Q1. How can a marketer circumvent those uncontrollable forces that limit his decision-making ability?
Answer 1)
Marketers solve problems through the Planning, Implementing & controlling phases of their work. Basically they face two problems to achieve -
· Determining Goals
· Developing Plans
Before Marketers can even attempt to find a solution, they must recognize that a problem exists. This is not always easy. Often symptoms are mistaken for problems. For example, a Marketer who is concerned with declining sales may describe the decline as a problem & may assume that the product is nearing the end of its product life cycle, whereas the decline may be a symptom of problems like poor servicing, overpricing etc.
Effective Marketers try to anticipate problems. The solution is usually the result of searching for & sifting through raw information.
The performance of the marketing function can be viewed as being concerned essentially with problem solving & decision making throughout the three stages of planning, implementing & controlling the marketing function.
The most significant change in recent times in the business environment is the recognition that information gathering is crucial. Since the primary function of marketing is to assess want-satisfying opportunities & match resources to them, the knowledge that flows from information is important for marketing.
Today, the need for efficient management of information is greater than ever. Thus information is the foundation & major source for the problem solving & decision making that marketing executives confront daily. To grasp the nature of information fully, we need to understand the manners in which systematic data gathering pulls together the information needed for decision-making.
Data Information:
Data and information are not the same. Information is data that have been converted to a useful form for decision-making. It is relevant, timely, accurate, cost-effective and reduces risk in decision making
Marketing managers face an immense volume of raw data coming from many kinds of internal and external sources such as accounting records, reports from sales force, government statistics and so on. If these data are to be useful, the data flow must be managed.
Data Classification:
Data can be classified as external or internal. External data are generated outside the firm. Examples are competitor’s sales, customer buying habits, media rates, and middlemen in the marketing channels. Internal data are generated from with the firms. Examples are call reports by the company sales force, credit records, sales data.
Data can also be classified as recurrent and non-recurrent. Sales persons collect recurrent data routinely in every day operations as sales data. Non-recurrent data are collected to deal with the special problem.
Cost and Value of Information:
Managers must consider the cost of collecting and converting the data into information when specifying their informational needs. Rarely will all information they want be available. The cost of additional information must be weighed against its value for planning, implementation and controlling market information.
In general, information should be sought if the firm has no better use for the funds and if the expected value of the information exceeds expected costs, but determining the value of information is difficult.
Q 4. How do Data & Information differ?
Answer 4)
Datum means fact. The plural of the word Datum is Data. Thus Data means facts. In the context of management principles, Data generally means facts or unevaluated facts or messages or numbers. Data can be in numbers or alphabets. In business organizations, the word data is used to represent facts that describe events or entities. For example - The amount of sales per week is Data. It is just a fact or figure that represents an event - “Sales in a week”.
Data is generally in unorganized form. Data to be more meaningful needs to be organized. When Data is organized in a meaningful manner then it is called as Information.
To understand the difference between Data & Information, we shall consider the following example -
Week 1 - Sale is Rs. 4,00,000.
Week 2 - Sale is Rs. 5,00,000.
Week 3 - Sale is Rs. 7,50,000.
Week 4 - Sale is Rs. 10,00,000.
In the above example, the sales figures per week are Data. They represent events.
When the above Data is analyzed & we say that sales are showing improvement over previous week for the last 3 weeks, it becomes Information.
Information is used at different places within the business organization. The scope, content & presentation of information differs depending on the level at which the information would be put into use.
Based on the location at which information is used, the information is classified as -
· Strategic Information
· Tactical Information
· Operational Information
· Strategic Information
The top management of a business organization is involved in Strategic activities. These activities include Strategic planning, Goal setting, Policymaking & so on. The information that is needed to support these activities can be termed as Strategic Information.
· Tactical Information
The middle management of a business organization is involved in tactical activities. The information support for such activities is provided by the Management Information Systems through tactical information. Tactical information is collected from internal as well as external sources.
· Operational Information
Operational Information deals with the information requirements of the operational level. Typically the Operational Information is generated as a result of the data processing activities using data generated through internal sources.
Q 5. What is the basic purpose of a Marketing Information System?
