list that lost the most readers. Dainik Jagran, Indias most read publication,
for instance, lost some 1.1 million readers. Telugu daily Vartha lost the
most, 1.3 million readers, or 21% of its readership. Vartha has presumably
been cannibalized by Saakshi, the new Telugu daily that was launched by
chief minister Y.S.R. Reddys son Jagan Mohan Reddy.
English Dailies: Of the top 24 most read English dailies, only six registered
a gain in readership. Mint, HT Medias business daily, grew the most,
posting a 15.67% growth in readership. This, is however, not counting Metro
Now, which grew its readership by 103%, but has since been discontinued
as a daily by its joint promoters Bennett, Coleman & Co. Ltd. and HT Media
Ltd. DNA, which grew 11.37%, comes second. The New Indian Express,
lost 14.19% of its readers, followed by The Indian Express, which lost
11.37%.
The National Readership Study 2006: The National Readership Study
2006 (NRS 2006) in India is the largest survey of its kind in the world, with a
sample size of 2,84,373 house-to-house interviews to measure the media
exposure and consumer product penetration in both urban and rural India
and of course the estimated readership of publications. The study covers
535 publications of which 230 are dailies and 305 are magazines.
Highlights from National Readership Survey (NRS) 2006
The reach of the press medium (dailies and magazines combined) has
increased from 216 million to 222 million over the last one year.
As a proportion however, press reach has stabilized in urban India at
45%. Press reach in rural India has also stayed the same at 19%
needless to say, on a much larger population base. The number of
readers in rural India (110 million) is now roughly equal to that in urban
India (112 million).
Dailies have driven this growth in the press medium, their reach rising as
a proportion of all individuals aged 12 years and above which is the
universe defined for NRS from 24% to 25%. Magazines have declined in
reach from 9% to 8% over the last one year.
The time spent reading has remained the same at 39 minutes daily on
an average per day over the last year. But there has been increase in
urban India (from 41 to 44 minutes daily) and decrease in rural India
(from 36 to 35 minutes daily).
Literacy as measured in the NRS has risen from 69.9% to 71.1% over
the last year. The rate of growth has been marginally lower urban areas
(84.4% to 85.3%) than in rural areas (63.6% to 64.8%).
Satellite TV has grown considerably in reach from 207 million individuals
watching in an average week in 2005 to as many as 230 million
individuals in 2006 further expanding its lead over the number of
readers.
Radio is one medium that has shown considerable resurgence. Its reach
has increased from 23% to 27% of the population listening to any station
in the average week.
Radio FM has driven this explosion in reach from 76 million individuals
listening in an average week in 2005 to as many as 119 million
individuals in 2006 a 55% increase over last year.
Cinema has, on the surface, declined sharply from 51 million individuals
going regularly to the movies (at least once a month) to 39 million. This
has been the story for years now.
The Internet as a medium seems to have paused on its growth
trajectory. From 7.2 million users who logged in every week last year,
the number has grown, though only to 9.4 million. As proportions, these
represent 0.9% and 1.2% of Indias 12 years plus population. However,
urban India has shown faster growth in internet reach from 2.3% to
3.4%.
Mobile phones must now be given their due place as media. Reach of
this medium as measured by the proportion of the population accessing
Value-added-features (VAS) at least once a week has grown from 1.1%
last year to 2.7% translating to nearly 22 million individuals.
If there is one overall conclusion, it is that the press medium must watch
emerging media closely.
The National Readership Study 2005: The National Readership Study
2005 (NRS 2005) in India is the largest survey of its kind in the world, with a
sample size of over 2,61,212 house-to-house interviews to track the media
exposure and changing consumer trends in both urban and rural India and
of course the estimated readership of publications.
The study covers 522 publications (221 dailies and 301 magazines).
1. _________ Readership measures the universe of readers who reads
any publication in a segment.
2. NRS 2005 in India is the _________ survey of its kind in the world.

7.3 Retail Store Audits
Retail store audit functions, challenged by resource and budget limitations,
multiple business locations, and regulatory reforms, are turning to
technology to manage the often vast quantities of information associated
with store audits. Staffing priorities, such as assisting with the
implementation of new regulatory processes, annual audit projects and
limited man-hours, as well as strained budgets, keep some internal audit,
loss prevention or store operations functions from venturing into the
electronic store audit world.
Traditional Store Audits: Whether it is reducing shrink or complying with
regulatory requirements, a rigorous store-level audit process is critical to
protecting and substantiating company assets and reporting processes, as
well as providing management with the real-time information necessary to
focus on identifying and resolving issues. Traditional retail store audit
methodologies include a visit from an internal auditor or loss prevention
personnel; they then complete a formal audit work plan, which results in
significant paperwork. Additionally, performing traditional audits alone often
results in incomplete or infrequent coverage of stores due to resource
constraints, limiting the efficiency and effectiveness of the store audit
function.
The current, traditional method of conducting store audits would benefit from
an innovative use of technology.
Store Self-assessment: The first step to progressing toward a more
effective and efficient store audit program is the implementation and
acculturation of control self-assessment. Self-assessment program raises
accountability by engaging store managers, who are direct control owners,
and places overall responsibility for control operations and assessment in
their hands.
Technology Enabling the Self-assessment Program: The next step in
building an effective self-assessment program is to ensure that data is
collected, analyzed and reported in a timely fashion. Efficient audits no
longer can be conducted by filling out paperwork at the store, and sending
those paper audits back to the corporate office, where data is entered into a
spreadsheet, and only then is a report manually created. Whether through
the use of simple Web-based forms or more advanced mobile collection
technologies, such as laptops, smart phones, or Pocket PCs, electronic
delivery mechanisms can expedite immediately the store audit process.
Such technology assists internal audit functions, management, and store
managers in conducting consistent self-assessments that can meet both
operational and regulatory objectives.
Activity 1:
How national readership surveys provide help to the organization for
making their future decisions?

3. The first step to progressing toward a more effective and efficient store
audit program is the and _________ of control self-assessment.
4. The self-assessment program _________ accountability.

7.4 Benefits of Audit Technology
Is an automated store audit solution really worth your investment? The
answer to that question depends on many factors. Each individual company
must explore its specific business priorities and the financial realities of the
current audit process. Once a clear picture of the current situation emerges,
the benefits and savings of an automated process also will become clear.
The three key benefits from audit technology:
Enhanced audit productivity
Increased operational effectiveness
Improved reporting capabilities.
Enhance audit productivity
Improve Consistency: Uniform data collection from standardized questions
provides the most useful information for analysis. Audit technology can
enhance consistency through customized scoring models and
predetermined response selections for specific questions. Advanced
collection rules can pose questions in sequence to elicit accurate and
relevant responses.
Minimize the Impact of Question Interpretation: Everyone interprets audit
questions from their own unique perspective, which can cause problems
with accuracy and render subjective questions all but useless. Audit
software is designed to keep audits on track, with downloadable support
documentation, context-sensitive hints and help text to clarify management
expectations.
Increase Location Coverage: In a large population of stores spread over a
wide area, sheer volume demands audits targeted at specific stores and
some important locations may be lost in the rush. Self-assessment, coupled
with improved productivity from an automated solution, can increase the
amount of time available to expand audit coverage to new topics, new
stores, distribution centers and emerging trouble spots.
Increase operational effectiveness
Generate Action Items Automatically: The audit process assists retailers
in understanding where a particular store is failing in terms of operational
controls. However, the onus rests on the management team to ensure
identified issues are addressed. Audit technology allows the retailer to
implement a proactive approach to areas identified as needing remediation.
For all questions where an unsuitable response is recorded, the user can be
prompted immediately to assign an action item. E-mail reminders and action
reports provide an effective management tool to ensure timely follow-up.
Manage Shifts in Responsibility: Utilizing a configurable user interface,
administrators are able to tightly control security privileges and user
functionality and oversee changes to the organizational hierarchy by adding
and moving stores in the companys structure.
Enhance Communication to the Field: A news bulletin board can provide
management with a centralized portal to create and distribute relevant
updates to users of the audit application. Furthermore, automated action
item notification ensures tasks are assigned consistently to the appropriate
users, improving productivity and communication among all team members.
Improve reporting
Reduce Cycle Time from Data Entry to Reporting: Information
bottlenecks are a silent killer of organizational strategy. Without timely data,
leaders are left to make decisions with an insufficient understanding of
performance. Audits completed electronically are available automatically;
there is no need to fax, transcribe or e-mail audit data. By accelerating the
audit life cycle, management can make informed decisions about targeting
low-performing stores and implementing meaningful change.
Improve Visibility of Key Performance Metrics: With the audit
technology, management has the ability to assess key performance metrics
in real-time. Armed with this intelligence, management can identify
operational issues and respond with swift, corrective action.
Eliminate Data Redundancy and Enhance Security: In the traditional
paper-based system, audits are distributed via fax or e-mail, which places
data in multiple locations and enhances the probability that redundant data
will be stored on disparate, unprotected systems. With audit technology,
data is synchronized upon completion and saved on a secure, centralized
server, limiting the opportunity for erroneous data to make its way into
reports or the wrong hands.
5. _________ technology can enhance consistency through customized
scoring models.
6. With the audit technology, management has the ability to assess
_________ in real-time.
7. _________ data collection from standardized questions provides the
most useful information for analysis.

7.5 Consumer Panels
When researchers are interested in detailed information about purchasing
behaviour or insight into certain leisure activities, they will often resort to
panels of consumers. A panel will allow the researcher to track behaviour
using the same sample over time. This type of longitudinal research
provides more reliable results on changes that occur as a result of life cycle,
social or professional status, attitudes and opinions. By working with the
same panel members, intentions can be checked against action, one of the
more problematic challenges that researchers face when studying planned
purchases or intentions to engage in certain behaviour (e.g. going on trips,
visiting certain sites, participating in sports, etc.).
Panels, whether formally established or tracked informally through common
behaviour (e.g. membership in a club, purchase of a specific product, use of
a fidelity card, etc.), can also be used to study the reaction to potential or
actual events, the use of promotional materials, or the search for
information.
Compared to the depth interview and the focus group, a panel is less likely
to exaggerate the frequency of a behaviour or purchase decision, or their
brand loyalty. In order to allow researchers to obtain more detailed follow-up
information from panel members, they are usually paid for their services. At
the same time, this can introduce a bias into the panel, since the financial
incentive will be more or less important depending on the panelists
economic status. Possibly one of the more interesting advantages of panels
is that they can provide significant insight into non-response as well as non-
participation or decisions not to purchase a given product.
Activity 2:
How consumer panel play vital role in market research?

8. Compared to the depth interview and the focus group, a panel is
_________ likely to exaggerate the frequency of a behaviour or
purchase decision.
9. Panels can be used to study the _________ to potential or actual
events.

7.6 Test Marketing
Test marketing is carried out to find out the acceptance level of the product.
A new product is introduced in a small geographical territory, and
commercial viability is checked. This procedure is known as test marketing.
Test marketing helps the management in two ways.
It helps in ascertaining the potential sale and profit for the new product.
It also helps to carry out any correction required before launching on a
commercial scale.
With test marketing, companies can minimize losses. Information collected
in test marketing is as follows:
Awareness level.
Reasons for not using a product.
User experience about the product.
Usage pattern of the product.
Reaction to the product by retailers.
Purchasing pattern.
Characteristics of buyers.
Effectiveness of advertising.
Reaction to offers made by company.

Designing test marketing
While designing test markets, the following factors should be taken into
account:
Time duration of the test.
Criteria used to select test markets.
Decide what to measure.
Time duration of the test
At least three repurchases should be allowed, before the sales are
estimated. This is because it has been found that in case of some products,
initial purchases are large and subsequently the product met its end value.
Therefore, a duration should be allowed before drawing any conclusion on
the sales volume. Shorter the repurchase period of the product, shorter will
be the test marketing period.
Criteria used to select a test market
The following criteria may be used to select a test market:
The market chosen for test marketing should not be too small or too big.
If it is too small, the results are not reliable. If it is too big, the cost
escalates.
A single industry should not dominate the market.
Decide what to measure
Effectiveness of advertising: In this case, the product awareness of
the customer is measured. How much the customer is aware of the
product feature, how long he is able to retain the advertisement, etc.
Awareness depends on how effective is the message and what medium
is used to advertise. The frequency of exposure also decides the ability
to recall an ad.
Market share: This is important when a new product is introduced. The
following questions are to be answered:
Does the new product increase the total sales?
Does it cannibalise any of the existing brands?
10. At least _________ repurchases should be allowed, before the sales
are estimated.
11. The market chosen for test marketing should not be _________.
7.7 Research in Advertising Decisions
The advertiser is interested in getting the best results of the advertisement
in the practical form especially in terms of rupee expenditure. The basic
purpose of advertising effectiveness studies is to test whether or not the
advertisement is achieving the expected or intended purpose of
communication.
Most of the advertisement effectiveness studies deal with a specific
advertisement or with specific advertisement campaigns. The studies are
also conducted on the level of consumer awareness, consumer knowledge,
consumer preference, etc.
Significance of advertisement as one of the promotional techniques is
undoubtedly increasing day-by-day. So, also the importance of such studies
is ever increasing, with the passage of time.
Objectives
The various objectives of research in advertising decisions are:
To identify target markets.
To study the habits of target markets.
To estimate the number of target customers.
To test an advertisement copy for advertisement layout.
To conduct media research.
To select a suitable media for advertisement.
To study practical effectiveness of an advertising agency.
Methodologies
For conducting advertisement effectiveness studies the following two as the
most common methodologies are utilized by the advertisers.
Opinion research
Memory tests.
Opinion research
The opinions or the reactions of individual potential buyers are recorded
either for an advertisement or far an advertisement campaign.
The opinions or the reactions of individual potential buyers pertain to:
Advertisement message.
Advertisement design.
Advertisement copy.
Typography.
The methodology could effectively be utilized either:
Prior to the advertisement are released
Post to the advertisements are released
Limitations of opinion research
Here as the feedback or the reaction of individual potential buyers are in
the opinion form, the feedback really fails to provide a guideline
regarding.
Attention value of the advertisement.
Recalling of the media where the advertisement was released.
How long the advertisement is remembered.
Which is the exact part of the advertisement that is remembered for
long?
The opinions of the reactions of individual potential buyers may be
unreal. Sometimes, it is also observed that the potential buyers prefer or
tend to give socially desirable response to real response.
Memory tests
In order to overcome the limitations of Opinion Research, as an
advertisement effectiveness studying methodology, different types of
memory tests are conducted.
Invariably, the tests are carried out after the advertisements have appeared
in different media.
Memory tests are further categorized in the following two kinds:
Recognition test
Recall test.
Recognition test: These tests are carried out with the help of different
illustrations, as follows:
The respondents are shown different advertisements. Thereafter, they
are asked:
To recognize the advertisements which have been seen earlier.
To remember the media in which they have seen them earlier.
As to why they have liked a particular advertisement.
As to which part, they have liked about a particular advertisement,
etc.
The names of the sponsors, brand names, etc. are removed from the
advertisement. Therefore, the respondents are asked.
To recognize the sponsors to whom the advertisement belong.
To remember the media in which they have seen them earlier.
To identify the advertisement agency releasing the advertisement.
Precaution of Reorganization Test: For both these recognition tests, a
precaution is needed to be taken to minimize respondents.
Inaccuracies
Biases.
If these are not minimized, to the possible extent, the basic purpose of
conducting of these tests stands totally defeated.
Recall Test: Just like Recognition Test, Recall Test, no practical
illustration are utilized. However, the tests are carried out in the following
two ways:
1. The respondents are asked to recall all the advertisements for a type of
a particular product.
For example,
Which advertisement have you seen for a toothpaste of late?
In which media have you seen an advertisement for a toothpaste, of
late?
Really, this undoubtedly becomes fully unaided form of the test.
2. The respondents are asked to recall a particular advertisement in
respect of a particular brand.
Example,
Do you mean remember the advertisement for Flair pen with cricket
star X?
Do you remember in which media have you seen the advertisement
for Flair pen with cricket star X?
As it can be observed, this definitely become partly aided form of the test.

12. _________ are conducted in order to overcome the limitations of
opinion research.
13. To identify target markets and to study the habits of target markets are
the various objectives of research in _________ decisions.

7.8 Marketing Audit
Marketing audit is the hottest management concept in the new millennium
and marketers are getting increasingly conscious about this, no matter small
or large sized companies. No chief or head of marketing can afford to stay
away from the up-to-date check on marketing process. The marketing audit
provides good input for a plan of action to improve a companys marketing
performance.
The ultimate utility or objective of conducting of Marketing Research could
really lie in conducting Marketing Audit of the organization.
The marketing audit has the following four characteristic:
1. Comprehensive: The scope of marketing audit is relatively broad as it
includes all the important marketing activities of business. In other
words, it is not at all, problem oriented always.
2. Systematic: The audit follows a specific system and it is an orderly and
well-organized scrutiny of organizations environment, objectives,
strategies, activities, systems, etc.
3. Independent: It can be conducted in different ways as follows:
Self-audit: Here, the marketing manager utilizes a checklist in order
to rate and evaluate different marketing activities or marketing
operations.
Audit from across: Here, the marketing auditing activities are
performed across the table.
Audit from above: Here the superior marketing manager in the
official hierarchy conducts the audit of different marketing activities
or marketing operations.
Audit officer of the company: Here, the officer of the company
appointed for the purpose of conducting audit, conducts the same in
respect of different marketing activities or marketing operations. This
is technically termed as Internal Audit, and the auditor, here is
called as Internal Auditor.
Company taskforce audit: Here, the audit is conducted by the
company taskforce, created, specially, for the purpose of conducting
audit.
Outside audit: Here, an outside agency or an organization is
employed for conducting the audit. This is technically termed as
External Audit and the auditor, here, is called as External Auditor.
4. Periodic: The marketing audit is periodic that is repetitive in its nature.
The period of audit may be varied depending upon the nature and the
requirements of the sponsoring organization.
(a) Periodic audit is, naturally, always superior as compared to its
conducting as and only when there crops up a marketing problem
like:
Poor sales performance
Decline in sales
Incurring of heavy looses
(b) The scope of the marketing audit extends to:
Marketing Environment
Marketing Objectives
Marketing Strategies
Marketing Activities, etc
(c) The objectives of the marketing audit are:
i) To determine the problem areas and opportunities.
ii) To recommend a plan of action, in order to improve the
marketing performance.
Components of marketing audit
The various components of marketing audit have been identified as follows:
Marketing environment audit
Marketing strategy audit
Marketing organization audit
Marketing systems audit
Marketing function audit
Marketing productivity audit
Marketing Environment Audit: Marketing environment audit concentrates
on:
Macro environment
Demographic environment
Economic environment
Political environment
Cultural environment
Technological environment
Task environment
Markets
Customers
Competitors
Distributors
Dealers.
Marketing Strategy Audit: Marketing strategy audit focus on:
Business strategy
Business mission
Business objectives
Marketing Organization Audit: Marketing organization audit area of
concentrates on:
Organization structure
Organizational efficiency
Marketing Systems Audit: The area of marketing system audit are:
Marketing information systems
Marketing planning systems
Marketing control systems
New product development systems
Marketing Function Audit
Marketing function audit concentrates on:
Product line objectives
Pricing objectives
Distribution objectives
Advertising objectives
Sales force objectives
Marketing Productivity Audit
Marketing productivity audit concentrates on:
Cost-benefit analysis
Profitability analysis
Methodology of Marketing Audit
The auditor collects the relevant and significant data for the purpose of audit
by conducting interviews of:
Customers
Dealers
Sales representatives
Marketing executives
People from top management.

Activity 3:
According to this text marketing audit is a very hot concept in todays
marketing field. What you think how it is very hot? Suggest with good
example.

14. The auditor collects the _________ and _________ data for the
purpose of audit
15. Periodic audit is _________ as compared to its conducting as and only
when there crops up a marketing problem.
16. The audit follows a _________ system.

7.9 Database Marketing
Database marketing is a systematic approach to the gathering,
consolidation, and processing of consumer data (both for customers and
potential customers) that is maintained in a company's databases. Although
databases have been used for customer data in traditional marketing for a
long time, the database marketing approach is differentiated by the fact that
much more consumer data is maintained, and that the data is processed
and used in new and more sophisticated ways.
One of the most successful forms of marketing used by marketers in India
and abroad on the Internet today is database marketing. Database
marketing is essentially about sending targeted promotions to any segment
of the customer and prospect lists and measuring the value of each
individual customer and tracking the promotional efforts, measuring
responses, purchases, and the return on investment for every dollar spent
on the promotional efforts.
Database marketing has in fact for long been in the domain of the Fortune
500 companies, which spend millions of dollars on their Database marketing
efforts. But, recently, it has also become the domain of smaller
organizations with smaller budgets.
Database marketing is essentially the technique of gathering all the
information available about your customer, leads, and prospects into a
central database. This central database is then used for the information, and
it is this information then that drives all the marketing efforts.
This information collected in Database marketing is stored in a marketing
database and then can be used at both the strategic and tactical levels to
drive targeted marketing efforts.
Future of database marketing
The development of the Internet has offered enterprises a highly effective
way to gather customer information. Internet users are now perfectly
comfortable with completing electronic forms for everything from online
purchasing to setting up e-mail accounts, so the amount of consumer
information available has increased greatly.
Online advertisers now use surfing habits as a method of directing
advertising towards Internet users. Search engines such as Google serve
ads according to users' keyword searches, while vendors such as Amazon
use details of previous transactions to build a list of user-targeted
recommendations. We can expect this trend to continue until all online
activities are tracked for marketing purposes.
17. _________ is a systematic approach to the gathering, consolidation,
and processing of consumer data maintained in a company's
databases.
18. _________ use surfing habits as a method of directing advertising
towards Internet users.
7.10 Focus Group Interview
There are broadly two ways in which a group discussion can be conducted:
Brain-storming: In such a method, there is no moderator for the group,
and the group freely expresses its ideas on the given topic. The ideas
could be absolutely abstract, but then this would help in generating new
product ideas and also better ways of conducting a particular business
etc. In this, use is made of tape-recorder to record the group discussion,
video-taping of proceedings is also done in order to record the facial
expressions of the, participants, as also the intensity of their feelings.
Focussed Group Discussion: In such a method, the group is given a
topic and asked to discuss the topic. A moderator would also be
involved in order to ensure that the group 'discussion remains relevant
and does not go off the track. The moderator could stop the, discussion
between time intervals to find out what conclusions are being drawn by
the group after each time interval.
Size and composition of a group discussion panel
There is no correct size prescribed for a Group Discussion. The size of the
group depends upon (a) the subject matter under discussion. (b) the type of
participants. Normally, 8 to 12 individuals in a group discussion panel is an
ideal size. However, for highly professional and articulate people, the ideal
size is 5/6 participants in the group, as the participants would have more to
contribute to the topic under discussion.
The role of the moderator in a group discussion is to establish a rapport with
the group members. He/she also informs the members of the rules to be
followed in the group discussion. The moderator acts as a stimulus' to
provoke heated discussion in, the group, so ' that all underlying ideas,
feelings and emotions emerge. The moderator also intervenes after time
intervals, to asses the extent of agreement/disagreement with the ideas that
are emerging.
Advantages of a group discussion
Advantages of a group discussion are:
In a group discussion setting, the interaction among members acts as a
stimulant to generate new ideas, which may never be possible in an in-
depth individual interview situation.
The group discussion setting leads to spontaneity in conversation which
cannot come in individual interview situation.
The group setting is emotionally provocative the conversation may set
off the thinking process, and one would recall older memories and
conversations that may be relevant to the discussion on hand.
Disadvantages of a group discussion
Disadvantages of a group discussion are:
Qualified and trained personnel are required to conduct group
discussion.
Analysis is highly subjective.
A few members in a group could dominate the entire discussion.
19. The size of the group for group discussion depends upon the
_________ under discussion and the _________.
20. Database marketing is a systematic approach to the _________,
_________ and _________ of consumer data that is maintained in a
company's databases

7.11 Summary
Marketing research is the function that links the consumer, customer, and
public to the marketer through information 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. Marketing research is a
systematic one.
Marketing research techniques come in many forms, including: Ad Tracking,
Advertising Research, Brand equity research, Brand name testing,
Commercial eye tracking research, Concept testing, Cool hunting, Buyer
decision processes research, Copy testing Customer satisfaction research,
Demand estimation, Distribution channel audits, Internet strategic
intelligence, Marketing effectiveness and analytics, Mystery Consumer or
Mystery shopping, Positioning research, Price elasticity testing, Sales
forecasting, Segmentation research, Online panel, Store audit.

Glossary
Auditing: evaluation of a person, organization, system, process, enterprise,
project or product.
Retail Audit: Study of a selected sample of retail outlets, provided as
subscription-based service by market research firms. Retail-audit service
providers gather information on a brand's sales volume, sales trends, stock
levels, effectiveness of in-store display and promotion efforts, and other
associated aspects
Consumer Panels: Sample group of consumers in a target market whose
buying behavior is believed to be representative of the entire market.
Test Marketing: to market a product or service in a limited area for a period
of time to determine the probable demand.
Advertising: The activity of attracting public attention to a product or
business, as by paid announcements in the print, broadcast, or electronic.

1. What are the highlights of national readership survey of 2006?
2. Describe traditional store audit.
3. Explain the benefits of audit technology.
4. What are test marketing and marketing audit? Also explain the
marketing audit in detail.
5. Explain database marketing.

7.13 Answers
1. Segment-wise
2. largest
3. implementation, acculturation
4. raises
5. Audit
6. key performance metrics
7. Uniform
8. less
9. reaction
10. three
11. too small or too big
12. Memory tests
13. advertising
14. relevant, significant
15. superior
16. specific
17. Database marketing
18. Online advertisers
19. subject matter, type of participants
20. gathering, consolidation, processing
Answers to Terminal questions
1. Refer to 7.2 Discuss NRS 2006
2. Refer to 7.3.
3. Refer to 7.4 Discuss advantages
4. Refer to 7.6 Describe test marketing and also explain the marketing
audit in detail
5. Refer to 7.9.

Mini-case
Coca Cola established its China market organization by the help of following
functions in various departments.
Marketing department: Major functions include integrated planning of
brand and enterprises image, promotion idea collection and promotion
campaign planning and relevant budget decision-making and implement
monitoring.
Operation department: Major functions include implementation of planning
and other decisions made by the management, product distribution and
channel expansion, daily transform of feedback collected from markets.
Quality control department: Major functions include all round control to
guarantee the credit of its products. For example, all products relevant to the
production of Coca Cola would be under the strict quality control system.
Those products that can pass the inspection will get certificate. Continuers
and strict control over quality has been acted through out the whole process
of production from the purchasing of raw materials to the output of final
products. It doesnt aim to control the rate of waster but to improve the
quality of all products.
Finance department: Control of the cash flow and storage of the products
as well as professional inspections of slots of marketing distribution channel.
Administration department: To ensure the fluency and efficiency of
communication of business, especially to keep good relationship with news
press and eliminate all the possible negative influence.
Question
How would the manager of China project come to know if the things are on
right track or not.
Hint: Discuss with respect to marketing audit.
Unit 8 Measurement and Scaling Techniques
Structure
8.1 Introduction
Objectives
8.2 Measurement of Attitude
8.3 Difficulty of Attitude Measurement
8.4 Use of Scaling in Marketing Research
8.5 Types of Scales
8.6 Criteria for Good Measurement
8.7 Summary
8.9 Answers

8.1 Introduction
In the earlier units, you came to know about the various techniques of
marketing research. In this unit you will study about the measurement and
scaling techniques.
In this unit you learn marketing research generally deals with the behaviour
of the consumers. A company which is able to sell its product/services must
be viewed by customers as pocessing a favourable attitude towards it. It is
therefore very important for the organization to understand and measure the
attitudes of its customers towards its products and services. This is because
if the customers have an unfavourable attitude or a poor image about the
company, it will not be able to sustain for a long time. It is not only essential
for the company to ensure that consumers have a favourable attitude
towards its product, but also to anticipate their future preferences.
Measuring attitude is a very difficult task because we cannot measure
product or customers but we can measures the opinion! perceptions of the
customers towards the product. In other words, attitude is inferred and not
directly observed. A study of consumer behaviour and likes and dislikes of
the customers play a very important role in understanding their perceptions
and thereby inferring their attitudes towards the product. This may be of help
in estimating how much of the product a company will be able to sell in
future.

