Bhavisha tushar dhamani

Roll no :- 24 T.Y.B COM Sub:- export Topic:- Marketing research

COLLEGE:- LAXMI CHAND GOLWALA COLLEGE

Marketing research
Marketing research is "the function that links the consumers, customers, and public to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve understanding of marketing as a process. Marketing research specifies the information required to address these issues, designs the method for collecting information, manages and implements the data collection process, analyzes the results, and communicates the findings and their implications."[1] It is the systematic gathering, recording, and analysis of qualitative and quantitative data about issues relating to marketing products and services. The goal of marketing research is to identify and assess how changing elements of the marketing mix impacts customer behavior. The term is commonly interchanged with market research; however, expert practitioners may wish to draw a distinction, in that market research is concerned specifically with markets, while marketing research is concerned specifically about marketing processes.[2] Marketing research is often partitioned into two sets of categorical pairs, either by target market:
Consumer marketing research, and Business-to-business (B2B) marketing research

Or, alternatively, by methodological approach:

Qualitative marketing research, and Quantitative marketing research

Consumer marketing research is a form of applied sociology that concentrates on understanding the preferences, attitudes, and behaviors of consumers in a market-based economy, and it aims to understand the effects and comparative success of marketing campaigns. The field of consumer marketing research as a statistical science was pioneered by Arthur Nielsen with the founding of the ACNielsen Company in 1923.[3] Thus, marketing research may also be described as the systematic and objective identification, collection, analysis, and dissemination of information for the purpose of assisting management in decision making related to the identification and solution of problems and opportunities in marketing.[

Role of marketing research (MR)

The task of marketing research (MR) is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment. Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumers. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers' response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers.[5] Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of marketing research in managerial decision making is explained further using the framework of the "DECIDE" model: The DECIDE model conceptualizes managerial decision making as a series of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints.[5] Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected. The next step is to identify and select the best alternative based on chosen criteria or measures of success. Then a detailed plan to develop and implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are evaluated.

Marketing research characteristics

First, marketing research is systematic. Thus systematic planning is required at all the stages of the marketing research process. The procedures followed at each stage are methodologically sound, well documented, and, as much as possible, planned in advance. Marketing research uses the scientific method in that data are collected and analyzed to test prior notions or hypotheses. Experts in marketing research have shown that studies featuring multiple and often competing hypotheses yield more meaningful results than those featuring only one dominant hypothesis.

Marketing research is objective. It attempts to provide accurate information that reflects a true state of affairs. It should be conducted impartially. While research is always influenced by the researcher's research philosophy, it should be free from the personal or political biases of the

researcher or the management. Research which is motivated by personal or political gain involves a breach of professional standards. Such research is deliberately biased so as to result in predetermined findings. The objective nature of marketing research underscores the importance of ethical considerations. Also, researchers should always be objective with regard to the selection of information to be featured in reference texts because such literature should offer a comprehensive view on marketing. Research has shown, however, that many marketing textbooks do not feature important principles in marketing research. [7]

Comparison with other forms of business research

Other forms of business research include:

Market research is broader in scope and examines all aspects of a business environment. It asks questions about competitors, market structure, government regulations, economic trends, technological advances, and numerous other factors that make up the business environment (see environmental scanning). Sometimes the term refers more particularly to the financial analysis of companies, industries, or sectors. In this case, financial analysts usually carry out the research and provide the results to investment advisors and potential investors. Product research - This looks at what products can be produced with available technology, and what new product innovations near-future technology can develop (see new product development). Advertising research - is a specialized form of marketing research conducted to improve the efficacy of advertising. Copy testing, also known as "pre-testing," is a form of customized research that predicts in-market performance of an ad before it airs, by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ads flow of attention and flow of emotion. Pre-testing is also used on ads still in rough (ripomatic or animatic) form. (Young, p. 213)

Classification of marketing research

Organizations engage in marketing research for two reasons: (1) to identify and (2) solve marketing problems. This distinction serves as a basis for classifying marketing research into problem identification research and problem solving research. Problem identification research is undertaken to help identify problems which are, perhaps, not apparent on the surface and yet exist or are likely to arise in the future like company image, market characteristics, sales analysis, short-range forecasting, long range forecasting, and business trends research. Research of this type provides information about the marketing environment and helps diagnose a problem. For example, The findings of problem solving research are used in making decisions which will solve specific marketing problems. The Stanford Research Institute, on the other hand, conducts an annual survey of consumers that is used to classify persons into homogeneous groups for segmentation purposes. The National Purchase Diary panel (NPD) maintains the largest diary panel in the United States.

Standardized services are research studies conducted for different client firms but in a standard way. For example, procedures for measuring advertising effectiveness have been standardized so that the results can be compared across studies and evaluative norms can be established. The Starch Readership Survey is the most widely used service for evaluating print advertisements; another well-known service is the Gallup and Robinson Magazine Impact Studies. These services are also sold on a syndicated basis.

