BBA 1006

PRINCIPLE OF BUSINESS MARKETING

TAN WAH TIONG

940928-14-5531
201565

DOUGLAS CHENG
NOVEMBER 2012
NO
1.0

DETAIL
Content

PAGE
1

2.0

Introduction

2-4
Page 0 of 40

3.0

Definition of marketing

- Importance of marketing
Body
-

Distinction between marketing and selling

Core concept of marketing according to Philip Kotler

5-12

4.0

- Scope of marketing
Conclusion

13-14

5.0

Reference

15

6.0

Coursework

16-31

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2.0 Introduction
Definition of marketing
Marketing is the process of communicating the value of a product or service to
customers. Marketing might sometimes be interpreted as the art of selling products, but
selling is only a small fraction of marketing. As the term "Marketing" may replace
"Advertising" it is the overall strategy and function of promoting a product or service to
the customer.
From a societal point of view, marketing is the link between a societys material
requirements and its economic patterns of response. Marketing satisfies these needs and
wants through exchange processes and building long term relationships. The process of
communicating the value of a product or service is through positioning to customers.
Marketing can be looked at as an organizational function and a set of processes for
creating, delivering and communicating value to customers, and managing customer
relationships in ways that benefit the organization and its shareholders. Marketing is the
science of choosing target markets through market analysis and market segmentation, as
well as understanding consumer buying behavior and providing superior customer

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value. So, there are five competing concepts under which organizations can choose to
operate their business; the production concept, the product concept, the selling concept,
the marketing concept, and the holistic marketing concept.
The four components of holistic marketing are relationship marketing, internal
marketing, integrated marketing, and socially responsive marketing. The set of
engagements necessary for successful marketing management includes, capturing
marketing insights, connecting with customers, building strong brands, shaping the
market offerings, delivering and communicating value, creating long-term growth, and
developing marketing strategies and plans.
Importance of marketing
Marketing is a very important aspect in business since it contributes greatly to the
success of the organization. Production and distribution depend largely on marketing.
Many people think that sales and marketing are basically the same. These two concepts
are different in many aspects. Marketing covers advertising, promotions, public
relations, and sales. It is the process of introducing and promoting the product or service
into the market and encourages sales from the buying public. Sales refer to the act of
buying or the actual transaction of customers purchasing the product or service.Since
the goal of marketing is to make the product or service widely known and recognized to

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the market, marketers must be creative in their marketing activities. In this competitive
nature of many businesses, getting the product noticed is not that easy.
Strategically, the business must be centered on the customers more than the products.
Although good and quality products are also essential, the buying public still has their
personal preferences. If you target more of their needs, they will come back again and
again and even bring along recruits. If you push more on the product and disregard their
wants and the benefits they can get, you will lose your customers in no time. The sad
thing is that getting them back is the hardest part.
Besides, marketing promotes product awareness to the public. It has already been
mentioned in the previous paragraph that getting the product or service recognized by
the market is the primary goal of marketing. No business possibly ever thought of just
letting the people find out about the business themselves, unless you have already
established a reputation in the industry. But if you are a start-out company, the only
means to be made known is to advertise and promote. Your business may be spending
on the advertising and promotional programs but the important thing is that product and
company information is disseminated to the buying public.
In addition, various types of marketing approaches can be utilized by an
organization. All forms of marketing promote product awareness to the market at large.
Offline and online marketing make it possible for the people to be educated with the

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various products and services that they can take advantage of. The company must invest
in marketing so as not to miss the opportunity of being discovered. If expense is to be
considered, there are cost-effective marketing techniques a company can embark on
such as pay-per-click ads and blogging.
Furthermore, marketing also helps boost product sales. Apart from public awareness
about a companys products and services, marketing helps boost sales and revenue
growth. Whatever your business is selling, it will generate sales once the public learns
about your product through TV advertisements, radio commercials, newspaper ads,
online ads, and other forms of marketing. The more people hear and see more of your
advertisements, the more they will be interested to buy.If your company aims to
increase the sales percentage and double the production, marketing department must be
able to come up with effective and strategic marketing plans.
Lastly, marketing builds company reputation. In order to conquer the general market,
marketers aim to create a brand name recognition or product recall. This is a technique
for the consumers to easily associate the brand name with the images, logo, or caption
that they hear and see in the advertisements.For example, McDonalds is known for its
arch design which attracts people and identifies the image as McDonalds. For some
companies, building a reputation to the public may take time but there are those who
easily attract the people. With an established name in the industry, a business continues
to grow and expand because more and more customers will purchase the products or