Objectives
Explain measurement concept
Define attitude measurement
Describe various attitude measurement scales

8.2 Measurement of Attitude
The measurement of attitudes is central to many marketing situations.
Marketing programmes are based on marketing executives perceptions of
consumer attitudes towards their products, what attitudes they would like
consumers to have and how they can change existing consumers attitudes
to the latter.
Nature of Attitudes: An attitude is an individuals enduring perceptual
knowledge based evaluative and action-oriented process with respect to an
object or phenomenon.
Components of Attitudes: Attitudes are generally considered to have three
main components (i) a cognitive component of a persons beliefs about the
object of concern, such as its speed or durability, strength or economy, etc.
(ii) an affective component (iii) behavioural component a persons readiness
to respond behaviourally to the object. A persons emotional feelings about
the object such as like and dislike, good or bad. The tendency to bring these
three components together into something is called image.
Link between Attitudes and Behaviour: Attitudes are important in
marketing decision-making because of the assumed relationship between
attitudes and behaviour. Models which conceptualise construct of an attitude
typically represent an attitude as a series of sequential components which
leads to behaviour. The connection between attitudes and behaviour is not a
simple one. The decision-maker and the researcher should be cautious in
assuming such a relationship in a decision situation. The prediction of future
behaviour for an aggregate of buyers does appear to be higher than the
most decision situations are concerned with aggregate behaviour rather
than individual behaviour, the attitude behaviour link does have some
empirical support for any marketing decision situations. However, attitudes
have only one influence on behaviour and in a particular decision situation
other factors could be more influential than attitude.
Attitude Measurement Process: In the attitude measurement process
numbers are used to represent the marketing phenomena under
investigation. The empirical system includes marketing phenomena, such as
buyer reactions to products or advertisements. Therefore, measurement
may be defined as the assignment of numbers to characteristics of objects
or events according to rules. In effective attitude measurement, there is a
requirement of relationships existing among the objects or events, the
empirical system directly corresponds to the rules of the number system.
Numbers are being used as symbols to model the characteristics of interest
in the empirical system. The nature of the relationships existing in the
empirical system determines the type of numerical manipulations that are
valid in the abstract system.
Measurement may be defined as the assignment of numbers to
characteristics of objects, persons, state or the event itself but some
characteristic of it. When objectives are counted, for example, we do not
measure the object itself but only its characteristic of being present. We
never measure people, only their age, height, weight, or some other
characteristic. A study to determine whether a higher percentage of males
or females purchases a given product measures the male-female and
purchase-nonpurchaser attribute of the persons sampled.
The most critical aspect of measurement is the creation of the rules that
specify how the numbers are to be assigned to the characteristics to be
measured. Once a measurement rule has been created and agreed on, the
characteristics of events, persons, states or objects are described in terms
of it.
1. An _________ is an individuals enduring perceptual knowledge based
evaluative and action-oriented process with respect to an object or
phenomenon.
2. _________ may be defined as the assignment of numbers to
characteristics of objects, persons, state or the event itself but some
characteristic of it.

8.3 Difficulty of Attitude Measurement
As we know the measurement of weight, length and height is an easy task
involving the use of a ratio scale. The natural zero point and equality of
differences are obvious. This type of measurement situation is more
characteristic of the physical sciences than the social sciences, marketing
being one of them. Consequently, the task of measurement in marketing is
typically more difficult and involves lower scales of measurement than those
found in the physical sciences. The following Table 8.1 shows the
comparison:
Table 8.1: Difficulty of the Measurement Process
Length Preference Happiness
Weight Attitudes Creativity
Easy Difficult Very difficult
Ratio Internal Nominal/ordinal
Scale Scale Scale
Measurement Accuracy: A measurement is a number designed to reflect a
characteristic of an individual, object, or event. However, it is just an
observation or picture of the characteristics of interest.
The terms validity, reliability and measurement accuracy are often used
interchangeably. The term reliability is used to refer to the degree of variable
error in a measurement. We define reliability as the extent to which a
measurement is free of variable errors.
Approaches to assessing reliability:
Test-retest reliability: Applying the same measure to the same objects
a second time.
Alternative-forms reliability: Measuring the same objects by two
instruments that are designed to be as nearly alike as possible.
Internal-comparison reliability: Comparing the responses among the
various items on a multiple-item item designed to measure a
homogenous concept.
Scorer reliability: Comparing the scores assigned to the same
qualitative material by two or more judges.
Measurement Development: Suppose you need to develop a
measurement for a particular concept such as brand image, customer
satisfaction or opinion leadership. The following steps are considered.

Figure 8.1: Methodology for Developing Sound Marketing Measures
Activity 1:
Reliability is the extent to which scale is free from errors. Explain.
3. The task of measurement in marketing involves _____________ scales
of measurement than those found in the physical sciences.
4. ____________ refers to the degree of variable error in a measurement.
5. _________ reliability refers to applying the same measure to the same
objects a second time.

8.4 Use of Scaling in Marketing Research
Attitude can be defined as the mental state of a consumer which
predisposes him/her to respond in a certain way to a given stimulus. In
marketing this can be perceived as a consumers predisposition to respond
to a product or service.
Marketing segmentation strategy is based on attitudinal segmentation. In
measuring the effectiveness of advertising, attitude measurement plays a
important role.
Scaling refers to the process of measuring of attitudes. Depending upon the
types of attitude, the following appropriate scales are designed:

Figure 8.2
6. ____________ refers to the process of measuring of attitudes.
7. Marketing segmentation strategy is based on ______________.

8.5 Types of Scales
Types of attitude rating scales
There are many ways to present a respondent with a continuum of
numbered categories that represent the range of possible attitude
judgments. The figure 8.3 shows various types of scales which are used in
research.

Figure 8.3: Types of Scale
Single-item scale
As the name itself suggests, single-item scales are those that have only one
item to measure a conduct. Under the single-item scale, the itemized-
category scale is most widely used by researchers.
Itemised-category scales
These are four categories from which respondents can choose to indicate
their overall level of satisfaction with their present banking facilities.
Very satisfied
Quite satisfied
Somewhat satisfied
Not at all satisfied
The itemised scales are also known as satisfaction scales with following
characteristics.
All categories are labelled.
The respondent is forced to make a choice.
There is no explicit comparison of the respondents.
A numerical scaling of the response categories form +2 to 2, as presented
in the following chart.

Comparative scales
Another version of the preceding scale would label the categories excellent
very good good fair and poor thereby eliminating the implicit
comparison. The problem with a comparative scale is that the reference
point is unclear and different respondents may use different reference points
or standards.
For example: Comparison of public school in an area with government
school in terms of quality of education.
Very superior Neither superior nor inferior Very inferior
Rank orders ordinal scale
Ordinal scales represent numbers, letters or other symbols used to rank
items. It can be classified not only on the basis of whether they share some
characteristic with another item but also whether they have more or less of
this characteristic than some other object. The ranking of certain
attributes/benefits as deemed important by the respondent is obtained
through this scale.
Example: Rank the following attributes on a scale of 1-5 according to their
importance to a washing machine.
A. Company image
B. Functions
C. Price
D. Comfort
E. Design
Suppose that the attribute ratings received from a sample of 100 washing
machine owners are as follows:
Attribute rating Number of respondents giving rating
1 40
2 60
3 40
4 30
5 30
A mode or a median may be used. The model attribute rating is 2, as it is
for the median. A mean should not be calculated because the differences
between ordinal scaled values are not necessarily the same.
Q-sort scaling
When the number of objects or characteristics that are to be rated or ranked
is very large, it becomes rather tedious for the respondents to rank order or
do a pair wise comparison.
If the respondent is forced to do a rank ordering or a pair wise comparison,
a number of problems and biases creep into the study. In Q-sort scaling the
respondents are asked to sort the various characteristics or objects that are
being categorised into various groups, such that the distribution of the
numbers of objects or characteristics in each group follows a normal
distribution.
Constant-sum scales
Constant-Sum scales require respondents to allocate a fixed number of
rating points among several objects, to reflect the relative preference of
each object. It is widely used to measure the relative importance of
attributes, as in the following example:
Please divide 100 among the following characteristics so the division
reflects the importance of each characteristic to you in the selection of a
management institute.
Placement __________________
Faculty __________________
Location __________________
Computer Centre __________________
Library __________________
Interval scale
Interval scale represents numbers used to rank items such that numerically
equal distances on the scale represent equal distances in the property being
measured. It involves qualitative description of number of aspects of a
product or traits of a person.
Example: How do you rate your present washing machine on the following
qualities?
A Product design Poor 1 2 3 4 5 Good
B Brand name Lesser known 1 2 3 4 5 Well known
C Price Low 1 2 3 4 5 High
D After sales services very dissatisfied 1 2 3 4 5 Very satisfied
Ratio scale
Ratio scales consist of numbers that rank items such that numerically equal
distances on the scale represent equal distances in the property being
measured and have a meaningful zero. All descriptive measures and
inferential techniques are applicable to ratio scaled data. Table 8.2 Gives a
Summary Description of each of the Four Types of Scales
Table 8.2: Types of Measurement Scales
Basic Empirical Typical Statistics
Scale
Inferential
Operations Typical Usage Descriptive
Nominal Determination
of equality
Classification: male-
female, purchaser
non-purchaser, social
class
Percentages,
mode
Chi-square,
binomial test
Ordinal Determination
greater or
less
Rankings: Preference
data, market position
attitude measures,
many psychological
measures
Median Mean-Whitney
U, Friedman
two-way
ANOVA, rank
order
Interval Determination
of equality of
intervals
about brands
Index numbers,
attitude measures,
level of knowledge
Mean, range,
standard
deviation
Product
moment
correlation, t-
test, factor
analyse
ANOVA
Ratio Determination
of equality of
ratios
Sales, units
produced, number of
customers costs
Coefficient of
variation
Source: Adapted from S S Stevens, On the Theory of Scales of Measurement,
Science, June 7, 1946, pp. 677-680.
Specialised scales
The judgements are against other similar objects. The respondents directly
compare two or more objects and may choose among them.
Methods of ranking scales are as follows:
Method of paired comparison
When there are more stimuli to judge, the number of judgements required in
paired comparison is given as:

n(n 1)
N=
2

N = number of judgements
n = number of stimuli or objects to be judged
Limitations
If N becomes a big figure, there is a risk of respondents giving all
considered answers or no answer at all. Paired comparisons provide ordinal
data. We can reduce the number of comparisons by choosing a few objects
which cover the range of attractiveness at equal intervals.
Law of comparative judgement by L L Thurstone
It involves converting the frequencies of preferences into a table of
proportions. This is then transformed to z matrix by referring to the table of
area under the curve.
Response patterns of paired comparison of different chocolate brands.
Dairy Milk Five Star Kit-Kat Perk Amul
Dairy Milk
Five Star
Kit-Kat
Perk
Amul
Total
Rank Order
In the above example, there are five brands so the number of comparisons
to be made should be 10 which will be as follows:
Dairy Milk vs Five Star
Dairy Milk vs Kit-kat
Dairy Milk vs Perk
Dairy Milk vs Amul
Five Star vs Kit-kat
Five Star vs Perk
Five Star vs Amul
Kit Kat vs Perk
Kit Kat vs Amul
Perk vs Amul
The strength of the paired comparison approach is the ease with which the
respondents compare only two brands/attributes at a time. And, the
weakness of paired comparison rating scale is the rapid increase in the
number of comparisons to be made in quick succession.
Composite standard method
The following steps are used in composite standard method:
Step 1: Comparing the total number of proposals or preferences for
each.
Step 2: Using the data, column mean can be calculated by using the
following formula.
MP = C + 0.5(N)
n(N)
Mp = the mean proportion of columns
C = Total number of choices for a given suggestion
N = Number of stimuli
N = Number of items in the sample
Step 3: When the Mp < 0.5, z is negative, where Mp > 0.5, z is positive,
z for Mp is secured from area under the curve.
Step 4: z represents an interval scale, zero is an arbitrary value.
Hence, negative value is eliminated considering zero is the
lowest.
Graphically it can be represented as

Example: Figures for Top Ten national advertisers are given as a per cent
of sales.
Top Ten MNC Advertisers
Rank Company Advt. as a ranking % of sales
United State

1. Procter & Gamble 13.8 II
2. Pepsi Co. 6.0 IV
3. McDonalds 18.7 I
4. Ford 1.1 V
5. Eastman (Kodak) 6.1 III
Arbitrary scales
They are developed on an adhoc basis and are designed largely through the
researchers own subjective selection of items. The researcher first collects
a few statements or items which he believes are unambiguous and
appropriate to a given topic, then a few of them are selected for inclusion in
the measuring instrument. People are then asked to check the list for the
statement on which they agree.
Merits
They can be developed very easily and quickly and are relatively less
expensive.
Designed to be highly specific and adequate.
Limitations
We do not have objective evidence that such scales measure the
concepts for which they have been developed.
We have to rely on the researchers insight and competence.
Example of an arbitrary scale
Keeping in mind the conditions of Delhi roads owning a luxury, high-cost
brand car is:
1. A necessity
2. To satisfy self-esteem
3. For comfort
4. A status symbol
5. A prevention against road accidents
Differential scales Thurstone-type scales
They are developed using consensus scale approach, where the selection
of items is made by a panel of judges who evaluate the items in terms of
whether they are relevant to that topic area and unambiguous in implication.
It is used to measure attitudes towards various issues like war, religion, etc.
Merits
These type of scales are most appropriate and reliable when used to
measure a single attitude.
Limitations
More cost and effort is required.
Values assigned to various statements by the judges may reflect their
own attitudes.
This method is more subjective then objective.
Summated scales (Likert type scales)
They are developed by utilising the item analysis approach wherein a
particular item is evaluated on the basis of how well it discriminates between
those persons whose total score is high and those whose score is low.
Thus, summated scales consist of a number of statements which express
either a favourable or unfavourable attitude towards a given object to which
the respondent is asked to react. The respondent indicates his agreement or
disagreement with each statement in the instrument. Each response is given
a numerical scale/score and these scores are totalled to measure the
respondents attitudes.
Most frequently used summated scales in the study of social attitudes
follow the pattern devised by Likert. The respondent may respond in any
one of the following ways:
i) Strongly Agree
ii) Agree
iii) Undecided
iv) Disagree
v) Strongly disagree

Advantages
1. Easy to construct and reliable. It also provides more information and
data.
2. Each statement included in the Likert type scale is given an empirical
test for discriminating ability.
3. It permits the use of statements that are not manifestly related to the
attitude being studied.
4. Such a scale can easily be used in respondent-centred and stimulus-
centred studies.
5. It takes less time to construct.
Limitations
1. We can simply examine whether respondents are more or less
favourable to that topic, but we cannot tell how much more or less they
are.
2. No basis for belief that the five positions are equally spaced. This
means that the Likert scale does not rise to a stature more than that of
an Ordinal scale.
3. There remains a possibility that people may answer according to what
they think they should feel rather than how they feel.
Cumulative scales
It consists of a series of statements to which a respondent expresses his
agreement or disagreement. These statements form a cumulative series,
i.e., they are related to one another in such a way that an individual who
replies favourably to say item no. 3 also replies favourably to items no. 2
and 1 and so on. The individuals score is worked out by counting the
number of points concerning the number of statements he answers
favourably. If one knows the total score one can estimate as to how a
respondent has answered individual statements constituting cumulative
scales.
Advantages
1. It assures that only a single dimension of attitude is being measured.
2. Researchers subjective judgement is not allowed to influence the
development of scale since the scale is determined by the replies of
respondents.
Limitations
1. In practice perfect cumulative or undimensional scales are very rarely
found and we have only to use its approximation, testing it through
coefficient of reproducibility.
2. Its development procedure is tedious and complex.
An Example of cumulative scale

Item Name
Esteem Cielo Opel
Ford/
Score
Escort/
Respondent

1. Which is the most luxurious
car
2
2. Which car provides you best
comfort
x x x 4
3. Which car gives best
mileage
x 3
4. Which is the most expensive
car
x 1
5. Which is an economic luxury
car
x x 2
6. Which car has best service
outlets
x x 2
Stapel scale
It is a modification of the differential scale. It differs from the semantic
differential scale in that the adjectives or descriptive phrases are tested
separately instead of simultaneously as bipolar pairs. Also, the points on the
scale are identified by number as these are ten scale positions rather than
five or seven as in the required manner.
Please rate AIR India on the following dimensions:

Fractionation Rating Scale: It requires the raters to rate an object by
comparing it with reference point. The goal is a ratio-scale representation of
attitudes toward the complete set of objects. An example is presented
below:
Please divide 100 points among the following TV brands so as to reflect how
much overall quality you believe each one has:
BPL __________________ points
SAMSUNG __________________ points
Fishbeins Scale: This scale uses a combination of constant sum and
semantic differential scale. To assess, how consumers perceive a set of
alternative offerings, this type of scale is used. Here the respondent is first
asked to assign a weightage to a set of given attributes. Afterwards the
respondent is given some specific choice alternatives. For example,
suppose a research study was assessing consumers attitude towards five
leading brands of decorative points in terms of the attributes like durability,
washability, finish, range of package size, range of colour, price, etc.
Fishben scale is found useful in problems such as comparing brand image
and advertising designs.
Multi-dimensional scaling
It is a complicated scaling device. But with this we can scale objects,
individuals or both with a minimum of information. MDS can be
characterised as a set of procedures for portraying perceptual or effective
dimensions of substantive interest. It is used when all the variables (metric
or non-metric) in a study are to be analysed simultaneously and all such
variables happen to be independent.
Assumptions
0 people perceive a set of objects as being more or less similar to one
another on a number of dimensions instead of one.
These techniques attempt to locate the points, given the information
about a set of interpoint distances, in space of one or more dimensions
such as to best summarise the information contained in the interpoint
distances.
An example of MDS

An example of consumer perception of similarities of selected cars on two
dimensions.
Uses of multi-dimensional scaling
1. Market segmentation
2. Product life cycle
3. Vendor evaluations
4. Advertising media selection
Limitations of multi-dimensional scaling
1. Conceptual problems
2. Empirical problems
3. Computational problems
Semantic differential scaling
It is developed by Charles. E. Osgood. G.J. Suci and P.H. Tennenbnum
(1957) is an attempt to measure the psychological meaning of an object to
an individual. For instance, the S.D. scale items for analysing candidates for
leadership position may be shown as under.

Figure 8.4
Disguised, structured, scaling techniques
For the disguised structured scaling method of data collection, certain
projective techniques are used. The popular projective techniques used are
(i) Word Association, (ii) Sentence Completion, (iii) Thematic Apperception
Test (TAT), (iv) Story-telling, (v) Body-building/House-building.
A. Word association
Description: A series of situation/words is given to the respondents and
they are asked to fill up the first word/brand which comes to their mind.
It is interesting for the respondent to fill up the various word associations. It
is also quick and easily understood.
Example:
1. DOVE: LOVE
2. Which brand of cooking oil comes to your mind when speaking of a light
and nutritious sunflower oil?
3. Who do you think is most likely to use the Bajaj Sunny?
a. A decent college-going student
b. A family man
c. A middle-aged executive
d. A robust youngster
B. Sentence completion
Description: The respondent is given a number of sentences and asked to
complete them. The profile of the respondent as well as his attitude towards
certain feelings can be approximated. The responses can be varied and
difficult to analyse. The respondent might require more time to fill up the
sentences.
Example: If the Times Group is interested in developing a profile of its FM
radio listeners of its Time Style programme by asking viewers to check
whether there exist any differences between the two, it can administer the
following sentences to the respondents.
A person listening to Times FM radio regularly is __________________.
Time Style viewership will definitely consist of people belonging to
__________________.
C. Thematic Apperception Test
Description: Pictures, instead of, words are used in this technique. A series
of pictures are shown to the respondent who may be asked to compare
them or answer questions on them. The innermost attitudes of the
respondents can get reflected, if the technique is properly administered. It is,
however, difficult to interpret the responses at times.
Example: Two typical housewives may be shown. A simple, traditional
housewife and a modern working woman. The question could be: Who do
you think is most likely to use instant mixes for cakes?

D. Story-telling
Description: A situation is described to the respondent who is asked to
complete the story based on his opinion and attitude. This technique holds
the interest of the respondent but its results may be difficult to interpret as
the responses would be varied. However, it is extensively used to tap any
creative responses which can be put to use.
Example: Two children are quarrelling at the breakfast table just before
going to school. The younger child has dropped some tomato ketchup on
her brothers shirt which he has to wear on the same day for the annual
sports day. What will the mother do?
E. House-building/Body-building
Description: The important values for a brand are given to the consumer
and he is asked to sort the values such that they can be used to construct a
house or build a body. The core values of the brand might form the
foundation of the house or the heart of the body. The packaging or the after-
sales services might be viewed as the arms/feet or windows as the case
may be.
The respondent may not be able to complete the house/body in case the
brand has few values. A strong brand, on the other hand, results in a
stronger body/house.
Also a situation may be described to the respondent to assess the value of
the brand most prone to attack from competition by asking questions like:
If the body meets with an accident, which parts would survive and which
would get severely damaged and which would escape with small cuts
and wounds?

General guidelines for developing a multiple-item scale
Multiple-item scales often are widely used in social sciences research to
measure abstract constructs. The characteristic that is to be measured is
generally referred to as the construct. The following steps are used in
construction of a scale.
Activity 2:
Identify the type of scale, you will use in each of the following (ordinal,
nominal, internal, ratio). Justify your answer.
8. The merit of ___________ scales is that these type of scales are most
appropriate and reliable when used to measure a single attitude.
9. _____________ scales consist of a number of statements which
express either a favourable or unfavourable attitude towards a given
object to which the respondent is asked to react.
10. ____________ Scale requires the raters to rate an object by
comparing it with reference point.

8.6 Criteria for Good Measurement
The adequacy of scale is judged in a way as to have measurement of
acceptable quality. The overall usefulness or the scale depends upon its
validity, reliability and sensitivity.
Validity
A-scale is said to be valid if it measures correctly what it is expected to
measure. As we know attitudes are multifaceted, therefore single item
scales are usually deficient on this criterion. In other words an attitude scale
is valid only when it is real and correct: There are several different types of
validity and these are:
Content validity
Construct validity
Predictive validity
Content validity: This is also known as face validity. Here the contents of
an attitude scale should cover all relevant facets of an issue which influence
respondent's attitude. Suppose we have a-scale to measure job satisfaction
of employees in, an organization. The scale, covers various dimensions like
nature of work, pay, security and superior. The scale, however, lacks in
content validity as it does not cover an important dimension like company
policies and practices. This could happen because what dimensions to be
included in a scale would depend on the judgement of the researcher which
is likely to vary from individual to individual. Therefore, in order to avoid this,
it would be better to approach a group of knowledgeable persons rather
than leaving to one person.
Construct validity: It is known that it is not possible to measure attitude
directly. It is inferred indirectly from the responses given by the respondents.
Construct validity involves understanding the theoretical rationale underlying
the obtained measurements. The content validity of an attitude can be
assessed quantitatively by finding its correlation with measures of other
constructs that one would expect to be strongly associated with the attitude
and measures of constructs that would not be correlated to the attitude.
Strong correlation of attitude with the construct is an example of convergent
validity whereas low correlation of attitude with the construct is an example
of discriminating validity. A scale with construct validity should have both
convergent and discriminating validity.
Predictive validity: It involves the ability of a measured market
phenomenon at one point of time to predict successfully another market
phenomenon at another point of time. If the correlation between two is high,
the initial measure is said to have a high predictive, validity. An opinion
questionnaire which forms the basis for correctly forecasting, the demand
for product has high predictive validity.
Reliability: A scale is said to be reliable when it gives the same
measurement under similar condition. If a scale makes equal error every
time, it would be reliable. However such a scale cannot be valid as we know
that the validity depends upon correct measurement. Reliability is achieved
when the scale is free from erratic measurements. The following two
methods are used for testing reliability.
Test-retest Reliability: It is concerned with how stable the ratings are when
the scale is administered to the same group of persons at two different
points of time. If there is a high correlation between two sets of scores
(consistency), the test-retest reliability is very high.
Split-half Reliability: It can be assessed only for multiple-item scales. Here
the scale items are split randomly into two equal parts. At times splitting may
be done by putting even number of items on one side and odd number on
the other side.
The correlation coefficient between respondents' total score derived from
two sets of items is computed. A high degree of correlation indicates a high
split-halt reliability of the scale.
Predicate Validity: The predicate validity of a scale is closely related to its
reliability. It is the ability of a scale to be able to discriminate between
respondents who differ even slightly in terms of their attitude toward
something. An essential of a rating scale is that it should have a sufficient
range of numbers to help detection of fine variations in attitude.
11. ___________ Reliability can be assessed only for multiple-item scales.
12. The ____________ validity of a scale is the ability of a scale to be able
to discriminate between respondents who differ even slightly in terms of
their attitude toward something.

8.7 Summary
Measurement involves the use of numbers to represent the marketing
phenomenon under investigation. The direct measurement of attitude is a
very difficult task. It can only be inferred indirectly from the responses of the
respondent. Attitude comprises of three components viz a cognitive
component, an affective component and a behavioural component. For
marketing decisions the attitude behaviour relationship relates to measuring
of cognitive and affective components so as to be able to predict future
behaviour.
There are four types of scales used in marketing research to infer attitude
towards a particular product/service. There are Nominal, Ordinal, Interval
and Ratio scale. The most powerful among them is ratio scale
measurement. A study of these scales is important in the sense that the
method of analysis for data depends upon the type of measurement used to
measure it.
The rating scale may take various physical forms. They could be presented
in graphic and itemized formats, comparative and non-comparative formats,
forced and non-forced response formats, balanced and tin-balanced
formats, constant sum rating format, paired comparison rating format and
ordinal scale format.
Glossary
Measurement: involves the use of numbers to represent the marketing
phenomenon under investigation.
Attitude: an individuals enduring perceptual knowledge based evaluative
and action-oriented process with respect to an object or phenomenon
Reliability: The probability that a component part, equipment, or system will
satisfactorily perform its intended.
1. Describe the link between attitude and behaviour.
2. What are the difficulties of attitude measurement?
3. Describe comparative scale in attitude measurement.
4. Explain multidimensional scaling.
5. What are the criteria behind for choosing good measurement?

8.9 Answers
1. attitude
2. Measurement
3. lower
4. Reliability
5. Test-retest
6. Scaling
7. attitudinal segmentation
8. differential
9. Summated
10. Fractionation Rating
11. Split-halt
12. predicate
1. Refer to 8.2 Base your answer on the definition of attitude.
2. Refer to 8.3 Discuss limitations and constraints
3. Refer to 8.5.
4. Refer to 8.5
5. Refer to 8.6.
Mini-case
Neckties have been in vogue in India for several decades. Prior to the 60s
neckties were imported from France or England and a couple of other
countries. It was Zodiac that gave the necessary impetus to the domestic tie
industry in the 70s. This was followed by a firm in Bombay called designers
tie, a private limited manufacturing company in 1971. The ties were sold
under the name fashion, which later took the name Prestige. Designer ties
remained the only well-known players specializing in neck wear, other
companies manufacturing tie, treat the tie as an additional item in mens
wear market.
Today, the market for ties is flooded with a number of brands such as
Zodiac, Park Avenue, etc. Prestige tie was facing stiff competition from new
entrants from the US, Japan, etc. Customers tastes seemed to be shifting
from domestic to foreign brands. The government was allowing imports
freely due to liberalization and the market was flooded. This import policy
likely to gain further momentum due to entry of many foreign retailers.
These retailers treat the tie as a part of an important dress item. This has
further added value to the product, with more choice to customers. Apart
from the discouraging trend domestic tie, there was another unfavourable
trend in recent times, the onslaught of denim wear and casual wear resulting
in the reduced usage of ties.
Prestige is now seriously thinking of sponsoring a comprehensive study on
the necktie market in India. It would like the proposed study to enlighten it
on the consumer profile, its image of local brand vis-a-vis other brands to
the various segments in the tie market. The company would like the study to
lay great emphasis on market segmentation.
Question
You have been approached by the company for the proposed study. How
would you proceed with it, keeping in mind three major issues pointed out by
Prestige?
Hint: Define the problem and then move ahead with determining various
measurement and scaling techniques.
Unit 9 Sampling
Structure
9.1 Introduction
Objectives
9.2 Census vs Sampling
9.3 Sampling Terms
9.4 Sampling Process
9.5 Features of Sampling Method
9.6 Limitations of Sampling
9.7 Characteristics of Ideal Sample
9.8 Types of Sample Design
Probability Sampling Techniques
Non-probability Sampling Techniques
Distinction between Probability and Non-probability Sample
9.9 Sampling Size Decision
9.10 Sample Size
9.11 Approaches to Determination of Sample Size
9.12 Types of Sampling Errors
Measurement of Errors
Biased and Unbiased Errors
9.13 Summary
9.15 Answers

9.1 Introduction
In the earlier units, you came to know about the research techniques and
scaling measurement of consumer. In this unit you will study about the
sampling concept.
In this unit you learn how sampling plays a vital role in carrying out any
marketing research study. There would be hardly any marketing research
study which does not involve the use of sampling. It is the backbone of
marketing research. A company selling a particular brand of toothpaste and
interested in knowing what proportion of households in Delhi use its brand
would involve the selection of samples of households. A market potential
study aiming at finding the numbers, distribution and socio-economic
characteristics of potential customers 'of a product would definetly involve
the selection of some kind of sample. A company interested in introducing a
new style of packaging for its product would be interested in knowing the
reactions of its customers a study of which would require the selection of
some type of sample.

