Download - The Marketing Research Process an Overview
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Welcome to Powerpoint slides
for
Chapter 2
The Marketing
Research Process:
An Overview
Marketing ResearchText and Cases
by
Rajendra Nargundkar
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Slide 1
A marketing research project starts with an information
need. It ends with an actionable report or presentation or
both. In between are various steps to ensure that the
marketing research project achieves what it set out to do.
A diagrammatic representation of the Marketing
Research Process is shown in the figure below
1. Information 4. Plan and do
Need Felt Secondary Research
2. Define the 5. Plan and do
Research Primary Research
Objective
3. Design the 6. Tabulation
Research and Analysis
Methodology
7. Report Writing
and Presentation
8. Marketing Action
We will now consider each of these steps in detail
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Slide 2 Information Need
Consider, for example, an expensive advertising campaign
which has been running on television for 3 weeks. It may
not have produced the expected jump in sales in some of
the major sales territories. The client, let us assume, is a
shaving blades manufacturer.
The marketing manager has to decide whether to
discontinue the campaign, or change it, or reconfirm that the
ad campaign is good. If the ad campaign is good, it may be
some other marketing variables such as the price or
distribution, or strong competitive promotions that are the
reasons for sales not being upto expectations.
One way to find out is to do marketing research. Therefore,
the marketing manager has identified an information need ,and it could be fulfilled by a marketing research study.
There could be a second marketing manager who is
considering the launch of a new brand of deodorant in the
market. He wants to know how to position the brand in the
market, and get a rough estimate of what the market sizewould be in the chosen segments. He has an information
need, which could be filled by doing a consumer survey.
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The risk involved in taking a marketing decision withinadequate information, should be weighed against the
cost of getting the information, and, taking a better-
informed decision. Success depends on many factors, and
information is only one of them.
Of course, any need for information must be examined
in terms of the cost of obtaining the required
information. Also, the cost of not having this
information should be estimated.
A third marketing manager heads a popular music
channel on T.V. He wants to know which of his video
disc jockeys is the most popular, and which show is the
most watched. He could commission a study by an
independent marketing research agency to do just that.
Slide 2contd...
The risk involved in taking a marketing decision withinadequate information, should be weighed against the
cost of getting the information, and, taking a better-
informed decision. Success depends on many factors,
and information is only one of them.
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Slide 3 Defining The Research Objective
If we do have an information need that can be met by doing
marketing research, the next step would be to define the
Research Objective in terms of that information need.
For example, a study could have as its objective, the
determination of customer satisfaction with a brand of new
frost-free refrigerator launched by ourcompany.
A research objective can be specified broadly, or narrowly.
One common pitfall in the field of marketing research is to
specify too many objectives for a single marketing research
project. It produces a mass of data that is not really needed
at that point of time.
In most cases, about four or five objectives are adequate todo a useful marketing research study.
Every objective translates into a few questions on aquestionnaire, and there is a limit to how many questions a
respondent can honestly answer before his interest level
goes down.
Sometimes, we call the research objective by another name
the research problem. Broadly, these two terms can beused interchangeably.
Whatever the terminology used, the research should end up
with useful information that enables a marketing manager or
entrepreneur to make a better decision. If a report is meant
to lie on a shelf, it is not really marketing research, but a
waste of resources.
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Research Designs: Exploratory, Descriptive and Causal
A research design provides the framework to be used as aguide in collecting and analysing data. But it is not necessary
that a particular research design is always the best. Experiencewith different research designs will generally provide theresearcher with the capability to match a research problem withan appropriate design.
For example, in a study for a new English daily newspaper
launched in Bangalore in the eighties, it was found that thesales were much below expectations. A survey was proposedBut as a complement to the survey, the author's team at aresearch agency proposed a Content Analysis of all the majordailies in Bangalore.
This method analysed the coverage of various categories ofnews such as politics, sports, regional, national, city-basednews etc. by the client's newspaper and the competitors.
This gave vital insights to the publishers of the paper, and overa period, it became successful. This is just an example to show
that sometimes unusual research designs do pay off.