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take advantage of the services from a reputable company.Marketing plays a very

essential role in the success of a company. It educates people on the latest market trends,
helps boost a companys sales and profit, and develops company reputation. But
marketers must be creative and wise enough to promote their products with the proper
marketing tactics. Although marketing is important, if it is not conducted and researched
well, the company might just be wasting on expenses and time on a failed marketing
approach.

3.0 Body
Distinction between marketing and selling
Marketing means all customer's wants satisfying efforts concerning with planning,
pricing, promoting product, pricing, promoting product and services. Besides,
marketing accords importance to the satisfaction of consumers wants effectively.
Marketing in its initial stage decides, what the consumers want. Secondly, it decides
how the commodity can be profitably produced and finally delivered to consumers for
satisfying their needs. In addition, marketing has to take into consideration both the
internal and external factors.Efforts are buyers oriented and emphasize the satisfaction
of the needs of buyers effectively.If refers to integrated approach towards achieving

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long term objectives.Profit is sought by ensuring customers satisfaction. Furthermore,

marketing is a comprehensive term, which includes selling, advertising and also the
distribution of goods.The main job is to find the right products for your customers. The
mindset is What is that we can make here or source from outside to satisfy the needs of
thetarget customers.Conceptual and analytical skills are required.
In the other side, selling is the transfer of the ownership and possession of the goods to
the purchases.Selling also emphasizes the products.Commodities are produced and after
wards efforts are made for their profitable selling. Other than that, Selling is concerned
with the internal considerations regarding production and distribution of goods. It is
narrower in scope.Efforts are seller oriented and emphasize sellers needs.It refers to
piece mental approach to achieve short term goals.Profit is sought by ensuring higher
sales volume.Selling is the part of marketing and thus not a comprehensive term. It
assumes: Let the buyer bewareand it has a functional structure.The main job is to find
the customers for your products. The mindset is Hook the customer. Lastly, Selling
and conversational skills are required.
Core Concept of Marketing According to Philip Kotler
Marketing Management is a social and managerial process by which individuals or
firms obtain what they need or want through creating, offering, exchanging products of
value with each other.

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Firstly, need, want or demand. Need is state of deprivation of some basic

satisfaction. For example, food, clothing, safety, shelter. Want is desire for specific
satisfier of need. For example, Indian needs food wants paneertikka or tandoori
chicken. Americans needs food- wants hamburger or French fries. Demand is want for a
specific product backed up by ability and willingness to buy. For example, need and
transportation are one of the demands. Want is Car let say, Mercedes but able to buy
only Maruti. Therefore, demand is for Maruti.Marketers cannot create needs. Needs
preexists. Marketers can influence wants. This is done in combination with societal
influencers.Demand influenced by making product, APPROPRIATE, ATTRACTIVE,
APPROACHABLE/ AFFORDABLE and AVAILABLE EASILY.

