Evaluating Value of Marketing Research Information

From a conceptual perspective, the value of marketing research information is reflected by the extent to which information can reduce decision uncertainty. Alternatively, the value of market research information is reflected by the degree to which the chances of a making a correct decision are increased by use of that information. Implicit in this perspective is the notion that there is value in the information. Hence information value implicitly refers to the value of incremental information.

Given this perspective, marketing research information is more valuable in certain decision situations than in others. Since the value of information may be defined as information benefits minus information costs, value increases as benefits increase or cost decreases. Additionally, information is potentially more valuable in a marketing decision situation in which there is a great deal of uncertainty present and the consequences of an incorrect decision are substantial.

Quantitative Evaluation of Market Research Information for Marketing Decisions 

There are several methods of establishing the value of marketing research information for marketing decisions. Each method is applicable primarily to the individual decision rather than the total research effort. Ideally, information value should be established before the marketing research is conducted, but this is not always feasible.

Some of the quantitative methods for evaluating research information for marketing decisions include:

1. Simple savings method: This method assumes that marketing management can make a single reasonably accurate estimate of the cost of making a wrong decision as well as estimate the chance of making such an incorrect decision. The value of information is determined as follows: Value = E (cost) n - E (cost) t, Where, E (cost) n = estimated cost of mistake using no additional information E (Cost) t = estimated cost of mistake using additional information. 
2. Return on investment: Another approach views research information for marketing decisions as an investment after the research has been completed and acted upon. 
3.  Present value method: This method also treats marketing research expenditures as an investment. This approach can be applied to individual marketing decisions and total market research effort by an organisation. d) Cost benefit approach: This approach involves determining value through a cost benefit framework and suggests that marketing research information evaluation be done by: 

· Setting a cost figure and maximizing benefits from that cost.
· Establishing a desired level of benefits and minimizing cost, or
· Maximizing benefits.

Decision theory analysis can be used to determine the value of research information for marketing decisions. Decision analysis is used to link together uncertainties in the marketing environment and the alternatives available to a marketing manager, and it can be extended to identify the upper limit to spend for market research information, as discussed and illustrated previously.

Qualitative Evaluation of Market Research Information forMarketing Management Decision

Although cost may be an overriding concern in determining whether a particular kind of research information is to be utilized in a specific marketing decision context, cost probably should not be the only factor taken into account. The value of research information for marketing management decision can also be evaluated according to some qualitative characteristics.

To be maximally useful for decision-making, marketing research information must possess the following characteristics:

1. Accuracy: This refers to the degree to which the information reflects reality. That is, the information must closely approximate the true in the present time period. The information for marketing decision must be up to date. b) Sufficiency: This refers to whether there is enough information to make a correct marketing decision 
2.  Availability: This refers to having information accessible (in hand) when a marketing decision is being made. 
3. Relevancy: This refers to the pertinence and applicability of information to the marketing decision issue at hand. This is perhaps the single most important factor. 

Even if research information for marketing decisions processes all the other qualitative characteristics of good information, it is of no use unless it is relevant. Although trade off must be made among other characteristics, relevancy should be the one characteristic that should not be compromised. It is the one information ingredient essential for successful marketing management decision-making. Bad information (i.e. information that does not possess the above characteristics) may be worse than no information at all. Even if a marketing decision- maker does not have information, there is always a chance of making a correct decision. Though good information does not ensure good decisions (judgement, intuition, etc. are still required), bad information will normally result in poor decision.

 CONCLUSION

Marketing research has been seen as a means by which the cycle of communication between manufacturer and the consumer or client may be efficiently and effectively achieved and maintained. The major objective of marketing research is to collect data, to monitor the performance of the existing products, to explore ways to improve on the product, and to research the possibility of new products, among others.