Customized services offer a wide variety of marketing research services customized to suit a client's specific needs. Each marketing research project is treated uniquely. Limited-service suppliers specialize in one or a few phases of the marketing research project. Services offered by such suppliers are classified as field services, coding and data entry, data analysis, analytical services, and branded products. Field services collect data through mail, personal, or telephone interviewing, and firms that specialize in interviewing are called field service organizations. These organizations may range from small proprietary organizations which operate locally to large multinational organizations with WATS line interviewing facilities. Some organizations maintain extensive interviewing facilities across the country for interviewing shoppers in malls. Coding and data entry services include editing completed questionnaires, developing a coding scheme, and transcribing the data on to diskettes or magnetic tapes for input into the computer. NRC Data Systems provides such services. Analytical services include designing and pretesting questionnaires, determining the best means of collecting data, designing sampling plans, and other aspects of the research design. Some complex marketing research projects require knowledge of sophisticated procedures, including specialized experimental designs, and analytical techniques such as conjoint analysis and multidimensional scaling. This kind of expertise can be obtained from firms and consultants specializing in analytical services. Data analysis services are offered by firms, also known as tab houses, that specialize in computer analysis of quantitative data such as those obtained in large surveys. Initially most data analysis firms supplied only tabulations (frequency counts) and cross tabulations (frequency counts that describe two or more variables simultaneously). With the proliferation of software, many firms now have the capability to analyze their own data, but, data analysis firms are still in demand. Branded marketing research products and services are specialized data collection and analysis procedures developed to address specific types of marketing research problems. These procedures are patented, given brand names, and marketed like any other branded product.

Types of marketing research

Marketing research techniques come in many forms, including:

Ad Tracking periodic or continuous in-market research to monitor a brands performance using measures such as brand awareness, brand preference, and product usage. (Young, 2005) Advertising Research used to predict copy testing or track the efficacy of advertisements for any medium, measured by the ads ability to get attention (measured with AttentionTracking), communicate the message, build the brands image, and motivate the consumer to purchase the product or service. (Young, 2005) Brand equity research - how favorably do consumers view the brand? Brand association research - what do consumers associate with the brand?

Brand attribute research - what are the key traits that describe the brand promise? Brand name testing - what do consumers feel about the names of the products? Commercial eye tracking research - examine advertisements, package designs, websites, etc. by analyzing visual behavior of the consumer Concept testing - to test the acceptance of a concept by target consumers Coolhunting - to make observations and predictions in changes of new or existing cultural trends in areas such as fashion, music, films, television, youth culture and lifestyle Buyer decision processes research - to determine what motivates people to buy and what decision-making process they use Copy testing predicts in-market performance of an ad before it airs by analyzing audience levels of attention, brand linkage, motivation, entertainment, and communication, as well as breaking down the ads flow of attention and flow of emotion. (Young, p 213) Customer satisfaction research - quantitative or qualitative studies that yields an understanding of a customer's satisfaction with a transaction Demand estimation - to determine the approximate level of demand for the product Distribution channel audits - to assess distributors and retailers attitudes toward a product, brand, or company Internet strategic intelligence - searching for customer opinions in the Internet: chats, forums, web pages, blogs... where people express freely about their experiences with products, becoming strong opinion formers. Marketing effectiveness and analytics - Building models and measuring results to determine the effectiveness of individual marketing activities. Mystery consumer or mystery shopping - An employee or representative of the market research firm anonymously contacts a salesperson and indicates he or she is shopping for a product. The shopper then records the entire experience. This method is often used for quality control or for researching competitors' products. Positioning research - how does the target market see the brand relative to competitors? what does the brand stand for? Price elasticity testing - to determine how sensitive customers are to price changes Sales forecasting - to determine the expected level of sales given the level of demand. With respect to other factors like Advertising expenditure, sales promotion etc. Segmentation research - to determine the demographic, psychographic, and behavioural characteristics of potential buyers Online panel - a group of individual who accepted to respond to marketing research online Store audit - to measure the sales of a product or product line at a statistically selected store sample in order to determine market share, or to determine whether a retail store provides adequate service Test marketing - a small-scale product launch used to determine the likely acceptance of the product when it is introduced into a wider market Viral Marketing Research - refers to marketing research designed to estimate the probability that specific communications will be transmitted throughout an individual's Social Network. Estimates of Social Networking Potential (SNP) are combined with estimates of selling effectiveness to estimate ROI on specific combinations of messages and media. All of these forms of marketing research can be classified as either problem-identification research or as problem-solving research. There are two main sources of data - primary and secondary. Primary research is conducted from scratch. It is original and collected to solve the problem in hand. Secondary research already exists since it has been collected for other purposes. It is conducted on data published previously and

usually by someone else. Secondary research costs far less than primary research, but seldom comes in a form that exactly meets the needs of the researcher. A similar distinction exists between exploratory research and conclusive research. Exploratory research provides insights into and comprehension of an issue or situation. It should draw definitive conclusions only with extreme caution. Conclusive research draws conclusions: the results of the study can be generalized to the whole population. Exploratory research is conducted to explore a problem to get some basic idea about the solution at the preliminary stages of research. It may serve as the input to conclusive research. Exploratory research information is collected by focus group interviews, reviewing literature or books, discussing with experts, etc. This is unstructured and qualitative in nature. If a secondary source of data is unable to serve the purpose, a convenience sample of small size can be collected. Conclusive research is conducted to draw some conclusion about the problem. It is essentially, structured and quantitative research, and the output of this research is the input to management information systems (MIS). Exploratory research is also conducted to simplify the findings of the conclusive or descriptive research, if the findings are very hard to interpret for the marketing managers.