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Next, targeting the consumers (4 Ps) which is Product, Promotion, Price and Place.
Firstly, product is anything that can satisfy need/ want. The product component include
physical Good, Service and Idea. For example, fast food, burger and pizza. Physical
Good also can be material eaten. Next is Service. For example, purchase of raw
material/ cooking whereas the Idea is speed of computer or processing power. It is an
importance of product lies in owning them (minor) and obtaining them (major).Hence,
products are really a media for services.Hence, in marketing, focus is on providing/
satisfying service rather than providing products. Marketing Myopia is Focus on
products rather than on customer needs.
In addition, value, cost andsatisfaction are also the core concept. Decision for purchase
made based on value/ cost satisfaction delivered by product or offering. Product fulfills
and satisfies Need or Want. Other than that, value is products capacity to satisfy needs/
wants as per consumers perception or estimation. Each product would have a price
elements attached to it. For example, travel from city A to city B. In these case, need is
to reach B ( from A), method or products is rail, air, road or train. Satisfaction is
estimated in terms of time lead & travel comfort. Lastly, value is Products capacity to
satisfy and cost is price of each products.
Besides, exchange and transaction are also one of the core concept. To satisfy need or
want, people may obtain the product through self production, by force coercion,
begging, and exchange. It is the act or process of obtaining a desired product from

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someone by offering something in return. For exchange potential to exist, the following
conditions must be fulfilled. For exchange to occur, there must be at least two
parties.Each party has something of value for other party.Each party is capable of
communication & delivery. Each party is free to accept or reject the exchange
offer.Each party believes it is appropriate to deal with the other party. Transaction is
event that happens at the end of an exchange. Exchange is a process towards an
agreement. When agreement is reached, we say a transaction has taken place. For
example, Barter transaction and Monetary Transaction. For a transaction to occur, there
must at least two things of value and condition must agreed upon. Besides, time of
agreement and place of agreement. It May have legal system for compliance.Proof of
transaction is bill or invoice. Transfer is one way. Hence, differ from Transaction.
Negotiation is process of trying to arrive at mutually agreeable terms.Negotiation may
lead to transaction and decision not to Transaction
Other than that, the relationship and networking are also the one of the core concept.
Relationship marketing is a pattern of building long term satisfying relationship with
customers, suppliers, distributors in order to retain their long term performances and
business. To achieved through promise and delivery ofhigh quality, good service and
fair pricing, over a period of time.Outcome of Relationship Marketing is a marketing
network.It is made up of the company and its customers, employees, suppliers,
distributors, advertisement agencies, retailers, research & development with whom it

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has built mutually profitable business relationship.Competition is between whole

network for market share and NOT between companies alone.
A market consists of all potential customers sharing particular need or want who may be
willing and able to engage in exchange to satisfy need/ want. Market Size isfn (Number
of people who have need/ want; have resources that interest, others, willing or able to
offer these resources in exchange for whatthey want). In Marketing terms, Sellers is
called as INDUSTRY. Buyers are referred to in a group as MARKET.Types of
Markets includesResource Market,Manufacturing Market,Intermediary
Market,Consumer Market, and Government market.
Lastly, marketer or prospects is working with markets to actualize potential exchanges
for the purpose of satisfying needs and wants.One party seeks the exchange more
actively, called as Marketer, and the other party is called Prospect.Prospect is
someone whom marketer identifies as potentially willing and able to engage in
exchange.Marketer may be seller or buyer. Most of time, marketer is seller.A marketer
is a company serving a market in the face of competition.Marketing Management takes
place when at least one party to a potential exchange thinks about the means of
achieving desired responses from other parties.

Scope of marketing

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It is common knowledge that marketing has lately developed into a separate

discipline that is being taught at universities now. When did it really come into
existence? The question is this century, last century, or in the middle Ages? OR Wrong
on all three counts.The transfer of goods from one person to another was probably one
of our earliest social acts. Whether

through violence or barter, this

transfer established that few people can satisfy all their desires alone. The inability
to produce everything desired creates reliance on others for both necessities
and luxuries. As societies grow more complex, so does the transfer of goods.
The basic motive for trading is that someone has something you want more than what
you already have. When that someone is willing to exchange what you want for what
you have, a mutually satisfactory transaction can be arranged. Generally speaking, then,
trade is the exchange of surplus items for shortagesof items. The reasons for
having surplus items range from geographic and resource variations to division and
amount of labor, skill variation, and differences in taste. One group or person may
create a surplus of some product in the hope of profitably exchanging it for other
products.As society and production expanded, so did the limits of trade, the range of
goods, and the distance between the traders. It became increasingly difficult for the
producers to locate each other and arrange mutually satisfactory exchanges without the
help of intermediaries or "middlemen." These intermediaries, in the role of bringing

