Market research

Market research is the process of collecting, analysing and presenting useful information about consumers. Marketing research also 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 research is 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 research measures 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 research is 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 research is 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 research is 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 research examines 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.

The marketing mix

The concept is simple indeed. Think about any mix in normal daily life for example a biscuit mix, all biscuits contain flour, sugar, milk and eggs however you can alter the final mix by altering the ingredients. So for sweet biscuit add more sugar.

It’s same with marketing mix or 7 p’s the offer you make your customer can be varied by altering marketing mix so for a high profile brand, increase the focus on promotion and desensitize the weight given to price.

There are 4 basic element in the marketing mix, but it can be increased by adding 3 more marketing mix elements. The first four marketing mix (product, price, place, promotion) belong to tangible products and other 3 (people, process, physical evidence) belong to services.

7Ps

What are features of good products? A good product must be DICEE.

Deep: product must have multiple features in it and should be able to serve multiple purposes that is called deep product. Intelligent: A firm must make a product which is intelligent the example of intelligent product is Panasonic’s torch light in that torch light you customer can use any of the different size batteries which one is available to customer. Completeness: company must not just provide a simple tangible product but also provide post and after sales services and documentations. Elegant: product must be elegant in looks and heart touching. Emotive: design the product like that company should add emotions of customer in product. Product must be the solution of customer’s problem or a package of benefits to customer. Nature of product is also often depending on which generic strategy company is using. If company is operating at low cost the company will be offer a very basic product with very basic facilities in it. That product is called core product. If company is operating at differentiation then company will be offering an actual product by adding little luxury to basic product. However if company is operating at best value strategy they will be providing augmented products. Augmented product is an actual product in which you add services. Other decision regarding products is to deciding product range, product width, quality, warranty, after sale services, packaging, branding and appearance etc.

The factors which can influence pricing are: economic influence, competitors pricing, quality conditions, discounts, payment terms, trade allowance.

Place is known as a channel, intermediary or a distributer. It is the mechanism through goods is carried from manufactures to end user. The decisions regarding place are: location, logistics, channel members, channel motivation, market coverage, service area, internet, mobile.

Promotion groups AIDA. A is attention; we must get customer’s attention towards our distribution channel. I is interest; demonstrate product features and benefits this is to get customer attention. D is desire; what is the product used for? Which need the product can fulfill? We need to create the desire for that product and then match the desire with need. A is action; take the product to customer rather than customer comes to you. Take action first to sell the product. Other concerns are to advertise, sale and media budgets.

Services are intangible. The people who render services are part of that product. If peoples are good educated the quality of service will be better.

Services are a package of process offered to customer. So processes are part of products. Quality of process will determine the quality of product. Therefore process is compulsory part of services.

Due to intangible nature of services the customer satisfaction is important and has to be on the spot. To serve this purpose other services p’s must be good.

Comprehension

1. Compare and contrast the terms marketing and selling concepts. .

2. Why is marketing research important?

3. Fill in the table.

Term	Function
Customer research
Promotion research
Product research
Distribution research
Sales research
Marketing environment research

4. How do marketing decision makers know when it will be profitable to conduct research?

5. Describe the chart on the main concepts of marketing research.

6. What characteristics should a good product have?

7. Are there any factors that influence the pricing strategy?

8. Name the decisions which are important in placing a product on the market.

9. What does the acronym AIDA stand for?

10. Name the 7Ps of the marketing mix and explain the importance of a target market for each of them.

Language study

1. Find in the text the English equivalents for the following.

Сбор информации; проблемы окружающей среды; приступить к исследованию; получение информации; солидное вложение денег; несомненно дешевле; общая стоимость; риск провала; запуск нового продукта; огромное количество; снизить риск; предоставлять информацию; достичь целевой аудитории; безрассудно тратить деньги; улучшенная версия; определить потребности; каналы распространения; совмещать с; расположение магазинов; целевые потребители; обучение персонала по продажам; предвидеть изменения; провести исследования; глубокий анализ; акцентировать внимание на; гарантийный сервис; набор преимуществ; добавление роскоши; выпущенный продукт; ассортимент товаров; влияние среды; скидки; доставка; демонстрировать качества товара; без промедления.

2. Fill each gap in the sentences below with the correct word from the box.

generate	specifies	define	monitor	identify
address	designs	links	improve	communicates

Marketing research is the function that 1)… the consumer, customer, and public to the marketer through information - information used to 2) … and 3) … marketing opportunities and problems; 4) …, refine, and evaluate marketing actions; 5) … marketing performance; and 6) … understanding of marketing as a process. Marketing research 7) … the information required to 8) … these issues, 9) … the methods for collecting information, manages and implements the data collection process, analyzes, and 10) … the findings and their implications.

3. Which words can be used to talk about each P? Fill in the table.

P	Characteristics
Product
Price
Placement
Promotion
People
Process
Physical evidence

4. Match the following parts of the sentences

Marketing is a process that satisfies customer needs …	competitors and interfunctional coordination over the long-term.
Marketing, and market orientation, promote …	deliver competitive advantage and (3) have a degree of integration.
Market orientation considers customers, …	via long-term exchange relationships.
Customer value is based on …	with the mix being extended for service based products (the 7Ps).
Such benefits are delivered via the marketing mix (the 4Ps), …	to poor application of the concept, as opposed to any fundamental flaw.
Customers tend to make decisions based …	perceived benefits.
The mix does have its critics. However, criticism is normally due to …	the concept as a strategic business philosophy.
To be successful, the mix needs to (1) meet customer expectations, (2) …	on acceptability, affordability and accessibility.

5. Fill in the missing words with the description of the marketing mix.

The traditional marketing mix was described in terms of 4 Ps.

1. . … the goods and services.

2. … the cost of the product.

3. … often called distribution.

4. … which aims to make people aware of the product.

In recent years other considerations have been added, giving a list of at least 7Ps:

5. … or everyone involved from producer to consumer.

6. … which mean the wrapper or the box the product comes in, but also all added value and intangible assets.

7. … or everything to do with time.

Over to you

1. Read the text and explain the main characteristics of each type of marketing strategy.