Broadly speaking, we can classify research designs into thefollowing three kinds -
.Exploratory Research
.Descriptive Research
.Causal Research
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Exploratory Research
It is generally used to clarify thoughts and opinions about the
research problem or the respondent population, or to provide
insights on how to do more conclusive (causal) research.
An example could be a chocolate manufacturer wanting to
identify the ten most important variables his consumers use to
decide on whether to buy a chocolate brand.
The results of this exploratory study could provide him withinputs for a second study using Factor Analysis techniques(discussed in Part 2 of this book) to reduce the ten variablesinto a smaller set of FACTORS.
Another example of exploratory research is a focus group
discussion among housewives to debate the future ofconvenience foods in India. It may be used to throw up ideasabout new products, or suggest modifications to existingproducts through a free-wheeling discussion.One major application of exploratory research is to generatehypotheses for further studies.
The methods used in exploratory studies can range from theusual surveys, to focus groups, to consultations with experts inthe field, to analysis of selected cases. An example of the lastmay be to study three of a company's best salespeople, andthree of the worst, to try and figure out what drives the salesof the products, and their motivations. This could help indesigning a study of customers to find out more from them.
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Descriptive Research
Most marketing research is of this type. Typically, descriptive
tudies are either (1) longitudinal or (2) cross-sectional.
Longitudinal studies
These generally take the form of a sample which is studied
over a period of time - from a few months to a few years. An
example is a panel. A Panel is a sample of respondents chosen
from the defined target population for the study. This sample
could be of consumers, retailers or of any other type.
A consumer panel could be used to study consumption of
products/brands over a period of time. It could also be used to
measure viewership of T.V. shows, or readership of magazines.
A retail store audit is a variation of the panel, with data beingcollected from retail stores on the products/brands being
tocked, shelf space allotted, sales and promotions etc.
Panel data has the advantage of enabling comparisons at
different points of time For example, the effect of a change in
price, pack design, or other elements of the marketing mix canbe easily measured by comparing the sales or market share
before and after the change.
This is not so easy to do in typical survey data, because it is
cross-sectional in nature, for only one point in time.
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One other advantage of panels is that if a quick check
on something is needed, sample selection time can besaved by approaching panel members. In these days of
the internet it may be possible to get a quick response
to a short survey of panel members in a matter of a
couple of days.
There is of course a disadvantage to panel data. Panels
suffer from a selection bias. Some people are more
likely to agree to be on a panel than others, because it
needs a commitment in terms of time and effort to
regularly record and report data. This selection bias
may make panels non-representative of the targetpopulation.
In some data mining applications, the analysis may
resemble longitudinal studies, because data from the
same customers or retailers over a period of time may
be analysed for patterns of behaviour etc.
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Cross-sectional design
t is the most commonly used in marketing research. This is aone-shot research study at a given point of time, and consistsof a sample (cross-section) of the population of interest. The
ypical market survey is of this type.
Its advantages are that it gives a good overall picture of theposition at a given time
t can cover many variables of interest, and is not affected by
he movement of elements in the sample, because otherelements can be substituted for them (at least in consumeresearch).
The disadvantages could be that a cross-sectional study tendso rely too much on numbers, can be affected by poor quality
of interviewers or supervisors, and tends to view thepopulation in terms of too many generalisations - the "average"consumer's views about anything, which may cloud thendividuals or segments among the population.
To some extent, the last mentioned problem can be overcomewith certain techniques of analysis. For example, we can
analyse data by town or region or by other segments to preventunnecessary aggregation which is misleading.
On the whole, though, cross-sectional research appears to bemost preferred by market researchers and their clients onaccount of its simplicity and understandability. It is also quiteflexible in nature, and can take care of simple analysis as well
as complex statistical methods.
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Causal Research Designs
In research, we can never be completely sure that a
particular variable (say X) influences another (say
Y). But a causal design seeks to establish causation
as far as possible, by employing controls and
conditions under which we can state with reasonable
confidence whether or not Y is affected by X.