[edit] Marketing research methods

Methodologically, marketing research uses the following types of research designs:[8] Based on questioning

Qualitative marketing research - generally used for exploratory purposes - small number of respondents - not generalizable to the whole population - statistical significance and confidence not calculated - examples include focus groups, in-depth interviews, and projective techniques Quantitative marketing research - generally used to draw conclusions - tests a specific hypothesis - uses random sampling techniques so as to infer from the sample to the population - involves a large number of respondents - examples include surveys and questionnaires. Techniques include choice modelling, maximum difference preference scaling, and covariance analysis. Based on observations

Ethnographic studies - by nature qualitative, the researcher observes social phenomena in their natural setting - observations can occur cross-sectionally (observations made at one time) or longitudinally (observations occur over several time-periods) - examples include product-use analysis and computer cookie traces. See also Ethnography and Observational techniques. Experimental techniques - by nature quantitative, the researcher creates a quasiartificial environment to try to control spurious factors, then manipulates at least one of the variables - examples include purchase laboratories and test markets Researchers often use more than one research design. They may start with secondary research to get background information, then conduct a focus group (qualitative research design) to explore the

issues. Finally they might do a full nation-wide survey (quantitative research design) in order to devise specific recommendations for the client.

Business to business market research

Business to business (B2B) research is inevitably more complicated than consumer research. The researchers need to know what type of multi-faceted approach will answer the objectives, since seldom is it possible to find the answers using just one method. Finding the right respondents is crucial in B2B research since they are often busy, and may not want to participate. Encouraging them to open up is yet another skill required of the B2B researcher. Last, but not least, most business research leads to strategic decisions and this means that the business researcher must have expertise in developing strategies that are strongly rooted in the research findings and acceptable to the client. There are four key factors that make B2B market research special and different to consumer markets:

The decision making unit is far more complex in B2B markets than in consumer markets B2B products and their applications are more complex than consumer products B2B marketers address a much smaller number of customers who are very much larger in their consumption of products than is the case in consumer markets

Marketing research in small businesses and nonprofit organizations

Personal relationships are of critical importance in B2B markets.

This section does not cite any references or sources. (April 2012) Marketing research does not only occur in huge corporations with many employees and a large budget. Marketing information can be derived by observing the environment of their location and the competitions location. Small scale surveys and focus groups are low cost ways to gather information from potential and existing customers. Most secondary data (statistics, demographics, etc.) is available to the public in libraries or on the internet and can be easily accessed by a small business owner. Below are some steps that could be done by SME (Small Medium Entreprise) to analyze the market: 1. Provide secondary and or primary data (if necessary); 2. Analyze Macro & Micro Economic data (e.g. Supply & Demand, GDP,Price change, Economic growth, Sales by sector/industries,interest rate, number of investment/ divestment, I/O, CPI, Social anlysis,etc.); 3. Implement the marketing mix concept, which is consist of: Place, Price, Product,Promotion, People, Process, Physical Evidence and also Political & social situation to analyze global market situation); 4. Analyze market trends, growth, market size, market share, market competition (e.g. SWOT analysis, B/C Analysis,channel mapping identities of key channels, drivers of customers loyalty and satisfaction, brand perception, satisfaction levels, current competitor-channel relationship analysis, etc.),etc.;

5. Determine market segment, market target, market forecast and market position; 6. Formulating market strategy & also investigating the possibility of partnership/ collaboration (e.g. Profiling & SWOT analysis of potential partners, evaluating business partnership.) 7. Combine those analysis with the SME's business plan/ business model analysis (e.g. Business description, Business process, Business strategy, Revenue model, Business expansion, Return of Investment, Financial analysis (Company History, Financial assumption, Cost/Benefit Analysis, Projected profit & Loss, Cashflow, Balance sheet & business Ratio,etc.). Note as important : Overall analysis should be based on 6W+1H (What, When, Where, Which, Who, Why and How) question.

International Marketing Research plan

International Marketing Research follows the same path as domestic research, but there are a few more problems that may arise. Customers in international markets may have very different customs, cultures, and expectations from the same company. In this case, Marketing Research relies more on primary data rather than secondary information. Gathering the primary data can be hindered by language, literacy and access to technology.

