Purpose and importance of marketing research
The difference between primary and secondary data and their uses
Types of Marketing Research
Purpose and Importance of Marketing Research
Market research refers to an approach that involves the use of a series of tools and techniques to acquire information that will help a business to understand the market and hence make the right decisions concerning its operations. Marketing research is important to an organization particularly because the effects of business decisions are very uncertain. Therefore marketing research helps an organization to acquire reliable information, which will enable the management to able to predict future trends of the market, effective measures to taken and the impact of any decision made hence reducing the risk (McKean, p. 69).
The purpose of market research refers to various ways in which it can be use in a business. First, to create the right marketing mix, which include: product, price, place and promotion. Through market research Virgin Atlantic can determine the right products that meet customer needs. For instance through research the company will establish what type of customers mostly uses their airline and their needs. They can either be tourists or even business travelers, therefore Virgin will be able to design products that suit each group with the right pricings and with the priority service quality factors in each category. As a result needs of each category of customers will be satisfied (Dean, p. 33).
Thirdly, there is place which refers to channels through which the products can reach the target customers. Here research will help Virgin in establishing the number of intermediaries available to Virgin to supply its products as well as the services offered by each channel member and the costs of using each. Therefore the company will be able to choose a channel that ensures that customers get their products with convenience and at a fair price as well as in way that is profitable to the organization. Lastly, promotion which refers to tools used in communication and selling to the customer and these include advertising, public relations, personal selling as well as sales promotion. Through research Virgin will determine the most efficient type of media to use and the message to put across. For instance it can decide to emphasize low prices in its airline services to attract customers who feel dislike high prices from major carriers.
Virgin Atlantic can also use marketing research to make marketing decisions on whether to enter a given market after finding out the challenges in the market and knowing how to survive competition from major carriers by obtaining and understanding competitor information such as consumer segments that are under served. This includes finding out the attitude of potential customers about low prices which is the company’s strategy – do they associate low prices with low quality (Dean, p. 33). The company will in the end be able to decide whether to enter say the American market by establishing whether it can cope with the regulations in that market, whether there are segments of the market that are under served and the profitability of the market in view of the costs to be incurred (McKean, p.72).
Differences between Primary and Secondary Data
Primary and secondary data are two main sources in marketing research and each of them has areas of strength and weakness. Before conducting any research it is important to consider the objectives that the organization wants to achieve, as a result they will be in a better position to choose which type of data to collect. Secondary research refers to reusing information that had been previously collected for another purpose different from which the information was collected. Secondary Internal source refers to data that is obtained within the organization, that is from internal records such financial statements. It also includes data of previous researches. Virgin can use such data in reviewing its expenditures and coming up with cost effective ways of operation, by finding ways to eliminate unnecessary expenditures (McKean, p.73).
Secondary external data refer to data found outside the organization that was prepared by someone outside the organization and not for the organization. Such data can be population statistics on economic levels obtained from government records, or researches data from researches done by other people outside the organization. Virgin can use such data to determine the most profitable markets on which to strongly promote its products. For instance it can establish those economic groups that have constant flow of money and provide financial services to them.
Primary research or field research refers to that research that is undertaken to collect original data, whereby the researchers go in to the field and carry out investigation using various techniques to unearth data. It falls in to two categories quantitative and qualitative research. Qualitative research tries to find data that can be interpreted in many ways for example obtaining data on how people perceive a given product or their attitude towards it (McKean, p.73). There are various techniques used in marketing research: a discussion group which refers to people selected randomly and put in a group to share their opinions about a given product. For instance if Virgin Atlantic wants to introduce another brand of cola drink, it will have a group of people discuss what they would like to experience in such a product.
Secondly, there is focused groups, which refers a group of people brought together to give their opinions concerning a given concept or product. Such groups have a facilitator who guides the testing and evaluations. For example Virgin Atlantic can bring together the managers of its different businesses to deliberate on how the various businesses of virgin can work together to reduce cost and ways of strengthening its brand such as the meeting held in Mallorca hotel (McKean, p.74).Lastly, In-depth interviews which are done by the interviewer on a personal level presenting questions to a respondent on a face-to-face basis. If Virgin wants to determine the service quality factors of its customers, this technique is the most appropriate because relatively more qualitative information can be collected (McKean, p.74).
