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Marketing Research: Definition, Purpose and Role in Marketing Strategy

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  • 0:31 Marketing Research…
  • 1:35 Identifying and…
  • 2:38 Research Design &…
  • 6:58 Collecting & Analyzing…
  • 7:45 Preparing & Presenting…
  • 8:43 Following Up
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Lesson Transcript
Instructor: Jennifer Lombardo
If you're a business owner, you need to know your clientele. Watch this lesson to understand the purpose and role of marketing research strategy in an overall marketing plan. This might be just the info you need!

Marketing Research

Detective Sam Lombardo is faced with a huge mystery! The local consignment kid clothing shop in town is in danger of going out of business after 21 years. The owner is heartbroken and wants to know what has happened to her business. Detective Lombardo will use precise marketing research steps to figure out the culprit. Marketing research is the process of planning, collecting and analyzing data relevant to a marketing decision.

Marketing Research Business Uses

There are many ways that marketing research can help Detective Lombardo solve the store mystery. First of all, marketing research can be invaluable in improving the quality of decision-making. What should the consignment shop owner do to save her business? Should she cut prices, increase advertising, improve customer service or do something else entirely? Marketing research is also excellent at tracing problems. Detective Lombardo can follow the steps to figure out WHY the store is doing so poorly. Perhaps the answer lies with growing competition or online stores?

The consignment store owner is also very interested in keeping her current customers. Marketing research can help find ways to keep her existing clients and find ways to increase their purchases. Consumers can be surveyed and asked many questions that could lead to a solution. Lastly, marketing research can be used to help understand trends and environmental changes. For example, it could show the Detective that people prefer buying kids' clothes on the Internet now instead of in a store.

Identifying and Formulating the Problem

Detective Lombardo's first step in the marketing research process is to figure out the problem. The major problem facing the consignment shop is declining sales. The Detective needs to analyze WHY the sales are declining and if the store is able to be saved. The major thrust of the problem-recognition step is identifying what information can help determine how to solve the problem. Detective Lombardo will search for secondary and primary data to help him make an educated recommendation.

Secondary data is data previously collected for any purpose other than the one at hand. Our Detective will start examining data such as sales receipts, invoices, competitive information, online consumer information, economic trends, etc. This data is free and will save the owner time and money. After plenty of research, the detective was not able to find the reason why consumers were not visiting the store the way they used to. The Detective decided he needed primary data in order to get the real culprit!

Research Design & Gathering Primary Data

The secondary research that Detective Lombardo found was helpful in creating a report that has led to some additional questions. He discovered that trends show more consumers were buying used clothes on eBay and through Craigslist. He also found economic trends that showed that overall consumer spending has consistently decreased over the past three years. Planning the research design and gathering primary data is needed to fully understand the situation. Primary data is information that is collected for the first time and is used for solving the investigation. The biggest issue with primary data is that it is very expensive because the researcher is conducting his or her own research from scratch.

Detective Lombardo must decide on the type of primary research he will conduct for the store. One of his choices is survey research. It is when a researcher interacts with people to obtain facts, opinions, and attitudes. The types of surveys include in-home personal, mall intercept, telephone, mail, Internet, and executive. Detective Lombardo does not have the time to visit consumers at their home, so he has eliminated that type of survey. He also does not care for using a mail survey because most consumers throw away mail surveys, plus the time it would take to get a response would be much too long. The executive survey would also be more fitting if this was about asking professionals about a specific problem. Mall intercept is a good start, as the detective could gather a large response very quickly from intercepting people shopping and asking their opinions about the store nearby.

Besides using a survey, there are other ways for Detective Lombardo to gather primary data. Detective Lombardo has spent time on designing a survey for his mall intercept. He has decided to use open-ended questions for the survey, which means that the interview question encourages an answer phrased in the respondent's own words. Detective Lombardo wanted to know exactly why people were not shopping at the consignment store. He rejected the use of closed-ended survey questions because then the respondents would have to choose from a limited list of responses such as 'yes' or 'no.' He did add one scaled-response question at the end of the survey. It is a closed-ended question designed to measure the intensity of a respondent's answer. He asked: 'Would you describe the consignment store as the best place to shop in town for clothes?' The answer selections would consist of strongly agree, agree, neutral, disagree, or strongly disagree.

Detective Lombardo also conducted some observational research. This was done in the store to figure out if there were additional circumstances for the decrease in sales. He was able to people-watch and see how the consignment shop employees handled the customers. Again he gained some new information that he planned to share with the store owner. His last effort was to hire mystery shoppers to pose as customers and gather observational data about the store. They interact as a customer would and report their findings.

Detective Lombardo chose to take the time to do one final research study called a focus group. A focus group is a type of personal interview where seven to ten people are randomly recruited by phone to form a group. This group is then invited to a research facility where they represent the target market and can give their opinions on a series of topics or questions. The focus group members are usually offered $50 to participate in the session, and the session is also videotaped for further analysis. The hopes are that having a group interaction will reveal more helpful data. Detective Lombardo already recruited and ran a focus group.

Focus groups are videotaped interviews of seven to ten people
Focus Group

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