Commonly used marketing research terms

Market research techniques resemble those used in political polling and social science research. (also called the Schmidt-Hunter technique) refers to a statistical method of combining data from multiple studies or from several types of studies. Conceptualization means the process of converting vague mental images into definable concepts. Operationalization is the process of converting concepts into specific observable behaviors that a researcher can measure. Precision refers to the exactness of any given measure refers to the likelihood that a given operationalized construct will yield the same results if re-measured. refers to the extent to which a measure provides data that captures the meaning of the operationalized construct as defined in the study. It asks, Are we measuring what we intended to measure?

Applied research sets out to prove a specific hypothesis of value to the clients paying for the research. For example, a cigarette company might commission research that attempts to show that cigarettes are good for one's health. Many researchers have ethical misgivings about doing applied research. (from SUG, for "selling under the guise" of market research) forms a sales technique in which sales people pretend to conduct marketing research, but with the real purpose of obtaining buyer motivation and buyer decision-making information to be used in a subsequent sales call.

comprises the practice of soliciting funds under the pretense of being a research

Careers in

marketing research
Some of the positions available in marketing research include vice president of marketing research, research director, assistant director of research, project manager, field work director, statistician/data processing specialist, senior analyst, analyst, junior analyst and operational supervisor.

The most common entry-level position in marketing research for people with bachelor's degrees is as operational supervisor. These people are responsible for supervising a well-defined set of operations, including field work, data editing, and coding, and may be involved in programming and data analysis. Another entry-level position for BBAs is assistant project manager. An assistant will learn and assist in questionnaire design, review field instructions, and monitor timing and costs of studies. In the marketing research industry, however, there is a growing preference for people with master's degrees. Those with MBA or equivalent degrees are likely to be employed as project managers. A small number of business schools also offer a more specialized (MMR) degree. An MMR typically prepares students for a wide range of research methodologies and focuses on learning both in the classroom and the field. The typical entry-level position in a business firm would be junior research analystor research analyst (for or MMRs). The junior analyst and the research analyst learn about the particular industry and receive training from a senior staff member, usually the marketing research manager. The junior analyst position includes a training program to prepare individuals for the responsibilities of a research analyst, including coordinating with the marketing department and sales force to develop goals for product exposure. The research analyst responsibilities include checking all data for accuracy, comparing and contrasting new research with established norms, and analyzing primary and secondary data for the purpose of market forecasting. As these job titles indicate, people with a variety of backgrounds and skills are needed in marketing research. Technical specialists such as statisticians obviously need strong backgrounds in statistics and data analysis. Other positions, such as research director, call for managing the work of others and require more general skills. To prepare for a career in marketing research, students usually: 1. Vice-President of Marketing Research: This is the senior position in marketing research. The VP is responsible for the entire marketing research operation of the company and serves on the top management team. Sets the objectives and goals of the marketing, research department. 2. Research Director: Also a senior position, the director has the overall responsibility for the development and execution of all the marketing research projects. 3. Assistant Director of Research: Serves as an administrative assistant to the director and supervises some of the other marketing research staff members. 4. (Senior) Project Manager: Has overall responsibility for design, implementation, and management of research projects. 5. Statistician/Data Processing Specialist: Serves as an expert on theory and application of statistical techniques. Responsibilities include experimental design, data processing, and analysis. 6. Senior Analyst: Participates in the development of projects and directs the operational execution of the assigned projects. Works closely with the analyst, junior analyst, and other personnel in developing the research design and data collection. Prepares the final report. The primary responsibility for meeting time and cost constraints rests with the senior analyst. 7. Analyst: Handles the details involved in executing the project. Designs and pretests the questionnaires and conducts a preliminary analysis of the data. 8. Junior Analyst: Handles routine assignments such as secondary data analysis, editing and coding of questionnaires, and simple statistical analysis.

9. Field Work Director: Responsible for the selection, training, supervision, and evaluation of interviewers and other field workers.

Need for overseas Market Research

In the areas of international marketing, market search is the crucial first step for firm which wants to engage itself in international business. Specially, market research is required to take decisions on the following: Market research is required to identify which markets should be selected as the target based on the market size, growth accessibility and competitive factors. Identification of suitable products is also dependent upon research. Detailed field investigations are required to determine the extent of product adaptation required to make the product acceptable in a given market. Research and help prevent the use of inappropriate market entry method. Thorough analysis should be done as to whether the firms should export using agents / distributors, go for joint ventures or open subsidiary units. Research also helps in taking appropriate packaging decisions. One color may not be acceptable in certain countries, while it would be the most appropriate in another. For example, green is the favored color in the Middle East but it is not acceptable in Malaysia Considerable amount of data collection and analysis are required to arrive at pricing decisions. Pricing is crucial for success in international marketing and a blunder can mar all prospects. Research can help determine the positioning of the product taking into account the socio-cultural factors. An English Firm manufacturing chocolate after dinner mints was considering the French market. Research showed that such product was not acceptable under normal circumstances the mints were, therefore positioned as a sophisticated British after dinner candy and was promoted through an advertisement campaign depicting serving of the mints in an aristocratic setting in a castle. The product was a success. Promotional Campaigns should be decided only when proper research has been carried out regarding their acceptability in a given environment. Binaca made a blunder while launching its talcum powder in India. Its advertisements showed a nude lady dousing herself with talcum powder. The caption which covered the strategic parts of her body read: Dont go wild. Just enough is all you need of Binaca Talc. The advertisement was considered indecent ad developed negative associations with the brand name. Information Requirements for an international marketer can be identified by analyzing the needs. These needs would be different for firm which is contemplating to go international and firm which is already in international business.

