MARKET RESEARCH

Introduction and Some Basics
Marketing is a dynamic and increasingly important business activity. It can • •

determine a firm's competitive edge, deliver new customers, and Increase sales and profits.

Marketing research is a key element in successfully developing and implementing marketing programs to achieve these goals. The goal of survey research is to be thought of as a consulting expert on how to market your products and services based on what your customer or your potential customer thinks… Research is being looked at more as a part of the marketing function. •
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One useful way to describe research is based on the specificity of its purpose. Applied marketing research is conducted to address a specific marketing decision for a specific firm or organization. Basic marketing research is conducted without a specific decision in mind, and it usually does not address the needs of a specific organization. It attempts to expand the limits of marketing knowledge in general, and as such it is not aimed at solving a particular pragmatic problem.

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Thus. lies in the scientific method. whether basic or applied. the techniques of basic and applied research differ largely in degree rather than in substance. testing these prior conceptions or hypotheses and then making inferences and conclusions about the phenomena leads to the establishment of general laws about the phenomena. The essence of research. involves the scientific method. whether basic or applied. Use of the scientific method in applied research ensures objectivity in gathering facts and testing creative ideas for alternative marketing strategies. It is analogous to physics and chemistry when certain research work is undertaken and thereafter it becomes principle or fact In basic research. The scientific method is the way researchers go about using knowledge and evidence to reach objective conclusions about the real world.The Scientific Method: All marketing research. .

Identify unsatisfied customers' needs and wants that might provide new business opportunities for the firm. 3. assisted by marketing research. order-taking.Marketing is a powerful tool in growing a business because it provides the vehicle to get and keep customers. marketing. and ability to buy the product or service. packaging. Define the individual (consumer) or organizational buyer who has the need. distribution. and • And understanding how one brand measures up against another brand in the customer's mind. An important role of marketing research is to help marketers: 1. . and brands. Marketing professionals are responsible for developing the strategy and tactics which enable firms to produce and deliver the appropriate goods and services to potential customers. These activities include: • • • • • • • • • product development. services. advertising many other functions Marketing research plays a key role in: • determining needs and wants. warehousing. provides the bridge between a firm's offerings and the customer. Marketing is the sum total of activities which maintain the firm's focus on the customer. selling. Attract new customers to existing products. 2. desire. In other words. • testing new product ideas. pricing.

the manager's responsibilities include: • • • • Setting marketing objectives that are measurable and consistent with corporate objectives Determining marketing strategy. Only then will they be equipped to participate in decisions about applications and courses of action based on their research. with the aid of marketing research. is capturing more information than ever before. Marketing researchers must understand the firm's objectives in seeking information. Marketing management involves the coordination of all of the marketing functions within the firm. In order to be an effective marketing researcher and to contribute more than information to a client. In planning marketing activities. The Marketing Mix: The marketing mix consists of a set of variables that are under the firm's control and is frequently referred to as "the 4 P's": . those who conduct research must be familiar with marketing theory and practice. Marketing Professional.Success in business is also highly dependent on a firm's ability to generate. its products and services. including selecting the target market and developing the marketing mix Developing implementation programs that put the marketing plan into operation Measuring and monitoring results. Thus. especially to measure customer behavior. and apply information to business decisions. Marketing Professional must also be able to draw appropriate conclusions from this information. But having descriptive data is only one side of the equation. interpret. marketing strategists and marketing researchers must work together to collect. its strategic vision and relevant marketing concepts. maintain. including comparison of performance against objectives Managing marketing activities and making marketing decisions require access to relevant marketing information that is frequently provided by the marketing research professional. and use information. and its competitive position.

Services (such as a haircut. and the overall experience. or a car rental) are largely intangible and are defined by the benefits received. By clearly defining each of the 4 P's in relation to the customer and the environment. since often they may be purchased for intangible reasons (such as status. a manager must respond to the changing environment by adjusting to environmental influences and by anticipating changes in customer demand. At the center of all decisions is the customer. or color). Life Cycles . security. shape. these are developed in response to an identified customer need. In determining the combination of elements in the marketing mix. Ideally. brokerage advice. Products and Services Products and services are the offerings a firm brings to the market. The relationship between the provider and the customer is the key to successful service marketing. and influencing the customer's needs as well as the firm’s capabilities are the marketing environment. the firm can achieve an advantage over its competition. While products and services may differ in their definition. the method of performance.• • • • Product Price Promotion Place (distribution) Marketing mix decisions cannot be made in a vacuum. and a firm's capabilities and objectives must all be considered in designing effective marketing programs for both products and services. Products cannot be defined only in terms of physical attributes (such as size. Products are also defined in terms of the buyer whether it is a consumer who is purchasing for personal or family use or an industrial buyer who is purchasing items for resale or for use in the production of final products. or service). from a marketing perspective the customer focus. This relationship is established during service delivery and may be reinforced through follow-up activities. environmental considerations.

