The first step in conducting research is to examine the reasons why research is being undertaken. Determining the research purpose sets the stage for the rest of the research plan because it lets everyone (e.g., researcher, client, outside firms) with a stake in the outcome of the research know the general philosophy of the project and also establishes the urgency of the research.
As we noted in the Marketing Research Tutorial, marketing research serves as the foundation of marketing since it is used to support all marketing decisions. Marketers use research to support decisions in five important ways: explanation, prediction, monitoring, discovery and hypothesis testing. Thus, the purpose for research falls into one of these categories.
- Explanation – Possibly the most cited reason for conducting research is to use it to explain why something is occurring. Most often this means identifying and explaining a problem facing the marketing organization. For example, marketers may seek to know why sales in a certain geographic region are declining when it was forecasted to rise.
- Prediction – Research is used to help assess a situation and predict what may happen in the future. This type of information is critical in many marketing decisions such as forecasting demand for a new product. It is also used to predict what may happen if something is changed such as a key marketing variable decision (e.g., effect on sales if price is changed).
- Monitoring – Many decisions made by marketers must be monitored to insure that goals are being attained. A sales manger, for instance, will look to monitoring research in order to track the performance of the sales force in meeting sales targets.
- Discovery – Most marketers are continually on the look out for ways to improve their marketing efforts. Improvements may include such things as new product options, ways to increase sales or decrease costs, promotional approaches that improve the company’s image and many more. Finding new opportunities is sometimes the result of luck but more often the marketer engages in research to locate these.
- Hypothesis Testing – Finally, marketers use research to help test theories or “gut feelings” about some issues. For instance, a marketer may suspect there is a difference between the purchasing habits of one type of customer as compared to another type. Hypothesis testing, which is at the heart of scientific research, relies on statistical analysis to help evaluate a hypothesis. It should be noted that each of the previously described purposes for doing research can also be undertaken as a hypothesis test. For example, a marketer looking to explain why sales are declining in a certain region may have a “gut feeling” for why this is occurring and thus can combine explanation with hypothesis testing.