Objectives
- Explain sampling
- Define various sampling terms
- Describe sampling process
- Analyze sample size
- Explain various type of errors

9.2 Census vs Sampling
Census refers to complete inclusion of all elements in the population. A
sample is a sub-group of the population.
When is a census appropriate?
- A census is appropriate if the size of population is small. For example, A
researcher may be interested in contacting firms in iron and steel or
petroleum products industry. These industries are limited in number, so
a census will be suitable.
- Sometimes, the researcher is interested in gathering information from
every individual.
Example: Quality of food served in a mess.
When is sample appropriate?
- When the size of population is large.
- When time and cost are the main considerations in research.
- If the population is homogeneous.
- Also, there are circumstances when a census is not possible. Example:
Reactions to global advertising by a company.
1. _________ refers to complete inclusion of all elements in the population.
2. Sample is appropriate when the size of population is _______________

9.3 Sampling Terms
The sampling terms are:
- Element
- Population
- Sampling units
- Sampling frame
- Study population
Element: An element is the unit about which information is collected. This
provides the basis for analysis according to a well defined procedure. It is
important that these should be well defined and it is possible to identify them
physically.
Population: Population or universe is the aggregate of all elements
possessing certain specified characteristics which the researcher wishes to
study and defined prior to the selection of sample. A properly designated
population must be defined in terms of elements, sampling units, extent and
time.
For example
A survey of consumers might specify the relevant population as:
- Element: Males 35-40
- Sampling Unit: Males 35-40
- Extent: Delhi
- Time: March 10-April 30, 1990
Sampling Units: A sampling unit is that element or elements considered
available for selection in some stage of the sampling process. In single
stage sampling, sampling units and the elements are same. For instance, in
our first example of specifying the population (see example above), both
sampling units and elements were "males 35-40". This is an example of
direct single stage sampling process as the sample of males 35-40 is
selected directly.
Sampling Frame: It is a list of all sampling units belonging to the population
to be studied with their proper identification and available for selection at a
stage of sampling process. In fact, the actual sample is drawn from the
sampling frame. Usually the availability of sampling frame defines the
population. Each stage of sampling process requires its own sampling
frame. For instance, in three stage sampling process, we would need three
sampling frames. These are (1) a list of tehsils (2) a list of villages under the
selected tehsils (3) a list of households within the selected villages.
Study Population: A study population is the aggregation of elements from
which the sample is actually drawn. You might recall that previously
population was defined as the aggregate of elements prior to the selection
of sample". Because of certain unavoidable problems, the actual sample is
selected from somewhat different population from the one defined prior to
the selection of sample. This is because it is very seldom that every element
which satisfies our definition of a population actually has a chance of being
selected. Our list may be incomplete as some elements are likely to be
omitted from a list of population because of certain reasons such as some
people may have unlisted phone numbers, a. map may not include a new
street, a list of registered voters may be incomplete.
3. A __________ is the aggregation of elements from which the sample is
actually drawn.
4. In single stage sampling _________ and the ___________ are same.

9.4 Sampling Process
Sampling process consists of seven steps. They are:
Step 1: Define the population
Population is defined in terms of:
- Elements
- Sampling units
- Extent
- Time.
Example: If we are monitoring the sale of a new product recently introduced
by a company, say (shampoo sachet) the population will be:
- Element Companys product
- Sampling unit Retail outlet, super market
- Extent Hyderabad and Secunderabad
- Time April 10 to May 10, 2006.


Figure 9.1: Sampling Process
Step 2: Identify the sampling frame
Sampling frame could be (a) Telephone Directory (b) Localities of a city
using the municipal corporation listing (c) Any other list consisting of all
sampling units.
Step 3: Specify the sampling unit
Individuals who are to be contacted are the sampling units. If retailers are to
be contacted in a locality, they are the sampling units.
Step 4: Selection of sampling method
This refers to whether (a) probability or (b) non-probability methods are
used.
Step 5: Determine the sample size
This means we need to decide how many elements of the target population
are to be chosen? The sample size depends upon the type of study that is
being conducted. For example, If it is an exploratory research, the sample
size will be generally small. The sample size also depends upon the
resources available with the company. It depends on the accuracy required
in the study and the permissible errors allowed.
Step 6: Specify the sampling plan
A sampling plan should clearly specify the target population. Improper
defining would lead to wrong data collection.
Example: This means that, if a survey of a household is to be conducted, a
sampling plan should define a household i.e., Does the household consist
of husband or wife or both, minors etc., Who should be included or
excluded.
Step 7: Select the sample
This is the final step in the sampling process. Based on the above
parameters sample respondents may be selected to collect the data for the
purpose of research.
Activity 1:
One mobile phone user is asked to recruit another mobile phone
user. What sampling method is this known as and why?
5. A ____________ is the element considered available for selection in
some stage of the sampling process.
6. ___________ and ____________ methods are two sampling methods.
7. The final step in the sampling process is ____________

9.5 Features of Sampling Method
The sampling technique has following good features and these highlight its
value and significance.
- Economy: The sampling technique is less expensive, much less time-
consuming than the census technique.
- Reliability: If the choice of sample units is made with due care and the
matter under survey is not heterogeneous, the conclusion of the sample
survey can have almost the same reliability as that of census survey.
- Detailed Study: Since the number of sample units is fairly small these
can be studied intensively and elaborately and can be examined from
multiple viewpoints.
- Scientific Base: This is a scientific technique because the conclusions
derived from the study of certain units can be verified from other units.
By taking random samples we can determine the amount of deviation
from the norm.
- Greater Suitability in most Situations: Most of the surveys are made
by the technique of sample survey, because when the matter is of a
homogeneous nature, the examination of a few units suffices as is the
case in the majority of situations.
8. The sampling technique is ___________ expensive, much _________
time-consuming than the census technique
9. Most of the surveys are made by the technique of ____________

9.6 Limitations of Sampling
The limitations of sampling are:
- Less Accuracy: In comparison to census technique the conclusions
derived from sample are more liable to error. Therefore, sampling
technique is less accurate than the census technique.
- Changeability of Units: If the units in the field of survey are liable to
change or if these are not homogeneous, the sampling technique will be
very hazardous. It is not scientific to extend the conclusions derived from
one set of sample to other sets which are dissimilar or are changeable.
- Misleading Conclusions: If due care is not taken in the selection of
samples or if they are arbitrarily selected, the conclusions derived from
them will become misleading if extended to all units. For example, in
assessing the monthly expenditure of university students we select for
sample study only rich students, our results will be highly erroneous if
extended to all students.
- Need for Specialised Knowledge: The sample technique can be
successful only if a competent and able scientist makes the selection. If
this is done by an average scientist, the selection is liable to be wrong.
- When Sampling is not Possible: Under certain circumstances it is very
difficult to use the sampling technique. If the time is very short and it is
not possible to make selection of the sample, the technique cannot be
used. Besides, if we need 100% accuracy the sampling technique
cannot be used. It can also not be used if the material is of a
heterogeneous nature.
10. In comparison to census technique the conclusions derived from sample
are __________ liable to error.
11. If the units in the field of survey are liable to change or if these are
__________, the sampling technique will be very hazardous.

9.7 Characteristics of Ideal Sample
A good sample has following qualities:
- Representativeness: An ideal sample must be such that it represents
adequately the whole populations. We would select those units which
have the same set of qualities and features as are found in the whole
data. It should not lack in any characteristic of the population.
- Independence: The second feature of a sample is independence, that
is interchangeability of units. Every unit should be available to be
included in the sample.
- Adequacy: The number of units included in a sample should be
sufficient to enable derivation of conclusions applicable to the whole
population. A sample having 10% of the whole population is generally
adequate.
- Homogeneity: The units included in the sample must bear likeness with
order units, otherwise the sample will be unscientific.
12. An ideal sample must be such that it represents adequately the
_________.
13. The number of units included in a sample should be sufficient to enable
__________ applicable to the whole population.

9.8 Types of Sample Design
Sampling design may be classified into two types i.e., probability sampling
and non-probability sampling.
Probability sampling: In a probability sample, every unit in the population
has equal chances for being selected as a sample unit.
Non-probability sampling: In the non-probability sampling, the units in the
population have unequal or negligible, almost no chances for being selected
as a sample unit.
9.8.1 Probability sampling techniques
1. Random sampling
2. Systematic sampling
3. Stratified random sampling
4. Cluster sampling
5. Multistage sampling
6. Area sampling
Random sampling
Simple random sample is a process in which every item of the population
has an equal probability of being chosen.
There are two methods used in the random sampling:
1. Lottery method
2. Using random number table.
1. Lottery method: Take a population containing four departmental stores:
A, B, C and D. Suppose we need to pick a sample of two stores from the
population using a simple random procedure. We write down all possible
samples of two. Six different combinations, each containing two stores
from the population, are AB, AD, AC, BC, BD, CD. We can now write
down six sample combination on six identical pieces of paper, fold the
piece of paper so that they cannot be distinguished. Put them in a box.
Mix them and pull one at random. This procedure is the lottery method
of making a random selection.
2. Using random number Table: A random number table consists of a
group of digits that are arranged in random order, i.e., any row, column,
or diagonal in such a table contains digits that are not in any systematic
order. There are three tables for random numbers (a) Tippets table (b)
Fisher and Yates Table (c) Kendall and Raington Table.
The table for random number is as follows:
40743 39672
80833 18496
10743 39431
88103 23016
53946 43761
31230 41212
24323 18054
Systematic random sampling
There are three steps:
1. Sampling interval K is determined by the following formula:
K =
population the in units of . No
population the in units of . No

2. One unit between the first and Kth unit in the population list is randomly
chosen.
3. Add Kth unit to the randomly chosen number.
Example: Consider 1,000 households from which we want to select 50
units.
Calculate K = 20
50
1000
=
To select the first unit, we randomly pick one number between 1 to 20, say
17. So our sample begins with 17, 37, 57.. Please note that only
the first item was randomly selected. The rest are systematically selected.
This is a very popular method because we need only one random number.
Stratified random sampling
A probability sampling procedure in which simple random sub-samples are
drawn from within different strata, that are, more or less equal on some
characteristics. Stratified sampling are of two types:
1. Proportionate stratified sampling: The number of sampling units
drawn from each stratum is in proportion to the population size of that
stratum.
2. Disproportionate stratified sampling: The number of sampling units
drawn from each stratum is based on the analytical consideration, but
not in proportion to the size of the population of that stratum.
Sampling process is as follows:
1. The population to be sampled is divided into groups (stratified).
2. A simple random sample is chosen.
Cluster sampling
The following steps are followed.
1. The population is divided into clusters.
2. A simple random sample of few clusters is selected.
3. All the units in the selected cluster are studied.
Step 1: The above mentioned cluster sampling is similar to the first step of
stratified random sampling. But the two sampling methods are different. The
key to cluster sampling is decided by how homogeneous or heterogeneous
the clusters are.
A major advantage of simple cluster sampling is the case of sample
selection. Suppose, we have a population of 20,000 units from which we
wish to select 500 units. Choosing a sample of that size is a very time-
consuming process, if we use Random Numbers table. Suppose, the entire
population is divided into 80 clusters of 250 units each, we can choose two
sample clusters (2 250 = 500) easily by using cluster sampling. The most
difficult job is to form clusters. In marketing, the researcher forms clusters so
that he can deal with each cluster differently.
Multistage sampling
The name implies that sampling is done in several stages. This is used with
stratified/cluster designs.
An illustration of double sampling is as follows.
The management of a newly-opened club is solicits new membership.
During the first rounds, all corporates were sent details so that those who
are interested may enroll.
Advantage: May reduce cost, if first stage results are enough to stratify or
cluster.
Disadvantage: Costs increase as more and more stages are included.
Area sampling
This is another type of cluster sampling. In this method clusters are formed
on the basis of geographical location.
Suppose a researcher wishes to measure certain characteristics of
salesman working in a certain industry. Assume that the attributes required
to be measured is job satisfaction or earnings or pride, etc. The researcher
could prepare a list of salesman working for various selected firms. If the
researcher studied each of the salesman in each of the firm selected, with
respect to the above characteristics he is carrying out would amount to one
stage sampling. If on the other hand the researcher sub sampled the
salesman from each of the firm listed, it would be 2 stage sampling. Area
sampling is very similar to this.
There are two types of area sampling (i) one stage area sampling, and
(ii) two stage area sampling.
One stage area sampling: One stage area sampling involves the following
procedure:
- Segmenting the total area (state or country) into sub areas.
- Select sub areas randomly.
- Study all the units in the sub area which has been selected. For
example, retailers or agents or households in a particular sub area
selected.
Advantages
- Easy to understand.
- There is no need to segment the population.
Disadvantages
Final sample may not be representative of the population. This is because,
characteristics of the units within a given sub area will be similar to one
another.
Two stage area sampling: Two stage area sampling is done as follows. As
the name itself indicates, the entire sampling is done in two stages of
random sampling. First stage involves selection of sub areas randomly.
Second stage involves further division of sub areas and selecting sampling
units from the sub divided areas. Sample chosen by this method will be
representative of the population. Therefore, statistically it will be more
accurate.
The disadvantage of this method is that, it is time consuming and expensive.
Advantages of probability sampling
- It is unbiased.
- Quantification is possible in probability sampling.
- Less knowledge of universe is sufficient.
Disadvantages of probability sampling
- It takes time.
- It is costly.
- More resources are required to design and execute than in non-
probability design.
In marketing research, non-probability sample is used due to time and
budget constraints.
9.8.2 Non-probability sampling techniques
1. Deliberate sampling
2. Shopping mall intercept sampling
3. Sequential sampling
4. Quota sampling
5. Snowball sampling
6. Panel samples
Deliberate or purposive sampling
This is also known as the judgment sampling. The investigator uses his
discretion in selecting sample observations from the universe. As a result,
there is an element of bias in the selection. The units in the universe do not
enjoy an equal chance of getting included in the sample. Therefore, it
cannot be considered a probability sampling.
Shopping mall intercept sampling
This is a non-probability sampling method. In this method the respondents
are recruited for individual interviews at fixed locations in shopping malls.
(Example: Shoppers Shoppe, Food World, Sunday to Monday). This type of
study would include several malls, each serving different socio-economic
population.
Merits
1. It has a relatively small universe.
2. In most cases, it is expected to give quick results. The purpose of
deliberate sampling has become a practical method in dealing with
economic or practical problems.
3. In studies, where the level of accuracy can vary from the prescribed
norms, this method can be used.
Demerits
1. Fundamentally, this is not considered a scientific approach, as it allows
for bias.
2. The investigator may start with a preconceived idea and draw samples
such that the units selected will be subjected to specific judgment of the
enumerator.
Sequential sampling
This is a method in which the sample is formed on the basis of a series of
successive decisions.
First a sample is selected, from the selected sample data collection and
analysis is done. Based on this, a decision is made whether further samples
are required or not. Sample size is not known in advance or beforehand in
this method. At each stage, a decision is taken, whether further samples are
required or not. This depends on the adequacy of information provided by
existing sample respondents.
Quota sampling
Quota sampling is quite frequently used in marketing research. It involves
the fixation of certain quotas, which are to be fulfilled by the interviewers.
Suppose, 2,00,000 students are appearing for a competitive examination.
We need to select 1% of them based on quota sampling. The classification
of quota may be as follows:
Example: Classification of Samples
Category Quota
General merit 1,000
Sport 600
NRI 100
SC/ST 300
TOTAL 2,000
Quota sampling involves the following steps:
1. The population is divided into segments on the basis of certain
characteristics. Here, the segments are termed as cells.
2. A quota of unit is selected from each cell.
Advantages
1. Quota sampling does not require prior knowledge about the cell to which
each population unit belongs. Therefore, this sampling has a distinct
advantage over stratified random sampling, where every population unit
must be placed in the appropriate stratum before the actual sample
selection.
2. It is simple to administer. Sampling can be done very quickly.
3. The necessity of the researcher going to various geographical locations
is avoided and thus cost is reduced.
Limitations
1. It may not be possible to get a representative sample within the quota
as the selection depends entirely on the mood and convenience of the
interviewer.
2. Since too much liberty is being allowed to the interviewer, the quality of
work suffers if they are not competent.
Snowball sampling
This is a non-probability sampling. In this method, the initial group of
respondents are selected randomly. Subsequent respondents are being
selected based on the opinion or referrals provided by the initial
respondents. Further referrals will lead to more referrals, thus leading to a
snowball sampling.
Example: College students bring in more students on the consumption of
Pepsi. The major advantage of snowball sampling is that it monitors the
desired characteristics in the population.
Panel samples
Panel samples are frequently used in marketing research. To give an
example, suppose that one is interested in knowing the change in the
consumption pattern of households. A sample of households are drawn.
9.8.3 Distinction between probability and non-probability sample
Probability sample
1. Here, each member of a universe has a known chance of being selected
and included in the sample.
2. Any personal bias is avoided. The researcher cannot exercise his
discretion in the selection of sample items.
Examples: Random Sample, cluster sample.
Non-probability sample
In this case, the likelihood of choosing a particular universe element is
unknown. The sample chosen in this method is based on aspects like
convenience, quota, etc.
Examples: Quota sampling, Judgment sampling.
14. In __________ sample, the likelihood of choosing a particular universe
element is unknown.
15. _________ Sampling is a probability sampling procedure in which
simple random sub-samples are drawn from within different strata.
16. Snowball Sampling is a ____________ sampling.

9.9 Sampling Size Decision
1. The first factor that must be considered in estimating sample size, is the
error permissible.
2. Greater the desired precision, larger will be the sample size.
3. Higher the confidence level in the estimate, the larger the sample must
be. There is a trade off between the degree of confidence and the
degree of precision with a sample of fixed size.
4. The greater the number of sub-groups of interest within the sample, the
greater its size must be.
5. Cost is a factor that determines the size of the sample.
6. The issue of response rate: The issue to be considered in deciding the
necessary sample size is the actual number of questionnaires, that must
be sent out. Calculation-wise, we may send questionnaires to the
required number of people, but we may not receive the response. For
example, we may like to obtain the family income level from a mail
survey, but the researcher may not receive response from everyone. If
the researcher feels the response rate is 40%, then he needs to
despatch that many extra questionnaires
Non-response error may be due to (1) failure to locate, (2) flat refusal.
The failure to locate: People move to new destinations. However, if the
sample frames used are of recent origin, this problem can be overcome.
Flat refusal: We do not know if those who did not respond hold different
views or opinions from those who responded.
This implies that those who dont respond should be motivated. It can be
done in any one of the following ways:
1. An advance letter informing the respondents that they will receive a
questionnaire and requesting their cooperation. This will generally
increase the rate of response.
2. Monetary incentive or gift given to respondents will yield a larger
response rate.
3. Proper follow up is necessary after the potential respondent received the
questionnaire.
Illustration: Determine the sample size if standard deviation of the
population is 3.9, population mean is 36 and sample mean is 33 and the
desired degree of precision is 99%.
Solution: Given o = 3.9, = 36, X = 33 and z = 1% (99% precision implies
1% level of significance)
i.e. z
o
= 2.576 (at 1% l.o.s) (Table value)
We know that sample size n can be obtained using the relation
n =
2
z
o
o | |
|
\ .
d
where d = X
n = 11 : 21 . 11
33 36
9 . 3 576 . 2
=

17. The first factor that must be considered in estimating sample size is the
___________
18. The greater the number of __________ within the sample, the greater its
size must be.

9.10 Sample Size
For proper study of the problem, it is necessary to have proper sampling. It
means that the sample should be of proper size. If the sample is either too
small or too big, it shall make the study difficult. What should be the size of
the sample, is a question which should be answered only after taking into
account the various factors of the research problem at hand. In this context,
Parten has laid down that:
An optimum sample in survey is one, which fulfills the requirements of
efficiency, representativeness, reliability and flexibility. The sample should
be small enough to avoid unnecessary expenses and large enough to avoid
intolerable sampling error.
19. What should be the size of the sample, is a question which should be
answered only after taking into account the various factors of the
___________ at hand.
20. An optimum sample in survey is one, which fulfills the requirements of
________,__________, ___________ and __________

9.11 Approaches to Determination of Sample Size
The following factors should be considered while deciding the sample size:
- The size of the universe: The large the size of the universe, the bigger
should be the sample size.
- The resources available: If the resources available are vast, a large
sample size could be taken. However, in most cases resources
constitute a big constraint on sample size.
- The degree of accuracy or precision desired: The greater the degree
of accuracy desired the larger should be the sample size. However, it
does not necessarily mean that bigger samples always ensure greater
accuracy.
- Homogeneity or heterogeneity of the universe: If the universe
consists of homogeneous units, a small sample may serve the purpose
but if the universe consists of heterogeneous units, a large sample may
be required.
- Nature of study: For an intensive and continuous study, a small sample
may be suitable. But for studies which are not likely to be repeated and
are quite extensive in nature, it may be necessary to take a large sample
size.
- Method of sampling adopted: The size of samples is also influenced
by the type of sampling plan adopted. For example, if the sample is a
simple random sample it may necessitate a bigger sample size.
However, in a properly drawn stratified sampling plan, even a small
sample may give better results.
The above factors have to be properly weighted before arriving at the
sample size. However, the selection of optimum sample size is not that
simple as it might seem to be.
21. The greater the degree of accuracy desired the ___________ should
be the sample size.
22. For an intensive and continuous study, a ____________ sample may
be suitable.

9.12 Types of Sampling Errors
Errors in statistics are classified in two categories:
1. Sampling Errors
2. Non-sampling Errors
Sampling errors
Sample always gives approximation to the parameter of universe. So, the
differences between the actual figure and the estimated figure is always
there. Generally sampling errors are due to the following reasons:
1. Improper selection of the sample leads to sampling error. This improper
selection may be due to the personal judgement, etc. i.e., non-
probability sampling techniques.
2. These errors may be there due to the variability of population and wrong
method of estimation. Usually this is in the case of hetrogeneous
population.
3. Faculty demarcation of statistical units.
Non-sampling errors
These kind of errors are present in both complete and sample enumeration.
These errors generally arise when data are not properly observed,
approximated and processed. The following factors give rise to the non-
sampling errors:
1. Incomplete questionnaire and defective method of interviewing.
2. Errors in compilation and tabulation gives rise to non-sampling errors.
Compilation errors include calculation mistakes.
3. Personal bias of the investigator.
4. If the various terms used are not properly defined then it also leads to
non-sampling errors.
9.12.1 Measurement of errors
Statistical errors can be measured
a. Absolutely or
b. Relatively
Absolute errors: Absolute error is the difference between true value and
the estimated value.
Example
Suppose that the actual figure of sales of a concern is 8,800 and the
approximated figure is 8,900. Then Absolute Error = 8900 8800 = 100
Relative errors: Relative error is the ratio of absolute error to the estimated
figure. Let
U actual value
U estimated value
U
e
Relative error
Then
e
U - U
U =
U

Let actual value = U = 10,100
Estimated value = U = 10,000
Then
Relative errors =
U-U 10,100-10000
= =0.01=1%
U 10000

9.12.2 Biased and unbiased errors
Statistical error can also be divided into the following categories:
1. Biased errors
2. Unbiased errors
Biased errors: When the errors are introduced due to the personal bias,
these are known as biased errors. These errors have a tendency to grow in
magnitude with the increase in number of observations.
Unbiased errors: These are the errors which do not accumulate with the
increase in the size of observations but rather have a tendency to get
neutralised. The main purpose of the statistical method is to avoid the
biased errors and devise methods in such a way that the errors, if any, are
only biased ones. One such devise is random selection over the bias
selection.
Activity 2:
List out some marketing research studies carried out in your
organisation or the organisation you know of where sample surveys
were conducted.

23. Errors in __________ and ____________ gives rise to non-sampling
errors.
24. Relative error is the ratio of _______________ to the ____________.

9.13 Summary
Sample is a representative of population. Census represents cent percent of
population. The most important factors distinguishing whether to choose
sample or census is cost and time. There are seven steps involved in
selecting the sample. There are 2 types of sample (a) Probability sampling
(b) Non probability sample. Probability sampling includes random sampling,
stratified random sampling systematic sampling, cluster sampling,
Multistage sampling. Random sampling can be chosen by Lottery method or
using random number table. Samples can be chosen either with equal
probability or varying probability. Random sampling can be systematic or
stratified. In systematic random sampling, only the first number is randomly
selected.
Glossary
Sampling: the process of selecting units (e.g., people, organizations) from a
population of interest so that by studying the sample we may fairly
generalize our results back to the population from which they were chosen.
Census: the procedure of systematically acquiring and recording
information about the members of a given population
Sampling Frame: the actual set of units from which a sample has been
drawn
Sample Size: the number of observations that constitute it

1. What do you mean by sampling units?
2. Distinguish between census and sampling.
3. Explain sampling process.
4. Describe the characteristics of an ideal sample.
5. Explain the approaches behind determination of sample size.

9.15 Answers
1. Census
2. large
3. population
4. sampling units, elements
5. sampling unit
6. Probability, non-probability
7. selecting the sample
8. less, less
9. sample survey
10. more
11. not homogeneous
12. whole population
13. derivation of conclusions
14. non-probability
15. Stratified Random
16. non-probability
17. error permissible
18. sub-groups of interest
19. research problem
20. efficiency, representativeness, reliability, flexibility
21. larger
22. small
23. compilation, tabulation
24. absolute error, estimated figure

1. Refer to 9.3 Discuss the definition with examples.
2. Refer to 9.2 Differentiate theoretically as well as with the help of
examples.
3. Refer to 9.4 Discuss the process.
4. Refer to 9.7 Try to illustrate through example
5. Refer to 9.11 Discuss the approaches in simple language.

