Week 5.1 Types of Marketing Research

Decision-making in marketing is based on research. Research helps in decision-making in two ways. First, it reduces risk. Second, it helps manage the uncertainty. Marketing research identifies both marketing problems and opportunities and helps evaluate marketing actions. We start our lesson by defining marketing research. 

Marketing research is the process of defining a marketing problem or opportunity, systematically collecting and analyzing information, and recommending actions to improve an organization's marketing activities.

When we talk about research we usually think that it is an attempt to identify and solve a problem. This is not true in this case. Research is done to define marketing problems and opportunities and to generate and evaluate marketing actions. Research helps to reduce risk and uncertainty. 

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Example: Chobani wants to enter Australia and serve their yogurt to Australian customers. Marketing research in the Australian market would help identify potential challenges they would face with this move. Companies invest millions of dollars in entering new markets, and not all of them are successful. Remember the case of Target in the Canadian market. 

There are three types of marketing research. Typically, the marketing research process follows the order of exploratory, descriptive, and causal research

Exploratory Research

Exploratory research is the preliminary research that clarifies the scope and nature of the marketing problem. This is the first step in the research process. There is usually the expectation that subsequent and more conclusive research will follow exploratory research.

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Example: The Dairy Farmers of Canada saw that milk consumption was declining in Canada and they wanted to discover why. They started their research process with exploratory research. They looked at existing literature on milk consumption, talked to experts in the field, and even conducted preliminary interviews with consumers to get ideas about why consumers were drinking less milk. The goal was to identify the scope and the nature of the problem. 

Descriptive Research

Descriptive research is designed either to describe the basic characteristics of a given population or to profile particular marketing situations.

It is different than exploratory research in the sense that, in the descriptive research stage, researchers have a general understanding of the issue. They are seeking conclusive data to determine a particular course of action.

Examples include: 

• profiling product purchasers (e.g., characteristics of shoppers at the health food store), 
• describing the size and characteristics of markets (e.g., the Canadian pizza market), 
• detailing product usage patterns (e.g., ATM usage by Canadian bank customers), and
• outlining consumer attitudes toward particular brands.

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Example: The Dairy Farmers of Canada, once they completed their exploratory research, moved on to descriptive research to determine the demographic characteristics of milk consumers. They identified current usage patterns and consumer attitudes toward milk consumption in this descriptive research stage. 

Causal Research

Causal research is designed to identify cause-and-effect relationships among variables. As mentioned earlier, there is typically an order in conducting marketing research. Exploratory and descriptive research normally precede causal research.

When conducting causal research, there is typically an expectation about the relationship to be explained. The previous steps of research help identify the cause-and-effect relationship. Causal research justifies the expected relationship among variables, such as predicting the influence of a price change on sales.

Examples include the examining of:

• the effect of advertising on sales, 
• the relationship between price and perceived quality of a product, and
• the impact of a new package on product sales.

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Example: The Dairy Farmers of Canada conducted descriptive research that showed that most adults believed milk was too fattening and too high in cholesterol. In order to correct this misconception, the Dairy Farmers of Canada ran a TV advertising campaign highlighting how milk is essential to a person's diet and how much nutritional value milk carries. Their goal was to change consumer attitudes toward milk, which in turn was causally related to an increase in milk consumption. Causal research justified the cause-and-effect relationship by proving the positive relationship between changed attitudes and milk sales.