Pre-export information requirements for firm having no export experience or exporting firms considering new product or a new market would include data for market identification, product selection, market entry methods, market logistics techniques, pricing and documentary requirements. A firm which is already operating in the export field would need data of a different type which would help in (1) consolidating its market position and (2) evaluating its performance in terms of financial returns as well as other physical targets. Data requirements would, therefore include the market dynamics analyzing introduction of a new product entry of new competitors, governmental regulations affecting product designs and performance parameters changes in the availability of promotional media, forecasted economic conditions own sales Vs sales of competing products, changes in relative competitive profile involving product quality, delivery and terms of sale. Domestic Vs International Market Research: Market research is to be carried out to help taking proper marketing decisions on the above aspects even while doing purely domestic business But international marketing research has certain additional complexities which arise out of the diverse national characteristics and requirements Basically, the differences between domestic and international marketing research are due to: 1. the complexity of research design, due to operations in a multi-country, multi-cultural and multilinguistic environment; 2. the lack of secondary data for many countries and product markets; 3. The high costs of collecting primary data, particularly in the developing countries 4. the problems associated with coordinating research and data collection in different countries 5. the difficulties of establishing the comparability and equivalent of data and research conducted in different contexts; 6. the intra functional character of many international marketing decisions; 7. the economies of many international investment and marketing decisions.

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Importance of Overseas Marketing Research - OMR ( sandeepkulkarni.2006@yahoo.com ) : 1) OMR basically helps to identify Market Potential for the given product in a region which is outside domestic area . 2) With OMR , One can understand about prevailing Economic and Political Environment in the subject region, which influnces the Marketing Strategy and Plans to be adapted suitably . 3) OMR may also help to understand Conumer behaviour , their Tastes / preferences / likes / dislikes / beliefs / customs etc. , which inturn will help the manufacturer OR trader to develope or trade suitable product . 4) Apart from pt no.3 , it is extremely important to understand present Competition Scenario in the subject region.

5) We all understand how important it is to Understand Government Rules and Regulation in the suject region / country , as this will decide the Business prospects at the very first stage. 6) OMR may also give some guidelines as regards selection of effective and efficient Disctrbution channel.

Factors affecting choice of channels

The international marketer needs a clear understanding of market characteristics and must have established operating policies before beginning the selection of channel middlemen. The following points should be addressed prior to the selection process: 1) Identify specific target markets within and across countries. 2) Specify marketing goals in terms of volume, market share, and profit margin requirements. 3) Specify financial and personnel commitments to the development of international distribution. 4) Identify control, length of channels terms of sale, and channel ownership. Once these points are established selecting among alternative middlemen choices to forge the best channel can begin. Marketers must get their goods into the hands of consumers and must choose between handling all distribution or turning part or all of it over to various middlemen. Distribution channels vary depending on target market size competition and available distribution intermediaries. Key elements in distribution decisions include the functions performed by middlemen (and the effectiveness with which each is performed) the cost of their services their availability and the extent of control that the manufacturer can exert over middlemen activities. Although the overall marketing strategy of the firm must embody the companys profit goals in the short and long run, channel strategy itself is considered to have six specific strategic goals. These goals can be characterized as the six Cs of channel strategy cost capital control coverage character and continually. In forging the overall channel of distribution strategy each of the six Cs must be considered in building as economical, effective distribution organization within the long range channel policies of the company. It should also be noted that many firms use multiple or hybrid channels of distributions because of the trade offs associated with any one option. Indeed both Dell selling computers at Kiosks inside Japans Jusco supermarkets and Toys R Us selling toys in food stores re good examples. Cost The two kinds of channel costs are (1) the capital or investment cost of developing the channel and (2) the continuing cost of maintaining it. The latter can be in from of direct expenditure for the maintenance of the companys selling force or in the form of margins, markup, or commission of various middlemen handling the goods. Marketing costs (a substantial part of which is channel cost) must be considered as the entire difference between the factory of the goods and the price the customer ultimately pays for the merchandise. The costs of middlemen include transporting and storing the goods, breaking bulk, providing credit and local advertising sales representatives and negotiations.

