CHAPTER NO.

INDUSTRIAL MARKETING
RESEARCH AND MIS
 Learning Objectives
• To know the nature and the scope of
marketing research in Industrial Marketing
Environment.
• To examine the marketing research process
with the focus on industrial marketing.
• To know the use of secondary sources of
information
• To understand the marketing intelligence
system and decision support system.
 Marketing Research

• What’s that????????????

“Marketing research is defined as

the objective and systematic
process of obtaining, analyzing
and reporting of data (or
information) for decision making in
marketing.”
 Why objective & systematic?

The marketing research should not be at any

point of time be influenced by personal views
and considerations.
 I.M.R
Industrial marketing research is one of the parts
or the components of the industrial marketing
intelligence .
WHAT IS MARKETING INTELLIGENCE?

Marketing intelligence is an ongoing activity to

provide continuous information for decision
making.
 Nature of marketing research
• Marketing research undertakes periodic
project or studies to collect and analyze the
data with specific objectives.

• Some of the projects or the studies on

industrial marketing research are forecasting
sales and market potential, competitive
analysis and new product research.
 Industrial marketing research
Vs.
Consumer marketing research

The basic elements of the consumer

and the industrial marketing
research are the same however the
distinguishing factors are the
environment of the industrial
markets, nature of industrial
buying, there are some major
differences between the industrial
and the consumer marketing
research.
 Industrial marketing research
Vs.
Consumer marketing research
Industrial Research Consumer research
The population size in industrial research is The population size is large and the sample
small and thus a small sample size size is also large.
Accessing a respondent is difficult due to Accessing is simple and easy
work schedule and preoccupation.
Research personnel should be trained and Needs to be trained but needn't have
technologically oriented technical orientation.
Secondary data forms a very important Focus mostly is on primary data
source and it is relatively difficult to find
accurate data .

Generally personal , in-depth interview is There are many other methods

followed
It is difficult to define respondents, because Defining respondents would be simpler.
purchasing would involve a lot of people
Scope of Industrial Marketing Research
Development of market potential
Market share analysis
Sales analysis
Forecasting
Competitor analysis
Benchmarking
New product acceptance and potential
Business trend studies
Sales quota determination
Marketing
Research
Process
 Identify the Develop a Collect the
problem/opportunity and research design or data or the
define research objectives plan information

Process and analyze the data

Present
the research
findings or making
the final report
 1. Identify the problem or opportunity
• Research brief is prepared by the marketing
manager stating the :
Background information of the problem
The problem itself
How the findings of the research will be useful to
make the decisions.

Normally the marketing manager and the

researcher will have an agreement regarding the
problem and the research objectives.
 “Research brief”