The marketing manager then makes a determination whether or not to employ: • • • Undifferentiated or mass marketing. as products move through maturity toward decline. Such considerations as customer needs. PR. the lifecycle concept generally identifies four stages: • • • • Introduction Growth Maturation Decline There are recommended treatments of the 4 P's that correspond to each stage. product usage. growing and mature products is important in this strategic decision. Concentrated marketing that targets a specific segment. the firm positions the product relative to that of its competitors. and lifestyle. This is accomplished through marketing communication (advertising.Though life cycles for different products may vary in length. Market Positioning In making its appeal to the defined market segment(s). Sales Forecasting and Market Forecasting: . For example. and personal selling) and through such product-related elements as pricing. or Differentiated marketing that uses different approaches to two or more different segment. but rather it attempts to influence how the customer perceives the product. and distribution. competition. marketers must decide whether to plan extinction of the product or revive it by improving and re-launching it to extend the PLC. Market Segmentation In developing its target market strategy. as well as demographic and geographic factors) and assesses each group's need or desire and ability to purchase its product. Positioning does not involve physically changing the product. packaging. promotion. and the firm's product portfolio its mix of new. a firm divides the market into several subgroups or segments (segments can be defined based on benefits sought.

As defined in the customer's terms. political. usually three to five years. Forecasting helps the firm allocates its resources more efficiently in a variety of areas such as: • • • • • • Planning personal selling efforts Budgeting selling expenses Establishing sales quotas Determining production-run size Selecting distribution channels Developing advertising budgets Market Forecasting Market forecasting predicts what the future marketplace will look like. and executive judgment. . Two basic methods are used: 1. but also may include such intangible components as: • reducing a perceived risk.Following market segmentation and target market selection. market tests. Pricing Price is considered one of the most important of the controllable variables influencing a purchase. 2. This activity estimates the market potential (size of the market for the product category) and the sales forecast (amount of sales that will occur for the brand) for a specified time period. The first method studies past purchase patterns of the same or related products. social. the marketing planning process also involves the development of sales forecasts. price is what the purchaser is willing to give up obtaining the product or service. the value of the good or service is not only a monetary one. Thus. and business environments in some future time. financial. Market forecasting attempts to provide a picture of the demographic. The second method predicts future behavior using such methods as customer surveys.

customer research can be an important component of pricing decisions. and profitability goals must support corporate objectives. all of which help drive the development of effective marketing strategy. each organization would not have been able to make effective decisions or to develop appropriate marketing strategies for these new products. and distributing the product. the price establishes the product's value. so that. for example. The established price for a product or service should be integrated with the rest of the marketing mix. identifies distinctive market characteristics. Without information and data relating to the market. profitability is also a strong component of pricing. or Offering a future trade-in value. Therefore. Profit includes the cost of developing. the marketing researcher and the marketer must work closely to integrate their efforts to make and implement marketing decisions. Because businesses are highly dependent on information. the channels of distribution add value. demand factors such as elasticity (consumers' price sensitivity). the channels of distribution add value. and measures market potential. customers. Through qualitative and quantitative studies. the researcher uncovers problems and opportunities. and competition must also enter into the consideration of alternative pricing strategies. promoting. producing. and competitors. the environment. the price establishes the product's value. and the promotional messages communicate that value. Pricing decisions should be tied to the positioning and target market.• • providing time. Marketing Research and the Marketing Function: Marketing research provides the vehicle through which the marketer can develop an understanding of the firm's current and potential customers. and the promotional messages communicate that value. In addition. . Pricing decisions should be tied to the positioning and target market. so that. environmental influences. Of course. The established price for a product or service should be integrated with the rest of the marketing mix. for example.

