Market research

Date: 2015-10-07; view: 411.

Marketing Concept Implementation

Market researchis the process of collecting, analysing and presenting useful information about consumers. Marketing researchalso includes the more general research into markets, which includes competitive activities and also environmental issues such as government activities and economic shifts. The first question any marketer should ask before embarking on a research exercise is whether the information gained will be worth more than the cost of collecting it. Market research can represent a substantial investment in both time and money terms; in some cases it is undoubtedly cheaper simply to go ahead with the project without carrying out any research at all. For example, if the total cost of sending out a mailing is less than £10 000, but research into finding out whether or not it would be effective would cost £12 000, it is obviously better not to do the research. More subtly, if the managers feel that the risk of the mailshot failing altogether is low, they may still not run the research even if it is much cheaper. If, for example, the management estimated the risk of failure at only 10%, the value of the research would be only £1000. Therefore it might not be worthwhile carrying out research even if the cost of it were, say, £3000. In general, however, it is not wise to embark on a major commitment (such as launching a new product) without carrying out some market research beforehand. The vast majority of new products fail, and this is usually because the consumers do not think that the product is worth the money. Good market research will reduce the risk of this happening, and it has been said (wisely) that those who find research expensive should think about what ignorance would cost.

Types of research that are carried out by marketers are as follows: customer research, promotion research, product research, distribution research, sales research, marketing environment research.

Customer researchis intended to produce facts about markets and market segments; it provides information about where customers live, what they do with their time, what their motivations are, what they like to spend money on and what their spending power is, and what the trends are in the market. Promotion researchmeasures the success of promotions in terms of their objectives. It relies on careful planning of objectives but can provide information about the suitability of the approach used in reaching a target audience. Research is also useful for determining which media should be used; since promotion in general, and advertising in particular, tends to be expensive it is important that the effort is not squandered on advertising in the wrong place. Product researchis used to identify new uses for existing products, or to identify needs for new products. Product research is often used to refine the design of an existing product to produce an improved ‘Mark 2' version. Distribution researchis concerned with finding the best channels of distribution for a product; often it overlaps with consumer research, since the location of retail outlets will depend on where the target consumers live and on their habits.

Sales researchis intended to help the sales management process by ensuring that territories are of equal size or value, that the techniques and approaches being used are effective, that the training of the salesforce is appropriate and sufficient, and that the salesforce motivation is appropriate.

Finally, marketing environment researchexamines aspects of the micro- and macro-environments. The purpose of the exercise is to ensure that the firm can anticipate environmental change and develop responses in advance. Very often research can be carried out fairly quickly and cheaply, since much of the information needed will probably already exist, either in published form or within the company's own records. Often the company records contain a great deal of useful data, or raw facts; analysis of those facts will turn it into usable information. The data items themselves are worthless until there has been some kind of thoughtful analysis to convert them to information. After having made a market reaearch, marketers have to consider the marketing mix.