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together interested parties, must perform a variety of tasks which can be called
marketing.
As defined by the American Marketing Association, marketing is "the performance of
business activities directed toward, and incident to, the flow of goods and services from
producer to consumer or user " Marketing, therefore, is made up of such physical
activities as transporting, distributing, storing, and selling goods, and of the decisions
which must be reached by individuals or groups who want to move goods from
production to use. Of course, not all producers engage in every marketing activity.
Thelocal carpenter in Guatemala or the supermarket manager in Japan does not
do product planning; most retail stores around the world have few or no
storage facilities.
However, most products are repeatedly subjected to all marketing operations. In
addition to an analysis of these activities, marketing involves understanding the
consumer circumstances and attitudes that determine why certain people want certain
products. Marketing trends, activities, and organizations are constantly changing and
developing. In the role of bringing together interested parties, the intermediary
may also be involve in grading, financing, assembling, packaging, refining, or altering
the form of the goods Indeed, a large portion of the working population in many
countries is involved in some form of marketing. In West Germany today, for example,
manufacturing and the marketing activities of retail and wholesale trade account for

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one-third of the national income, while twenty-five percent of the work forcesare
engaged in full-time marketing activities.The contribution of marketing to society is a
subject of controversy among economists. Contributions such as refining, transporting,
assembling, and packaging are considered productive; speculating, storing,
accepting commissions, and merchandising activities such as advertising are considered
parasitic and of little value to society. The general belief is that prime costs of
distribution should be eliminated and supplemental cost excesses should be reduced.
Supplementary costs of distribution such as packaging, storing, and selling are
generally considered to be continuations of the production process, and are
thus acceptable as an added value to the product. In the free enterprise system, the full
range of marketing activities operates with little control. Other more controlled
economies regulate and limit some of these functions.
Capitalist economies do acknowledge that marketing has its excesses, as in cases where
a product is stored for an undue period of time merely to raise the price. Consumerism
has arisen out of a belief that consumers have rights which are often abused. People like
consumer advocate Ralph Nader have fought to have laws enacted which would protect
these rights.On the whole, however, functions can continue only if they perform
a service and fulfill a need. If unnecessary marketing activities raise the cost of goods
above that of the competition, the product will be priced out of the market. The
corollary to this is that marketing functions will only produce a profit and the basic

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motive for doing business if they provide a service worth the money. It is argued that
almost all marketing activities thus contribute to the real value of a product. Whether or
not this is true, the aim of this text is to explore those marketing activities and functions
which do exist and which are practiced.
The following questions face those involved in marketing. How should the product be
designed? How should it be packaged? What retail and wholesale channels should be
used? Is advertising advisable? So, the question is how much and what kinds? What
prices should be set? Will it sell, and to whom?Although marketing activities have
expanded tremendously in the past hundred years, there was little formal study of them
until the past few decades. Today, there are many publications on the various aspects
of marketing and colleges give courses and degrees in this field. Marketing research
has developedintoa highly specialized activity employing tens of thousands of people
around the world. There is general agreement among marketing people that, in many
cases and countries, marketing activities account for more than half the cost of the
product to the consumer. In many countries, those engaged in marketing activities
outnumber those engaged in manufacturing or production. We have noted that, in
general, marketing directs the flow of goods and services from producers to consumers
or users. Marketing is not confined to one particular type of economy; goods in all but
the most primitive societies must be marketed. Indeed, a broader concept of marketing

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does not limit its application to business enterprises. Schools, hospitals, libraries, and
many other services must also be marketed to be used.