Quantitative research is the other type of primary research and this seeks to find statistical information on a given subject matter. The techniques employed in getting data include: Observation, whereby Virgin can watch and count the number of age groups that frequently visit their retail stores. As a result they can decide to specialize in selling products to the most frequent group. Secondly, there is experimental research whereby real life market situations are acted out so that reactions can be obtained to show what would happen if the real situation was in place. For example Virgin Atlantic can air out an advert in the cinemas and observe reactions by taking account of how many of the viewers liked or disliked the advert. This will determine if the company will eventually use the advert in the market (ICMR, p.3).
Advantages and uses of secondary data
Secondary data is easily and cheaply available, particularly because it consists of work that has been collected and sampled hence its generally ready for use. This also means that it is time saving because it takes relatively lesser time to collect, therefore it is economical to the business. Secondary research is also helpful in that it helps the collection of primary data to be more specific in that the primary researcher will only collect what is lacking from the secondary research. Secondary data and research can be used to have an understanding of the research problem, before primary research is undertaken. For instance before Virgin carries out a research to find out the service quality factors perceptions of a given market, it can first find out what services competitors are offering, and then use the data to verify if the competitors understand the quality factors needed by the customers and what is lacking.
Advantages and uses of primary research and data
Primary research provides relevant information that helps the researcher to address the specific issues of the research. The researcher also has relatively greater control over how the research that is to be carried out, such as how many respondents to interview, what geographical area to cover and many others. The researcher also has exclusive ownership of the research data hence can keep its findings secret. Virgin can use primary research to find out customers’ perceptions and attitudes on Virgin as a brand. Particularly because this is the only way to get what is relevant as there is no available data that provide current information. Such data will enable the company to determine whether to use the brand name to start other business lines.
Disadvantages of primary and secondary research
One disadvantage of secondary research is that the data may be outdated, another reason is that the accuracy of such data cannot be established, because the research was done by someone else. At times the data may be up to date but irrelevant to the research problem, for example if the data is for different a class though on the same topic being researched. Disadvantages of primary research include: a lot of costs are incurred, it cost more to carry out this research compared to secondary research. Particularly because of the materials used and the high number of researcher needed. This also explains a lot of time that is spent in this research, as a lot of geographical areas will also be covered. Although this research provides relevant information, carrying out this research is sometimes not feasible. Precisely because some areas cannot be reached or the cost-benefit analysis does not justify the research (Kurtz, Mackenzie & Snow, p. 235).
Types of Marketing Research and their Uses
There are various types of research that can be carried out depending on the information needed. Exploratory research, which usually undertaken not necessarily to solve the problem but to acquire initial that assists in forming the objective of the research. This type of research is characterized by flexibility as there is no a clear objective to guide the researcher. Therefore curiosity on the new developments makes the researcher to probe more in order to get more information. For example Virgin can seek to find information on the effects of advertising in a given market. Therefore they will start by finding which adverts the respondent is familiar with, this might lead the interviewer to ask from which media did they see the advert and from the response the respondent will be asked how it affected their decision. As a result the findings will have enabled Virgin to gain an under standing on how adverts work in that market (McKean, p.73).
Descriptive research is one which seeks to explain a given phenomenon such as why something is happening or what causes it to happen by obtaining detailed information on the subject matter. This research has a clear objective which in most cases is developed from data obtained from explorative research. Therefore in order to come up with useful and accurate results the researcher must stick to the outlined procedure and objective. In the case of Virgin, it can use descriptive research to find out what types of customers use there airline services in given different periods. For example the objective can be to check whether those who use the airline during holiday seasons are only tourists and what quality factors can the airline provide to those customers to specifically meet their needs. Therefore research questions to customers can seek to find out what quality is to them and to arrange the quality factors in order of priority (McKean, p.73).
Casual or predictive research is done to determine the possible outcomes of a given cause-effect relationship. This type of research is undertaken to find out how given variables are related, hence establish what change will happen to one variable when a particular related variable is changed. Market researchers use this type of research tom predict hypothetical situations, hence the company can use such results to make their business plan. This therefore means that this type of research to determine the impact of their decision in the future. For instance Virgin can make use of predictive research in many ways which include; determining the relationship between price and demand whereby the company will try to establish whether there will be an increase in demand with the lowering of price. This can be done when it wants to determine the effect of introducing lowly priced computer personals in to a given market, whereby it will test whether by reducing the market price demand will increase and by what margin (McKean, p.100).