Mini-case
ABC Milk Federation, a well-known public sector milk federation in India,
has commanding a leadership position in the market for the last three and
half decades. ABCMF has 500 milk processing units. The total turnover of
the company is over Rs. 20,000 crores. ABCMF staff head count is 26,000.
The product portfolio of the company is milk and its by-products. For
example, milk is a basic products of the company and ghee, butter, curd,
milkshake, doodhpedha, paneer, sweets, milk drinks, ice creams and
chocolates etc., are the by-products.
ABCMFS supply chain is very strong. It has about 1.5 lakh trucks to procure
milk from every nook and corner of India and supply packaged milk to all
parts of the country. Since ABCMF is a public sector under taking, its social
responsibility is greater than any private organisation. This social
responsibility forced the company to procure all the milk supplied by the
farmers, though there is no requirement. Eventually, the company was
caught in the mismatch of demand and supply. Supply of milk was more
than the demand in the market.
As explained in the first paragraph, the company started producing various
by-products with the excess milk which remained after supply of packaged
milk to the customer. Even after producing by-products, barrels of milk
remained the excess. Milk is a perishable product, and it can not be stored
for more than two weeks with the available technology. So, the best
alternative for the company was to convert the milk into milk powder. By
producing and selling the milk powder, the company incurred Rs 1.00/loss
per liter. Profits made by the company in milk and other dairy products was
being eaten away in milk powder. Year ending, ABCMF made no profit. This
has been a major problem of the company for the last one decade. The
above problem drove the company to mounting losses.
Keeping in mind the companys responsibility towards the farmers and
inevitability to purchase milk supplied by the farmers, answer the following
issues.
Question
If you conduct a study, who are the sample respondents for data collection?
Hint: Base your answer on the sample selection procedures.
Unit 10 Data Processing and Analysis
Structure
10.1 Introduction
Objectives
10.2 Steps in Data Processing
10.3 Measure of Central Tendency
10.4 Measures of Dispersion
10.5 Bivariate Analysis
10.6 Multivariate Analysis
10.7 Summary
10.9 Answers

10.1 Introduction
In the earlier units, you came to know about the sampling process in
research. In this unit, you will study about the data processing and analysis
criteria.
In this unit you learn processing of data is very important in market
research. After collecting the data, the next task of the researcher is to
analyse and interpret the data. The purpose of analysis is to draw
conclusions. There are two parts in processing the data:
Data analysis
Interpretation of data
You also learn analysis of the data involves organising the data in a
particular manner. Interpretation of data is a method for deriving conclusions
from the data analysed. Analysis of data is not complete, unless it is
interpreted.
Objectives
Explain various steps involved in data processing
Discuss the measures of central tendency
Describe dispersion measurement
Explain bivariate and multivariate analysis

10.2 Steps in Data Processing
Step 1: Preparing raw data
Step 2: Editing
Step 3: Coding
Step 4: Data Entry
Step 5: Tabulation.
Step 1: Preparing raw data
Data collection is a significant part of market research. Even more
significant is to filter out the relevant data from the mass of data collected.
Data continues to be in raw form, unless they are processed and analysed.
The data lying in a crude form are not ready for analysis. Keeping this in
mind, the researcher must take some measures to organise the data so that
it can be analysed.
The various steps which are required to be taken for this purpose are (a)
editing (b) coding and (c) tabulating.
Step 2: Editing
The main purpose of editing is to eliminate errors and confusion. Editing
involves inspection and correction of each questionnaire. Editing thus
means the activity of inspecting, correcting and modifying the correct data.
This can be done in two stages (a) Field editing (b) Office editing.
a) Field Editing: Objectives of field editing are to make sure that proper
procedure is followed in selecting the respondent, interview them and
record their responses. In field editing, speed is the main criteria, since
editing should be done when the study is still under progress. The main
problems faced in field editing are:
1. Inappropriate respondents
2. Incomplete interviews
3. Improper understanding
4. Lack of consistency
5. Legibility
6. Fictitious interview
b) Office Editing: Office editing is more thorough than field editing. The job
of an office editor is more difficult than that of the field editor. In case of
a mail questionnaire there are no other methods of cross-verification,
except to conduct office audit. Examples as below illustrate the kind of
problems faced by office editors. Problems of consistency, rapport with
respondents, etc., are some of the issues which get highlighted during
office editing.
Step 3: Coding
Coding refers to those activities which helps in transforming edited
questionnaires into a form that is ready for analysis. Coding involves
assigning numbers or other symbols to answers so that the responses can
be grouped into limited number of classes or categories.
Examples: 1 is used for male and 2 for female.
Step 4: Data entry
Data entry can be defined as direct input of data in the appropriate data
fields of a database, through the use of a human data-input device such as
a keyboard, mouse, stylus, or touch screen, or through speech recognition
software. It is very important that the data entry personnel take meticulous
approach while entering the data.
Cost of quality: Errors in data cause a variety of problems and raise the
costs in several areas. The cost to recognize and detect errors is not trivial.
Further costs are incurred to correct the data errors. The largest cost
components are the hidden costs that affect other departments.
Error detection: Detecting data errors in programs often takes as much, or
more, of the analysis and programming efforts than the main logic. The
earlier an error is detected, the cheaper it is to correct it. Fifty years ago it
was common to key verify punch cards. This technique is still one of the
best methods for detecting errors. Re-key verifying selected data items,
combined with programs that look for invalid data, can detect most data
errors.
Error correction: Correcting errors programmatically is the cheapest way.
Doing it with a single keystroke when the data is initially keyed is the
cheapest manual method. Conversely, it costs hundreds, or thousands, of
times more to create update transactions to fix errors that remain
undetected until later in the process.
Hidden costs: The hidden cost of errors is much higher. For example,
customer service problems increase proportionately to the number of
mistakes that result in billing errors or shipping the wrong product, or
potential costs of litigation resulting from bad data.
There are many reasons for errors in the entry. But the main of the errors
are missing characters, extraneous characters and key entry speed.
Step 5: Tabulation
This is the final step in data processing. The final product i.e. the data is
tabulated and arranged in a systematic format so that it can be further
analyzed.
Example:
A class has 10 students. Tabulate the data according to their heights and
ages.
Ram: Height 5 ft 2 inches; Age 18 years
Manoj: Height 5 ft 6 inches; Age 18 years 3 months
Mukesh: Height 5 ft 9 inches; Age 19 years
Preet: Height 5 ft 2 inches; Age 18 years 6 months
Ajay: Height 5 ft 4 inches; Age 18 years 6 months
Akhilesh: Height 6 ft; Age 18 years 3 months
Raman: Height 6 ft 1 inch; Age 19 years 3 months
Rajdev: Height 5 ft 3inches; Age 18 years 9months
Dilshan: Height 5 ft 5 inches; Age 18 years 3 months
Abhimanyu: Height 5 ft 8 inches; Age 18 years 6 months
S.No. Name of the Student Height (ft. inches) Age (years)
1. Ram 5.2 18.00
2. Manoj 5.6 18.25
3. Mukesh 5.9 19.00
4. Preet 5.2 18.2
5. Ajay 5.4 18.2
6. Akhilesh 6.0 18.25
7. Raman 6.1 19.25
8. Rajdev 5.3 18.75
9. Dilshan 5.5 18.25
10. Abhimanyu 5.8 18.5
1. Data entry can be defined as direct input of data in the appropriate data
fields of a _________.
2. Data editing can be done in two stages namely _________ editing and
_________ editing.

10.3 Measure of Central Tendency
In marketing research, central value or tendency plays a very important role.
The researcher may be interested in the average sales/shop, average
consumption per month etc.
The three most common ways to measure centrality or central tendency are
the mode, median and mean.
Mode
The mode is the central value or item that occurs most often, when data is
categorized in a frequency distribution, it is very easy to identify the mode,
since the category in which the mode lies has the greatest number of
observations.
Median
Median lies precisely halfway between the highest and lowest values. It is
necessary to arrange the data into ascending or descending order before
selecting the median value. For the ungrouped data with an odd number of
observations, the median would be the middle value. For an even number of
observations, the median value is half way between central value.
Mean
In a grouped data, the midpoint of each category would be multiplied by the
number of observation in that category.
3. The three most common ways to measure centrality or central tendency
are the _________, _________ and _________.
4. Median lies precisely _________ between the highest and lowest
values.
5. The mode is the central value or item that occurs _________.

10.4 Measures of Dispersion
Dispersion, also called statistical variability or variation, is variability or
spread in a variable or a probability distribution. A measure of statistical
dispersion is a real number that is zero if all the data are identical, and
increases as the data becomes more diverse. It cannot be less than zero.
Most measures of dispersion have the same scale as the quantity being
measured. In other words, if the measurements have units, such as metres
or seconds, the measure of dispersion has the same units. Such measures
of dispersion include Standard deviation; Interquartile range, Range, Mean
deviation. A measure of dispersion indicates the degrees of the
scatteredness of the observations.

Figure 10.1
Let us understand dispersion through figure 10.1. If curves A and B
represent two frequency distributions, the point to be noticed is that A and B
have the same mean. But curve A has less variability than B.
If we measure only the mean of these two distributions, we will miss an
important difference between A and B. To increase our understanding of the
pattern of the data, we must also measure its dispersion.
Range: the range is the length of the smallest interval which contains all the
data. It is calculated by subtracting the smallest observation from the
greatest and provides an indication of statistical dispersion. Range is the
crudest measure of dispersion.
Mean Deviation (MD): The mean deviation of a statistical data is defined as
the arithmetic mean of the numerical values of the deviations of items from
some average value. Mean deviation is also known as average deviation.
The mean deviation is generally denoted by M.D..
Variance: The variance of a random variable is a measure of its statistical
dispersion, indicating how far from the expected value its values typically
are. Variance measures the variability (volatility) from an average. Volatility
is a measure of risk, so this statistic can help determine the risk an investor
might take on when purchasing a specific security.
Standard deviation: Standard deviation of a statistical population, a data
set, or a probability distribution is the positive square root of the variance.
Standard deviation is a widely used measure of the variability or dispersion,
being algebraically more tractable though practically less robust than the
expected deviation or average absolute deviation.
Coefficient of Variation (CV): It is a relative measure of dispersion that
enables us to compare two distributions. It relates the standard deviation
and the mean by expressing the standard deviation as a percentage of the
mean.
Activity 1:
A marketing research organization is conducting a survey to
determine the consumption pattern of food items by households in
Delhi. You are the head of computer division responsible for editing
the raw data from the questionnaires and analyzing the same. A
filled up set of questionnaires have been sent to you. List out the
points on which you would like to concentrate while editing the raw
data.

6. ____ is the difference between the highest and lowest observed values.
7. _________ equals the standard deviation as a percentage of the mean.
8. Standard deviation is the _________ of the variance.

10.5 Bivariate Analysis
Sometimes, the marketers will come across situations, which are complex
involving two or more variables. Hence, bi-variate analysis deals with this
type of situation.
Example: Chi-Square is an example of bi-variate analysis.
Chi-square test
The chi-square (I) test is used to determine whether there is a significant
difference between the expected frequencies and the observed frequencies
in one or more categories.
It tests a null hypothesis stating that the frequency distribution of certain
events observed in a sample is consistent with a particular theoretical
distribution. The events considered must be mutually exclusive and have
total probability 1.
Pearson's chi-square is used to assess two types of comparison: tests of
goodness of fit and tests of independence. A test of goodness of fit
establishes whether or not an observed frequency distribution differs from a
theoretical distribution. A test of independence assesses whether paired
observations on two variables, expressed in a contingency table, are
independent of each other for example, whether people from different
regions differ in the frequency with which they report that they support a
political candidate.
Activity 2:
Distinguish between descriptive and inferential analysis of data.

9. A _________ is any statistical hypothesis test in which the sampling
distribution of the test statistic is a chi-square distribution when the null
hypothesis is true.
10. A _________ is a hypothesis that might be falsified using a test of
observed data.

10.6 Multivariate Analysis
In multi-variate analysis, the number of variables to be tackled are many.
Example: The demand for television sets may depend not only on price, but
also on the income of households, advertising expenditure incurred by TV
manufacturer and other similar factors. To solve this type of problem,
multivariate analysis is required.
This can be studied under:
1. Discriminant analysis
2. Factor analysis
3. Cluster analysis
4. Conjoint analysis
5. Multidimensional scaling.
Discriminant analysis
In this analysis, two or more groups are compared. In the final analysis, we
need to find out whether the groups differ one from another.
Example: Where discriminant analysis is used
1. Those who buy our brand and those who buy competitors brand.
2. Good salesman, poor salesman, medium salesman
If we are interested in segmenting the market using income and education,
we would be interested in the total effect of two variables in combinations,
and not their effects separately. Further, we would be interested in
determining which of the variables are more important or had a greater
impact. To summarize, we can say, that Discriminant Analysis can be used
when we want to consider the variables simultaneously to take into account
their interrelationship.
Like regression, the value of dependent variable is calculated by using the
data of independent variable.
Z = b
1
x
1
+ b
2
x
2
+ b
3
x
3
+ ..............
Z = Discriminant score
b
1
= Discriminant weight for variable
x = Independent variable
Application: A company manufacturing FMCG products introduces a sales
contest among its marketing executives to find out How many distributors
can be roped in to handle the companys product. Assume that this contest
runs for three months. Each marketing executive is given target regarding
number of new distributors and sales they can generate during the period.
This target is fixed and based on the past sales achieved by them about
which, the data is available in the company. It is also announced that
marketing executives who add 15 or more distributors will be given a Maruti
omni-van as prize. Those who generate between 5 and 10 distributors will
be given a two-wheeler as the prize. Those who generate less than
5 distributors will get nothing. Now assume that 5 marketing executives won
a Maruti van and 4 won a two-wheeler.
The company now wants to find out, Which activities of the marketing
executive made the difference in terms of winning a prize and not winning
the prize. One can proceed in a number of ways. The company could
compare those who won the Maruti van against the others. Alternatively, the
company might compare those who won, one of the two prizes against
those who won nothing. It might compare each group against each of the
other two.
Discriminant analysis will highlight the difference in activities performed by
each group members to get the prize. The activity might include:
1. More number of calls made to the distributors.
2. More personal visits to the distributors with advance appointments.
3. Use of better convincing skills.
Factor analysis
The main purpose of Factor Analysis is to group large set of variable factors
into fewer factors. Each factor will account for one or more component.
Each factor a combination of many variables. There are two most commonly
employed factor analysis procedures. They are:
1. Principle component analysis
2. Common factor analysis.
When the objective is to summarise information from a large set of variables
into fewer factors, principle component factor analysis is used. On the other
hand, if the researcher wants to analyse the components of the main factor,
common factor analysis is used.
Example: Common factor Inconvenience inside a car. The components
may be:
1. Leg room.
2. Seat arrangement.
3. Entering the rare seat.
4. Inadequate dickey space.
5. Door locking mechanism.
Principle component factor analysis
Purposes: Customer feedback about a two-wheeler manufactured by a
company.
Method: The M.R manager prepares a questionnaire to study the customer
feedback. The researcher has identified six variables or factors for this
purpose. They are as follows:
1. Fuel efficiency (A)
2. Durability (Life) (B)
3. Comfort (C)
4. Spare parts availability (D)
5. Breakdown frequency (E)
6. Price (F)
The questionnaire may be administered to 5,000 respondents. The opinion
of the customer is gathered. Let us allot points 1 to 10 for the variables
factors A to F. 1 is the lowest and 10 is the highest. Let us assume that
application of factor analysis has led to grouping the variables as follows:
A, B, D, E into factor-1
F into Factor -2
C into Factor - 3
Factor - 1 can be termed as Technical factor;
Factor - 2 can be termed as Price factor;
Factor - 3 can be termed as Personal factor.
For future analysis, while conducting a study to obtain customers opinion,
three factors mentioned above would be sufficient. One basic purpose of
using factor analysis is to reduce the number of independent variables in the
study. By having too many independent variables, the M.R study will suffer
from following disadvantages:
1. Time for data collection is very high due to several independent
variables.
2. Expenditure increases due to the time factor.
3. Computation time is more, resulting in delay.
4. There may be redundant independent variables.
Cluster analysis
Cluster Analysis is used:
1. To classify persons or objects into small number of clusters or group.
2. To identify specific customer segment for the companys brand.

Cluster analysis is applicable when:
An FMCG company wants to map the profile of its target audience in
terms of lifestyle, attitude and perceptions.
A consumer durable company wants to know the features and services
a consumer takes into account, when purchasing through catalogues.
A housing finance corporation wants to identify and cluster the basic
characteristics, lifestyles and mindset of persons who would be availing
housing loans. Clustering can be done based on parameters such as
interest rates, documentation, processing fee, number of installments
etc.
Process
There are two ways in which Cluster Analysis can be carried out:
1. First, objects/respondents are segmented into a pre-decided number of
clusters. In this case, a method called non-hierarchical method can be
used, which partitions data into the specified number of clusters
2. The second method is called the hierarchical method.
The above two are basic approaches used in cluster analysis. This can be
used to segment customer groups for a brand or product category, or to
segment retail stores into similar groups based on selected variables.
Ideally, the variables should be measured on an interval or ratio scale. This
is because the clustering techniques use the distance measure to find the
closest objects to group into a cluster. An example of its use can be
clustering of towns similar to each other which will help decide where to
locate new retail stores.
Example: In cluster analysis, the following five steps to be used:
1. Selection of the sample to be clustered (buyers, products, employees).
2. Definition on which the measurement to be made (E.g.: product
attributes, buyer characteristics, employees qualification).
3. Computing the similarities among the entities.
4. Arrange the cluster in a hierarchy.
5. Cluster comparison and validation.
Cluster analysis on three dimensions
The example below shows Cluster Analysis based on three dimensions age,
income and family size. Cluster Analysis is used to segment the car-buying
population in a Metro. For example A might represent potential buyers of
low end cars. For example, Maruti 800 (for common man). These are
people who are graduating from the two-wheeler market segment. Cluster
B may represent mid-population segment buying Zen, Santro, Alto etc.
Cluster C represents car buyers, who belong to upper strata of society.
Buyers of Lancer, Honda city etc. Cluster D represents the super-rich
cluster, i.e. Buyers of Benz, BMW etc.

Figure 10.1: Matching Measure
Example: Suppose there are five attributes, 1 to 5, on which we are judging
two objects A and B. The existence of an attribute may be indicated by 1
and its absence by 0. In this way, two objects are viewed as similar if they
share common attributes.
Attribute 1 2 3 4 5 6 7
Brand A 1 0 0 1 0 0 1
Brand B 0 0 1 1 1 0 0
One measure of simple matching S is given by:
a d
S
a b c d

Where, a = No. of attributes possessed by brands A and B
b = No. of attributes possessed by brand A but not by brand B
c = No. of attributes possessed by brand B but not by brand A
d = No. of attributes not possessed by both brands.
Substituting, we get
1 2 3
0.43
1 2 2 2 7
S

A and Bs association is to be the extent of 43%.
It is now clear that object A possess attributes 1, 4, and 7 while object B
possess the attributes 3, 4 and 5. A glance at the above table will indicate
that objects A and B are similar in respect of 2 (0 & 0), 6 (0 & 0) and 4 (1 &
1). In respect of other attributes, there is no similarity between A and B. Now
we can arrive at a simple matching measure by (a) counting up the total
number of matches either 0, 0 or 1, (b) dividing this number by the total
number of attributes.
Symbolically,
SAB = M/N
SAB = Similarity between A and B
M = Number of attributes held in common (0 or 1)
N = Total number of attributes
SAB = 3/7 = 0.43
i.e., A & B are similar to the extent of 43%.
Conjoint analysis
Conjoint analysis is concerned with the measurement of the joint effect of
two or more attributes that are important from the customers point of view.
In a situation where the company would like to know the most desirable
attributes or their combination for a new product or service, the use of
conjoint analysis is most appropriate.
Example: A comparison between the utility of a price level of Rs. 400
versus Rs. 500, a delivery period of 1 week versus 2 weeks, or an after-
sales response of 24 hours versus 48 hours.
Once we know the utility levels for each attribute (and at individual levels as
well), we can combine these to find the best combination of attributes that
gives the customer the highest utility, the second best combination that
gives the second highest utility, and so on. This information is then used to
design a product or service offering.

Process
Design attributes for a product are first identified. For a shirt manufacturer,
these could be design such as designer shirts Vs plain shirts, this price of
Rs. 400 versus Rs. 800. The outlets can have exclusive distribution or mass
distribution. All possible combinations of these attribute levels are then listed
out. Each design combination will be ranked by customers and used as
input data for Conjoint Analysis. Then the utility of the products relative to
price can be measured.
The output is a part-worth or utility for each level of each attribute. For
example, the design may get a utility level of 5 and plain, 7.5. Similarly, the
exclusive distribution may have a part utility of 2, and mass distribution, 5.8.
We then put together the part utilities and come up with a total utility for any
product combination we want to offer, and compare that with the maximum
utility combination for this customer segment.
This process clarifies to the marketer about the product or service regarding
the attributes that they should focus on in the design.
If a retail store finds that the height of a shelf is an important attribute for
selling at a particular level, a well-designed shelf may result from this
knowledge. Similarly, a designer of clocks will benefit from knowing the
utility attached by customers to the dial size, background colours, and price
range of the clocks.
Approach
From a discussion with the client, identify the design attributes to be studied
and the levels at which they can be offered. Then build a list of product
concepts on offer. These product concepts are then ranked by customers.
Once this data is available, use Conjoint Analysis to derive the part utilities
of each attribute level. This is then used to predict the best product design
for the given customer segment. Use the SPSS Conjoint procedure to
analyse the data.
There are three steps in conjoint analysis:
(a) Identification of relevant products or service attributes.
(b) Collection of data.
(c) Estimation of worth for the attribute chosen.
For attributes selection, the market researcher can conduct interview with
the customers directly.
Example of conjoint analysis for a Laptop:
For a laptop, consider 3 attributes:
Weight (3 Kg or 5 Kg)
Battery life (2 hours or 4 hours)
Brand name (Lenovo or Dell)
Task: Rank order the following combination of these characteristics:
1 = Most preferred, 8 = Least preferred
Combination Rank
3 Kg, 2 hours, Lenovo 4
5 Kg, 4 hours, Dell 5
One combination 3 kg, 4 hours, Dell clearly dominates and 5 kg, 2 hours,
Lenovo is least preferred.
Let us now take the average rank for 3 kg option = (4 + 3 + 2 + 1)/4 = 2.5
For 5 kg option average rank is (5 + 8 + 7 + 6)/4 = 6.5
For 4 hour option (5 + 3 + 7 + 1)/4 = 4
For 2 hour option (4 + 8 + 2 + 6)/4 = 5
For Dell (5 + 6 + 1 + 2)/4 = 3.5
For Lenovo 5.5
Looking at the difference in average ranks, the most important characteristic
to this respondent is weight = 4, followed by brand name = 2 and battery
life = 1.

Activity 3:
You have collected data on employees of a large organisation in a
metro. You analyse the data by the type of work, education level,
whether the employee belongs to an urban or rural area. The results
are as below. How would you interpret them?
Annual Employee Turnover*
Higher Education Lower Education
Salaried
monthly
Daily
wage
Salaried
monthly
Daily
wage
Rural 6 14 18 18
Urban 10 12 19 20
*Turnover per 1,000 employees

11. In multi-variate analysis, the number of variables to be tackled is
_________.
12. _________ analysis is concerned with the measurement of the joint
effect of two or more attributes that are important from the customers
point of view.
13. The main purpose of _________ is to group large set of variable
factors into fewer factors.

10.7 Summary
In this unit various aspects of data processing namely editing, coding,
classification and presentation of data through tables and graphs have been
discussed. Editing is of two type namely field editing and central editing.
Coding involves assigning of some symbols or numerals or both to the
answers of the questions in a questionnaire so that the responses can be
recorded in a limited number of classes or categories. This helps in analysis
of data. Designing of a coding scheme has been discussed with the help of
a sample questionnaire. Classification is the process of arranging data in
groups or classes on the basis of certain characteristics. It involves
condensation of data which facilitates comparison and helps in establishing
relationships between variables. Classification can be according to attributes
or numerical characteristics. The former may be divided into simple and
manifold classification. The later is achieved using either inclusive or
exclusive method of forming frequency distribution. The data may be
presented in the form of tables or graphs.
Glossary
Mean: Average of two or more numbers.
Median: The numeric value separating the higher half of a sample, a
population, or a probability distribution, from the lower half.
Data Processing: Conversion of data into a form that can be processed by
computer.
Null Hypothesis: A null hypothesis is a statistical hypothesis that is tested
for possible rejection under the assumption that it is true.
Cluster Analysis: The assignment of a set of observations into subsets so
that observations in the same cluster are similar in some sense.

1. Explain data processing.
2. Elucidate upon data editing.
3. Explain the following:
(a) Mode
(b) Median
(c) Mean
4. What is measure of dispersion?
5. Explain the following:
(a) Mean deviation
(b) Variance and Standard deviation
(c) Coefficient of variation

10.9 Answers
Answers to Self Asessment Questions
1. database
2. field, office
3. mode, median, mean
4. halfway
5. most often
6. Range
7. Coefficient of Variation
8. positive square root
9. chi-square test
10. null hypothesis
11. large
12. Conjoint
13. Factor Analysis
1. Refer to 10.2 Discuss definition and stages.
2. Refer to 10.2 Discuss editing and its types
3. Refer to 10.3 Discuss each with appropriate example.
4. Refer to 10.4 Discuss in short with examples.
5. Refer to 10.4 Discuss each with example.

Mini-case
This is a company having branches all over India. Their activity includes
market research service provision, advertising research, project consultancy
and recruitment. Among all the above services, the organisation offers a
two-week marketing research training programme to employees of various
companies. The highlight of this programme is to train those employees,
who will be conducting market research on their own. It was also meant for
those who use marketing research information in decision-making.
The first week of the programme is spent in explaining to the participant, a
feel of the nature and potential utility of market research. Topics for
discussion would include: (a) Role of research (b) Different applications
(c) How it helps decision-making (d) What M.R can accomplish and what it
cannot (e) How effective is overall organizational decision. All the above
discussions are done through quoting live examples from real life situation.
During the second week, participants are asked to discuss role that M.R can
play in different situations. Participants are told that they should focus on the
following four issues:
1. Can market research be helpful to solve the problem?
2. If the answer is yes, in what ways and situations will it help?
3. What type of marketing research activities are likely to be beneficial in
generating information which is relevant to given situation?
4. If the answer is no explain what are the limitations or impediments
which are likely to prevent marketing research from being useful?
The following examples were used by Angel Market Research Agency
during their training programme.
Situation 1: Auto component manufacturer
An auto component manufacturer has a very large customer base. The firm
has developed a new spark plug as one of its components. This newly-
designed component (spark plug) is expected to greatly increase the
reliability when installed in a car. However, the improved version of the
component will cost about 40% more than the present component being
sold.
Situation 2: XYZ Insurance firm
A major life insurance company is becoming increasingly concerned about
the increasing lapse rate in life insurance policies it has sold to its
customers. Lapse rate means the percentage of policy holders who drop out
after some period of time. For example: If 20,000 policies are sold and 1,000
of them dropout within a year, the lapse rate is 5%. During the last five
years, XYZ firms lapse rate is 10%. During first year of its marketing, its
policies with its lapse rate increasing to 18% during last year.
Question
Address the issues that participants in the programme are asked to discuss.
Answer the four questions discussed during the training programme with
respect to the two situations.
Hint: Answer the question assuming you are one of the participant in
Angels two week market research training programme.
Unit 11 Hypothesis Testing
Structure
11.1 Introduction
Objectives
11.2 Types of Hypothesis
11.3 Steps involved in Hypothesis
11.4 Tests of Significance
11.5 Sources of Hypothesis
11.6 Errors in Hypothesis Testing
11.7 Students T-Distribution
11.8 Kruskal-Wallis Test
11.9 Kolmogorov-Simmov Test
11.10 Summary
11.12 Answers
11.1 Introduction
In the earlier units, you came to know about the sampling and data
processing. In this unit, you will study about the hypothesis testing.
In this unit, you learn hypothesis is a tentative proposition relating to certain
phenomenon, which the researcher wants to verify when required.
We may say that, while a hypothesis is useful, it is not always necessary.
Many a time, the researcher is interested in collecting and analysing the
data indicating the main characteristics without a hypothesis. You also know
how, a hypothesis may be rejected but can never be accepted except
tentatively. Further evidence may prove it wrong. It is wrong to conclude that
since hypothesis was not rejected it can be accepted as valid.
This unit on hypothesis testing will help you get familiar with the concept of
test of significance and students t-distribution.
Objectives
Describe various steps involved in hypothesis testing
Explain errors in hypothesis testing
Define test of significance
Describe students T-distribution
11.2 Types of Hypothesis
There are several basis on which hypothesis are classified:
a. Descriptive Hypothesis
b. Relation Hypothesis
Descriptive hypothesis
These by name implies describing some characteristics of an object, a
situation, an individual or even an organization.
Example:
1. Students from autonomous institutions are placed faster than other
institutions.
2. Research and practice of educations system in our country is not
integrated.
3. Why youngster prefer X soft drinks?
4. Decentralization of decision making is more effective.
The above tells us the characteristics of some entity.
Relational hypothesis
In this case we describe relationship between two variables:
1. Why rich people shop at life style?
2. Rate of attrition is high in those Jobs where there is night shift working
3. More cohesive is the group, better is the output
Working hypothesis: This is a hypothesis framed in the early stages of
research. These are altered or modified as investigation proceeds.
Example: As of now demand and quality are related. Later on this may
not be the fact as investigation proceeds.
4. Null hypothesis: This hypothesis states that there is no difference
between the parameter and the statistic that is being compared.
Example: There is no relationship between marks obtained in the
examination and the success of the same student in the corporate world.
Null hypothesis are framed for testing statistical significance. Null
hypothesis is very exact.
5. Analytical hypothesis: Here relationship of analytical variable is found.
These are used when one would like to specify the relationship between
changes in one property leading to change in another.
Example: Income level related to number of children in the family or
literacy related to number of children in the family.
6. Statistical hypothesis: These are got from samples that are
measurable. Statistical hypothesis are of two types:
(a) Hypothesis which indicates differences
Example: There is a difference between the performance of students
graduating from English medium schools and those of others.
(b) Hypothesis which indicates association
Example: There is a perfect relationship between price and demand.
7. Common sense hypothesis: They are based on what is being
observed. (1) Junior students are more disciplined than seniors
(2) Economically poor students work hard compared to those who come
from well to do families (3) Middle class families lead a humble living.
The above are observed on a day to day basis over a period of time
before drawing any conclusions.
Activity 1:
An automobile company has manufacturing facility at two different
geographical locations. Each location manufactures two-wheelers of
a different model. The customer wants to know if the mileage given
by both the models is the same or not. Samples of 45 numbers may
be taken for this purpose. Suggest what hypothesis test and
procedure would you use in this situation?

1. ___________ hypothesis is a hypothesis framed in the early stages of
research.
2. Statistical hypothesis are of two types, namely hypothesis which
indicates ___________ and hypothesis which indicates ___________.