4.0 Conclusion
In the nutshell, I learn that the marketing is process of communicating the value of a
product or service to customers. Marketing might sometimes be interpreted as the art of
selling products, but selling is only a small fraction of marketing. As the term
"Marketing" may replace "Advertising" it is the overall strategy and function of
promoting a product or service to the customer.
I also learn that the Marketing is a very important aspect in business since it
contributes greatly to the success of the organization. Production and distribution
depend largely on marketing. Many people think that sales and marketing are basically
the same. These two concepts are different in many aspects. Marketing covers
advertising, promotions, public relations, and sales. It is the process of introducing and
promoting the product or service into the market and encourages sales from the buying

Page 16 of 40

public. Sales refer to the act of buying or the actual transaction of customers purchasing
the product or service.Since the goal of marketing is to make the product or service
widely known and recognized to the market, marketers must be creative in their
marketing activities. In this competitive nature of many businesses, getting the product
noticed is not that easy.
In addition, marketing is a broad composite and worldwide concept,more so in this
era of globalization whereas selling is a narrow concept related to product, seller
andsales activity.Marketing is more pull than push whereas selling involves push
strategy.Marketing begins much before the production of goods and services, i.e. with
identification of customers needs. It continues even after the saleto ensure customer
satisfaction through after sales services whereas selling comes after production and ends
with thedelivery of the product and collection of payment.
I also learn that the core concept from Philip kotler. Below is the shortcut figure to
show what I learn.

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Finally, I learn that the scopes of marketing are common knowledge that marketing
has lately developed into a separate discipline that is being taught at universities now.

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5.0 Reference

www.google.com

http://en.wikipedia.org/wiki/Marketing

http://www.exforsys.com/career-center/marketing-management/importance-ofmarketing.html

http://www.publishyourarticles.net/knowledge-hub/business-studies/distinguishbetween-marketing-and-selling.html

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http://arpitsrivastava.wordpress.com/2011/09/26/core-concepts-of-marketing-philipkotler-summary/

http://marketingbasics.16mb.com/the-scope-of-marketing-

6.0 Coursework
Development of Marketing Concept
There are different kinds of concepts adopted by firms to understand how marketing
concept is developed. The relevant concepts are illustrated in figure below.
Product Concept
(1869-1920s)

Production Concept
(1869-1920s)

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Selling Concept
(1920s-1950s)

Marketing Concept
(1950s-1980s)

Societal Concept
Concept (1980s)

Production Concept

The production concept holds that people will buy a product that was well made
and reasonably priced. As a result, the focus of a firm is on its internal
capabilities rather than customers needs. Producers concentrate on producing
and distributing more efficiently. A famous saying by Henry Ford to elaborate

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the concept at its dominant time Doesnt matter what colour you want, as long
as its black.

Useful when the demand for a product is greater than the supply.

Dominant era: 1870 to 1920s coincides with industrial revolution in United

States.

Product Concept

The product concepts hold that consumers will buy products that offer the most
quality performance and features. The underlying assumption is that good
products sell themselves. The concentration was to make a bigger, better or
faster product without acknowledging the customers need.

Useful when the market is highly competitive.

Dominant era: Around the time of production concept.

Selling Concept

The selling concept believes that consumer will not buy enough of the
organizations products unless the firm has taken considerable promotion and

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selling efforts. The philosophy is to sell the firms products, which is probably
not what the customers want. However, the sales people are to persuade
consumers to buy what is offered, as producers are the one who decided upon
the product development. The focus on selling sometimes leads to aggressive

tactics that may irritate customers.

Useful when supply of goods exceed demand and for unsought products like

encyclopedias and funeral plots.

Dominant period: During the Great Depression in the 1920s as many firms had
difficulty in selling their products due to excess supply of products.

Marketing Concept

In the late 1920s General Motors in United States realized that it is quite difficult
to sell their large-scale output to large-scale consumers. Firms begin to realize
that efficient production and pushing scales may not lead to purchases or
customer satisfaction. They begin to realize that consumers needs had to be
taken into account.

The concept holds that organizations must determine the needs of its customers
as being central to the organizations capability to achieve its goals. As
customers needs change, producers and retails must realize those changes to
survive in the changing environment. Three basic features of this concept are

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customer satisfaction, coordinated efforts by every unit in the organization to

meet customers satisfaction, and emphasis on long-run profit goals.