In addition to X and Y, of course, there may be other
variables which could affect the relationship
between X and Y. How to treat the other variables
during the analysis of the effect of X on Y alsoforms part of the causal designs.
Causal designs differ from descriptive designs in
their greater probability of establishing causality.
The reason for this is that causal designs are similar
to experiments done in a lab, where we know whatgoes in, what changes are made, and what results
from the changes. Causal designs are also known as
Experimental Designs, for this reason.
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Designing The Research Methodology
Every research study starts with some information
need. Sometimes, the information required can be
collected entirely from published sources or internal
records. This is called secondary research.
It is more usual, however, that we will need tocollect data from primary sources customers,
buyers, users, dealers or some other respondents.
The major parts of the research methodology that
need designing are
.Research MethodSecondary and Primary
.Sampling Plan
.Questionnaire Design (if applicable)
.Field Work Plan
.Analysis Plan
Usually, the first thing one has to decide is the
method to be used for data collection.
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Data Collection Methods
It is possible to collect data from respondents by many
different methods. The major methods commonly used
are
.Survey
.Observation.Experimentation
.Qualitative Techniques
.Other specialised techniques
Quantitative methods are generally more popular than
qualitative techniques in marketing research studies.Also, the survey technique is more popular than other
techniques.
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Survey
There are different ways a survey can be carried out. It
can be done by telephone, by mail, or in person. In
present times, it can even be done by email using theinternet. Each of these has its own merits and demerits.
For example, personal interviews have the advantage
that questions can be explained to respondents, and
facial reactions or body language can be observed.
Telephonic surveys have the advantage of low cost. But
facial reactions cannot be observed.
Internet surveys are quite new, but may have the same
disadvantages that telephonic surveys have. It isdifficult to ensure that all target respondents have an
opportunity for selection in the sample.
For example, every potential respondent for the survey
may not be using the e-mail, or even a computer.
Therefore, the e-mail survey does not represent a truesample of the target population for many products or
services. To that extent, the results may be wrong,
compared to the errors in a door-to-door personal
interview done with scientific probability sampling.
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But if some amount of error is acceptable and
speed is of the essence, an e-mail survey or a
telephone survey would be excellent methods. Atraditional mail survey would be much slower, by
comparison.
At present, personal interviews are the preferred
method for doing surveys in India. Telephone
and mail surveys are used in a minority of caseswhere they are justified by the target population
and the objective of the research.
Slide 11 contd...
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Observation
Sometimes, Observation, or Experimentation could be the
method of choice. Observation is a technique where the
consumers behaviour is recorded, usually without his
knowledge.
For example, a video camera in a retail store can be used to
record a customers behaviour while she buys a garment.
If it is a full service store, like many Indian stores, she couldask for a particular brand or brands, look for specific colours,
or fabric, or prices etc. in a particular sequence. Her facial
reactions or eagerness or lack of interest when a piece is
displayed to her can be recorded along with the garment.
Viewed later, this video tape can be interpreted for thepurchase factors, purchase behaviour, brand preference, price
and colour preference, and matched with the ladys age and
complexionif she bought for herself.
The obvious advantage of this technique is that it is actual
consumer behaviour that gets recorded, rather than their
statements of purchase intention. Therefore, we get more
accurate information.
If a video recording is too expensive, an audio recording is
possible, or even a data collector in person can observe andrecord his findings on paper.
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Experimentation
This is the third major technique in quantitative
research. This involves more control over the cause
and effect, when compared to a survey.
In experiments, we try to measure the effect of one or
more variables by changing the level of some variables,
and measuring the effects. For example, if an
advertisement is released, and we measured the Brand
Awareness of the advertised brand among a sample oftarget respondents, we would be doing an experiment.
In the same way, a product test could be designed as an
experiment, with three different variants of the product
being tested on three randomly chosen sets of
respondents from a target population. The modern
method of Simulated Test Marketing (STM) is usually a
design which can be termed an experiment.
A detailed discussion of experimental techniques with
numerical examples appears in the Chapter titledANOVA.