11.3 Steps involved in Hypothesis
1. Formulate the null hypothesis, with H
0
and H
A
, the alternate hypothesis.
According to the given problem, H
0
represents the value of some
parameter of population.
2. Select on appropriate test assuming H
0
to be true.
3. Calculate the value.
4. Select the level of significance other at 1% or 5%.
5. Find the critical region.
6. If the calculated value lies within the critical region, then reject H
o
.
7. State the conclusion in writing.
Formulate the hypothesis
The normal approach is to set two hypotheses instead of one, in such a
way, that if one hypothesis is true, the other is false. Alternatively, if one
hypothesis is false or rejected, then the other is true or accepted. These two
hypotheses are:
1. Null hypothesis
2. Alternate hypothesis
Let us assume that the mean of the population is
o
and the mean of the
sample is x. Since we have assumed that the population has a mean of
o
,
this is our null hypothesis. We write this as H
o
=
o
, where H
o
is the null
hypothesis. Alternate hypothesis is H
A
= . The rejection of null hypothesis
will show that the mean of the population is not
o
. This implies that
alternate hypothesis is accepted.
Significance level
Having formulated the hypothesis, the next step is its validity at a certain
level of significance. The confidence with which a null hypothesis is
accepted or rejected depends upon the significance level. A significance
level of say 5% means that the risk of making a wrong decision is 5%. The
researcher is likely to be wrong in accepting false hypothesis or rejecting a
true hypothesis by 5 out of 100 occasions. A significance level of say 1%
means, that the researcher is running the risk of being wrong in accepting or
rejecting the hypothesis is one of every 100 occasions. Therefore, a 1%
significance level provides greater confidence to the decision than 5%
significance level.
There are two types of tests.
One-tailed and two-tailed tests
A hypothesis test may be one-tailed or two-tailed. In one-tailed test the test-
statistic for rejection of null hypothesis falls only in one-tail of sampling
distribution curve.

Example: In a right side test, the critical region lies entirely in the right tail of
the sample distribution. Whether the test is one-sided or two-sided
depends on alternate hypothesis.
Example: A tyre company claims that mean life of its new tyre is 15,000 km.
Now the researcher formulates the hypothesis that tyre life is = 15,000 km.
A two-tailed test is one in which the test statistics leading to rejection of null
hypothesis falls on both tails of the sampling distribution curve as shown.

When we should apply a hypothesis test that is one-tailed or two-tailed
depends on the nature of the problem. One-tailed test is used when the
researcher's interest is primarily on one side of the issue.
Example: A product is manufactured by a semi-automatic machine. Now,
assume that the same product is manufactured by the fully automatic
machine. This will be two-sided test, because the null hypothesis is that "the
two methods used for manufacturing the product do not differ significantly".
H
0
=
1
=
2

Sign of alternate hypothesis Type of test
= / Two-sided
< One-sided to right
> One-sided to left
Degree of freedom
It tells the researcher the number of elements that can be chosen freely.
Example: a + b/2 = 5. fix a = 3, b has to be 7. Therefore, the degree of
freedom is 1.
Select test criteria
If the hypothesis pertains to a larger sample (30 or more), the Z-test is used.
When the sample is small (less than 30), the T-test is used.
Compute
Carry out computation.
Make decisions
Accepting or rejecting of the null hypothesis depends on whether the
computed value falls in the region of rejection at a given level of
significance.
3. The two types of hypotheses are ______ hypothesis and ________
hypothesis
4. Accepting or rejecting of the null hypothesis depends on whether the
computed value falls in the ______ at a given level of significance.
5. A hypothesis test may be ______ or ______ .

11.4 Tests of Significance
The following are the factors to be taken into account before judging
whether hypothesis is good or not. Some of the characteristics of a
hypothesis to be good are:
1. Clarity of concepts
2. Whether possible to test or not?
3. Whether what is to be tested is clear or not?
4. Whether appropriate statistical techniques are available for testing?
5. Whether logical derivation is possible or not?
6. Whether bias or subjectivity is eliminated or not. Objectivity should be
the sole criteria?
7. Whether the hypothesis is simple or not?
8. Adequate theoretical backing is a prerequisite for hypothesis testing
1. Clarity of concepts: Concepts should not be abstract. If concepts are
not clear, precise problem formulation will be difficult leading to difficulty
in data collection. Concepts are important because, it means different to
different people. The way concept is understood depends on the needs
of a person.
Example: Wearing a sunglass represents a life style for a student,
whereas it is a eye protecting device to a doctor. Therefore different
people hold different concepts about the same object. Concept can be
classified as concrete concepts and abstract concepts. Concrete
concepts are tangible things like chair or book. Abstracts concepts refer
to characteristics of items such as attitude, motivation etc. concepts can
also refer to different phenomenon.
Example: Same word may have several meaning. The researcher may
use a word in one context but it may mean different to different people.
2. Ability to test: It should be possible to verify the hypothesis. Therefore
a good hypothesis is one in which there is empirical evidence.
Example: Children of rich parents do not do well in their studies.
Most multinationals do not follow ethical codes statement such as
above, which are general in nature should be avoided.
3. Specific/Clear: What is to be tested should be clear. The relationship
between the variables should clear or the statistic under verification
should be mentioned clearly.
Example: Two wheeler manufactured by company A gives better
mileage than that manufactured by company B. Here what is to be
verified is clear and specific.
4. Statistical tools: Hypothesis should be such that, it is possible to use
statistical techniques. Such as Anova, Chi square, t test or other non
parametric tests.
5. Logical: If there is 2 or more Hypothesis derived from the same basic
theory, they should not contradict each other.
Example: All objects dropped from a height come down. Stone is an
object. Therefore when dropped from a height should come down.
6. Subjectivity: Researchers subjectivity or his biased judgement should
be eliminated from the hypothesis.
Example: older sales man sells less than younger salesman. This may
be a biased opinion. As a matter of fact, older salesman may be selling
more due to their experience and rapport developed with the customer.
7. Simple: Hypothesis should be simple. Simple means less constraints or
assumptions before formulating it.
Example: Our advertisement and our sales are related. Here the
assumption made is that No other factor other than our advertisement is
responsible for our sales. In reality, the advertiser should know that
competitors activity, which is beyond the control of the advertiser is
assumed to be non existent. This may be done by the researcher to
make the hypothesis simple. In reality it is not so.
8. Theory: Hypothesis must be supported or backed up by theoretical
relevance.
Example: Attitude of customer towards a new product introduction. This
study is very well backed up by theory on consumer behaviour.
Activity 2:
A study was conducted to measure the motivation level of each of
the category of managers. Formulate a hypothesis, suggesting
testing procedures to show that there is no relation between the
category of managers and the level of motivation.

6. Every test of significance begins with a ____________ .
7. A significance test consists of calculating the ______ of obtaining a
statistic as different or more different from the null hypothesis.

11.5 Sources of Hypothesis
Hypothesis can be derived from many sources:
1. Theory
2. Observation
3. Past experience
4. Case studies
1. Theory: Theory on the subject can act as a source of hypothesis. We
start of from a general premise and then formulate hypothesis.
Example: Providing employment opportunity is an indicator of social
responsibility of a government enterprise. From the above several
hypothesis, it can be deduced that:
(a) Public enterprise has greater social concern than other enterprises
(b) Peoples perception of government enterprise is social concern.
(c) Govt enterprise helps in improving the life of less privileged people.
2. Observation: Peoples behaviour is observed. In this method we use
observed behaviour to infer the attitudes. This is indirect method of
attitude measurement. Direct observation is used to get insights into
research behaviour and other related issues.
Example: A shopper in a supermarket may be disguised, to watch the
customer in the stores. The following may be observed. (a) How the
customer approaches the Product category (b) How long he/she
spends in front of display. (c) Whether the customer had difficulty in
locating the product. Collect all these data and formulate a hypothesis
regarding the behaviour of the customer towards the product.
3. Past experience: Here researcher goes by past experience to formulate
the hypothesis
Example: A dealer may state that fastest moving kids apparel is frock.
This may be verified.
4. Case studies: Case studies published can be used as a source for
hypothesis. Normally this is done before the launch of a product to find
customer taste and preferences
Similarity: This could be with respect to similarity in activities of human
beings.
Example: Dress, food habits or any other activities found in human
living in different parts of the globe.
8. Theory on the subject can act as a source of ____________.
9. Under observation method, we use observed behaviour to infer the
_________ .
10. _________ published can be used as a source for hypothesis.

11.6 Errors in Hypothesis Testing
There are two types of errors:
1. Hypothesis is rejected when it is true.
2. Hypothesis is not rejected when it is false.
(1) is called Type 1 error ( ), (2) is called Type 2 error ( ). When a =0.10 it
means that true hypothesis will be accepted in 90 out of 100 occasions.
Thus, there is a risk of rejecting a true hypothesis in 10 out of every 100
occasions. To reduce the risk, use a = 0.01 which implies that we are
prepared to take a 1% risk i.e., the probability of rejecting a true hypothesis
is 1%. It is also possible that in hypothesis testing, we may commit Type 2
error () i.e., accepting a null hypothesis which is false. The only way to
reduce Type 1 and Type 2 error is by increasing the sample size.
Example of Type 1 and Type 2 error: Type 1 and Type 2 error is
presented as follows. Suppose a marketing company has 2 distributors
(retailers) with varying capabilities. On the basis of capabilities, the company
has grouped them into two categories (1) Competent retailer
(2) Incompetent retailer. Thus R1 is a competent retailer and R2 is an
incompetent retailer. The firm wishes to award a performance bonus (as a
part of trade promotion) to encourage good retailership. Assume that two
actions A1 and A2 would represent whether the bonus or trade incentive is
given and not given. This is shown as follows:
Action (R1) Competent
retailer
(R2) Incompetent retailer
A 1 performance
bonus is awarded
Correct decision Incorrect decision error ()
A 2 performance
bonus is not awarded
Incorrect decision error
()
Correct decision
When the firm has failed to reward a competent retailer, it has committed
type-2 error. On the other hand, when it was rewarded to an incompetent
retailer, it has committed type-1 error.
Self assessment questions
11. _________ error is when a hypothesis is rejected when it is true.
12. _________ error is when a hypothesis is not rejected when it is false.

11.7 Students T-Distribution
T-test is used when the sample size n < 30.
A t-test is any statistical hypothesis test in which the test statistic follows a
Student's t distribution if the null hypothesis is true. It is most commonly
applied when the test statistic would follow a normal distribution if the value
of a scaling term in the test statistic were known. When the scaling term is
unknown and is replaced by an estimate based on the data, the test statistic
follows a Student's t distribution.
The important properties of the Student t distribution are:
The Student t distribution is different for different sample sizes.
The Student t distribution is generally bell-shaped, but with smaller
sample sizes shows increased variability (flatter). In other words, the
distribution is less peaked than a normal distribution and with thicker
tails. As the sample size increases, the distribution approaches a normal
distribution. For n > 30, the differences are negligible.
The mean is zero (much like the standard normal distribution).
The distribution is symmetrical about the mean.
The variance is greater than one, but approaches one from above as the
sample size increases (2 = 1 for the standard normal distribution).
It takes into account the fact that the population standard deviation is
unknown.
The population is essentially normal (unimodal and basically symmetric)
Among the most frequently used t-tests are:
A one-sample location test of whether the mean of a normally distributed
population has a value specified in a null hypothesis.
A two sample location test of the null hypothesis that the means of two
normally distributed populations are equal. All such tests are usually
called Student's t-tests, though strictly speaking that name should only
be used if the variances of the two populations are also assumed to be
equal; the form of the test used when this assumption is dropped is
sometimes called Welch's t-test. These tests are often referred to as
"unpaired" or "independent samples" t-tests, as they are typically applied
when the statistical units underlying the two samples being compared
are non-overlapping.
A test of the null hypothesis that the difference between two responses
measured on the same statistical unit has a mean value of zero. For
example, suppose we measure the size of a cancer patient's tumor
before and after a treatment. If the treatment is effective, we expect the
tumor size for many of the patients to be smaller following the treatment.
This is often referred to as the "paired" or "repeated measures" t-test.
A test of whether the slope of a regression line differs significantly
from 0.

13. t-distribution is generally _________ shaped.
14. t-distribution is _________ for different sample sizes.

11.8 Kruskal-Wallis Test
The Kruskal-Wallis Test was developed by Kruskal and Wallis jointly and is
named after them. The test is used, when more than two populations are
involved. It enables us to know whether independent samples have been
drawn from the same population or from different populations having the
same distribution.
This test is used to find out whether two or more independent samples are
drawn from an identical population. This test is also called the H Test. Mann
Whitney test is used when only two populations are involved and Kruskal-
Wallis test is used when more than two populations are involved.
Hypothesis in Kruskal-Wallis Test
Null hypothesis: assumes that the samples are from identical populations.
Alternative hypothesis: assumes that the sample comes from different
populations.
Assumption in Kruskal-Wallis Test
1. In Kruskal-Wallis Test, we assume that the samples drawn from the
population are random.
2. In Kruskal-Wallis Test, we also assume that the cases of each group are
independent.
3. The measurement scale for Kruskal-Wallis Test should be at least
ordinal
Self assessment questions
15. The Kruskal-Wallis test is used, when more than _________.
populations are involved.
16. This test will enable us to know whether independent samples have
been drawn from the same population or from different populations
having the _________ distribution.
11.9 Kolmogorov-Simmov Test
The Kolmogorov-Smirnov test (KS-test) is one of the useful and general
nonparametric method for comparing two samples. It can be used to test
whether the two samples are different in the location and the shape of
empirical distribution functions. As a nonparametric test, it does not require
the normality of the population. This is used for examining the efficacy of fit
between observed samples and expected frequency distribution of data
when the variable is in the ordinal scale.
Example: A manufacturer of cosmetics wants to test four different shades of
the liquid foundation compound - very light, light, medium and dark. The
company has hired a market research agency to determine whether any
distinct preference exists towards either extreme. If so, the company will
manufacture only the preferred shade, otherwise, the company is planning
to market all shades. Suppose, out of a sample of hundred, 50 preferred
"very light shade" 30 liked light shade, 15 the medium shade, and 50 dark
shades. Do you think the results show any kind of preference?
The Kolmogorov-Smirnov test (KS-test) tries to determine if two datasets
differ significantly. The KS-test has the advantage of making no assumption
about the distribution of data. (Technically speaking it is non-parametric and
distribution free.) Note however, that this generality comes at some cost:
other tests (for example Student's t-test) may be more sensitive if the data
meet the requirements of the test. In addition to calculating the D statistic,
this page will report if the data seem normal or lognormal. (If it is silent,
assume normal data at your own risk!) It will enable you to view the data
graphically which can help you understand how the data is distributed.
How the Kolmogorov-Simmov test works
In looking at a list of numbers, for example, the controlB group results from
the second example:
Control B = {1.26, 0.34, 0.70, 1.75, 50.57, 1.55, 0.08, 0.42, 0.50, 3.20, 0.15,
0.49, 0.95, 0.24, 1.37, 0.17, 6.98, 0.10, 0.94, 0.38}
it is hard to see the general situation. Thus descriptive statistics were
developed to reduce the list of all the data items to a few simpler numbers.
Thus we can perhaps better interpret data set from the following:
Mean = 3.61
Median = 0.60
High = 50.6 Low = 0.08
Standard Deviation = 11.2
We can see from this that something is abnormal. For normally distributed
data you should expect about 15% of the data to lie more than 1 standard
deviation below the mean (i.e., below 3.61-11.2=-7.59), but no data are that
small, in fact no datum is even negative. Similarly only about 2% of the data
should be more than 2 standard deviations above the mean (i.e., above
3.61+211.2=26.01), but in fact we have one data-point (50.57) way beyond
that (hence an "outlier"). Something is funny about the distribution of this
data; we need a way to look at how the data is distributed.
Activity 3:
What type of error evolved in hypothesis? Suggest the use of all
types of errors.

17. The Kolmogorov-Simmov test tries to determine if _________ differ
significantly.
18. The value of the _________ statistic is not affected by scale changes
like using log.

11.10 Summary
Hypothesis is a proposition which the researcher wants to verify. There are
two types of hypothesis, descriptive and relationship, there are several types
of hypothesis such as theory, observation, past experience and case
studies. There are several characteristics of the hypothesis, which decides
whether a hypothesis is good or bad. Researcher will form 2 hypothesis (a)
Null hypothesis (b) Alternative hypothesis, for accepting or rejecting the
statement. There are 2 types of tests one tailed test or two tailed test. Two
types of error may occur while testing hypothesis (a) Hypothesis is rejected
when it is true (b) Hypothesis not rejected when it is false former is known
as types error and later is known as type 2 error.
Glossary
t-Distribution: continuous probability distribution that arises in the problem
of estimating the mean of a normally distributed population when the sample
size is small
Type-I error: also known as an "error of the first kind", an error, or a "false
positive": the error of rejecting a null hypothesis when it is actually true.
Type-II error: also known as an "error of the second kind", a error, or a
"false negative": the error of failing to reject a null hypothesis when it is in
fact not true. In other words, this is the error of failing to observe a difference
when in truth there is one, thus indicating a test of poor sensitivity.

1. Discuss hypothesis and its types.
2. Explain the various sources from which hypothesis are derived.
3. What are the characteristics of hypothesis?
4. What are the various steps used to test hypothesis?
5. What is null hypothesis and alternate hypothesis?

11.12 Answers
1. Working
2. differences, association
3. null, alternate
4. region of rejection
5. one-tailed, two-tailed
6. null hypothesis
7. probability
8. hypothesis.
9. attitudes
10. Case studies
11. Type 1
12. Type 2
13. bell
14. different
15. two
16. same
17. two datasets
18. D
1. Refer to 11.2 Discuss with examples
2. Refer to 11.5.
3. Refer to 11.4 Explain each one in detail
4. Refer to 11.3
5. Refer to 11.6 Explain with examples.

Mini-case
Sandwich Corner was a regional fast food chain, with 150 outlets throughout
the country. The balance sheet of previous year showed that, last years
sales varied from Rs. 6 lakhs to Rs. 12 lakhs per outlet depending on size
and location, average sales per outlet was around Rs. 8 lakhs.
Recently, Sandwich Corner introduced pizza to its menu in a selected group
of 30 outlets. This was the costliest item, around Rs. 65 per piece. The
management wanted to evaluate the potential impact of pizza on over all
sales in the selected outlets, before deciding whether to offer the pizza, in all
its outlets.
Before selecting the 30 outlets for test marketing, all the outlets were
arranged from smallest to biggest, based on previous year sales. Then,
using systematic random sampling, one outlet between first and sixth outlet
in the list is chosen. This method is continued till 30 outlets are chosen. The
previous years annual sale per outlet, within the group of 30 was Rs. 7
lakhs.
Pizza was introduced in the beginning of July, and monthly sales in 30 test
outlets were monitored up to end of December. During this 6 month period,
from July to December, point of promotion displays was setup in all the
outlet selling pizza. The message was Try out the special dish exclusively
made for you. Except for point of purchase display in 30 outlets, no other
form of promotion was undertaken. The reason for not promoting in
newspapers, radio was that pizza was not available in all the outlets. In the
same city, one outlet offered pizza and the other did not. Therefore the
management thought that mass media may not be appropriate for
promotion.
Study of sales impact on the introduction of pizza
Average monthly sales during six month period (July through December) for
the rest were approximately Rs. 60,000 per month. The average monthly
sales for the same outlets, during the six months preceding the introduction
of pizza (January through July) had been Rs. 68,000 per month. The
management of Sandwich Corner was quite disappointed with these results.
For comparison purpose. The management examined the first six months
and second six months average monthly sales for the 30 test outlets during
the past two years. The figures are as follows:
Jan-Jun Jul-Dec
Last Year 70,000 68,000
Year Before Last 66,000 63,000
After comparing this years sales in these test outlets, with the sales figure
tabulated, the management concluded that pizza was not a viable new
product capable of significantly adding to Sandwich Corners sales.
Therefore they decided to withdraw the product.
Question
Do you agree/disagree with the decision made by Sandwich Corner? Why?
Give reasons.
Hint: Proceed step by step while reaching to the decision.
Unit 12 Using Statistical Package for the
Social Sciences
Structure
12.1 Introduction
Objectives
12.2 Concept of Statistical Package for the Social Sciences
12.3 Statistical Package for the Social Sciences Products
12.4 Loading/Using of Statistical Package for the Social Sciences
12.5 Summary
12.7 Answers
12.1 Introduction
In the earlier units, you came to know about the hypothesis testing. In this
unit, you will study about the SPSS package used for the purpose of
marketing research.
In this unit, you learn to know the SPSS is a computer application that
provides statistical analysis of data. It allows for in-depth data access and
preparation, analytical reporting, graphics and modelling.
SPSS (originally, Statistical Package for the Social Sciences) is a software
program developed in the late 1960s by graduate students at Stanford
University. Although initially created to manage a large survey research
project of citizen participation in seven nations, the package quickly gained
popularity, and was greatly enhanced over the next few years. In 1985, a
microcomputer version of SPSS for IIBM-compatible personal computers
was introduced, which included many of the most popular features of the
mainframe version of SPSS. Today there are more than one million users of
SPSS in academic, business, government, and non-profit organizations.
This unit on using SPSS will help you get familiar with the use of SPSS tool
for the purpose of marketing research.
Objectives
Explain SPSS
Describe highlights of previous versions of SPSS
SPSS use as a marketing research tool
12.2 Concept of Statistical Package for the Social Sciences
SPSS is the data analysis package of choice for people wanting to analyze
quantitative data. However, most researchers find dealing with quantitative
data quite daunting. Although most researchers are quite comfortable with
qualitative research methods and analyses, they tend to shy away from
using quantitative statistics. However, the ability to perform quantitative data
analysis is increasingly becoming an important skill for researchers to
possess. Actually most peoples fear of statistics is unfounded. The advent
of computer software programmes such as SPSS that can be used to
analyze data, has meant that people do not have to know or learn
mathematical formulae in order to be able to perform quantitative statistical
analyses. Nowadays, all one needs to know is the appropriate analyses to
perform on their data and how to do it so they can obtain the information
they need to know.
Knowledge of SPSS is useful because:
SPSS is a leader in the field of market research and social surveys
It has been in the forefront of these fields for over 40 years
It is a very powerful piece of software that will enable you to carry out
quantitative analysis in seconds
You can legitimately see it as an extension or complement to Excel
It is easier to use than other packages when it comes to handling large
datasets
It may help you get a job in the job market.
Statistical Package for the Social Sciences for Windows
SPSS for Windows is a comprehensive, interactive, general-purpose
package for data analysis and it includes most routine statistical techniques.
SPSS is a true Windows package being mouse-driven with movable,
scalable windows, drop-down menus and dialog boxes. Underlying the
graphical interface is a command language consistent with previous
versions of the package.
SPSS for Windows is probably one of the easiest major statistics package to
use. It allows even inexperienced users to run complicated statistical
analyses at the click of a few buttons. When you are at the PC, you are in
charge of the package and it will attempt to do whatever you ask it, whether
your instructions are sensible or not. The adage of garbage in, garbage out
applies. It is therefore essential that you get a good understanding of the
commands that you need to use and what the results mean.
SPSS for Windows provides a powerful statistical analysis and data
management system in a graphical environment, using descriptive menus
and simple dialog boxes to do most of the tasks for you. Simply pointing and
clicking the mouse can accomplish most tasks.
SPSS provides a powerful statistical-analysis and data-management system
in a graphical environment, using descriptive menus and simple dialog
boxes to do most of the work for you.
In addition to the simple point-and-click interface for statistical analysis,
SPSS provides:
Data editor: The Data Editor is a versatile spreadsheet-like system for
defining, entering, editing, and displaying data.
Viewer: The Viewer makes it easy to browse your results, selectively
show and hide output, change the display order results, and move
presentation-quality tables and charts to and from other applications.
Multidimensional pivot tables: Your results come alive with
multidimensional pivot tables. Explore your tables by rearranging rows,
columns, and layers. Uncover important findings that can get lost in
standard reports. Compare groups easily by splitting your table so that
only one group is displayed at a time.
High-resolution graphics: High-resolution, full-color pie charts, bar
charts, histograms, scatter-plots, 3-D graphics, and more are included
as standard features.
Database access: Retrieve information from databases by using the
Database Wizard instead of complicated SQL queries.
Data transformations: Transformation features help get your data
ready for analysis. You can easily subset data; combine categories; add,
aggregate, merge, split, and transpose files; and more.
Online help: Detailed tutorials provide a comprehensive overview;
context-sensitive Help topics in dialog boxes guide you through specific
tasks; pop-up definitions in pivot table results explain statistical terms;
the Statistics Coach helps you find the procedures that you need; Case
Studies provide hands-on examples of how to use statistical procedures
and interpret the results.
Command language: Although most tasks can be accomplished with
simple point-and-click gestures, SPSS also provides a powerful
command language that allows you to save and automate many
common tasks. The command language also provides some
functionality that is not found in the menus and dialog boxes.
New added to Statistical Package for the Social Sciences 16.0
User Interface Enhancements: Enhancements to the point-and-click
interface include:
All dialog boxes are now resizable. The ability to make a dialog box
wider makes variable lists wider so that you can see more of the variable
names and/or descriptive labels. The ability to make a dialog box longer
makes variable lists longer so that you can see more variables without
scrolling.
Drag-and-drop variable selection is now supported in all dialog boxes.
Variable list display order and display characteristics can be changed on
the fly in all dialog boxes. Change the sort order (alphabetic, file order,
measurement level) and/or switch between display of variable names or
variable labels whenever you want.
Data and Output Management: Data and output management
enhancements include:
Read and write Excel 2007 files.
Choose between working with multiple datasets or one dataset at a time.
Search and replace information in Viewer documents, including hidden
items and layers in multidimensional pivot tables.
Assign missing values and value labels to any string variable, regardless
of the defined string width (previously limited to strings with a defined
width of 8 or less bytes).
New character-based string functions.
Output Management System (OMS) support for Viewer file format (.spv)
and VML-format charts and image maps with pop-up chart information
for HTML documents.
Customize Variable View in the Data Editor. Change the display order of
the attribute columns, and control which attribute columns are displayed.
Sort variables in the active dataset alphabetically or by attribute
(dictionary) values.
Spell check variable labels and value labels in Variable View.
Change basic variable type (string, numeric), change the defined width
of string variables, and automatically set the width of string variables to
the longest observed value for each variable.
Read and write Unicode data and syntax files.
Control the default directory location to look for and save files.
Performance: For computers with multiple processors or processors with
multiple cores, multithreading for faster performance is now available for
some procedures.
Statistical Enhancements: Statistical enhancements include:
Partial Least Squares (PLS): A predictive technique that is an
alternative to ordinary least squares (OLS) regression, canonical
correlation, or structural equation modeling, and it is particularly useful
when predictor variables are highly correlated or when the number of
predictors exceeds the number of cases.
Multilayer Perceptron (MLP): The MLP procedure fits a particular kind
of neural network called a multilayer perceptron. The multilayer
perceptron uses a feed-forward architecture and can have multiple
hidden layers. The multilayer perceptron is very flexible in the types of
models it can fit. It is one of the most commonly used neural network
architectures. This procedure is available in the new Neural Networks
option.
Radial Basis Function (RBF): A Radial basis function (RBF) network is
a feed-forward, supervised learning network with only one hidden layer,
called the radial basis function layer. Like the multilayer perceptron
(MLP) network, the RBF network can do both prediction and
classification. It can be much faster than MLP, however it is not as
flexible in the types of models it can fit. This procedure is available in the
new Neural Networks option.
Generalized Linear Models supports numerous new features, including
ordinal multinomial and Tweedie distributions, maximum likelihood
estimation of the negative binomial ancillary parameter, and likelihood-
ratio statistics. This procedure is available in the Advanced Models
option.
Cox Regression now provides the ability to export model information to
an XML (PMML) file. This procedure is available in the Advanced
Models option.
Complex Samples Cox Regression: Apply Cox proportional hazards
regression to analysis of survival times that is, the length of time
before the occurrence of an event for samples drawn by complex
sampling methods. This procedure supports continuous and categorical
predictors, which can be time-dependent. This procedure provides an
easy way of considering differences in subgroups as well as analyzing
effects of a set of predictors. The procedure estimates variances by
taking into account the sample design used to select the sample,
including equal probability and Probability Proportional to Size (PPS)
methods and With Replacement (WR) and Without Replacement (WOR)
sampling procedures. This procedure is available in the Complex
Samples option.
1. SPSS stands for _________.
2. SPSS for Windows is a package for _________.