Dominant period: 1950s to 1980s.

Societal Marketing Concept

This most recent concept holds that organizations must not only determine the
needs and wants of its customers but must also deliver the desired satisfaction
effectively and efficiently in a way that will preserve the societys well-being.
Firms are now more conscious of portraying positive image of themselves.

Dominant Period: 1980s to now.

Marketing Research Process

There are four steps in the process of marketing research (Figure 4.2).
Defining problem and research objectives

Designing research plan

Implementing research plan

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Interpreting and reporting findings

Figure 4.2 Steps of marketing research

1. Defining the problem and research objectives

This first step is the hardest step in the research process. Understanding the
marketing problem and developing research objectives are two crucial tasks as
they determine the research approach in the subsequent steps.

In most cases, managers fail to identify and recognize the fundamental problem
in their companies. For example,

A manager of a large discount retail store chain decided that falling in sales
were due to poor advertising, and they ordered research to test the companys
advertising. When this research showed that there is nothing wrong with the
current advertisement, the manager was puzzled. It turned out that the real
problem was that the chain was not delivering the products and services as
were promised in the advertising. Careful problem definition would have
avoided the cost and delay of doing advertising research. Sometimes, the
problem is in finding new market opportunities.

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Sometimes it is not easy to develop a problem statement. The tendency is to

confuse a problem and a symptom. A problem is a situation requiring some type
of action while a symptom is merely the evidence that a problem exists.

When a problem statement is not defined correctly, the mistake can be costly to
the firm. For example, when Coca-Cola faces taste test challenge from Pepsi,
Coca-Cola thought that the problem was which formula tasted best. However,
one of the problems that they should define first will be How will consumer
react if we replace our formula with a newer one?

The objectives of the research can be exploratory, descriptive of casual.

i.

Exploratory research emphasizes on means to discover ideas and insights

to a problem. It is used to generate possible explanations and identify the
areas for further clarification. This type of research collects all possible
information that will give a better definition of what to study. It
emphasizes on opening up all channels of communication for those who
have something to say rather than on probability sampling. A restaurant
may ask their customers to define a good service in this type of research.

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ii.

Descriptive research is to describe the number of times an event happens

of the relationship between two variables. For example, a marketer
would like to investigate the potential of introducing certain food for
breakfast on the demographics of consumers who buy the food.

iii.

Casual research tries to find the cause-and-effect relationship between

two variables. For example, a marketer would like to know whether the
introduction of a new food product results in an increased demand for the
whole food products.

Normally, one will start with an exploratory research to define a clear picture of
a situation. After objective s is clearly defined, the organizations may use
descriptive or casual research.

Once the objective is determined, the researcher will state the hypothesis. A
hypothesis is a testable statement. An example of a hypothesis is Higher
advertising leads to higher sales. This hypothesis is normally tested via data
analysis.

In a typical research, the managers would often start with the exploratory and
later do the follow-up with descriptive and causal research. The statement of the
problem and research objectives guides the entire research process so that it is
within scope, budget and time frame.

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2. Designing research plan

After the research problems and objectives have been defined, researchers must
then determine the exact information needed, develop a plan for fathering it
efficiently, and present the plan to management.

The research plan outlines sources of existing data and spells out the specific
research approaches, contact methods, sampling plans, and instruments that
researchers will use to gather new data.

Research objectives must be translated into specific information needs. A typical

marketing research would require information such as the demographic,
economic and lifestyle of existing consumers, and the patterns of consumers
consumption.

Type of information needs

A researcher needs to decide whether to use primary data, secondary data, or a
combination of the two.
i.

Primary data-information collected for the specific purpose at hand.

ii.

Secondary data-information that already exists or have been collected by

a third party for another purpose. Typically, secondary data are used in

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the beginning to develop a plan for gathering primary data. Secondary

data is used for exploratory purposes.