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Qualitative Techniques
Sometimes, the research objective calls for more indirectmethods of questioning, either because normalquantitative surveys are inadequate, or inappropriate.
In such cases, qualitative methods, which probe the mindsof respondents may be used. Here, the emphasis may beon free-wheeling interviews with open-ended,unstructured questions such as What do you expect froma refrigerator?,What needs does it fulfill? orWhat do
you feel when a friend shoots an envious glance at yourcar?
Other methods of qualitative research include the WordAssociations where a respondent is asked to think of aword which comes to mind when he thinks of a brand.Other variations include associating each brand with a
person or celebrity, or an animal, etc.
The major requirement for using qualitative techniques isthat we require a behavioural specialist such as a
psychologist or sociologist to analyse the findings. Thesample sizes in qualitative studies are usually small, and
analysis and interpretation is not as easy as it is inquantitative studies. If done by non-experts, qualitativeresearch can be completely misleading.
Qualitative techniques can also be used in combinationwith quantitative techniques to gain better insights into
consumer mindsets.
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Slide 15
An example of qualitative research is a study done
by TVS Suzuki, among scooter and moped users in
1989. (cited in The Catalyst, Business Line, July 10,1989).
The research objective was to assess the impact of a
newly launched scooterette from Bajaj on the market
for TVS mopeds, and to try and find out what people
expected TVS to do in response.
The method used was focus groups, who discussed
on motivations behind purchase of mopeds and
scooters.
Projective techniques were also used with
respondents being asked to put themselves in place of
existing moped brands and talk about themselves as
if they were the brands.
The concept of a low cost scooterette was thenexposed to the participants, and their interest levels
appeared high. This research formed one of the bases
for TVS to design and launch the SCOOTY.
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Specialised Techniques
There are three specialised techniques, used commonly b
marketing researchers
.A Consumer Panel is a sample of consumers chosen fo
keeping a record of what they buy in a given period or wha
T.V. shows they watch in a given periodThe special feature o
this is that the sample remains the same for a year or si
months
.Retail Audit : Many companies routinely do a retail aud
and publish the results (at least partially). Detailed reports ar
available for anyone to buy and use. A retail audit measure
what brands are sold and their quantity sold in a particula
period. It could be done weekly. In India, ORG is a compan
which routinely performs retail audits.
Both regional and national audits can be done. Usually, suc
audits are best done by a third party (independent agency), t
reduce chances of bias, rather than the marketing company.
Sometimes, similar studies are undertaken by the company foits own brands at either consumer level or retail level.
.T.V. Audience Measurements : These days, millions o
rupees are spent in ads on T.V. It is important for the markete
to know who is watching the T.V. shows on which he ha
advertised. Or, to plan for a particular audience profile.
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There are now commonly used technologies which
record who is watching a given channel and show at
any given time, for upto a week. These are called
Peoplemeters, and are available in India for about
Rs. 40,000/- a piece. Indian Market Research
companies such as IMRB and ORG-MARG/A.C.Nielsen have already started using them, and their
use is likely to grow. The branded names for the
peoplemeters in India are TAM and INTAM.
The new meters have changed the advertising
patterns of many T.V. channels and individualshows after they were introduced in India.
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The next stage in a marketing research study, after the
primary research method has been decided upon, is the plan
for
.Sampling
.Field Work
.Analysis
These are probably the most important in a study involvingprimary research, as the credibility and the accuracy of a
study is dependent on these stages.
Sampling Plan
This is the statement of what will be the sample composition
and size. This is the most critical of all decisions in the
marketing research process, because we are usually trying to
make a statement about the target population based on our
study of the sample.
For instance, if we find that 50% of our sample is favourably
disposed towards Brand A, we are likely to use it as a
benchmark for the entire target market, give or take a few
percentage points (due to errors). But in order to make the
sample representative of the population, a lot of care has to be
taken by the researcher.
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In general, two precautions should be taken to ensure a
good sample (good means representative).
.Use a probabilistic sampling technique which is not
biased.