12.3 Statistical Package for the Social Sciences Products
SPSS is used by market researchers, health researchers, survey
companies, government, education researchers, marketing organizations
and others. In addition to statistical analysis, data management (case
selection, file reshaping, creating derived data) and data documentation (a
metadata dictionary is stored with the data) are features of the base
software.
The developers of the Statistical Package for the Social Sciences (SPSS)
made every effort to make the software easy to use. This prevents you from
making mistakes or even forgetting something. That's not to say it's
impossible to do something wrong, but the SPSS software works hard to
keep you from running into the ditch. To foul things up, you almost have to
work at figuring out a way of doing something wrong.
You always begin by defining a set of variables, and then you enter data for
the variables to create a number of cases. For example, if you are doing an
analysis of automobiles, each car in your study would be a case. The
variables that define the cases could be things such as the year of
manufacture, horsepower, and cubic inches of displacement. Each car in
the study is defined as a single case, and each case is defined as a set of
values assigned to the collection of variables. Every case has a value for
each variable. (Well, you can have a missing value, but that's a special
situation described later.)
Variables have types. That is, each variable is defined as containing a
specific kind of number. For example, a scale variable is a numeric
measurement, such as weight or miles per gallon. A categorical variable
contains values that define a category; for example, a variable named
gender could be a categorical variable defined to contain only values 1 for
female and 2 for male. Things that make sense for one type of variable don't
necessarily make sense for another. For example, it makes sense to
calculate the average miles per gallon, but not the average gender.
After your data is entered into SPSS your cases are all defined by values
stored in the variables you can run an analysis. You have already finished
the hard part. Running an analysis on the data is much easier than entering
the data. To run an analysis, you select the one you want to run from the
menu, select appropriate variables, and click the OK button. SPSS reads
through all your cases, performs the analysis, and presents you with the
output.
You can instruct SPSS to draw graphs and charts the same way you instruct
it to do an analysis. You select the desired graph from the menu, assign
variables to it, and click OK.
When preparing SPSS to run an analysis or draw a graph, the OK button is
unavailable until you have made all the choices necessary to produce
output. Not only does SPSS require that you select a sufficient number of
variables to produce output, it also requires that you choose the right kinds
of variables. If a categorical variable is required for a certain slot, SPSS will
not allow you to choose any other kind. Whether the output makes sense is
up to you and your data, but SPSS makes certain that the choices you make
can be used to produce some kind of result.
All output from SPSS goes to the same place a dialog box named SPSS
Viewer. It opens to display the results of whatever you've done. After you
have output, if you perform some action that produces more output, the new
output is displayed in the same dialog box. And almost anything you do
produces output.
3. On SPSS wealways begin by defining a _________.
4. SPSS _________ models predict behaviour or events when your data
go beyond the assumptions of simpler regression techniques.

12.4 Loading/Using of Statistical Package for the Social Sciences

Click on the SPSS option to load and run SPSS. You may get a screen that
looks like this:

If you do, click on the cancel button at the bottom of the dialogue box to
remove it. You will see Untitled SPSS Data Editor screen.
When you load and run the SPSS package it opens up a menu bar and two
views. These are the Data View (currently visible) and the Variable View.
Menu Bar: This provides a selection of options (File Edit View Data.....)
which allow you for example to open files, edit data, generate graphs,
create tables and perform statistical analyses. Selecting from this menu
bar will, like in other windows packages, provide further pull-down
menus and dialogue boxes.
Data View: This sheet contains your data (once you have entered it!),
each column representing a variable for which data are available and
each row representing that data for an individual or case. At present this
sheet should be blank. As this sheet is currently selected its name on
the tab at the bottom is in bold.
Variable View: At present this sheet is not visible as the variable view
sheet is not active. Consequently the name is not in bold.

The menu bar options are used as follows:
File is used to access any files whether you want to Open an existing
SPSS file or read data in from another application such as Excel of
dBase, or start a New file. It is also the menu option you choose to Save
files.
Edit can be used to alter data or text in the Data View or the Variable
View.
View can be used to alter the way your screen looks. Please leave this
on the default settings.
Data is used to define variables and make changes to the data file you
are using.
Transform is used to make changes to selected variable(s) in the data
file you are using. This can include recode(ing) existing variables and
compute(ing) new variables.
Analyze is used to undertake a variety of analyses such as producing
Reports, Calculating Descriptive Statistics such as Frequencies and
Crosstabs (crosstabulations) and associated summary statistics, as well
as various statistical procedures such as Regression and Correlation.
Graph is used to create a variety of graphs and charts such as Bar, Line
and Pie charts.
Utilities are for more general housekeeping such as changing display
options and fonts, displaying information on variables.
Window operates in the same way as other Windows packages.
Help is a context sensitive help feature which operates the same way as
other Windows packages.
Enter the data in the SPSS data editor after creating variables. Then save
the files as TEACH which will be saved as TEACH.SAV
You will now see the file appear in the Data View and the filename above
the menu bar change to TEACH.SAV

Example 1: To check how variables have been coded
To check what the column heading for each variable and the codes refer to:
click on the Variable View sheet at the bottom of the screen. You will now
see:

The first column contains the variable Name, in the case of the first row
gender. This is the column heading that appears in the Data View.
The second column refers to the Type of data. Although gender is
categorical data, it is refereed to as numeric because numeric code values
have been used. The key to these code values is given in the column
headed Values.
The fifth column contains the variables Label. At present this is partially
obscured by the subsequent column. To see the full value label:
(a) Move your mouse pointer in-between the Label and the Values column
headings so that the appears.
(b) Click and drag the column width to the right until the variables label can
be read.

(Note: if you wish to edit a variables label just retype the label in the
appropriate cell)
The sixth column contains the key to the codes used for each variable.
These are known as the Values Labels.
To see the Value Labels used:
(a) Click on the cell containing the first value for the variable gender

(b) Click on the to the right of this cell
The following dialogue box will be displayed:

It shows the current value labels for this variable.
Note: you can also use this option to change each value label for the codes
or enter new value labels.
Example 2: Frequency distribution
Return to the Data View
Click on Analyse then Descriptive Statistics then Frequencies
This will usually give the Frequencies dialogue box. However sometimes
the variables in the left hand box are arranged alphabetically.

If the variables are arranged alphabetically use the downward arrow on the
left hand box to scroll down until gender appears.
Highlight gender in the left hand box by clicking on it. Click on the button to
move gender into the Variable(s) box and then click on OK
You will now see a series of tables displayed in the SPSS Output Viewer.
Note how SPSS first tells you if there are any missing cases. For this
variable there is one missing case.

To save the contents of the SPSS Output Viewer to a file
(a) Ensure that the SPSS Output Viewer window is maximised
(b) Click on File, Save as
(c) Type in the filename you wish to save it to in the File name box, making
sure the file type is *.spo
(d) Ensure that the file is being saved to the correct drive and directory
(N.B. please don't save output from the teach.sav file)
(e) Click on the Save button
Example 3: To produce a bar chart
(a) Click on Analyze, Descriptive Statistics, Frequencies
(b) Dselect all variables by clicking on the Reset button
(c) Scroll down and select the variable social class in the normal way
(d) Click on the charts button, you will see the following dialogue box:

(e) Click on the Bar Chart(s) radio button and then on the Continue button
(f) At the Frequencies dialogue box click on OK
The SPSS Output Viewer should now contain your bar chart.
Notice that missing data are automatically excluded from the chart. Notice
also that you are presented with a different menu bar which allows you to
Edit the current chart and other options such as Delete.

5. When you load and run the SPSS package it opens up a menu bar and
_________ views.
6. In SPSS, the results of the correlation will appear in the _________.
7. The positive sign of the _________ indicates that this relationship is
positive.

12.5 Summary
Statistical software systems have been available for performing basic
statistical analysis since the early years of the computer. These systems
analyze large volumes of data and compute basic statistics such as means
and standard deviations. They also compare sets of numbers and use such
tests as t-tests and chi-square tests to determine how similar or different the
number sets are. More sophisticated routines like multiple regression and
analysis of variance are also included.
While a variety of statistical software systems exist, SAS and SPSS-X are
the most robust packages for the MDSS. Due to the vast knowledge of
mathematical and statistical background needed to use these systems,
however, they are usually the favorite choice for the research analyst, not
the manager. Therefore, managerial function software systems are also
incorporated into the MDSS.

The SPSS, Inc. software package is designed to be user-friendly, even for
novice computer users. Released in the Microsoft Windows format and
touted as Real Stats. Real Easy, SPSS delivers easy data access and
management, highly customizable output, complete just-in-time-training, and
a revolutionary system for working with charts and graphs. The producers of
SPSS proudly claim that you dont have to be a statistician to use SPSS,
an important characteristic for individuals who are somewhat afraid of
computers and their power. Available in almost any format, SPSS provides
immense statistical analysis capability while remaining one of the most user-
friendly statistical packages available today.
Glossary
Data Editor: The data editor window is the default window when you run
SPSS. The data worksheet works just like a spreadsheet, where a column
represents a variable and a row represents a case or an observation
Data Transformation: converts data from a source data format into
destination data. It can be divided into two steps, namely data mapping
which maps data elements from the source to the destination and captures
any transformation that must occur and code generation that creates the
actual transformation program.
HTML: stands for Hyper Text Markup Language. It is not a programming
language, but a markup language (a set of markup tags).
Object Linking and Embedding, Database (OLEDB): An application
programming interface designed by Microsoft for accessing data from a
variety of sources in a uniform manner.

1. What you mean by SPSS?
2. What are the new features added in SPSS 16.0?
3. Explain SPSS base in detail.
4. Explain how will you calculate variance with the help of SPSS.

12.7 Answers
1. Statistical Package for the Social Sciences
2. data analysis
3. set of variables
4. Regression
5. two
6. Output Window
7. slope coefficient
1. Refer to 12.2
2. Refer to 12.2
3. Refer to 12.3
4. Refer to 12.4
Unit 13 Presentation of Research Results
Structure
13.1 Introduction
Objectives
13.2 Types of Reports
Oral Report
Written Report
13.3 Writing a Market Research Report
13.4 Components of the Report
13.5 Style and Layout
13.6 Revising and Finalizing the Report Text
13.7 Quality Research Report
13.8 Responsibilities of a Market
13.9 Research Report Writer
13.10 Presentation of the Report
13.11 Presentation Plan
13.12 Summary
13.14 Answers
13.1 Introduction
In this unit, you will learn about the research reporting is an essential
component of the research and knowledge translation process (KT).
Knowledge translation is facilitated when research is reported and
communicated with sufficient depth and accuracy for readers to interpret,
synthesize, and utilize the study findings. This unit emphasizes on reporting,
types of reports and how to interpret the qualitative & quantitative data, and
contents of report.
This unit on presentation of research report will help you get familiar with the
report writing to report presentation plan.
Objectives
Explain report writing concept
Describe components of report
Describe style and layout of report
Define research report writer
13.2 Types of Reports
There are two types of reports:
Oral report
Written report
13.2.1 Oral report
This type of reporting is required, when the researchers are asked to make
an oral presentation. Making an oral presentation is somewhat difficult
compared to the written report. This is because the reporter has to interact
directly with the audience. Any faltering during an oral presentation can
leave a negative impression on the audience. This may also lower the self-
confidence of the presenter. In an oral presentation, communication plays a
big role. A lot of planning and thinking is required to decide What to say,
How to say, How much to say. Also, the presenter may have to face a
barrage of questions from the audience. A lot of preparation is required; the
broad classification of an oral presentation is as follows:
Nature of an oral presentation
Opening: A brief statement can be made on the nature of discussion
that will follow. The opening statement should explain the nature of the
project, how it came about and what was attempted.
Finding/Conclusion: Each conclusion may be stated backed up by
findings.
Recommendation: Each recommendation must have the support of
conclusion. At the end of the presentation, question-answer session
should follow from the audience.
Method of presentation: Visuals, if need to be exhibited, can be made
use of. The use of tabular form for statistical information would help the
audience.
Points to remember in oral presentation
Language used must be simple and understandable.
Time Management should be adhered.
Use of charts, graph etc. will enhance understanding by the audience.
Vital data such as figures may be printed and circulated to the audience
so that their ability to comprehend increases, since they can refer to it
when the presentation is going on.
The presenter should know his target audience well in advance to
prepare tailor-made presentation.
The presenter should know the purpose of report such as Is it for
making a decision, Is it for the sake of information etc.
13.2.2 Written Report
Types of Written Reports:
Reports can be classified based on the time-interval such as:
Daily
Weekly
Monthly
Quarterly
Yearly
Type of reports:
Short report
Long report
Technical report
Informal report
Government report
Short report: Short reports are produced when the problem is very well
defined and if the scope is limited, e.g. Monthly sales report. It will run into
about five pages. It consists of report about the progress made with respect
to a particular product in a clearly specified geographical locations.
Long report: This could be both a technical report as well as non-technical
report. This will present the outcome of the research in detail.
Technical report: This will include the sources of data, research procedure,
sample design, tools used for gathering data, data analysis methods used,
appendix, conclusion and detailed recommendations with respect to specific
findings. If any journal, paper or periodical is referred, such references must
be given for the benefit of reader.
Non-technical report: This report is meant for those who are not
technically qualified, e.g. Chief of the finance department. He may be
interested in financial implications only, such as margins, volumes etc. He
may not be interested in the methodology.
Informal report: The report prepared by the supervisor by way of filling the
shift log book, to be used by his colleagues.
Government report: These may be prepared by State Governments or the
Central Government on a given issue.
Other types of report
Incident report: a report describing how many goods or services were
sold, and the reasons for any differences from the plan.
Accident report: a report describing how close you are to completing
something you planned.
Progress report: an academic report on how and why something has
changed over time.
Recommendation report: a report on how practical a proposal is.
1. There are two types of reports, namely __________ report and
__________ report.
2. __________ reports are produced when the problem is very well defined
and if the scope is limited.
3. __________ report may be prepared by the supervisor by way of filling
the shift log book, to be used by his colleagues.

13.3 Writing a Market Research Report
The professional marketing research report must achieve four primary
objectives:
To effectively communicate the findings of the marketing research
project,
To provide interpretations of those findings in the form of sound and
logical recommendations,
To illustrate the credibility of the research project,
To serve as a future reference document for strategic or tactical
decisions.
The first and foremost objective of the research report is to effectively
communicate the findings of the marketing research project. Since the
primary purpose of the research project was to obtain information that will
answer specific questions in relation to a specific business problem, the
report must explain both how the information was obtained and what
relevance it has to the research questions. Best practices suggest that a
detailed description of the following factors be communicated to the client:
The specific research objectives.
The specific research questions the study was to answer.
Specific procedural information relevant to the collection of secondary
data (if necessary).
A description of the research methods employed.
Findings displayed in tables, graphs, or charts.
An accurate interpretation and summation of the findings.
Conclusions based on data analysis.
Recommendations and suggestions for their implementation.
Far too often, the researcher is so concerned about communicating results
that he or she forgets to provide a clear, logical interpretation of those
results. The researcher must always be aware that his or her level of
understanding regarding sampling methods and statistics, for example, may
not be the same as that of the user. Therefore, the researcher must always
attempt to take technical or complex information and present it in a manner
that is understandable to all parties concerned. Most researchers are often
fully armed with statistics, computer output, questionnaires, and other
project-related material. In presenting such information to the client, the
researcher should always rely on the original research objectives. The task
is to focus on each objective and communicate how each part of the project
is related to the accomplishment of that objective.
A critical dimension of the research report is to establish credibility of the
research methods, findings, and conclusions. This can be accomplished
only if the report is accurate, believable, and professionally organized.
These three dimensions cannot be treated separately, for they collectively
operate to build credibility into the research document. For the report to be
accurate, all of the input must be accurate. No degree of carelessness in
handling data, reporting statistics, or phasing outcomes must be tolerated.
Errors in mathematical calculations, grammatical errors, and incorrect
terminology are just a few types of inaccuracy that can serve to diminish the
credibility of the entire report.

Activity 1:
What are the good and bad effect of any research report based on
genuine project?

4. The main objective of the research report is to ________ the findings of
the marketing research project.
5. For the report to be accurate, all __________ must be accurate.

13.4 Components of the Report
Prior to commencing work on a report, a few queries should be raised by the
report-writer and satisfactorily answered. This enables the writer to produce
a highly focused report. The queries are central on the five W's and the one
H. What is the problem? What is it that needs to be ascertained? Clarity
along these lines helps in eliminating any redundancies that might crop up.
Identification of the genesis of the problem help in streamlining the
approach.
The five W's and One H are:
Why, What, Who, When, Where and How.
Questions like the following pertaining to these W's and H are to be
answered before writing the report:
1. Why is it important to study the problem?
2. Why (purpose) should the problem be analyzed?
3. What is its relevance and significance to the department in specific,
and organisation in general?
4. What are the benefits that will accrue as a result of this particular report
to the department, the organisation, and the self?
5. Who is involved in the situation? This could take into account both the
reader(s) and the writer. In case there is a third party involved, it would
also account for that.
6. Who is going to be the reader of this report? With a change in the
reader, a change is visible in the manner of approach in the report.
7. When did the trouble start? In case it is an analytical report, one would
also need to address oneself to the source and time of the problem
before reaching any conclusion.
8. When am I going to write the report? The time factor is very important.
9. Where would the reader be at the time when he receives the report?
Would the reader read the report in a meeting or read it within the
confines of his room? There would definitely be a difference in the
manner of approach.
10. Finally, how would the report be written? What information is to be
included and what is to be excluded/which graphs and chart would be
used/avoided?
All these queries need to be satisfied before beginning a report. They give
the report a certain direction and help the writer to concentrate on making
the report acceptable to the audience for whom it is aimed.
There is no set outline that can be used in preparing reports. The most
appropriate form and contents of a particular report should be determined by
nature of the target audience. The following is the suggested broad outline
of a report.
1. Preliminary pages:
(a) Title page is showing the heading.
(b) Contents along with chapter headings and page numbers.
(c) Preface and acknowledgements
(d) Foreword
(e) List of tables
(f) List of graphs and diagrams
(g) Abbreviations
2. Main text
(a) Summary
i) Introduction
ii) Main findings
iii) Conclusions and Recommendations
(b) Introduction
i) Introducing the theme
ii) Review of related literature
iii) Methodology
(c) Results
i) Statistical analysis
ii) Testing of hypothesis
iii) Conclusions
iv) Recommendations
3. End Matter
(a) Annexure
(b) Bibliography
(c) Questionnaire
(d) Indexing
(e) Mathematical derivations
(f) Appendices
6. The five W's and One H are: __________ , __________ , __________,
__________ , __________ and __________.
7. The most appropriate form and contents of a particular report should be
determined by nature of the __________.

13.5 Style and Layout
Style of Report Writing:
Remember that the reader:
Has short of time,
Has many other urgent matters demanding his or her interest and
attention,
Is probably not knowledgeable concerning research jargon.
Therefore, the rules are:
Simplify. Keep to the essentials.
Justify. Make no statement that is not based on facts and data.
Quantify when you have the data to do so. Avoid large, small, instead,
say 50%, one in three.
Be precise and specific in your phrasing of findings.
Inform, not impress. Avoid exaggeration.
Use short sentences.
Use adverbs and adjectives sparingly.
Be consistent in the use of tenses (past or present tense). Avoid the
passive voice, if possible, as it creates vagueness (e.g., patients were
interviewed leaves uncertainty as to who interviewed them) and
repeated use makes dull reading.
Aim to be logical and systematic in your presentation.
Layout of the report:
A good physical layout is important, as it will help your report:
Make a good initial impression,
Encourage the readers, and
Give them an idea of how the material has been organised so the reader
can make a quick determination of what he will read first.
Particular attention should be paid to make sure there is:
An attractive layout for the title page and a clear table of contents.
Consistency in margins and spacing.
Consistency in headings and subheadings, for example, font size 16 or
18 bold, for headings of chapters; size 14 bold for headings of major
sections; size 12 bold, for headings of sub-sections, etc.
Good quality printing and photocopying. Correct drafts carefully with
spell check as well as critical reading for clarity by other team-members,
your facilitator and, if possible, outsiders.
Numbering of figures and tables, provision of clear titles for tables, and
clear headings for columns and rows, etc.
Accuracy and consistency in quotations and references.
8. One of the most important points in report writing style is __________
needless words.
9. An __________ , ________ report stands a better chance of being read.

13.6 Revising and Finalizing the Report Text
Revise your report in the context of your research of any problem in the final
report and your findings make sure before finalize the report it should be in
proper shape with required changes. After revising your research report
throughly what the text and style used in the report. It should be good for
your report you make sure not use many type of text in the same report.
Activity 2:
On what criteria, oral report is evaluated. Suggest a suitable format.

Self Assessment Question
10. One must revise a report in the context of __________ of any problem in
the final report.

13.7 Quality Research Report
Before communicating the results of the project to the manager, the
researcher should keep several issues in mind for effective communication.
The first and foremost rule for writing the report is to empathize. The
researcher must keep in mind that the manager who is going to read and
utilize the findings of the research project might not be as technically
knowledgeable with statistical techniques or at times with the methodology.
Furthermore, the manager will be more interested in knowing how results
can be used for decision making rather than how they have been derived.
Therefore, the jargons and technical terms should be kept at minimum. If the
jargons cannot be avoided, then researcher should provide a brief
explanation for the manager to understand it.
The second rule researcher should keep in mind is related to the structure of
the report. The report should be logically structured and easy to follow. The
manager should easily be able to grasp the inherent linkages and
connections within the report. The write up should be succinct and to the
point. A clear and uniform pattern should be employed. One of the best
ways to check weather the structure of the report is sound or not, the report
should be critically looked at by some of the research team members.
Furthermore, researcher must make sure that the scientific rigour and
objectivity is not lost when presenting the research project findings. At times,
because of the heavy involvement of researcher in the overall research
process, it is possible that there is a loss of objectivity. Therefore,
researcher should keep a tab on the aspects of objectivity of the overall
report.
Many times managers do not like to see the results which oppose their
judgmental beliefs however the researcher must have the courage to
present the findings without any slat to conform to the expectations and
beliefs of the managers.

11. In report writing, the jargons and technical terms should be kept at
__________.
12. Researcher should keep a tab on the aspects of __________ of the
overall report.

13.8 Responsibilities of a Market
Market Analysis identifies critical intelligence topics, investigates relevant
market research, and communicates significant market insights and
implications.
Market Analysis provides thought leadership and timely, actionable market
insights, derived from the analysis of market research, marketplace data,
and expert opinion, in order to drive informed executive decision-making,
both within and across business units and functions.
Using consultative techniques and working with decision makers, the Market
Analyst identifies critical intelligence topics, investigates relevant market
research and information, develops analytical work plans, and forms
appropriate work teams in order to identify and communicate, through
written and oral presentations and reports, significant market insights and
concepts, and their implications, and provides relevant recommendations to
those decision-makers.
Market Data Analysts are skilled in:
Project framing the ability to clearly define the internal client issue that
leads to the appropriate project scope and planning
Understanding customer wants and needs
Analyzing the competitive landscape
Assessing the marketplace
Identifying emerging growth trends and opportunities across various
dimensions including: economic, technological, financial, cultural and
other market segments, competitive, partnerships and alliances, and
customer value attributes
Evaluating performance/execution gaps and the development of
actionable recommendations.
Success is measured on the timeliness, clarity, and utility of the
actionable insights and analysis delivered.
13. Market Analysis identifies __________ topics, investigates relevant
market research, and communicates significant __________ and
implications.
14. Success of a market analysis is measured on the __________ ,
__________ , and __________of the actionable insights and analysis
delivered.

13.9 Research Report Writer
After having prepared an outline of the report, the researcher has to write it
down. Report writing is a job that needs some skill which can be developed
with practice. However, some broad principles of writing a report may be
followed:
Reports must be written objectively. Objectively is a prerequisite of good
research work. Absolute words such as always and never, for
example, should be avoided. The researcher should not impose his
viewpoint on the reader, he should narrate the facts and draw such
inferences as can be drawn.
The report must be written in a concrete style. It must contain necessary
statistics to support the thesis. One should avoid the use of such vague
words as several people, a large number of respondents, a few
interviewees and often.
The report must be organized and coherent, which can be ensured by
formulating a research outline prior to writing the report. Different
sections of the report must be given in a paper sequence so that the
reader is taken logically from beginning to end.
A research report or any formal report should be written in a impersonal
style, avoiding the use of the first-person. This would also help the writer
to remain more objective.
There must be absolute clarity in the presentation of ideas. Clarity in
writing is not possible in just one draft. The writer may have to revise the
draft once, twice or even several times to make it lucid and
understandable. A point that needs emphasis is that writing a research
report is different from writing an essay or literary piece. As such, the
writing should be plain and simple as the use of elegant words and
syntax variation is not needed in a research report. However, the report
need not be dull.
The report should be neat and tidy. Wherever possible, charts and
diagrams should be given. The write-up should be divided into different
paragraphs and suitable headings should be provided. If necessary,
paragraphs may be numbered to facilitate easy reference.
At the time of writing a quality report remember three things:
The writer, i.e. sender of the message
The receiver of the message
The message itself
The writer should engage in clear thinking before he sits down to write. As
he rightly says that this clear thinking does not come in the early period of
incubation of thoughts but only after lots of trial and error and thinking and
re-thinking As regards the receiver of the message.
A report that achieves the goal of communicating with its readers is
generally one that meets the specific criteria of completeness, accuracy,
clarity and conciseness. These criteria are intimately related. An accurate
report, for example, is also a complete report. For discussion purpose,
however, it is helpful to discuss the criteria as if they were distinct.
15. At the time of writing a quality report remember three things: the
__________, the __________ and the __________.
16. The writer should engage in clear ______ before he sits down to write.

13.10 Presentation of the Report
The presentation has become an integral part of most marketing research
projects. Most managers are finding it hard to read the entire report and so
prefer the researcher to present the report in an oral presentation.
Furthermore, the presentation provides an opportunity for the research and
management team to interact the issue of concern and in that way it
becomes an important exercise.
For any presentation, the most important aspect is preparation. Researcher
should first develop an outline of the presentation keeping the
audience in mind. Once the outline is developed, the researcher should
focus on the content management and decide as to what is relevant and
important and what is not. Use of various audio-visual aids as well as other
materials such as chalkboards or flipcharts should be planned out in
advance. While audio-visual presentation adds to the overall engagement,
chalkboards and flipcharts provide flexibility in presentation.
The rules regarding what to do and what not to do when writing reports also
apply to the presentation and researcher must keep in mind that the
presentation is being done for the managers to grasp the results.
Researcher must remember that the research was conducted for assistance
in decision-making and was not a statistical exercise. Therefore, the focus of
the presentation should be on how the research can help managers in
making a better informed decision.
There are several ways of making presentation of statistics in the research
report and four of them are most important. They are:
Textual explanation
Semi tabular form
Tabular form
Graphics.
Textual explanation
Textual presentations are used when there are only a few statistics. The
drawback is that the reader has to read the entire text before finding or
locating the meaning.
Semi tabular form
This method is used when there are just a few figures. Whenever there is a
comparison, this method is used.
Items Annual Sales growth Net profit (2008) in millions
Mens wear 3% 200
Womens wear 4% 312
Kids wear 0.8% 430

Tabular presentation
These are superior to text for presenting statistics. Tables enable
quantitative comparison and provide a precise way to present the data.
Year Annual Sales growth Net profit in Rs millions
2008 3% 200
2009 4% 312
2010 0.8% 202

Graphics
Graphics presentation is the only way to present quantitative information
effectively. There are two basic kinds of graphics namely charts which show
how much, and diagrams that show how. Charts are generally the most
useful for research reports and diagrams are the least useful.
The various charts used in report writing are given below:
Line Chart
Bar Chart
Pie Chart
Stratum Charts
Scatter diagram
Pictogram
Line Chart
Line Chart shows information over a period of time. Figure 13.1 shows a
Line Chart.

Figure 13.1: Circulation of News Paper
Time change is shown from left to right (X axis) and change in the quantity
(circulation) on the Y-axis.
A line chart is a two dimensional chart, when more than one variable is
presented, it is preferable to use two different color for one each type of Line
chart. The greatest disadvantage of line chart is that the number of items
that can be compared on one line chart is limited.

Figure 13.2: Stock Prices Index (BSE)
Figure 13.2 above is a line chart that shows a range of data for a particular
time. This is called hi-low chart or variance chart. This type of line chart is
extensively used to analyze stock market indices or to analyze high/low of a
stock during intraday trading. Chart in the Figure 13.3 will indicate high and
low points and also opening and closing of stock prices.

Figure 13.3: Movement of Individual Stock
Bar chart
This is a very popular method form of graphical representation, because it is
very easy to interpret. They show magnitude or comparison between
groups.
Vertical or horizontal bars are used to represent frequencies and percentage
numbers. In bar chart, the length of the bars represents the quantities that
they stand for in Figure 13.4. If 2 or more quantities are to be represented in
a single chart, Clustered bar chart as in Figure 13.5 is used. In this type of
chart, bars show the values of the quantities compared cross hatching or
different colors may be used to distinguish different kinds of information.
Transport used to commute to the place of work in a metro.