Despite the old truism that you can eliminate middlemen but you cannot eliminate their functions or cost, creative efficient marketing does permit channel cost savings in many circumstances. Some marketers have found, in fact that they can reduce cost by eliminating inefficient, middlemen and thus shortening the channel. Mexicos largest producer of radio and television sets has built annual sales of $36 million on its ability to sell goods at a low price because it eliminated middlemen established its own wholesalers and kept margins lows. Conversely many firms accustomed to using their own sales forces in large volume domestic markets have found they must lengthen channels of distribution to keep costs in line with foreign markets. Capital Requirements The financial ramifications of a distribution policy are often over looked. Critical elements are capital requirement and cash flow patterns associated with using a particular type of middleman. Maximum investment is usually required when a company establishes its own internal channels, that is, its own sales force. Use of distributors or dealers may lessen the capital investment but manufacturers often have to provide initial inventories on consignments loans, floor plans or other arrangements. Coca Cola initially invested in China with majority partners that met most of the capital requirements. However, Coca-cola soon realized that it could not depend on its local majority partners too distribute its product aggressively in the highly competitive market share driven business of carbonated beverages. To assume more control of distribution it had to assume management control, and that meant greater capital from Coca-Cola One of the highest costs of doing business in China is the capital required to maintain effective distribution.

New Product Development for Export Markets

August 3, 2011 There is an ever growing desire for customers to have new products. Meanwhile, companies frequently use new product development as a means to refresh their competitive advantage and some even set it as a business objective. With respect to international business, faster new product development is essential for companies wishing to secure increased export involvement. Ceris Burns, international marketing specialist for the cleaning industry considers new product development for overseas markets and outlines the implementation process that should be followed to minimise risk. Few products these days are revolutionary which means that companies need to be innovative in every aspect of their business in order to keep one step ahead. Most often new products refresh or reinforce a product range by complementing the existing offer as opposed to being a catalyst for business change. Companies should bear in mind that the time needed to copy products is shortening and as such fast and cost-effective simultaneous launch of new products across multiple markets can be prudent. The process used to develop products for international markets is similar to that for domestic markets. The main steps include; idea generation, market screening, business analysis, product development, market testing, marketing and product launch. The major difference is the increased requirement to analyse a products suitability for launch as several countries are to be targeted as opposed to one. In depth research and reliable local knowledge is crucial to ensure that local product needs are met and for products to be positioned correctly from the beginning. The process for international product development should include: Idea Generation Make sure you use all resources available to you both internal and external for new idea generation. Get

everyone involved from employees, R&D, competitors, customers, sales personnel and distributors through to external experts. Market Screening Develop tough criteria to test ideas for their suitability in all target regions or countries so opportunities and any country specific restrictions are not missed. What will work wonders in one country might not make it off the starting blocks in another. Also remember to assess the level of adaptation needed for the product to be accepted in each market. Business Analysis Establish criteria to measure launch success and failure and link these to your target markets. You should also make provision for contingencies and unexpected events that might just occur. Product Development All relevant functions from production to design should be involved in the product development process. Whether in-house or external R&D is used, its important that key management has easy access to the technology experts. It might also be practical if R&D were located close to your key target markets. Test Your Market The test area must be representative of your key target markets if the results are to be trusted. Infrastructure for market research, advertising and distribution will need to be established and you should remember to consider how your competitors may respond in your test market and globally. Product Launch Prepare a launch plan for either sequential launches where your primary focus is on lead markets or for a simultaneous launch where all countries are entered at the same time. Be ready for your competitors to react. If serious players they shouldnt give up their slice of the market without a challenge. Protect Your Competitive Advantage Think about your competitors ability to copy and launch similar products. You should protect your Intellectual Property by taking out patent protection. Establishing a licensing agreement could also protect your position by enabling fast widespread distribution of your product on a regional or even worldwide basis. Timing Is Everything Finally, timing is critical for new product development to succeed. Get it right and youll be able to fully exploit opportunities or competitor weaknesses. It is also important to keep your time to market i.e. from idea generation to full market distribution, to a minimum.

Product Research -- New Products

Product development marketing research serves several goals: new product design and market validation research, or assessing existing products. The goal -- and your overall positioning and market strategy -- drive our product research design.

These steps show when product research may be needed to increase the probability of optimum decisions and successful market impact: Effective product market research -- for new products and exisiting products -- is well integrated with R&D and technical product design functions. For consumer or business B2B product market research, we take a global approach, incorporating appropriate market research at each design stage: The goal is to align astute technical product R&D, product innovation and design with market demand. We include in our services the following new product development and research services :

New Product Development Stages

For new product development market research, the question becomes one of matching the stage of new product development with the right creative or product market research method. We use the Marketing Intelligence Platform to guide the use of the three forms of Intelligence --Ideas, Data, & Drivers -- to the product development process. We provide consulting and specific new product research market research capabillities at each new product development stage. Product development market research methods and tools used may vary according to the product type, the extent of incremental change from other products, the investment and risk factors, and the costs of seeding the new product in the marketplace.

Product development is a sequential decision process. It's a series of decisions, not one. It is key, therefore, to concentrate attention on the precise new product decision at hand, and think through the market research and creative tools needed for that stage.