.Try and divide the population to be sampled into
segments or strata based on relevant parameters such
as users/non-users, or classes based on age, income,etc. Then, ensure that each segment gets represented
adequately in the final sample. This also applies to
studies that are done in multiple cities. If a study is
done in twenty cities, and if analysis is required by city
(i.e. for each city separately), then the sample size for
each city must be adequate for such analysis.
Generally, formulas can be used to determine sample
sizes, but they suffer from some limitations. For a more
detailed discussion, please refer to the chapter titled
Sampling MethodsTheory and Practice.
It is usually a blend of theory, practical limitations and
experience which generates the best sampling plan in any
given research situation.
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Field Work Plan
This is clearly linked to the sampling plan. Once
the sampling centres (cities, towns, etc.) are
decided on, and the sample sizes are determined
for each, the next step is to plan on the
following
.Who
.When
The first question is who will do the field work
for collecting data. Field work assumes that we
are collecting data from respondents by going to
the field that is, homes, offices, shops,
dealerships, etc.
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Slide 20
Before doing field work, whoever is going out in the
field needs to have an idea of what is to be collectedand its format of recording. In the traditional format of
personal interviews (which is still the most popular
format in India), a questionnaire is used by the field
workers in most cases.
Sometimes, a checklist is used instead, if the situationdemands it. We will assume here that the
questionnaire has been developed. A detailed
discussion of how to develop a good questionnaire
appears in the chapter titled Questionnaire Design a
Customer-centric Approach.
The second question is when. In many studies
carried out nationally, it is not possible always to
simultaneously cover all centres, on the same days.
There could be logistical problems for supervisors, or
there may be difficulties in recruiting adequate fieldworkers etc. But it is desirable to have a well-planned
schedule so that all field work is completed in an
orderly fashion, and cross-checks can be established.
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Briefing
For all important studies, the research executive in
charge should personally brief the field supervisor (the
person who will actually supervise the team of field
workers during the data collection).
This briefing session is conducted after recruiting field
workers, and ends with a practice round of mock
interviews and questions from field workers on any
special difficulties they may encounter in locatingrespondents, asking certain questions, etc.
The mock interviews and the briefing session is
designed to explain and clarify to the field workers
how to go about their data collection task. In most
studies, temporary field workers are recruited on adaily wage basis and paid on the basis of a minimum
number of complete, usable questionnaires filled up.
The number of field workers required in each centre is
usually estimated based on the sample size required,
the locations where the sample can be found, the
number of supervisors available, and the time limit for
completion of field work. These are communicated by
the research executive in charge to the field
supervisors in his branch offices, who generally recruit
the field workers.
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Debriefing
It is important that any problems on the field get
reported to the field supervisor or the research
executive, and solutions found quickly. These problemsmay include difficulty in locating target sample units, or
non-cooperation in answering some questions, or
difficulties in comprehension.
To minimise any problems the field staff may encounter,
a debriefing session is usually held at the end of the firstdays field work in each new centre (location). The field
staff reports on the work progress, and problems faced
in the field, if any. Solutions are thought of by the
research executive or field supervisor, and implemented
for the remaining part of the study.
Some of these problems are recognised even earlier if a
pilot study of a small sample is performed, before
starting regular field work. Alternatively, the first days
or half days field work could be considered as a pilot
study, and not included in the survey results.
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Analysis Plan and Expected Outcome
Analysis is based on the answers given to questions. It
is important to have an analysis plan in mind even
before going to the field with a questionnaire.
Regrettably, this is not always given the attention it
deserves by the researcher. It is sometimes assumed that
it can be done later, or that all possible analyses can be
done anyway, so why bother to plan the analysis inadvance. But for many reasons, it is vital to do so.
A very powerful reason is that the sample size gets
reduced, if the analysis is done on parts of the sample.
For instance, in a sample of 200 respondents, there
could be 16 combinations of income (4 groups) and age
(4 age groups). If analysis is performed for a
combination of age and income, we get a 16- celled
output matrix. Even assuming a uniform distribution of
the sample into these 16 cells, each cell only gets a
sample size of 100 / 16 or 12.5 persons. This may notbe good enough to draw conclusions about the given
Age-Income combination.