Figure 13.4: Bar Chart
Reasons for part time working

Figure 13.5: Clustered Bar Chart
When the researcher want to show plus and minus differences, bilateral
column charts are used as in Figure 13.6.
Titles of the bar will appear either up or down. Bilateral column charts are
good for showing percentage change.
In Figure 13.6 Bilateral column chart showing vote swing in general election.

Figure 13.6: Bilateral Column Chart
Sometimes subdivisions of the column need to be compared. In this case
Stacked column chart is used as in figure 13.7.

Figure 13.7: Stacked Column Chart
Pie Chart
In pie chart, a circle is divided into sections. Each section represents a
portion of the total. The advantage of pie chart is that the area represented
is proportional to the size of the item. Pie chart is excellent for showing the
decomposition of a total quantity into its components. For example,
contribution of companys product line to its sales or profits, income
distribution of households, allocation of budget to various expense
categories or brand available within a product category. This is shown in
Figure 13.8.
In figure 13.8, Pie diagram showing the market share for various brands.

Figure 13.8: Pie Chart
Stratum Chart

Figure 13.9: Strain Chart
It is a two dimensional graph with time along the horizontal axis and values
of the item plotted on the vertical axis. The area of the graph is divided into
several horizontal layers, or strata, one layer corresponding to each item.
The width of each stratum represents the relative magnitude of the
corresponding item at that time (Refer Figure 13.9).
The lowest stratum of Figure 13.9 represents Brand A. The second lowest
stratum corresponds to Brand B. The line representing the upper boundary
of this stratum represents the sum of the market shares of Brand A and
Brand B. Similarly, the upper boundary of the third lowest stratum
represents the combined shares of A, B and Brand C.
Scatter Diagram
This diagram shows whether any relationship exists between the two
variables under consideration. Example, price and sales. In a scatter
diagram if the points are closer to the straight line to be drawn, we can
conclude that there is a strong relationship between the variables. Scatter
Diagram gives 2 types of information. Visually, we can find out if the 2
variables are related. Secondly, if it is related what kind of line describes the
relationship is linear or curvilinear, etc. (Refer Figure 13.10)

Figure 13.10: Scatter Diagram
Pictogram
This is a special type of bar chart. It uses pictures instead of rectangular
bars. A Pictograph (also called pictogram) is an ideogram that conveys its
meaning through its pictorial resemblance to a physical object. The
advantage of a pictogram is that, it is more appealing and interesting to the
reader. Pictographs can often transcend languages in that they can
communicate to speakers of a number of tongues and language families
equally effectively, even if the languages and cultures are completely
different. This is why road signs and similar pictographic material are often
applied as global standards expected to be understood by nearly all.
Pictograph is given in figure 13.11.

Figure 13.11: Pictograph/Pictogram
Activity 3:
Would you suggest the exact presentation criteria of a research
report.

17. Scatter Diagram shows whether any relationship exists between the
__________ under consideration.
18. In pie chart, a circle is divided into __________ , each representing a
__________ of the total.

13.11 Presentation Plan
The presentation plan of the report shown in figure 13.12

Pre-report
Writing
Activities

Report
Writing
Activities

Post
Report
Writing

Problem Definition,
Research Design
and Methodology

Data
Analysis
Interpretation of
Research
findings
Report
Preparation
Oral
Presentattion
Reading of the
Report by the
client
RESEARCH
FOLLOW-UP

Figure: 13.12
19. Data analysis is a __________ activity.
20. Report preparation is a __________ activity.

13.12 Summary
As discussed in this unit, the prime objective of any marketing research
report is to communicate in an effective manner, the results of the research,
so the manager can take informed decisions. Marketing research report
provides the communication bridge between the researcher and the
manager and that is why it is an important aspect if the overall research
process.
It is very important for the researcher to remember that the report is being
prepared for the manager and therefore researcher must empathize with the
manager in the writing process. The report must be logically structured and
easy to follow. The objectivity of the research is also a supreme concern
and researcher should oppose inclusion of any judgment beliefs which
cannot be supported. The researcher should make sure that the report is
well written and looks professional.
Glossary
Research Report: a written document or oral presentation based on a
written document that communicates the purpose, scope, objectives,
hypothesis, methodology, findings, limitations and recommendations of a
research project to others.
Pie Chart: A circular graph having radii dividing the circle into sectors
proportional in angle and area to the relative size of the quantities.
Bibliography: A list of the works of a specific author or publisher. A list of
writings relating to a given subject
Written Report: A written document describing the findings of some
individual or group.

1. What are the criteria for an oral report?
2. What is meant by consider the audience when writing a research
report.
3. Why are visual aids used in oral presentation?
4. What are the various criteria used for classification of written report?
5. What are the essential content of the following parts of research report?
(a) Table of contents
(b) Title page
(c) Executive summary
(d) Introduction
(e) Conclusion
(f) Appendix
6. Oral presentation requires the researcher to be good public speaker.
Explain.

13.14 Answers
1. oral, written
2. Short
3. Informal
4. effectively communicate
5. inputs
6. Why, What, Who, When, Where, How
7. target audience
8. omitting
9. attractive, clearly organised
10. research
11. minimum
12. objectivity
13. critical intelligence, market insights
14. timeliness, clarity, utility
15. writer, receiver, message itself
16. thinking
17. variables
18. sections, portion
19. Pre-report writing
20. report writing
1. Refer to 13.2 Explain briefly
2. Refer to 13.3.
3. Refer to 13.2 Discuss reasons.
4. Refer to 13.2 Discuss criteria in short.
5. Refer to 13.5.
6. Refer to 13.2 Discuss with logical examples
Mini-case
India is a country comprising over 6 lakh villages and 741 million people
dwelling in rural areas. The main occupation of Indians is agriculture. More
than half of the Indians depend on agriculture. During the early 80s, Indian
farmers, especially those who were growing tomatoes on a large scale
encountered a major problem in the area of harvesting. Tomato is a labour
intensive crop and large scale tomato growers were depending on labourers
for harvesting and transporting it to the market. Tomato is a perishable
product, so tomato growers need large number of labourers at a time.
Availability of labour was a problem.
To aid the farmers, harvesting machines were introduced into the market.
Large scale growers of tomatoes were very happy because the machine
was introduced to overcome the problem of non-availability of labourers.
Their happiness was short lived, because farmers found that there was a
massive wastage of tomatoes while harvesting in machines.
It was felt that, the wastage was due to the layout of plantation and the
distance between the rows in planting. So farmers were asked to follow the
guidelines given by concerned authorities (i.e. agriculture department) in
plantation to minimise the wastage during the harvesting time. Farmers
followed the guidelines given by agricultural department. Even then they
could not decrease the wastage of tomatoes.
Subsequently, joint study was conducted by agriculture department and
farmers to identify the problem. This time, they felt that wastage was due to
improper handling in the operation of machine. To overcome this, machine
operators were trained to handle the machine. Despite this, the wastage did
not decrease. The government was quite serious and asked the authorities
to take appropriate steps to solve the problem at the earliest. The
investigation team defined the problem differently. They stated that the
harvesting machine was the problem. Based on this statement, the machine
was altered and tested. The problem could still not be solved. It was now
obvious that the mistake was in problem identification. As a management
student, could you analyse and answer the following issues.
Question
What are the possible solutions to the problem of tomato growers?
Hint: Discuss on the basis of the research report written by you in the this
case.

Unit 14 Ethics in Marketing Research
Structure
14.1 Introduction
Objectives
14.2 Ethical Theories
14.3 Ethics in MR
14.4 Research Supplier Ethics
14.5 Client Ethics
14.6 Field Service Ethics
14.7 Data-collection Code of Ethics
14.8 Summary
14.10 Answers

14.1 Introduction
In the earlier units, you came to know about the research reporting. In this
unit you will study about the ethics in marketing research.
In this unit you know the two most important factors for research clients in
their relationships with research departments/suppliers are client
confidentiality and honesty. Each is a question of ethics. Ethics are moral
principles or values generally governing the conduct of an individual or
group. Ethical behavior is not, however, a one-way relationship. Clients,
suppliers, as well as field services, must also act in an ethical manner.
Ethical questions range from practical, narrowly defined issues, such as a
researchers obligation to be honest with its customers, to broader social
and philosophical questions, such as a companys responsibility to preserve
the environment and protect employee rights. Many ethical conflicts develop
from conflicts between the differing interests of company owners and their
workers, customers, and surrounding community. Managers must balance
the ideal against the practical the need to produce a reasonable profit for the
companys shareholders with honesty in business practices, and larger
environmental and social issues.
This unit on ethics in marketing research will help you get familiar with some
ethics in the field of marketing research.
Objectives
Explain ethical theories
Describe ethics in marketing research
Define client ethics
Explain field service ethics

14.2 Ethical Theories
People usually base their individual choice of ethical theory on their life
experiences. The following are some of the ethical theories that apply to
business and marketing research.
Deontology: The deontological theory states that people should adhere to
their obligations and duties when analyzing an ethical dilemma. This means
that a person will follow his or her obligations to another individual or society
because upholding ones duty is what is considered ethically correct. For
instance, a deontologist will always keep his promises to a friend and will
follow the law. A person who follows this theory will produce very consistent
decisions since they will be based on the individuals set duties. Note that
this theory is not necessarily concerned with the welfare of others. Say, for
example, a research supplier has decided that its his ethical duty (and very
practical!) to always be on time to meetings with clients. Today he is running
late. How is he supposed to drive? Is the deontologist supposed to speed,
breaking his duty to society to uphold the law, or is the deontologist
supposed to arrive at his meeting late, breaking his duty to be on time? This
scenario of conflicting obligations does not lead us to a clear ethically
correct resolution, nor does it protect the welfare of others from the
deontologists decision.
Utilitarianism: The utilitarian ethical theory is founded on the ability to
predict the consequences of an action. To a utilitarian, the choice that yields
the greatest benefit to the most people is the choice that is ethically correct.
One benefit of this ethical theory is that the utilitarian can compare similar
predicted solutions and use a point system to determine which choice is
more beneficial for more people. This point system provides a logical and
rational argument for each decision and allows a person to use it on a case-
by-case context.
There are two types of utilitarianism: act utilitarianism and rule utilitarianism.
Act utilitarianism adheres exactly to the definition of utilitarianism as
described in the above section. In act utilitarianism, a person performs the
acts that benefit the most people, regardless of personal feelings or the
societal constraints such as laws. Rule utilitarianism, however, takes into
account the law and is concerned with fairness. A rule utilitarian seeks to
benefit the most people but through the fairest and most just means
available. Therefore, added benefits of rule utilitarianism are that it values
justice and doing good at the same time.
As is true of all ethical theories, however, both act and rule utilitarianism
contain numerous flaws. Inherent in both are the flaws associated with
predicting the future. Although people can use their life experiences to
attempt to predict outcomes, no human being can be certain that his
predictions will be true. This uncertainty can lead to unexpected results,
making the utilitarian look unethical as time passes because his choice did
not benefit the most people as he predicted.
Another assumption that a utilitarian must make is that he has the ability to
compare the various types of consequences against each other on a similar
scale. However, comparing material gains such as money against intangible
gains such as happiness is impossible since their qualities differ so greatly.
Casuist: The casuist ethical theory compares a current ethical dilemma with
examples of similar ethical dilemmas and their outcomes. This allows one to
determine the severity of the situation and to create the best possible
solution according to others experiences. Usually, one will find examples
that represent the extremes of the situation so that a compromise can be
reached that will hopefully include the wisdom gained from the previous
situations.
One drawback to this ethical theory is that there may not be a set of similar
examples for a given ethical dilemma. Perhaps that which is controversial
and ethically questionable is new and unexpected. Along the same line of
thinking, this theory assumes that the results of the current ethical dilemma
will be similar to results in the examples. This may not be necessarily true
and would greatly hinder the effectiveness of applying this ethical theory.
Understanding ethical theories will help us better decide how certain
unethical practices in marketing research should be resolved.
1. To a _____________ the choice that yields the greatest benefit to the
most people is the choice that is ethically correct.
2. The ____________ ethical theory compares a current ethical dilemma
with examples of similar ethical dilemmas and their outcomes.
3. The _____________ theory states that people should adhere to their
obligations and duties when analyzing an ethical dilemma.

14.3 Ethics in MR
Ethics is nothing but the accepted codes of conduct. Ethics in marketing
research is very much required and relevant in todays industrial scenario.
The ethical issues involved in marketing research can be studied from three
different angles.
1. Ethics in the treatment of the respondent.
2. Ethics in the treatment of buyers and clients.
3. Ethics in the treatment of researchers.
Ethics in the Treatment of the Respondent: An ethical code of conduct
must consider the following things:
Information that should not be disclosed and made public, i.e.,
participants name and secrecy must be protected.
Data collected from respondents must be correct and should not be
manipulated.
The rights of the respondents must be protected:
Right to privacy: The researcher should convince the customer that
the survey does not involve unethical things and it is being
conducted for mutual benefit. Eg. Skin care products should not
mislead the user.
Right to choose: The customer must be allowed to choose what he
wants. No force should be exerted by sellers on the buyer.
Right to safety: The researcher must not inflict psychological harm
by putting the respondents under pressure to answer.
Right to be informed: The researcher must inform the customer in
advance about the purpose of gathering the information.
The Respondents Ethics and Rights: A respondent who of his or her own
free will agrees to participate in a marketing research project has the ethical
obligation to provide the supplier, and hence the client with honest and
truthful answers. The respondent can abstain from answering a sensitive
questions but falsifying the answer is ethically improper.
Respondents in a marketing research project typically give their time and
opinions and receive little or nothing in return. These individuals, however,
do have certain rights that should be upheld by all marketing researchers.
All potential participants in a research project have the right to choose, the
right to safety, the right to be informed, and the right to privacy.
Right to Choose: Everyone has the right to determine whether or not to
participate in a marketing research project. Some people, such as poorly
educated individuals or children may not fully appreciate this privilege. A
person who would like to terminate an interview or experiment may give
short, incomplete answers or even false data.
The fact that a person has consented to be part of an experiment or to
answer a questionnaire does not give the researcher carte blanche to do
whatever she or he wants. The researcher still has an obligation to the
respondent. For example, if a person participating in a taste test
involving a test product and several existing products prefers the test
product, the researcher does not have the right to use the respondents
name and address in a promotion piece, saying that Ms. Jones prefers
new Sudsies to Brand X.
Right to Safety: Research participants have the right to safety from
physical or psychological harm. While it is unusual for a respondent to
be exposed to physical harm, there have been cases of persons
becoming ill during food taste tests. Also, on a more subtle level,
researchers rarely warn respondents that a test product contains, say, a
high level of salt. An unwitting respondent with hypertension could be
placed in physical danger if the test ran several weeks.
It is much more common for a respondent to be placed in a
psychologically damaging situation. Individuals might experience stress
when an interviewer presses them to participate in a study. Others might
experience stress when they cannot answer questions or are given a
time limit to complete a task (for example, You have five minutes to
browse through this magazine, and then I will ask you a series of
questions).
Right to be informed: Research participants have the right to be
informed of all aspects of a research task. Knowing what is involved,
how long it will take, and what will be done with the data, a person can
make an intelligent choice as to whether to participate in the project.
Often, it is necessary to disguise the name of the research sponsor to
avoid biasing the respondent. For example, it is poor research practice
to say, We are conducting a survey for Pepsi; which brand of soft drink
do you consume most often? In cases in which disguising the sponsor
is required, a debriefing should take place following the completion of
the interview. The debriefing should cover the studys purpose, the
sponsor, what happens next with the data, and any other pertinent
information. A debriefing can reduce respondent stress and build
goodwill for the research industry. Unfortunately, taking the time to
debrief a respondent is a cost that most companies are unwilling to
incur.
In some business and academic research, the researcher may offer to
provide the respondent with a copy of the research results as an
incentive to obtain his or her participation in the project. When a
commitment has been made to disseminate the findings to survey
respondents, it should be fulfilled. On more than one occasion, we have
participated in academic surveys where the carrot of research results
was offered but never delivered.
Right to Privacy: All consumers have the right to privacy. All major
research organizations, including the MRA (discussed above), the
Council of American Survey Research Organizations (CASRO), the
Internet Marketing Research Association (IMRO), the American
Marketing Association (AMA), and the Advertising Research Foundation
(ARF), have privacy codes. For example, with online research, lists of
potential respondents must have one of two characteristics. Potential
respondents must have either a prior opt-in for contact, or they must
have an existing business relationship with the sender through which an
e-mail contact would not be considered a random, unsolicited e-mail
(spam).
Consumer privacy can be defined in terms of two dimensions of control.
The first dimension includes control of unwanted telephone, mail, e-mail,
or personal intrusion in the consumers environment, and the second
concerns control of information about the consumer. Consumer privacy
can be viewed in the context of any interaction, profit or nonprofit,
between marketer and consumer, including (but not limited to) credit and
cash sales, consumer inquiries, and marketer-initiated surveys. The very
nature of the marketing research business requires interviewers to
invade an individuals privacy. An interviewer calls or approaches
strangers, requests a portion of their limited free time, and asks them to
answer personal questions sometimes very personal questions.
Ethics in the treatment of buyers and clients
The method for conducting the research and the results obtained should
be accurate.
The researcher should keep the identity of the client confidential.
If the client request or demands an unethical research, the researcher
should refuse to take up the ill-advised research for his clients.
Maintaining confidentiality and secrecy is of utmost importance and it is
a part of the ethical code of conduct to be followed by the researcher.
Ethics in the treatment of researchers
Selecting the bidders: Sometimes firms, for the sake of formality, call
for quotations from a number of market research agencies, even though
they have already decided to whom the project should be given. This is
an unethical practice in the matter of selection of researchers.
Limited funds: Certain firms have limited funds allocated to carry out
the research. For example, the firm may have a budget to be conducted
on a regional basis but the firm does not make this clear to the
researcher while inviting proposals. It may so happen that such
ambiguity may cause the researcher to prepare his proposal for a
nationwide research, but upon bagging the project, the funds released
are sufficient only to conduct research on regional basis. This may
frustrate researchers besides, it is an unethical practice.
Non-availability of data: Some firms give projects to their researcher,
but do not provide him with required sales and cost data. Since this may
be the basis for carrying out the research, the researcher feels frustrated
at not receiving the basic promised data. This is an unethical on the part
of the client firm.
Pseudo-Pilot studies: Some clients ask the research agencies to
conduct pilot studies and promise that if the researcher does a good job
during the pilot study stages, there will be an additional major contract
immediately. Most often, this comprehensive study never materialises
and the research agencies absorb a huge loss. This is not an ethical
practice.
Political research: Political organizations hire some research
consultants to carry out a research. In such cases, there is all likelihood
that the consulting firm or organisation will be politically pressurised to
produce reports and forecast in favour of the party commissioning it.
This is also a very unethical practice.
Activity 1:
Every field of management have certain ethics. What kind of ethics plays
vital role in marketing research. Explain
4. All potential participants in a research project have the right to _____.,
the right to _______, the right to be _______, and the right to
_________
5. If the client request or demands an unethical research, the researcher
should __________.

14.4 Research Supplier Ethics
Unethical research supplier practices range from low-ball pricing to violating
client confidentiality.
The more common ethical issues for the research supplier are:
Violating client confidentiality
Improper execution of research
Low-Ball Pricing
Allowing Subjectivity into the Research
Abusing Respondents
Selling Unnecessary Research
Violating Client Confidentiality: Disclosing any information about the
client that the supplier has gathered from the research project amounts to a
violation of client confidentiality.
Improper Execution of Research: Suppliers are required to conduct
marketing research projects in an objective manner, free from personal
biases and motives. Improper execution also includes using biased
sampling, ignoring relevant data, or misusing statistics all of which lead to
erroneous and misleading results.
Low-Ball Pricing: A research supplier should quote a firm price based on a
specific incidence rate (percentage of the respondents in the sample that
will qualify to complete the survey) and questionnaire length (time to
complete). If either of the latter two items changes, then the client should
expect a change in the contract price. Low-ball pricing in any form is
unethical. In essence, low-ball pricing is quoting an unrealistically low price
to secure a firms business and then using some means to substantially
raise the price. For example, quoting a price based on an unrealistically high
incidence rate is a form of lowball pricing. Offering to conduct a focus group
at $6,000 a group and, after the client commits, saying, The respondents
fees for participating in the group discussion are, of course, extra is a form
of low-balling.
Allowing Subjectivity into the Research: Research suppliers must avoid
using biased samples, misusing statistics, ignoring relevant data, and
creating a research design with the goal of supporting a predetermined
objective. One area of research today is so-called advocacy studies. These
studies are commissioned by companies or industries for public relations
purposes or to advocate or prove a position. For example, Burger King once
used positive responses to the following question in an advocacy study in an
attempt to justify the claim that its method of cooking hamburgers was
preferred over that of McDonalds: Do you prefer your hamburgers flame-
broiled or fried? When another researcher rephrased the questionDo
you prefer a hamburger that is grilled on a hot stainless-steel grill or cooked
by passing the meat through an open gas flame? the results were reversed:
McDonalds was preferred to Burger King.
Kiwi Brands, a shoe polish company, commissioned a study on the
correlation between ambition and shiny shoes. The study found that 97
percent of self-described ambitious young men believe polished shoes are
important. In many cases, advocacy studies simply use samples that are not
representative of the population. For example, a news release for a diet
products company trumpeted: Theres good news for the 65 million
Americans currently on a diet. A company study had shown that people
who lose weight can keep it off the sample consisted of 20 graduates of
the companys program, who also endorsed its products in commercials.
When studies are released to the news media, the methodology should be
readily available to news reporters. Typically, this information is withheld,
often on the ground that the material is proprietary. A survey done for
Carolina Manufacturers Service, a coupon redemption company, found that
a broad cross-section of Americans find coupons to be true incentives for
purchasing products. The description of the methodology was available
only at a price: $2,000.
Abusing Respondents: Respondent abuse can take several forms.
Perhaps the most common is lengthy interviews. This problem stems in part
from the as long as youre asking questions mentality of many product
managers. It is not uncommon for clients to request additional nice to know
questions, or even exploratory questions on an entirely separate project.
This leads to lengthy questionnaires, 30-minute telephone or internet
interviews, and 40-minute mall-intercept interviews. As a result of long
interviews and telephone sales pitches, more and more Americans are
refusing to participate in survey research. The refusal rate for telephone
surveys now averages 60-plus percent, an increase of 10 percent over 10
years. Forty-nine percent of the people who do participate say the surveys
are too personal.
Predictive dialers are tremendous productivity tools for survey research
telephone call centers. They remove much of the idle time an interviewer
would otherwise spend manually dialing numbers and recording call
dispositions, such as no-answer and busy signals. By definition, predictive
dialers dial phone numbers ahead of available interviewers, predicting when
an interviewer will become available. Adjusting the pacing manually sets the
aggressiveness of this dial-ahead capability. Obviously, there is strong
motivation for call-center managers to increase the pacing and minimize the
time an interviewer spends between calls. However, this action has
undesirable consequences because some respondents are contacted
before an interviewer is available. In most cases, the dialer than places the
respondent on hold or disconnects the call. Both actions decrease
respondent goodwill.
Interest in a product or service is often discerned during the interviewing
process, and the researcher knows the interviewees potential purchasing
power from their answers to income and other pertinent financial questions.
Although the introduction phase of the questionnaire usually promises
confidentiality, some researchers have sold names and addresses of
potential customers to firms seeking sales leads. Individuals willing to
participate in the survey research process have a right to have their privacy
protected.
The state of New York sued Student Marketing Group for selling information
on a broad scale to direct marketers. The survey filled out by students
included age, gender, religious affiliation, career interests, and grade point
average. The company said that it was gathering the data to provide to
universities to help the students gain admission and financial aid. Direct
marketers used the information to sell credit cards, magazines, videos,
cosmetics, and other products.
Selling Unnecessary Research: A research supplier dealing with a client
who has little or no familiarity with marketing research often has the
opportunity to trade the client up. For example, if a project called for four
focus groups and an online survey of approximately 350 consumers, the
research supplier might sell eight groups and 1,000 Internet interviews, with
a 400-interview telephone follow-up in 6 months.
It is perfectly acceptable to offer a prospective client several research
designs with several alternative prices when and if the situation warrants
alternative designs. The supplier should point out the pros and cons of each
method, along with sample confidence intervals. The client, in consultation
with the supplier, then can decide objectively which design best suits the
companys needs.
6. Research suppliers must ___________ using biased samples, misusing
statistics, ignoring relevant data.
7. Disclosing any information about the client that the supplier has
gathered from the research project amounts to a violation of
___________.

14.5 Client Ethics
Like research suppliers, clients (or users) also have a number of ethical dos
and donts. Some of the more common client problems are requesting bids
when a supplier has been predetermined, requesting bids to obtain free
advice and methodology, making false promises, and issuing unauthorized
RFPs.
Requesting bids when a supplier has been predetermined: It is not
uncommon for a client to prefer one research supplier over another. Such a
preference may be due to a good working relationship, cost considerations,
ability to make deadlines, friendship, or quality of the research staff. Having
a preference per se is not unethical. It is unethical, however, to
predetermine which supplier will receive a contract and yet ask for proposals
from other suppliers to satisfy corporate requirements. Requiring time, effort,
and money from firms that have no opportunity to win the contract is very
unfair. Why more than a single RFP? Some corporations require more than
one bid.
Requesting Bids to Obtain Free Advice and Methodology: Client
companies seeking bargain basement prices have been known to solicit
detailed proposals, including complete methodology and a sample
questionnaire, from a number of suppliers. After picking the brains of the
suppliers, the client assembles a questionnaire and then contracts directly
with field services to gather the data. A variation of this tactic is to go to the
cheapest supplier with the clients own proposal, derived by taking the best
ideas from the other proposals. The client then attempts to get the supplier
to conduct the more elaborate study at the lower price.
Making False Promises: Another technique used by unethical clients to
lower their research costs is to hold out a nonexistent carrot. For example, a
client might say, I dont want to promise anything, but we are planning a
major stream of research in this area, and if you will give us a good price on
this first study, we will make it up to you on the next one. Unfortunately, the
next one never comes or if it does, the same line is used on another
unsuspecting supplier.
Requesting Proposals without Authorization: In each of the following
situations, a client representative sought proposals without first receiving the
authority to allocate the funds to implement them:
A client representative decided to ask for proposals and then go to
management to find out whether she could get the funds to carry them
out.
A highly regarded employee made a proposal to management on the
need for marketing research in a given area. Although managers were
not too enthused about the idea, they told the researcher to seek bids so
as not to dampen his interest or miss a potentially (but, in their view,
highly unlikely) good idea.
A client representative and her management had different ideas on what
the problem was and how it should be solved. The research supplier
was not informed of the management view, and even though the
proposal met the representatives requirements, management rejected it
out of hand.
Without consulting with the sales department, a client representative
asked for a proposal on analyzing present sales performance. Through
fear of negative feedback, corporate politics, or lack of understanding of
marketing research, the sales department blocked implementation of the
proposal.
Activity 2:
How clients ethics create problem sometime? Explain.

8. A ____________ may prefer one research supplier over another due to
a good working relationship, cost considerations and ability to make
deadlines.
9. After picking the brains of the suppliers, the client assembles a
_______ and then contracts directly with field services to gather the
data.

14.6 Field Service Ethics
Marketing research field services are the production arm of the research
industry requiring telephone or face-to-face interviews. They are the critical
link between the respondent and the research supplier. It is imperative that
they properly record information and carefully follow sampling plans.
Otherwise, even the best research design will produce invalid information
(garbage in; garbage out). Maintaining high ethical standards will aid a field
service in procuring good raw data for the research firm.
Using Professional Respondents: The problem of professional
respondents arises most often in the recruitment of focus group participants.
Virtually all field services maintain a database of people willing to participate
in qualitative discussion groups, along with a list of their demographic
characteristics. Maintaining such a list is good business and quite ethical.
When qualifications for group participants are easy (for example, pet
owners, persons who drive SUVs), there is little temptation to use
professional respondents. However, when a supplier wants, for example,
persons who are heavy users of Oxydol detergent or who own a Russian
Blue cat, it is not unheard of for a group recruiter to call a professional
respondent and say, I can get you into a group tomorrow with a $75
respondent fee and all you need to say is that you own a Russian Blue cat.
In an attempt to weed out professional respondents, a research supplier
may specify that the participant must not have been a member of a
qualitative discussion group within the past 6 months. However, dishonest
field services will simply tell the professional respondent to deny having
participated in a group within the past 6 months.
10. Marketing research field services are the critical link between the
__________and the __________
11. Dishonest field services will simply tell the____________ to deny having
participated in a group within the past 6 months.