Answer 5)
Marketing information is “a structured and interacting complex of persons, machines and procedures designed to generate and orderly flow of pertinent information collected from intra and extra company resources for use as the basis for decision making in specific responsibility areas of marketing management ”.
An MIS gives marketing managers accurate, timely and relevant information to make better decisions. It cannot however, reduce decision-making to an exact science. The experience, intuition and judgment of the marketing managers also play a part. But it is the relevant, timely and accurate information that is the key to good decision-making. This includes monitoring of key environmental variables.
MIS Design & Organization:
The objectives information managers & information users set for a firms MIS influence its design & how its functions will be performed. Although there is no one best model, the following functions are always performed by an MIS –
1. Data gathering
2. Data processing
3. Data analyzing
4. Storing & retrieving data
5. Evaluating information
6. Disseminating information to Marketing managers
The input is raw data. The output is relevant marketing information to decision-makers. It is a variable tool for planning, implementing & controlling the marketing effort.
A MIS has a Recurrent Data Subsystem (RDS) and a Non-Recurrent Data Subsystem (NDS). The RDS routinely performs all MIS functions on useful, recurrent, internal & external data. This provides a continuous flow of data into the system for conversion to relevant information. The RDS is usually computerized & has access to many sources of data.
The NDS that is not routinized handles non-recurring internal & external data generated because of special problems or to access market opportunity.
Q 6. What are the 2 major types of stages in Marketing Research Design? How do they differ?
Answer 6)
The Marketing Research Design specifies the overall framework & the specific procedures for collecting & analyzing the data. This is the most important step in the research process. Research design can be classified by -
1.Function
2.Methodology
1. Function
There are four major categories in Market Research Design by function. They are -
· Exploratory research
This is conducted when researchers need more information about the problem or opportunity, when tentative hypotheses may be formulated more specifically or when new hypotheses are needed. The purpose of such research is to gather data that suggest meaningful research questions.
Researchers often use the Focus Group interview technique in exploratory research. A moderator leads six to twelve people through unstructured questions on the given topic to develop hypotheses that might lead to more specific research topics. A firm, to identify potential market segments may, for example, interview groups of potential users in different segments with distinct profiles to establish which groups to interview further. Once the problem or the opportunity is clearly defined, researchers try to describe a market or a part (segment) of a market by developing summary statistics on it.
· Descriptive Research
The task here is to find adequate methods for collecting & measuring data.
· Casual Research
This is conducted to test hypotheses about the relationship between dependent variables. For example, descriptive research may describe that a price reduction leads to increased sales of a product but does not say definitely that the price cut was the actual cause of the increase in sales. Sales may have increased because of other factors like decrease in competitors marketing efforts. Casual research on the other hand, tries to show either that the price cut (Independent Variable) is not the cause of increased sales (Dependent Variable) or vice versa. This requires the researchers to keep all factors other than price & sales constant. This is hard to do naturally.
· Predictive Research
It is used to predict forecasts future values such as numbers of votes, sales revenues etc. Political pollsters like MARG - India Today have for years, used a predictive model to forecast how many seats each party will win in a coming election. Similarly, Marketers try & estimate sales volume in different market conditions in order to predict the performance of a particular brand/product.
2. Methodology
Marketing research can be categorized according to Methods as well. The four methods under this are -
· Historical Research
· Survey Research
· Experimental Research
· Motivational Research
· Historical Research
This involves using past experiences to find solutions to marketing problems. In most marketing research, the preliminary exploration stage involves Historical Research.
· Survey Research
This involves obtaining data from respondents in person, by telephone or by mail.
· Experimental Research
This focuses on observing the effects that controlled changes in the independent variables like advertising & pricing have on a dependent variable (normally sales). This is done by attempting to hold all other factors but the one being studied constant.
· Motivational Research
This is based on the theories of behavioral sciences especially psychology. It tries to understand & analyze major consumer motives - motives that consumers are often unaware of. Direct questioning is therefore replaced by free discussions on a topic. Trained psychologists analyze the discussion & attempt to determine the consumer’s motives. Focus group interviews, projective & depth-interviewing techniques are the tools often used in Motivational Research.
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