and sometimes they base purchase decisions on emotional considerations (perceived status. each of which plays a different role in the distribution function. • From the customer's perspective. Because channel members operate somewhat independently. . conflict may occur. peer influence. distribution is a highly complex activity that requires careful planning and integration with the other elements of the marketing mix. self esteem) as well as product features and price. From the firm's point of view. and price. delivery time. • Costs as well as profits can be severely affected by the selection of an inappropriate distribution channel. or for resale to final consumers. promotion and distribution strategies differ for these two types of customers. Distribution channels are comprised of a series of channel members. distribution makes the product available to be purchased conveniently and when needed. Their interest is in satisfying the needs of one or a few people.Consumers and Organizational Buyers: Consumers and organizational buyers are both customers. 3/8-inch flathead aluminum pins). Therefore. Such purchases are generally made in large quantities and are repeated periodically. However. Channels involve all of the organizations and individuals who contribute to the distribution function. service from the vendor. and can actually enhance its value. Organizational buyers purchase goods and services which are used in the operation of the firm. further production of goods and services. Channels of Distribution: The distribution function links the producer and its products with the customer. Their purchase decisions are generally based on more rational factors such as conformity to specifications (for example. Consumers purchase goods and services for personal or household use. they differ in the nature of their purchase decisions.

outdoor.Non-paid communication through the media 3. Awareness can be created in many ways. Advertising -. Thus. • Channel conflict can have a negative impact on channel efficiency. and/or cause price increases.g. coupons. the battle over price discounting). or other media 2. Vertical conflict occurs between channel members at different levels (e. the Internet.. print. most of which fall under the category of promotion.• Horizontal conflict occurs between different types of retailers who sell the same product (e. The role of promotion is to make sure that customers know about and have positive feelings toward a company's offerings.. Sales promotion -.g. Personal selling -. and is comprised of four major activities: 1. Publicity/public relations -. cause gaps in product availability. Creating Customer Awareness: Products and services cannot be sold unless customers are aware of them. it is in the marketer's best interest to minimize channel conflict and maximize cooperation among channel members.Paid-for communication activities such as giveaways. a wholesaler boycotting a manufacturer who sells directly to large retail discounters).Paid-for mass communication through broadcast. Promotion represents the communication elements of marketing.Face-to-face communication 4. and demonstrations Selecting the appropriate communication element(s) is a complex decision and must include such considerations as: • • • • • Target market Budget Objectives Competition Stage of the product's life cycle .

New channels of communication are entering the promotion mix as a result of new technology. for each new market the firm must consider several key areas: • • • • • Competition Economy Culture Geography Technology . the skills and strategies applied at home must be analyzed carefully and perhaps altered. has caused many organizations to consider expanding internationally.) or word-of-mouth (friendly advice). In addition. In doing so. those companies that survive and prosper will place an emphasis on customer satisfaction. Domestic and International Marketing: Increasing competition in the domestic marketplace. today direct marketing is advancing rapidly as an effective means of creating customer awareness. etc. By understanding these expectations (through marketing research) and managing them (through excellent customer service) the firm can deliver superior value to its customers and establish long-term customer loyalty. where advertising was once considered the primary form of promotion for most consumer products. Customer Satisfaction: In today's competitive environment.This decision must also be coordinated with the other elements of the marketing mix. In order to market successfully abroad. Satisfaction can be defined as the difference between the customer's expectations and the outcome of the purchase experience. they will meet or exceed customers‘expectations. In order to develop an effective international marketing program. such as the Internet. as well as easier access to existing markets and the opening of new markets overseas. Expectations are frequently established through marketing communication (advertising. particularly among targeted customer groups.

Some of the objections do have merit and are being addressed through industry self-regulation and consumer-oriented legislation. stockholders. In general. misleading and deceptive advertising. in fact. too many intermediaries in the distribution channel resulting in excessive costs and higher prices. competitors. etc. most problems can be attributed to individual organizations. including customers.• • Politics the legal system Societal and Ethical Dimensions of Marketing: Marketing has been widely criticized from a variety of perspectives. . In making marketing decisions. firms must consider the consequences of their actions on all of their constituents. and society. and. However. including poor product quality. increasing price competition. the marketing system as a whole works very well. contributes a great deal to the overall quality of life.

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