• “ The problem identification is very important

and to avoid any controversy at a later stage
the marketing manager should prepare a
written statement referred to as “Research
Brief.”
The Art of a Research Brief
WHAT A BRIEF SHOULD CONTAIN
Some sponsors prefer to deliver their brief orally, developing points of detail
during the initial discussion with the researcher. Alternatively the brief may be
fully thought through and committed to paper. This can be especially important
when a number of research agencies are invited to submit proposals. A written
brief provides a standard which is the same for all contestants.
Whether written or oral, the research sponsor should pay regard to a number of
subjects which constitute a good brief.
A background to the problem: this may be a short chronicle of the events which
have led up to and precipitated the study. It gives the researcher a perspective and
a better understanding of why the project is to be commissioned.
A description of the product (or service) which is to be researched: the researcher
needs as much detail as possible. The greater the understanding of the features
benefits, construction and uses of the product (or services), the more closely it will
be tailored. It can be helpful for the sponsor to state which products are included
as well as those which are not. Technical data sheets and product literature are a
big help.
A description of the markets to be researched: the researcher must know which
geographical territories the study will cover and whether or not it will be limited to
certain end user markets.
A statement of the objectives: the sponsor may feel inhibited by
limited knowledge of the market research process. The
responsibility then lies with the researcher to interpret the brief
and give a view on what can be achieved.
Timing and budget constraints: the researcher should be told of
constraints if they exist. A limited budget is an obvious example.
The sponsor may also be able to suggest, within the brief, a
research method though usually this is left for the researcher to
propose.
Finally there may be special aspects of the study which the
sponsor needs to mention in the brief. These could cover a wish
to remain anonymous, reporting requirements and progress
meetings.
It is always helpful for a researcher to see the product or service
that is being studied, if practicable. A visit around the plant or to a
customer to see the product in use can provide that important
"feel" which researchers get from direct contact.
THE ROLE OF THE RESEARCHER
Frequently management know that they face a problem but identifying what it is,
its cause and the research solution are left to the researcher. With no formal
brief the researcher must dig out the necessary background data himself.
Below is a checklist of questions which could be used by the researcher to draw
out the background to design a research programme.
Checklist to guide a researcher when taking a brief:
HISTORY
How long has the company been established?
How long has it concentrated on its present product range?
What was the company's product range originally, and 10, 20, 30 years ago?
Has the company always been sited in its present location?
What factors have influenced its location?
COMPANY BACKGROUND
What is the principal business of the company? What are its subsidiary activities?
What is its total turnover – (a) UK (b) exports?
Describe any holding companies/subsidiary companies
How many employees are there at the establishment?
PRODUCT DETAILS
What are the important products (or services) in the range (by size, capacity, shape,
material, etc)?
What proportion of the total turnover does each of the above groups account for?
To what extent are the products standard/custom built?
What proportion of an assembled product is made in-house or bought out?
How important are spares in terms of revenue v profit?
Are any of the products built under licence?
PRICING
What are the prices for each of the important products (are these prices trade or retail)?
How do prices compare with those of the competition?
Is there a published price list?
What is the discount policy?
What power does the salesman have to alter prices?
How price-sensitive is the product?
SALES FORCE
Number of representatives
Are they a general or a specialised sales force – in what way are they specialised?
How many calls a day do they make?
Does the sales force bring back orders or are they sent in independently?
MARKETS
What are the major user markets for the products?
What proportion of total sales are to each of these markets?
Are any markets known for the product where the company currently does not/cannot
sell?
Which markets are believed to offer the greatest scope for expansion of sales?
DECISION MAKERS
Who are the key decision makers who specify and buy this type of product? What roles
do they play?
What do decision makers look for from suppliers? PROBE price, quality, delivery, sales
service?
COMPETITION
Who are the most important competitors? Where are they based?
What is their rank order/market share?
What are each company's (including the client's) perceived strengths and weaknesses?
To what extent do competitors rely upon this market for their turnover and profit?
QUALITY
Where does the product fit against the competition in its quality?
What are the special features of its quality?
Where is it weak on quality?
How long will the product last?
When it finally fails, why will it do so?
DELIVERIES
What is the current delivery period?
What is the competition's delivery?
What is the ideal delivery?
DISTRIBUTION
How is the product distributed?
What proportion goes direct/indirect? What is the policy which leads to this split (eg size of
account - OEM v replacement etc)?
What are distributors' margins?
What other products do distributors sell?
Do distributors actively sell or just take orders?
Who are the major distributors:
(a) used by the company?
(b) not used by the company?
What is the average size of a direct account and a distributor account?
PROMOTION
How big is the promotional budget?
How does this break down between:
(a) media
(b) exhibitions
(c) PR
(d) print
(e) direct mail
(f) web sites?
Which media are used? Which are most successful?
What proportion of sales leads come from promotion? How many? What is their quality?
Which exhibitions are attended? What is their perceived value?
What opportunities exist for e-commerce?
OTHER DATA
Full details of names (initials as well) of persons present at briefing; date of briefing;
address of company; address to which proposals should be sent
How many copies of the proposal are required - to be sent separately or en bloc?
PREPARING THE RESEARCH PROPOSAL
Having received the brief the researcher, whether in-house or from an agency, must
submit a written proposal to the sponsor which states an appreciation of the problem,
the objectives, the research method and the timing. If an agency is preparing the
proposal, a statement of cost must be given. An in-house job may omit this but many
managers still like to see an estimate as a benchmark to compare with other surveys and
as a perspective which they can use to relate to the size of any decision which may be
taken.
If the proposal is accepted it becomes the contract between researcher and sponsor. The
nature of business to business market research is such that it is seldom possible to know
in advance whether the objectives or research method will remain fixed. Invariably slight
modifications need to be made. These should always be documented and copied to all
parties so they can react to them and in the event of any later argument, refer back to
whatever was agreed.
 Some Marketing Research Activities
MARKET RESEARCH
SL NO. ACTIVITIES
(i) Development of market potential
(ii) Studies of market share
(iii) Sales analysis
(iv) Determination of market characteristics
(v) Establishment of sales territories
(vi) Establishment of sales quotas
(vii) Studies of market changes
(viii) Channels of distribution and distribution cost studies
(ix) Studies on methods of salesman compensation
(x) Test markets- store audits
(xi) Studies of export markets
(xii) Forecasting on personnel requirements
(xiii) Studies of deals or premiums.
Product Service Research
SL. NO. Activities
Research on potential of new products
(i)
(ii) Research on present product vs.
competition
(iii) Research on competitors products