14.7 Data-collection Code of Ethics
The Marketing Research Association (MRA) is an association to which may
field services belong. The organization is dedicated to promoting excellence in
data collection. To this end, it recently enacted the following code of ethics:
Will treat the respondent with respect and not influence a respondents
opinion or attitude on any issue through direct or indirect attempts,
including the framing of questions.
Will conduct themselves in a professional manner and ensure privacy
and confidentiality.
Will ensure that all formulas used during bidding and reporting during
the data collection process conform with the MRA/CASRO Incidence
Guidelines.
Will make factually correct statements to secure cooperation and will
honor promises made during the interview to respondents, whether
verbal or written.
Will give respondents the opportunity to refuse to participate in the
research when there is a possibility they may be identifiable even
without the use of their name or address (e.g., because of the size of the
population being sampled).
Will not use information to identify respondents without the permission of
the respondent except to those who check the data or are involved in
processing the data. If such permission is given, the interviewer must
record it, or a respondent must do so, during all Internet studies, at the
time the permission is secured.
Will adhere to and follow these principles when conducting online
research:
Respondents rights to anonymity must be safeguarded.
Unsolicited e-mail must not be sent to those requesting not to
receive any further e-mail.
Researchers interviewing minors must adhere to the Childrens
Online Privacy Protection Act (COPPA).
Before collecting, using, or disclosing personal information from a
child, the researcher must obtain verifiable parental consent from the
childs parent.
For Internet research, will not use any data in any way contrary to the
providers published privacy statement without permission from the
respondent.
Will respect the respondents right to withdraw or refuse to cooperate at
any stage of the study and will not use any procedure or technique to
coerce or imply that cooperation is obligatory.
Will obtain and document respondent consent when it is known that the
personally identifiable information of the respondent may be passed by
audio, video, or Interactive Voice Response to a third party for legal or
other purposes.
Will obtain permission and document consent of a parent, legal
guardian, or responsible guardian before interviewing children 13 years
of age or younger. Prior to obtaining permission, the interviewer should
divulge the subject matter, length of interview, and other special tasks
that may be required of the respondent.
Will ensure that all interviewers comply with any laws or regulations that
may be applicable when contacting or communicating to any minor (18
years old or younger) regardless of the technology or methodology
utilized.
Will not reveal any information that could be used to identify clients
without their written authorization.
Will ensure that companies, their employees, and subcontractors
involved in the data-collection process adhere to reasonable precautions
so that multiple surveys are not conducted at the same time with a
specific respondent without explicit permission from the sponsoring
company or companies.
Will consider all research materials provided by the client or generated
as a result of materials provided by the client to be the property of the
client. These materials will not be disseminated or disposed of without
the verbal or written permission of the client.
Will, as time and availability permit, give their client the opportunity to
monitor studies in progress to ensure research quality.
Will not represent a non-research activity to be opinion and marketing
research, such as:
The compilation of lists, registers, or data banks of names and
addresses for any non-research purposes (e.g., canvassing or fund
raising).
Industrial, commercial, or any other form of espionage.
The acquisition of information for use by credit rating services or
similar organizations.
Sales or promotional approaches to the respondent.
The collection of debts.
12. MRA is an organization is dedicated to promoting excellence in
_____________
13. In an online research, respondents rights to ___________ must be
safeguarded.

14.8 Summary
Ethics is accepted code of conduct. Ethical issues of business research can
be studied under three different entities. Maintaining integrity is important in
research. Acts such as lack of confidentiality, falsifying, holding back the
information, etc., should be avoided.
Ethics are moral principles or values generally governing the conduct of an
individual or group. The deontology theory says that a person will follow his
or her obligations to another individual or society because upholding ones
duty is what is considered ethically correct. In contrast, utilitarian ethical
theory maintains that a choice yielding the greatest benefit to the greatest
number of people is the choice that is ethically correct. The casuist theory
holds that a decision should be made by comparing a current ethical
dilemma with examples of similar ethical dilemmas and their outcomes.
Unethical practices by some suppliers include low-ball pricing, allowing
subjectivity into the research, abusing respondents, selling unnecessary
research, violating client confidentiality, and using black box branding.
Unethical practices performed by some research clients include requesting
bids when a supplier has been predetermined, requesting bids to gain free
advice or methodology, making false promises, and issuing unauthorized
requests for proposals. Marketing research field services have used
professional respondents which is unethical.
Glossary
Ethics: branch of philosophy that addresses questions about morality that
is, concepts such as good and bad, noble and ignoble, right and wrong,
justice, and virtue.
Utilitarianism: the idea that the moral worth of an action is determined
solely by its utility in providing happiness or pleasure as summed among all
sentient beings.
Low-Ball: To underestimate or understate deliberately.
1. Explain ethics in market research.
2. Describe the researcher and supplier ethics in detail.
3. What do you mean by data collection code of ethics?
4. Describe one theory of MR ethics.

14.10 Answers
1. utilitarian
2. casuist
3. deontological
4. choose, safety, informed, privacy
5. refuse
6. avoid
7. client confidentiality
8. client
9. questionnaire
10. respondent, research supplier
11. professional respondent
12. data collection
13. anonymity

1. Refer to 14.3 Discuss with reasons.
2. Refer to 14.4 Discuss with examples.
3. Refer to 14.7.
4. Refer to 14.2.
Mini-case
A reputed two-wheeler agency located in North India needed a decision
about whether to import or not, a relatively unknown brand of bike to
supplement its domestic product. To facilitate the decision-making, the
agency approached a reputed market research firm. The main purpose is to
conduct a study, to determine potential consumer interest and demand for
imported bikes. The result of the survey showed that, not only were
respondents aware of the bike, there was a positive interest among the
respondents. Consequently the agency took a decision to import the bike.
A press conference was held involving media, such as newspapers,
magazine, TV, etc. Important personalities were invited. The company also
expressed interest in inviting the survey participants, who had expressed
their interest. This was proposed by the agency to have better interaction
with respondents. Keeping this in mind, the company asked the research
firm to furnish the names, addresses and phone numbers of the
respondents. The research firm refused to comply with this request. They
argued that to do this is a violation of respondents promised anonymity.
Question
What could be some of the consequences of providing respondents detail
to the agency?
Hint: Discuss with respect to the various rights enjoyed by the respondent.
Unit 15 Marketing Research in Indian Context
Structure
15.1 Introduction
Objectives
15.2 Growing Importance of Marketing Research in India
15.3 Expenditure on Marketing Research in India and Major Users
15.4 Ways of Conducting Marketing Research in India
15.5 Increased Demand for Outside Research Services
15.6 Common Applications of Marketing Research in India
15.7 Problems in Conducting Marketing Research in India
15.8 Challenges in Carrying Out Marketing Research
15.9 New Trends in Marketing Research
15.10 Summary
15.12 Answers

15.1 Introduction
In this unit, you will learn the role and organization of marketing research in
India. More specifically, you know why marketing research is becoming
important in India and what organizational arrangements firms have for
conducting researches. Major users and uses of marketing research in the
country shall be identified. The unit shall also examine the problems which
the researchers face while doing researches in India.
This unit on marketing research in Indian context will help you get familiar
with the improvement of marketing research in India and other concept of
marketing research in the context of India.

Objectives
Explain growing factor of marketing research in India.
Describe various problems faced by Indian researchers
Describe challenges of marketing research in India

15.2 Growing Importance of Marketing Research in India
Use of marketing research in India has been considerably low in the past.
Only a few large firms, especially those having linkages with foreign firms,
were making use of marketing research during the fifties and sixties. Even
among such firms, only a select ones were conducting researches on a
regular basis and/or having a marketing research department within the
organization. A number of reasons can be put forward to explain this
phenomenon. Highly protected nature of the Indian market during the fifties
and sixties is amongst the most important reasons. A highly restrictive
industrial licensing policy coupled with a ban on capacity expansion led to
constant shortages of goods and services in the country. With demand
always exceeding supply and a virtual absence of competition in the market,
the firms were able to easily push to the consumers all those products they
produced. The focus of the firms at that time was primarily on procuring the
licenses and raw materials. They hardly had any concern for the product
improvements or satisfaction of their customers' needs and wants. In a way,
a sort of sellers' market prevailed at that time, and availability of an assured
market to the producers did not provide any incentive to them to make use
of marketing research for becoming more efficient, innovative and
competitive in the market place.
Moreover, the firms during those times operated on small scales and that
too within the peripheries of the local markets. Since they were very close to
their customers and had personal knowledge about them, they did not feel
the need for conducting marketing researches. Even a few of the firms that
were desirous of making use of marketing research could not do so because
of the paucity of funds. Lack of professional approach to management and
decision-making was another important reason for the neglect of marketing
research among the business firms in India.
Of late, however, the situation has undergone considerable changes. With
successive deregulation of the economy in the ensuing period and abolition
of the archaic industrial licensing system and other regulations especially in
the nineties, the competition has hot up in the market. Many a new firms -
both the Indian and foreign ones - have made a foray into the market.
Scalewise also, firms have expanded their businesses and they today
operate in the local as well as national and international markets. Due to fast
changing technological environment, product life cycles have been
shortened and many a new substitute have emerged. New methods of
communications and distribution channels have radically transformed the
Indian marketing scene, In many product categories, sellers' markets have
paved way to the buyers' markets. In the wake of these changes and
growing customer sophistication, it is no longer possible for the firms to
continue to base their marketing decisions solely upon gut feelings and past
experiences. Need for timely, accurate and relevant information about the
markets and buying behavior of the target market customers is fast
becoming sine qua non for improved decision-making.
1. Due to fast changing technological environment, product life cycles have
been ______________
2. Today everyone requires ___________ and ___________ information.

15.3 Expenditure on Marketing Research in India and Major
Users
Though no precise information is available; the guesstimate is that Indian
firms do not spend much money on marketing research. Consulting and
Research Enterprise (CORE), Hyderabad conducted a survey of the Indian
firms in 1986 to ascertain their expenditure on marketing research and
attitudes toward it. About 500 questionnaires were mailed out to the firms
selling industrial goods, consumer products and services, out of which 130
responded. Despite an overall favorable attitude towards marketing
research, the study found most of the firms spending low money on it. About
40 per cent of the firms were found spending less than Rs. 1 lakh.
Expenditure by the other 46 per cent of the firms ranged between Rs. 1 lakh
and Rs. 10 lakhs. Only about 14 per cent firms we spending more than
Rs. 10 lakhs, with highest figures being Rs. 1 crore (Table 15.1).
Table 15.1: Expenditure on Marketing Research by Indian Firms: 1985-86

CORE study also attempted an analysis of the marketing research
expenditure in relation to sales, and found that while 28 per cent of the
surveyed firms were spending 0.01 per cent or even less of their sales
volume on marketing research during the year 1985-86, 63 per cent firms
had their expenditure on marketing research in the range of 0.02 per cent to
0.4 per cent of sales. Though the rest of the 9 per cent of the surveyed firms
were spending more than 0.4 per cent on marketing research, it was only
the firms producing consumer goods which had expenditure on marketing
research in excess of 1 per cent of their sales.
In the past, only big firms used to be major users of the marketing research.
But of late, medium and small size firms have also started showing interest
in marketing research. Little wonder that even the marketing research
agencies have started turning to them for securing research business from
them. The number of the firms using marketing research on a regular basis
is also on an increase.
Over time, a significant decline has occurred in the relative importance of
the multinational firms. Two decades ago, multinational corporations were
the major users of marketing research, and their share was as high as 67
per cent of the total commercially available research in-India. But their share
has now started declining, and is expected to fall to a level of 45 per cent by
the end of this century. In contrast, the Indian firms are fast emerging as the
major uses of the marketing research in the country.
Another noteworthy change is the increasing use of marketing research by
the industrial goods firms. Though the consumer goods firms continue to
dominate the scene even at present, the share of industrial goods firms is
likely to rise in future with increased competition in the industrial goods
market.
3. CORE conducts __________.
4. In India, __________ goods firms continue to dominate the market.

15.4 Ways of Conducting Marketing Research in India
Broadly speaking, a firm can get the researches conducted in two ways:
either through its own staff or by hiring the services of outside agencies.
Some firms make use of both the alternatives.
So far as the in-house research is concerned, it can be conducted by the
firm's sales and marketing staff of or else they can have specialized staff or
department for conducting marketing researches. Since the employment of
specialized research staff or setting up of a separate research department
entails huge expenditure, only large firms requiring researches on a frequent
basis go in for this type of organizational arrangement. Small firms and the
organizations not so frequently requiring researches prefer using their sales
or marketing staff for undertaking research studies. As and when the need
arises, some of the sales and marketing persons are picked up and
assigned the research tasks. Since these persons generally do not have
specialized knowledge of marketing research and, moreover, perform side
by side the routine sales and marketing activities quality of the studies
conducted by such persons remains under doubt.
The other important method of collecting information is the use of outside
agencies or experts such as marketing research organizations, advertising
agencies and consultants. Seeing the increased demand for research
services, many a marketing research organization have come up in the
country and help business films through provision of customized as well as
syndicated research services. When the research is tailor-made to meet the
information needs of one particular client, it is known as customized
research. Since the benefit of such a research accrues to a single firm, that
single firm alone bears the entire research cost. Syndicated research, on the
other hand, involves collection of a common pool of data for meeting the
information needs of a number of firms. As the results of such a study are
shared among several films, it costs pretty less to a single firm. Quite often,
these studies are undertaken on a regular basis by the research agencies
and the information so collected is made available to the films on a
subscription basis.
Table 15.2: Organizational Arrangements for Conducting Marketing Research
in India

Table 15.2 contains the information regarding usage of different modes of
conducting researches. It is evident that the majority of the Indian firms
(about 70 percent) depend upon their sales staff for doing researches. Use
of outside marketing research agencies conies next in order of importance,
with about one-half of the firms employing them. In-house marketing
research staff exists in the case of 44 percent of the firms, especially among
the large size firms and those engaged in marketing of industrial products
and services. About one-third each of the Indian films get their marketing
research studies done through advertising agencies and consultants.
Syndicated researches are not yet common among the Indian firms. Despite
their low costs to the clients and the advantage of such information in many
cases being available at regular intervals, only about one-fifth of the firms
make use of the syndicated research services.
Table 15.2 also provides information about the nature of the firms preferring
a particular arrangement. It can be observed that practice of using sales
staff for carrying out researches exists among the firms of all sizes. Use of
in-house marketing research staff, outside research agencies and marketing
research services is more often prevalent among the larger rather than
medium mid small size firms. Important differences also, exist among firms
selling different types of products. While industrial goods and services firms
show a greater reliance on their sales persons and in-house marketing
research staff, consumer goods firms depict a preference for marketing
research agencies and syndicated research services to meet their
information needs.
Activity 1:
How is marketing research activity organized in your firm'? List the
arrangements that your firm has for conducting researches both
within and outside the firm. (Alternatively you may approach some
other organization and complete this activity in respect of that
organization)
5. Employment of specialized research staff or setting up of a separate
research department entails _____________.
6. Syndicated researches are _________ common among the Indian firms

15.5 Increased Demand for Outside Research Services
The demand for outside marketing research services has phenomenally
increased during the eighties and nineties. This is evident from the increase
in turnover of the marketing research agencies during this period. The value
of marketing research conducted by the marketing research agencies was
just Pa. 1 crore during the seventies. It went up to a figure of Rs. 3 crore in
1983, and further tip to Rs. 10.06 crore in 1988-89. Currently, the turnover of
the research agencies is expected to be somewhere around Pa. 20 to 10.25
crore.
Seeing growth in demand for different kinds of outside marketing research
services, a number of marketing research agencies and other organizations
have mushroomed in the country to meet the information needs of the
business firms. A list of some of these organizations is provided in Table
15.3.
Table 15.3: Major Organizations Offering Marketing Research Services in India
Operation Research Group (ORG)
Indian Marketing Research Bureau (IMRB)
Marketing and Research Group (MARG)
Marketing Operations Design and Enquiry Service (MODES)
Pathfinders
Advertising Consultants (India) Pvt. Ltd.
Concept Marketing and Advisory Pvt. Ltd.
Marketing and Business Associates ( MBA)
Research Consultants and Marketing Services Pvt. Ltd.
Consulting and Research Enterprise (CORE)
Marketing Research and Data Processing Consultancy Tata Consultancy
Services
National Council of Applied Economic Research (NCAER)
Indian Institute of Public Opinion
Indian Institute of Foreign Trade (IIFT)
Feedback Marketing Services
Research Consultancy Group
C. Marck (India) Ltd.
Quantum Market research Pvt. Ltd.
Research International India
Indica Research
A break-up of the firms using services of marketing research agencies is
provided in Table 15.4. Manufacturing firms have been the single largest
users of such research services, with a share of 72 per cent of the total
commissioned marketing research in India. Though the advertising agencies
are themselves important research services providers, they also employ
marketing research agencies for getting researches conducted for them.
Share of the firms using syndicated research services has been just
6 per cent in 1989. Media owners, services industries, government
departments/organizations, and research/consultancy organizations are yet
to emerge as important users of the commissioned marketing research in
India.
Table 15.4: Clientwise Break-up of the Marketing Research Commissioned in
India during 1988-89

7. The demand for ______________ marketing research services has
phenomenally increased during the eighties and nineties.
8. Though the advertising agencies are themselves important research
services providers, they also employ ____________ agencies for getting
researches conducted for them.

15.6 Common Applications of Marketing Research in India
The most common application areas of marketing research in India are
listed in Table 15.5. New product decisions constitute the most frequent
usage of marketing research. The other important application areas include:
estimation of market share, collection of competitive information, demand
estimation, product modification decisions, measurement of customer
satisfaction, product positioning, diversification and market segmentation
decisions. Only about one-third of the firms reported the use of marketing
research for developing advertising theme/message and arriving at pricing
and customer service decisions.
Application of marketing research for product elimination and evaluation of
advertising effectiveness is prevalent only among 20 per cent firms.
Furthermore, only 9 per cent firms reported the incidence of marketing
research for channel modification decisions.
Table 15.5: Common Applications of Marketing Research in India
Areas in which marketing research is
frequently/always used
Percentage of
respondents*
New product decisions 58
Estimating market share 49
Gathering competitive information 47
Demand estimation 46
Product modification decisions 44
Measuring consumer satisfaction 43
Product positioning decisions 42
Diversification decisions 40
Market segmentation decisions 38
Advertising theme/message decisions 31
Pricing decisions 30
Customer service decisions 27
Product elimination decisions 21
Evaluating advertising effectiveness 20
Channel modification decisions 9

Activity 2:
Compile a list of the organizations that provide marketing research
services in your area. Also approach any two of them and find out
what type of research services they provide to the clients.

9. __________ decisions constitute the most frequent usage of
marketing research.
10. Application of marketing research for product elimination and
evaluation of advertising effectiveness is prevalent only among
___________ firms.
15.7 Problems in Conducting Marketing Research in India
Due to country's vast size, heterogeneous population and infrastructural and
attitudinal problems, it is not easy to conduct marketing research in India.
Some of the major problems that you as a researcher would face in
conducting marketing research in the country are discussed below.
India's large and heterogeneous population comes in a big way in
conducting marketing research. Being a big and diverse country,
national surveys require India to be divided into several hundred districts
and interviewing several thousands of people. This calls for enormous
time and money and a big fleet of field workers well beyond the
capacity of any small or medium size company.
Cultural diversity and linguistic nuisances further compound the
researcher's problem. More than 14 languages are spoken in the
country, with dialects exceeding 1,400 in number. Any major survey in
the country requires translation of the questionnaire in a minimum of five
to six languages. Many a time, strict translation of certain technical
words or phrases is not possible, thus giving rise to the problem of non-
comparability of data across the regions.
Accessibility to people living in the hinterland of the country is another
big problem. Only very few people own telephone. Postal system is also
not up to the mark: Because of low literacy level, mail interviews are of
limited application. Personal interviews seem to be the only viable
alternative, but even these are beset with transport problems and lack of
trained staff in the small towns and rural areas.
Secondary data available in the country also suffer on account of poor
coverage and redundancy of information. Data are at all not available for
many a variable of interest to the researchers. Though census is
conducted after every ten yews in the country, it is after a considerable
lapse of time that the full results are released. Even the trade and
industry associations: lack complete and up-to-date lists of the
manufacturers and trades. The industry and firms' production and sales
figures are also not complete, up-to-date and reliable.
Use of random and other elaborate sampling techniques presuppose the
existence of suitable sampling frames (i.e., list of the target market
population from which the samples are drawn). Non-availability of such
lists in the country complicates the research tasks and forces the
researcher to use non-probability sampling methods, thus adversely
affecting the reliability and validity of the survey results.
Attitudinal problems also restrict the use of marketing research in India,
The study by, Consulting and Research Enterprise (CORE) group, for
instance, found that only two-third of the executives of the surveyed
firms had the opinion that marketing research findings represent the real
world, and marketing research data are reliable cough to be of use iii,
decision-making. In response to the question whether costs incurred on
marketing research are low relative to the benefits that accrue from it,
about 58 per cent firms indicated disagreement, implying low utility of
marketing research. Further only 57 per cent of the executives refuted
the statement that "gut feeling is more important than marketing
research". Rest were either ambivalent or in agreement with the
statement.
The managers also appeared quite concerned with the time involved in
completing the marketing research studies. Only 42 per cent of the
respondents did not feel that " market research often takes too long to
be of any real use". In terms of quality and sophistication too, marketing
research in India in the opinion of many executives is far below the
expectations.
Not only the business firms, but advertising agencies also do not hold
favorable attitudes towards marketing research. Advertising executives
view it as a hindrance to their -creative work and hence do not like
spending much money on it. In 1988, about Rs. 1078 crores were spent
on advertising in the country. Had even 1 per cent of this amount been
spent on marketing research, the expenditure on advertising research
alone would have been Rs. 10.78 crore. But its is not due as the total
expenditure on commissioned marketing research itself in India was just
of the order of Rs. 10.06 crore in 1988-89.
Self Assessment Question
11. In India, cultural ___________ and ____________ differences further
compound the researcher's problem.

15.8 Challenges in Carrying Out Marketing Research
The various challenges in carrying out in marketing research are:
Be clear about the purpose of the marketing research.
Decide what you want to find out. A golden rule is that you should not try
to cover too much in one exercise.
Be clear about who your customers are. The key stage of any marketing
research is to decide whom it is you want to question.
Develop a brief. The brief is a clear statement of what is expected, by
when and at what price.
Decide who's going to carry out the marketing research.
If your organisation does not have a marketing research department (or
sometimes, even if it does), you may need to bring in a specialist
organisation to help you.
Select an external agency. Find the names of suitable agencies through
the trade press or trade association, directories, or contacts and
recommendations. Circulate your brief and shortlist candidates from their
responses.
Choose your method.
Think about data analysis.
Activity 3:
For what purposes has your organization in the last two years conducted
or commissioned marketing researches'? List the major applications.
(Alternatively you may approach another organization and complete this
activity in respect of that organization).
12. The ____________ is a clear statement of what is expected, by when
and at what price.
13. The key stage of any marketing research is to decide _________ you
want to question.

15.9 New Trends in Marketing Research
The various new trends in marketing research are:
Personal Interview
Field Trials
Online Survey

Personal Interviews
Like focus groups, personal interviews include unstructured, open-ended
questions. They usually last for about an hour and are typically recorded.
Focus groups and personal interviews provide more subjective data than
surveys. The results are not statistically reliable, which means that they
usually don't represent a large enough segment of the population.
Nevertheless, focus groups and interviews yield valuable insights into
customer attitudes and are excellent ways to uncover issues related to new
products or service development.
Field Trials
Placing a new product in selected stores to test customer response under
real-life selling conditions can help you make product modifications, adjust
prices, or improve packaging. Small business owners should try to establish
rapport with local store owners and Web sites that can help them test their
products.
Online Survey
Online surveys usually generate unpredictable response rates and
unreliable data, because you have no control over the pool of respondents.
But an online survey is a simple, inexpensive way to collect anecdotal
evidence and gather customer opinions and preferences.
14. A ____________ product should be placed in selected stores to test
customer response under real-life selling conditions.
15. ___________ surveys usually generate unpredictable response rates
and unreliable data.

15.10 Summary
Because of excessive regulations and lack of competition in the market in
the past, not much need was felt for marketing research in India. However,
with the dismantling of the licensing system and other regulatory measures
during the last two decades or so, and increasing competition in the market,
fast changing technology and growing consumer sophistication, it is no
longer possible for the marketing managers to solely make decisions on the
bias of met gut feeling and past experiences. They have come to
increasingly rely upon the information collected through the process of
marketing research. The Indian firms make use of both the in-house staff
and outside research organizations, advertising agencies and consultants
for getting researches conducted. Seeing the growth in demand for outside
research services, a large number of marketing research organizations have
come up in the country to provide both the customized and syndicated
research services.
In view of the country's large size, heterogeneous population, language
diversity, infrastructural bottlenecks and lack of secondary data, it becomes
a uphill task for the researcher to carry out researches in India. Unfavorable
attitudes of the managers also come in a big way in the widespread
acceptance of marketing research in India.
Glossary
CORE: Consulting and Research Enterprise
Demand: desire to own anything and the ability to pay for it and willingness
to pay
Cultural Diversity: of human societies or cultures in a specific region, or in
the world as a whole.

1. What are the major reasons for growing importance of Marketing
Research in India'?
2. What are the different ways of conducting marketing research'?
Describe the scope for outsourcing of marketing research services in
India?
3. Suggest some possible areas where marketing research would find
increasing application in India'?
4. Briefly comment on the problems faced by researchers in conducting
marketing research in India?

15.12 Answers
1. shortened
2. accurate, relevant
3. marketing surveys
4. consumer
5. huge expenditure
6. not yet
7. outside
8. marketing research
9. New product
10. 20 per cent
11. diversity, linguistic
12. brief
13. whom
14. new
15. Online

1. Refer to 15.2
2. Refer to 15.5
3. Refer to 15.6
4. Refer to 15.7
Mini-case
K.S.T.D.C is a premier organisation to promote tourism in the State of
Karnataka. People from all parts of the country and abroad visit different
parts of Karnataka every year. Soon after the capital of Karnataka,
Bangalore was identified as the Silicon Valley of India, the number of
tourists visiting Karnataka is on the rise. Both domestic and foreign tourists
are drawn here.
It is the opinion of global travellers that India is a top holiday destination.
The important aspect to be remembered is to remove all impediments or
barriers to tourists. K.S.T.D.C is considering a detailed study on those who
visited Karnataka during the last 3 years. It is intended towards answering
the following.
1. Profile of tourist based on important attributes/characteristics.
2. What people want from the tourist department vs what is currently
offered.
3. What are the difficulties or hardship tourists face?
4. Opinion/Suggestion by the tourist which will enable K.S.T.D.C to woo
more tourists by improving its services.
Question
Prepare a report giving proper explanation for each of the above questions.
Hint: Prepare the report based on the methods learnt but apply them in
Indian context.

Acknowledgements, References & Suggested Readings
Alexander Nicolas and Doherty Anne Marie, International Retailing,
Oxford University Press.
Bajaj Chetan, Retail Management, Oxford University Press.
Berman Barry, Retail Management, Prentice Hall of India.
Biyani Kishore and Baishya Dipayan, It happened in India, Rupa
Publications.
Dion Jim and Topping Ted, Start and Run a Retail Business, Jaico
Books.
Dunne Patrick M, Retailing, Thomson South Western.
Gilbert David, Retail Marketing Management, Pearson Education.
Lamba A J, Art of Retailing, Tata McGraw Hill.
Levy Michael, Retailing Management, McGraw Hill.
E-references:
dspace.iimk.ac.in/bitstream/2259/392/1/17-27.pdf
http://retail.about.com/od/marketingsalespromotion/Marketing_Sales_Pr
omotion.htm
http://tutor2u.net/business/marketing/segmentation-psychographic.html
http://www.emergingretailtrends.com/blog/
http://www.netmba.com/marketing/market/segmentation/
http://www.pwc.com/gx/en/retail-consumer/index.jhtml
retail.about.com/od/merchandisingbuying/Merchandising.htm
www.helium.com/.../164933-the-importance-of-a-retail-stores-design-
and-atmosphere
www.hinduonnet.com/businessline/praxis/pr0301/03010440.pdf
www.ibef.org/industry/retail.aspx
www.jimnovo.com/Relationship-Marketing-more.htm
www.lapointerosenstein.com/fichier/listelibrary/.../ako-franchising.pdf
www.people.umass.edu/debevec/.../Retail%20Pricing%20Strategies.pdf

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