Researchers usually start gathering secondary data. This is because secondary

data can be obtained more quickly and at a lower cost than primary data.
Moreover, secondary sources can sometimes provide data an individual
company cannot collect on its owninformation that is either not directly
available or would be too expensive to collect.

There are various sources of data either in electronic or printing format such as
the companys annual reports. Some data can be purchased from data vendors
such as AC-Nielsen. Some data can be obtained free of charge from industry
associations, government agencies and business publications.

However, secondary data can also present problems as:

The needed information may not existresearches can be rarely obtaining all
the data they need from secondary sources.
Even when data can be found, they might not be very usable. The researcher
must evaluate secondary information carefully to make certain it is relevant,
accurate, current, and impartial.

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Method of data collection

At this stage, a researcher needs to determine the data collection method. There are
several ways of collecting data which has been summarized in Figure 4.3. The two main
methods are survey and non-survey.
i.

Survey: The most popular technique for gathering primary data is survey
research, in which a researcher interacts with people to obtain facts, opinions,
and attitudes. Survey can be done either through questionnaires or through
interviews.

ii.

Non-survey: Choices of non-survey methods are observation or experiment.

In any research, the quality of data is very important. The researchers must take
great care of the quality of both data, primary and secondary.

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Data Collection Method

Survey
Questionnaires
1. Mail / e-mail / online
2. Face-to-face / personal

Interviews
1. Telephone
2. Face-to-face/personal

Non-survey
Observation

Experiment
1. Face-to-face/personal
2. Online

Figure 4.3

Data collection methods

There are several approaches in gathering primary data:

Questionnaire: This can be distribute via either mail, e-mail (online) or face-to-face.
Questionnaires are in two forms, either open-ended or close-ended. Open-ended
question require an elaborate answer and respondents may answer in their own words.
For example, how do you use product A? Close-ended questions provided respondents
with limited choices. For example, what is your age? The answer choices: ( ) below 20,
( ) 20 to 40, ( ) 40 and above.
Observations: This involves gathering data by observing relevant people, actions and
situations. For example, a restaurant owner might evaluate to employ more workers to
work during certain hours by checking the number of customers queuing or their

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waiting time. In some cases, observation may be the only way to obtain the needed
information particularly when people are unwilling to provide. In ethnographic
research, trained observers watch and interact with customers in their natural settings.
This often yields more information that usually does not emerge from traditional focus
groups on interview.
Experiment: It is best to gather casual information. Experiments involve selecting
matches groups of subjects, giving them different treatments, controlling unrelated
factors, and checking for differences in group responses. It usually takes place when a
company would like to introduce a new product.
Medium of contact
There are various ways to collect information such as mail, telephone, personal, and
online.
Mail questionnaire: This method is used to collect large amount of information at a low
cost per respondent. As respondents are answering the questionnaires are answering the
questionnaires in their own time, there is no interviewer bias.
However, mail questionnaires are not flexible and response rate is usually very poor.
Telephone interview: This one of the best methods of gathering information quickly, and
it provides greater flexibility than mail questionnaires.

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However, the cost per respondent is higher than mail questionnaires, and many people
may not want to discuss personal questions with an interviewer. Interviewer bias may be
present.
Face to face interview: This can be done individually or in groups.
Individual interesting is flexible. Interviewers can guide interviews, explain difficult
questions, and explore issues as the situation requires.
Group interviewing consists of inviting 6 to 10 people to talk with a trained moderator.
This is called a focus group.
As the discussion is free and easy, focus group discussion has become one of the major
marketing research tools for gaining insight into consumer thoughts and feelings.
However, this method is also costly.
Online: Advances in communications have resulted in a number of high-tech contact
methods such as online/e-mail surveys, online panels, experiments, and online focus
groups.
Online research can take many forms such as an online questionnaire on a company
website. The company can also use e-mail, web links, or web pop-ups to invite people
to answer and offer incentives for participating in it.
The advantages of online over traditional surveys are the speed and low costs. It can
also reach to a group that is difficult to reach such as people who lead busy lives or the
working single parents.