Marketing Consulting Services :: Overview

Marketing Strategy Consultants
As marketing strategy consultants, our consulting firm will work with you and your company and management team in a professional product launch, branding research, or market sizing and targeting engagement. Since each client company or firm is unique with its own set of issues and opportunities, we often begin our relationship with a decision identification and clarification engagement what we call Decision Mapping. This identifies the most relevant problems, opportunities, and issues most relevant, and serves to clarify the decision agenda. We believe this is a crucial step to ensure as consultants to your company, that our research or marketing strategy engagement meets your specific management requirements. Further, Decision Mapping saves both time and money as it sharpens focus as to the exact work which needs to be accomplished in our remaining consulting or market research work for your company.

Experts in Marketing Strategy

As experts and specialists in marketing and market research, we are well qualified in these strategy arenas: positioning, segmentation, product launch, new product development advertising strategy, corporate and product naming, company branding, brand equity measurement, pricing, brand development, brand strategy, product concept testing, identifying opportunities, and targeting positioning.

Functional Marketing Research Experience

Our consulting company has deep experience working with large and small firms, although typical clients include Fortune 500, Fortune 100, or middle market companies. Our team members have been involved as executives and board members of technology venture start-ups, conducting research and assessments used by private equity, and venture capital firms.

Industry Consulting and Market Research Experience

First, we are not industry specialists or experts. Our philosophy is that we bring a tool kit of analytical and management skills to the table. You bring deep industry knowledge of your business. The blending of our functional and management expertise, and your knowledge of your own business and industry, makes for a productive decision-focused engagement.

Here are some examples from industries we've served with management strategy consulting and marketing research...

Business-to-Business: B2B
B2B marketing studies are focused, practical research efforts to enhance the fast-paced decision-making requirements of the B2B marketing environment. Industrial and B2B manufacturing and wholesale marketing research studies are designed to be practical, accurate, and reflective of the particular client needs and the nature of the targeted market. We've conducted scores of industrial B2B studies for manufacturing firms engaged in sales of chemicals, heavy equipment, technology products, software systems, plant procesing equipment, computer systems, farm equipment and implements. Industrial B2B market research, as in consumer research, requires decision-clarification up front, tight goal definition, rigorous research design, and meticulous field research data collection.

Consumer Products CPG

Our consumer products experience includes advertising research, new product concept development and testing, new product research and concept ideation for packaged goods companies such as Ore-Ida Foods, Heinz Foods, Simplot Foods, Chiquita Brands, Proctor & Gamble, and others. Our CPG assignments are customized to meet the specific decision faced.

Product Life Cycle Theory

Product life cycle theory comprises analysis of a product's life in the market from the time it has been launched to its withdrawal from the market. This article dwells on the four stages of a product life cycle...

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Enroll In The Free AdWords Training Program For SEM Professionals! The product life cycle theory is used to comprehend and analyze various maturity stages of products and industries. Product innovation and diffusion influence long-term patterns of international trade. This term product life cycle was used for the first time in 1965, by Theodore Levitt in a Harvard Business Review article: "Exploit the Product Life Cycle".

Anything that satisfies a consumer's need is called a 'product'. It may be a tangible product (clothes, crockery, cars, houses, gadgets) or an intangible service (banking, health care, hotel service, airline service). Irrespective of the kind of product, all products introduced into the market undergo a common life cycle. To understand what this product life cycle theory is all about, let us have a quick look at its definition.

Definition

A product life cycle refers to the time period between the launch of a product into the market till it is finally withdrawn from it. In a nut shell, product life cycle or PLC is an odyssey from new and innovative to old and outdated! This cycle is split into four different stages which encompass the product's journey from its entry to exit from the market.

Stages of Product Life Cycle

This cycle is based on the all familiar biological life cycle, wherein a seed is planted (introduction stage), germinates (growth stage), sends out roots in the ground and shoots with branches and leaves against gravity, thereby maturing into an adult (maturity stage). As the plant lives its life and nears old age, it shrivels up, shrinks and dies out (decline stage).

On the same lines, a product also has a life cycle of its own. A product's entry or launching phase into the market corresponds to the introduction stage. As the product gains popularity and wins the trust of consumers, it begins to grow. Further, with increasing sales, the product captures enough market share and gets stable in the market. This is called the maturity stage. However, after some time, the product gets overpowered by latest technological developments and entry of superior competitors in the market. Soon the product becomes obsolete and needs to be withdrawn from the market. This is the decline phase. This was the crux of a product life cycle theory and the graph of a product's life cycle looks like a bell-shaped curve. Let us delve more into this management theory.

Introduction Stage

After conducting thorough market research, the company develops its product. Once the product is ready, a test market is carried out to check the viability of the product in the actual market, before it can set foot into the mass market. Results of the test market are used to make correction if any and then launched into the market with various promotional strategies. Since the product has just been introduced, growth observed is minimal, market size is small and marketing costs are steep (promotional cost, costs of setting up distribution channels). Thus, introduction stage is an awareness creating stage and is not associated with profits! However, strict vigilance is required to ensure that the product enters the growth stage. Identifying hindering factors and nipping them off at the bud stage is crucial for the product's future. If corrections cannot be made or are impractical, the marketer withdraws the product from the market.