(iv) Studies on channel length & depth

(v) Research on packaging , design

(vi) Make or buy analysis

(vii) Product testing

 Business economics
SL. NO Activities
(i) Short range forecasting

(ii) Long range forecasting

(iii) Business trends

(iv) Profit analysis

(v) Plant & warehouse locations

(vi) Purchasing of companies, selling of division

 Advertising research
Sl . no Activities

(i) Media study

(ii) Copy research

(iii) Use of projective techniques for

motivational research
 2. Developing the Research
design/Plan
Decision Areas in a Research Design

DECISION AREAS PARTICULARS

1. Information Type Prepare a list of information required from
the research objectives.
[Link] of Data Primary , secondary, commercial,
combination
3. Research Methods Observatory, exploratory, descriptive ( or
survey) , experimental
4. Sampling Plan Sampling unit, sampling size, sampling
procedure
5. Method of contacts Mail, telephone or personal interview

6. Data collection methods( Research Questionnaire, mechanical devices

Instruments)
 1. Information Type
 Prepare a list of information required on the basis of
the objective .

 Eg: The objective of the research is competitors

products. The list of information required would be
 (i) the list of the competitors
 (ii) the list of the competitors products
 (iii) their market shares.
 (iv) the SWOT, sales policy, pricing policy, and the
marketing strategies would be very much required.
 2. Sources of Data.

• Primary Data Secondary Data

This consists of the original This normally consists of the data or
information gathered for the specific the information that is already
purpose. collected earlier for some other
purpose or research which was
The survey method is used mostly to similar to the one is being done
get the information from the now.
industrial buyers who have the The main advantage of this is that it
various information with them. is easily available at low cost .

Most of the time the various heads of The major disadvantage of the data
the department ( DMU) are would be it may be outdated ,
interviewed to get the desired inaccurate or incomplete.
information
Sources of secondary data

• Governmental publication.
• Non governmental publications.
• On- line portals.
[Link] methods for Primary Data
Collection
 Observational – people and their behavior are
observed and recorded without asking questions.
 Exploratory- focus group interviews in-depth
interviews are conducted to gain the insight into
the problem.
 Survey – interviewing or asking questions to
people who are believed to posses the
information.
 Experimental- setting up a controlled situation
and measuring the cause and effect of the
relationship.
 Survey Research Method.
• In IMR survey method the primary data is
collected by this method.
• What is understood mainly in this??
Information on awareness , attitudes, and
buying behavior of customers.

These information will never be there in the

secondary data.
 Survey Method- Data Collection
possibilities

• (i) Structured & direct way of interview

• (ii) unstructured & direct interview
• (iii) Delphi technique of interview
• (iv) Indirect interviews.
 Structured & Direct interview
• This is a formal questionnaire.
• The interviewer is instructed to ask those questions only in
the order given in the questionnaire.
• This is also referred to as “structured survey”
• Advantages:
• -Less skilled interviewers can be used.
• - editing, tabulating, and analyzing the information is easy.
Disadvantages
• The words of the questions can be misinterpreted by
different individuals.
• Related to personal and motivational factor question the
answers would be unbiased and incomplete.
• This kind of data collection is done when the sample size is
relatively large and the market is widespread.
 Unstructured Direct Interview.
• Often known as the “Depth Interview”. Mostly
used for exploratory research.
• The interviewer is given instruction as to what
information he needs to get from the person.
• Probing questions like:
• Why do you feel this way?
• What do you mean by that statement?
• This goes on till the information required is
obtained.
• Depth interviews are normally conducted in
casual manner.
 Advantages & Disadvantages
• Advantages:
• Respondents are at ease and are free to express
their ideas in their best possible ways.
• Lot of flexibility with the interviewer also.
• Gets a variety of opinions from the respondents.