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One of the drawbacks of online research is that the Internet penetration is restricted.
Another major issue is the sampling problem because it is difficult to know who they
are. The emotions and body language of respondents are also not captured.
Consumer privacy is also a major problem as they are concerned about the use of
personal information without their consent.
Sampling Design
The next step in marketing research is sampling plan. A sample is a segment of the
population selected to represent the population as a whole.

As the cost of researching on a population is very high, researchers normally

select a sample from the whole population. A sample is a section of the
population chosen to represent the population as a whole.

Ideally, the sample should be representative of the population that needs to be

researched on.

Designing the simple requires three decisions :

I. Who is to be surveyed (the sampling unit)?
ii. How many people should be surveyed (the sample size)?
iii. How should people in the sample be chosen (the sampling procedure)?

The two type of sampling are probability and non-probability choice

I. Probability sampling: It ensures that each populations member has a
known chance of being included in the sample, and researchers can calculate

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confidence limits for sampling error. It gives the opportunity for everyone in the
population to be chosen. Frequently used probability samples are:
Simple random sampling equal opportunity to be selected is applied to
every member of the population.
Stratified sampling population are divided into mutually exclusive
groups and a random sample is applied to each group.
Cluster sampling populations are divided into mutually exclusive
groups and a sample is applied to each group.

Sampling

Probability

Non-probability

Simple random

Convenience

Stratified

Judgmental

Cluster

Quota

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ii. Non-probability sampling: the researchers often take this approach when sampling
cost is too high or takes too much time; however their sampling error cannot be
measured. It gives little or no effort in obtaining the representative cross-section of the
population. Frequently used sample are:
Convenience sampling respondents are easily accessible by the researcher,
family and friend.
Judgement sampling respondents are chosen by researchers own judgement.
For example, researchers choose respondent that they feel can give accurate
information.
Quota sampling respondent are chosen by a prescribed number of people on
each of several categories. For example, researchers set a number; certain
percentage of respondents that will be selected across ethnic groups.
Research Instrument
Finally, the researchers have to decide the instrument to be used to measure the
information. There are two choices, the questionnaire and mechanical devices.
I.

Questionnaire
The questionnaire is by far the most common instrument, whether
administered in person, by phone, by online. This is because
questionnaires are very flexible that the researchers could ask closedended or open-ended questions.

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In a closed-ended question, all possible answers are included,

while in an open-ended question, the researchers allow
respondents to answer in their own words. Researchers should
use care in the wording and ordering of questions. Questionnaire
should not be too lengthy or misleading.

II.

Mechanical Devices
This is a device used to monitor consumer behaviour and obtain
information. For example, Nielsen Media Research attaches people
meters to television sets in selected homes to record who watches which
programmes. In a shopping complex, retailers use check-out scanners to
record shoppers purchases.

- Figure 4.5 shows an example of a barcode scanner placed at checkout counters to track
and record shoppers purchase.

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Figure 4.5

a barcode scanner

3. Implementing the research plan

- Next, the research puts the marketing research plan into action.
- This involves collecting, processing, and analyzing the information.
- The data collection phase of marketing research process is generally the most
expensive and the most subject to error.
- Researchers must process and analysis the collected data to isolate important
information and findings.
- They need to check data for accuracy and completeness and code it for analysis. The
researchers then tabulate the results and compute averages and other statistical
measures.

4. Interpreting and reporting the findings

- In the final stage of a marketing research process, the researcher must now interpret
the findings, draw conclusions and report them to the management.
- The researcher must not try to overwhelm managers with numbers and fancy statistical
techniques. Rather, the researcher should present important findings that are useful in
the major decisions faced by management.

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- Interpretation should not be left only to the researcher. The marketing manager who
knows more about the problem and the decisions that must be made.
- In many cases, findings can be interpreted in different ways, and discussions between
researches and managers will help point to the best interpretations.
- The research must also communicate the conclusions and recommendations to
management. Usually both oral and written reports are required.

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