Purpose of Marketing Research

The basic purpose of marketing research is to facilitate the decision- making process. A manager has before him a number of alternative solutions to choose from in response to every marketing problem and situation. In the absence of market information, he may make the choice on the basis of his hunch. By doing so, the manager is taking a big risk  because he has no concrete evidence to evaluate these alternatives in comparison with others or to assess its possible outcome. But with the

help of information provided by marketing research, the manager can reduce the number of alternate choices to one, two or three, and the possible outcome of each choice is also known. Thus, the decision- making process becomes a little easier.

The second purpose of marketing research is that it helps to reduce the  risk associated with the process of decision-making. The risk arises because of two types of uncertainties: uncertainty about the expected outcome of the decision, and uncertainty about the future. Uncertainty about the expected outcome of the decision will always remain no matter how much information you may have collected to base your decision on hard facts. Unforeseen factors have the uncanny ability of upsetting even the most stable apple cart.


For example, in the mid-1950’s, Ford Motor Company in the USA had a 25 per cent share of the automobile market. The company wanted to introduce a new car model which would appeal to young executives and professionals. The decision was based on research which revealed that  this market segment accounted for 25 percent of the market, and was expected to grow to about 40 percent. Ford spent colossal amounts researching and designing the new model which was named Edsel. When introduced in the market, the car was a total flop. This happened because of occurrence of three unforeseen events.

 Firstly, the youthful car market segment did not grow as rapidly as the market research had indicated. Secondly, the recession also set in at about this time and people began looking for more economical means of transportation. Thirdly, there was a sudden change in customer tastes, with people turning away from flashy exteriors, and the flamboyant Edsel was totally out of tune with new the taste for austerity and functional simplicity. This example highlights the fact that despite best research efforts, the outcome can still be unpredictable. As Reynolds, a former Ford executive, commented on the Edsel fiasco, It is hard to see how anyone could, given the kind of car market that existed in 1955 and 1956, have anticipated such trends.…”


The risk also arises because of uncertainty of what will happen in the future, the way the customers or distributors would behave, the manner in which the competition will react, and so on. To the extent that research provides information about the future, it anticipates the future, thus providing the manager with a solid basis for his decision-making. However, it cannot provide perfectly exact or accurate information. But since the techniques of marketing research are based on scientific methods of collecting, analysing and interpreting data, its findings and projects, at the least, provide a definite trend of scenarios for future decision-making.

The third purpose of marketing research is that it helps firms in discovering opportunities which can be profitably exploited. These opportunities may exist in the form of untapped customer needs or wants not catered to by the existing firms. Food Specialities Limited (manufacturers of Nescafe Coffee, Lactogen Powdered Milk) have recently introduced in the Indian market a dairy whitener (as a substitute for milk) called ‘Every Day’ to be used for making tea and coffee. The product has proved to be a success because it is most convenient for use in offices, where tea and coffee are consumed in large quantities but milk is not easy to procure. Every Day fulfils a slot in the market for
powdered milk which was not being catered to by the existing milk powders brands.