• Disadvantages:
• Takes a longer time to finish the interview.
• Competent interviewers are required.
• Cost per interview is more
• Lot of difficulty in quantifying or analyzing the
information.
 Delphi technique
• Method to get the information from a group of
experts from within or outside the organization.
• Senior executives of the company or from any
external agency form Delphi panel .
• Each member is asked to respond separately to
the same problem.
• A coordinator collects the responses , and then
the average score is given and then the process
is repeated till the panel members come to a
conclusion.
 Delphi technique.
• This is useful in getting answers to very difficult
questions:
• Eg.- How do we forecast the future trend on
external environmental factors such as economic,
technological, and political factors on the
industry.
• How much will be the effect of the turnaround
happening after the economic turndown last
year.
• Very Important care should be taken in the
selection of the panel experts.
 Indirect Interviews
• Also called as the focus group interview.
• In this method 6-10 person are invited to spend
few hours with a skilled moderator to discuss the
given problem.
• The meeting is held in a pleasant surrounding
and is held in a relaxed and informal way.
• The moderator focuses on the problem and
hence the name “focus interview.”
• The discussion is recorded by audio and video
which is examined to understand the attitude,
opinion , and the buying behavior of the present
and the future customers.
 Focus-group technique is used for
 Obtaining preliminary report before doing a large
scale market survey.
 Generating hypothesis.(A concept that is not yet
verified but that if true would explain certain
facts or phenomena)
 Examining new product concepts
 Ideas on how to improve upon the existing
products.
 Getting insight into customers perceptions,
attitudes, and behavior.
 4. Sampling Plan
Sample- “This is a part of the population( or
universe) which is selected to obtain the
necessary information.”

Universe- “This consists of all the items or

objects or respondents under consideration in
a research project, and depends on the
research objective.”
 Why sampling is used??
o Sampling is more economical.
o The quality of data by sampling is much better
than the census method.
Sampling plan consists of major three decisions:
Sampling unit
Sample size
Sampling procedure or scheme.
 Sampling Unit
• The first question the researcher should ask is
“ who is to be surveyed?”
• The sample selected should represent various
types of customers , their geographic locations
and the current purchases.
Reference to our study: -
- All the industrial units that use steel is the
universe.
- The researcher needs to list the consumers by
the type of industry( auto, furniture,engineering)
- Their geographic location
 Sample size
• The researcher decides how many firms or
respondents to be selected from the universe.
• If the population is homogeneous in terms of
characteristics the sample size is smaller.
• Some researchers use mathematical formula based
on statistical analysis but ultimately
“ The decision on the sample size depends upon the
researchers judgment.”
The decision is taken after considering the customer
groups, geographic spread and the cost.
 Sampling procedure
• The decision on how the study objects (respondents)
are to be selected is known as the sampling plan or
the procedure.
Characteristics of a good sample scheme are:-
 it should be a truly representative sample.
 It should result in small sampling error.
 Should consider the cost and the time for the
research.
 Should enable the results of the sample study to be
applicable to the population with reasonable level of
confidence.
 Types of sampling scheme

• 1. Probability sampling or random

sampling.
• 2. Non-Probability sampling.
 Probability sampling
• Based on random selection- each object or
respondent has an equal chance of being
included in the sample.
• Has an advantage of being superior design as
it can measure the errors of estimation
statistically.
• Disadvantage of being costly and time
involved is also very high.
 Probability Sampling Methods
SAMPLING METHOD DESCRIPTION
SIMPLE RANDOM SAMPLING This process includes drawing the
sampling in such a manner that each
member has equal chance of being
included in the sample.
CLUSTER SAMPLING The population is divided into clusters.
Then with a random selection few clusters
are chosen and again few members are
chosen with the clusters
SYSTEMATIC SAMPLING Selecting a unit will depend upon the
selection of the previous unit.