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But if it is known in advance that we will analyse the
data by this combination, we can increase the sample
sizes in each cell to say, 20 or 30 by incurring marginaladditional cost. This cannot be done easily at the
analysis stage, after all data has been collected and
tabulated.
In certain cases, special statistical procedures or tests
have to be performed. For example, in a procedurecalled multidimensional scaling (covered in a later
chapter), the questionnaire has to be constructed in a
particular way. Otherwise, it is not possible to do the
required analysis.
For these reasons, we must know in advance, at least the
types of analyses we want to perform.
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There are normally two very basic kinds of analyses in a
marketing research study. These are
.Simple Tabulation
.Cross Tabulation
Simple Tabulation involves counting the number of
esponses in each category for a question, and putting it in a
frequency table form. This can be used to computepercentages, by dividing the number of responses by the
ample size. This is done for each question in the
questionnaire.
Cross Tabulation: This is the result of counting
imultaneously, answers to two or more different questions ona questionnaire. For example, one question may ask howfrequently respondents buy a soap brand. Answers may varyfrom Once a Month to Thrice a Month.
Another question on the same questionnaire may ask for their
eaction to the fragrance of the soap. We may want to crossabulate the responses to these two questions. How many ofhe people who liked the fragrance bought once a month, and
how many of them bought twice or thrice a month? Similarly,how many who did not like the fragrance bought it once, twiceor thrice a month?
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While doing cross-tabulation, it is also necessary that
the two questions (variables) that we are cross-
tabulating must be related to each other. For example,
in the above example, it is possible that the frequency
of soap purchase is a function of family size, rather
than the liking for its fragrance.
It is possible to compute cross tabulation data for any
two questions on a questionnairebut all of these maynot be meaningful.
Expected Outcome
One good way to think about expected outcome is to
prepare a blank table of output, particularly for anycross tabulations we may be interested in.
This can be done after the questionnaire is designed,
but before the field work is done. This helps to
anticipate some of the problems in sampling and
corrective action can be taken easily to adjust sample
sizes on the field.
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Budget and Cost Estimation
There are two or three basic parameters which provide an
estimate of how much a study is going to cost.
Sample sizeHow difficult to find the sampling units (respondents) are, and
heir geographical dispersion.
Who will do the field work
For example, if hired field workers are doing the field work, a
tudy costs much less per respondent, than if a researchexecutive conducts the interviews. In some industriamarketing research, a qualified research executive may in facdo the field work himself. But in most consumer product oervice studies, it is hired temporary field workers who do it. Inuch cases, sample size is multiplied by the estimated cost per
espondent to arrive at a total cost estimate.
This estimate is modified by the number of centregeographical dispersion) for the study, and the difficulty inocating required respondents.
For example, locating a 2-wheeler owner for a given brand of 2wheeler (say, a Suzuki or Honda), is much easier than locatingan owner of a luxury carsay, a Mercedes. Additional cities fohe survey may entail travel and communication cost for theesearch executive and supervisory staff in addition to norma
cost of field work.
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Presentation, Report and Marketing Action
After the tabulation and analysis is completed, the
next step is usually a presentation to the sponsor of
the study. This includes frequency tables and cross
tabulations in percentage terms, and special analyses
if any. It also includes a summary of major findings,
and some recommendations. If any additional cross
tabulations are required, the client or sponsor usuallyrequests them at this stage.
A formal report usually follows the presentation.
This should normally contain the following :
.Executive Summary
.Table of Contents
.Introduction
.Research Objectives
.Research Methodology-Sample Design
Field Work Plan and Dates
-Analysis / Expected Outcome Plan
-Questionnaire Copy (as Annexure)
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.Analysis
-Simple Tabulation-Cross Tabulation
-Any Special Analysis
.Findings
.Limitations
.Recommendations for Action.Bibliography / List of References
Based on the report, the client
normally will take some marketing
actions. This is the expected outcomeof any marketing research study.
Slide 27 contd...