Growth Stage

Once the introductory stage goes as per expected, the initial spark has been set, however, the fire has to be kindled carefully. The marketer has managed to gain the consumer's attention and works on roping in loyal customers. He also works on increasing his product's market share, by investing in aggressive advertising and marketing plans. He will also use different promotional strategies like offering discounts, etc. to increase sales. As output increases, economies of scale are seen and better prices come about, conducing to profits in this stage. The marketer maintains the quality and features of the product (may add additional features) and seeks brand building. The aim here is to coax consumers to prefer and choose this product over those sold by competitors. As sales increase distribution channels are added and the product is marketed to a broader audience. Thus, rapid sales and profits are characteristics of this stage.

Maturity Stage

This stage views the most competition as different companies struggle to maintain their respective market shares. The clich 'survival of the fittest' is applicable here. Companies

are busy monitoring product's value by the consumers and its sales generation. Most of the profits are made in this stage and research costs are minimum. Any research conducted will be confined to product enhancement and improvement alone. The manufacturer is constantly on the look out for new ideas, to improve his product and make it stand out among the competitor's products. His main aim is to lure non-customers towards his customer base and increase the existing customer base. Since consumers are aware of the product, promotional and advertising costs will also be lower, as compared to the previous stage. In the midst of stiff competition, companies may even reduce their prices in response to the tough times. The maturity stage is the stabilizing stage, wherein sales are high, but the pace is slow, however, brand loyalty develops, thereby roping in profits.

Decline Stage

After a period of stable growth, the revenue generated from sales of the product starts dipping due to market saturation, stiff competition and latest technological developments. The consumer loses interest in the product and begins to seek other options. This stage is characterized by shrinking market share, dwindling product popularity and plummeting profits. This stage is a very delicate stage and needs to be handled wisely. The type of response contributes to the future of the product. The company needs to take special efforts to raise the product's popularity in the market once again, either by reducing the cost of the product, tapping new markets or withdrawing the product from the market. The manufacturer will cut down all non-profit distribution channels and continue focusing on improving the product design and features, so as to gain back the lost customer base. However, if this strategy fails, the manufacturer will have no option, but to withdraw the product from the market.

It is important to note that, not all products go through the entire life cycle. Just as how not all seeds sown germinate, not all products launched into the market succeed. Some

flop at the introductory stage, while some fail to capture market share due to quick fizzling out. Moreover, some marketers quickly change strategies when the product reaches decline phase and by various promotional strategies regain the lost glory, thereby achieving cyclic maturity phases. Also, there are no time frames for the stages. The growth stage for a product may take a very long time, while the maturity stage may be extremely short. Time frame for each stage differs from one product to another.

Application of product life cycle is important to marketers, because via this analysis they can manage their product well and prevent it from incurring losses. A well-managed product life cycle leads to rise in profits and does not necessarily end. Product innovations, new marketing strategies, etc. keeps the product appealing to customers for a very long period of time. Hope this article was informative and helpful!

Factors of the decision on the international product policy

The life cycle of the product in an international market can influence the product launch strategy in a foreign market and therefore the selection of export products. The graph below shows the classic life cycle of a product.

The product often passes through different stages, which correspond, to different marketing strategies : launch phase. The company launches a new product on the market, which is aimed at the innovative purchaser. At this stage, the company often occupies a monopoly position : it can therefore allow itself to apply quite a high retail price which can finance investments undertaken in Research and development as well as higher production costs ; growth and development phase. During this phase, demand is in full growth and competitors imitate the technology or the product in the market. Prices tend to decrease but still remain quite high. Research and Development is already supported by the adaptation of the product ; maturity phase. The company aims at a growing or slowly replenishing mass market. Competition increases and the company, which is seeking to maintain its market share, has to lower its retail price under pressure and take up intensive promotion and advertising and a reduction in production

costs. It is the moment when the company has to question itself and invest in the development of new products ; decline phase. Production decreases following decreasing demand and fierce competition. The company strongly decreases investments in research and development and communication for this product. The retail price is lowered further and margins are very slim.

A given product can find itself at different stages in its life cycle depending on the market, this can equally differ in its form and length !

The theory on the product's life cycle, rather suitable for technological products can help the company to determine if its products can be exported to another market or not depending on the stage at which it finds itself in the targeted foreign market. A company where the product is at the end of its life cycle in its domestic market with insufficient openings and decreasing sales finds itself faced with an alternative : abandon the product ; export this product -following possible adaptation- to a market where it is in a phase of growth or maturity. Doing this, the company can lengthen the life cycle and profitability phase of its product and continue to redeem investments connected to the conception of the product. Expenses for launching the product in the export market will be covered by the funding obtained in the domestic market in phases of development or maturity.

SMEs which do not generally have very large human, financial and production capacities rather tend to introduce their products in a sequential way than simultaneously. In effect, they could experience difficulties in operating more than one or two stages of the life cycle for a given product as this would imply different marketing strategies for each market according to the life cycle stage at which the product is found.