STRATIFIED RANDOM SAMPLING The population is classified into groups on

the basis of some characteristics , and
then a simple random sample is drawn
from them.
Non probability sampling methods
This is a non random sampling method.
Sampling error cannot be estimated and
Research finding cannot be generalized.
Possibility of personal biases of the researcher
is very high while selecting the sample.

However the only advantage is that the cost

and time involved is very less.
 Non-Probability Sampling Method
SAMPLING METHOD DESCRIPTION
CONVINIANCE SAMPLING It is left at the discretion of the researcher.
Depends on the convenience of the location
or the cooperation the sample

JUDGEMENT SAMPLING The judgment and the opinion of the experts

form the basis of sampling.

QUOTA SAMPLING Groups or categories are identified and a

fixed quota is interviewed based on the
convenience or judgment
 [Link] of Contact
• In IMR majorly three methods of contact with
the respondents are used:-

• (i) Personal interview

(ii) Telephonic Interview
• (iii) Mail Surveys.
 6. Data Collection Methods
(Research Instruments)
• Collection of the primary data is done by two
methods:

• QUESTIONNAIRE
• MECHANICAL INSTRUMENTS
 3. COLLECTING THE DATA
• This phase is referred to as the field work.
• Expensive, problem oriented phase.

Types of Problems:
(i) Not available contacts to be contacted again and again.
(ii) Some respondents may not cooperate.
(iii) Some respondents may give biased or dishonest replies.
(iv) Sometimes the interviewers are biased or are dishonest.

HENCE THE INDUSTRIAL RESEARCHER IS REQUIRED TO SET

UP A SYSTEM OF SUPERVISING THE INTERVIEWERS.
 4. PROCESSING & ANALYZING
• Processing includes:

EDITING CODING
PROCESSIN
G&
ANALYZING

CLASSIFICATION TABULATION
5. Presenting the Research Findings

• The final stage.

• Normally the written report is given to the
company by the researcher.
• The researcher has to present the same to the
senior executives of the organizations.
 Some important points …
• The researcher should have the knowledge as
to whom is he presenting the report.
• The research objective and the finds should
match with each other.
• The logical justification of the choice of the
research method should be stated clearly so
that the interested person or the reader is
convinced about the authenticity of the
report.
 Some important points …
• There should not be any approach to please
the personnel of the company by the
researcher.
• Clarity of thought and expression should be
clear from the research report.
Industrial Marketing Intelligence
System

Industrial marketing managers need

continuous basis of information in
developing strategies and tactics.
 Industrial MIS
• Marketing Intelligence system provides
relevant , accurate and timely information on
continuous basis to the industrial marketing
manager to make decisions.

• Industrial marketing research is a part of

industrial marketing intelligence system.
 Components of Industrial MIS
• Industrial Marketing Intelligence System

Marketing
d
research studies
M e
s
a v
t
Industrial r e
Decision r
Secondary data Marketing k l
support a Market
sources Intelligence e o
system t Response
System t p
e
i m
g
Internal n e
y
Information g n
System t
 Marketing Research Studies
• Developing the market potential
• Market share analysis
• Forecasting
• Business trends

• Separate set of dedicated files are set up for

each marketing research project.
 Internal Information System
• Reports on the evaluation of actual
performance and the goals set by the
organization .
• These periodic reports are on sales, profits,
costs , product , territory , customer database.
• All the internal reports are for a particular
time frame only.
 Secondary Data Sources
• These are published data and the data available is
enormous and hence the relevant data should be
always taken up.
• MIS provides a systematic approach for
collecting, storing, and disseminating the
marketing information.
• The logical extension of MIS is the Decision
Support System(DSS) which helps the
organizations to make effective decisions in
complex marketing situations.
 Decision Support System(DSS)
• “ A coordinated collection of data, systems,
tools, and techniques with necessary
software and computer hardware through
which an organization gathers and interprets
relevant information from business and
environment and turns it into information
that can be acted upon.”
 Decision Support System(DSS)
• Decision support system enables the
industrial marketing manager to interact
with the computer, develop various
alternatives and select the best alternative.
Components of DSS
• Database
• Decision models
• Statistics
• Display