Marketing process needs market research

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Marketing process needs market research

  1. 1. Explain as to how market research inputs are required at every stage of a typicalmarketing process.1. Since the time of the industrial revolution till until the early 1920s, businessesconcentrated on production – resulting in the production concept. i.e. the business wouldfocus on those products that it could produce most efficiently and that the creation of asupply of low-cost products would in itself create the demand for the products. Thisconcept worked well because the goods that were produced were largely those of basicnecessity and there was a relatively high level of unfulfilled demand. Virtually everythingthat could be produced was sold easily by a sales team whose job it was simply to executetransactions at a price determined by the cost of production. By the early 1930s however,mass production was common thus leading to competition while unfulfilled demand hadreduced. To ensure sale the products produced by the businesses they began to practicethe sales concept (or selling concept), where in the manufacturing companies not onlyproduced the products, but also would try to convince customers to buy them throughadvertising and direct or personal selling. This concept paid little attention to whether theproduct actually was needed by the customer, the goal simply was to sell againstcompetition from competitors. In both these concepts, marketing was a function that wasperformed after the product was developed and produced, and marketing was associatedwith hard selling.2. After World War-II, the range of products increased and hard selling no longer couldbe relied upon to generate sales. With increased income, customers could afford to beselective and buy only those products that precisely met their changing needs, and theseneeds were not immediately known. In response, businesses began to realise;- Focusing on customer needs before developing the product.- Aligning all functions of the company to focus on those needs.- Realising a profit by successfully satisfying customer needs over the long-term.With this realisation, businesses across the globe evolved towards meetingcustomer satisfaction, and the organisation as whole began to develop a company-widecustomer focus. Since the existence of the organisation was customer centric, thebusinesses adopted the marketing concept which relies upon the philosophy thatcompanys should analyse the needs of their customers and then make decisions to satisfythose needs, better than the competition. Towards practicing this philosophy, researchwas required to gather information regarding market needs, market size, market segmentsetc...The Marketing Process3. Under the marketing concept, a company must find a way to discover unfulfilledcustomer needs and bring to market products that satisfy those needs. This processthus comprises of the following steps:-
  2. 2. (a) Situation Analysis(b) Marketing Strategy(c) Marketing Mix Decisions(d) Implementation & Control4. Situation Analysis. In order to profitably satisfy customer needs, thecompany must first understand its external and internal situation, including thecustomer, the market environment, and its own capabilities. Furthermore, it needs toforecast trends in the dynamic environment in which it operates. The externalenvironment constitutes macro-environmental factors that broadly affect manycompanies, while the micro-environmental factors are closely related to the specificsituation of the company including the past, present, and future aspects.If the situation analysis reveals gaps between what consumers want and what currentlyis offered to them, then there may be opportunities to introduce products to satisfy thoseconsumers. Thus, the situation analysis would bring to light - a summary of problemsand opportunities. From this summary, the company can match its own capabilities withthe opportunities in order to satisfy customer needs better than the competition.Situation analysis can be undertaken by the following methods:-(a) 5C Analysis. Company, Customers, Competitors, Collaborators, Climate.While Company - represents the internal situation; Customers, Competitors,Collaborators, Climate – represent the external situation.MARKETING PROCESSMARKETING RESEARCHTECHNIQUESCompany: The aspects required to be identifiedare:-Product lineImage in the marketTechnology and experienceCultureGoalsPrimary market researchmethods like Surveys, Focusgroups, Interviews for theemployees, Secondarymarket research data willprovide the required data forassessment.CustomersMarket size and growthMarket segmentsBenefits that consumer is seeking, tangibleand intangible.Motivation behind purchase; value drivers,benefits vs. costsDecision maker or decision-making unitRetail channel - where does the consumerPrimary market researchmethods like Surveys, Focusgroups, Interviews,Experiments & field trials andobservation will provide a therequired data for assessment.
  3. 3. MARKETING PROCESSMARKETING RESEARCHTECHNIQUESactually purchase the product?Consumer information sources - where doesthe customer obtain information about theproduct?Buying process; e.g. impulse or carefulcomparisonFrequency of purchase, seasonal factorsQuantity purchased at a timeTrends - how consumer needs andpreferences change over timeCompetitorsActual or potentialDirect or indirectProductsPositioningMarket sharesStrengths and weaknesses of competitorsSecondary market researchmethods will provide marketanalysis for a particularindustry.Certain aspects like marketshare, strength & weakness ofcompetitors might not beavailable through secondarydata. In this scenario primaryresearch methods like Surveys,Observation techniques like – instore observation, Mysteryshoppers etc.. can helpCollaboratorsDistributorsSuppliersAlliancesSecondary market researchmethods will provide marketanalysis for a particularindustryClimate (or context) - The climate or macro-environmental factors are:Political & regulatory environment -governmental policies and regulations thataffect the marketEconomic environment - business cycle,inflation rate, interest rates, and othermacroeconomic issuesSocial/Cultural environment - societys trendsand fashionsTechnological environment - new knowledgethat makes possible new ways of satisfyingneeds; the impact of technology on the demandfor existing products.Scenario planning techniqueshelp to deal with high levelsof uncertainty in importantmacro-environmentalvariables.The analysis of the these fourexternal "climate" factorsoften is referred to as a PESTanalysis.
  4. 4. (b) PEST Analysis. Political, Economic, Societal, and Technological.These contribute towards the macro-environmental factors. The PEST analysiscan be used to determine the ‘Climate’ aspect of 5C analysis.(c) SWOT Analysis. Strengths, Weaknesses, Opportunities, and Threats.The analysis of the data collected from 5C analysis will assist in determining theSWOT. The SWOT analysis can be further used to concentrate upon the mostrelevant problems and opportunities and to assess how well the company isequipped to deal with them.5. Marketing Strategy. Once the best opportunity to satisfy unfulfilledcustomer needs is identified, a strategic plan for pursuing the opportunity can bedeveloped. Market research will provide specific market information that will permit thecompany to select the target market segment and optimally position the offering withinthat segment. The result is a value proposition to the target market. The marketingstrategy then involves:(a) Market segmentation: As different customers have different needs, itis rarely possible to satisfy all customers by treating them alike. Hence need forTarget Marketing is adopted by recognising the diversity of the customers. Toidentify diversity of the market, the market segments are broadly classified as –MARKETING PROCESSMARKETING RESEARCHTECHNIQUESGeographic – Grouped based upon the region Secondary market researchDemographic – Grouped based upon factors like age,gender, income, education, occupation etc..Secondary market research likecensus data, Primary marketresearch like survey, Focusgroups, interviews , observationPsychographic – Grouped based upon lifestyle Primary market research likesurvey, Focus groups, interviews ,observationBehavioralistic – Grouped based upon customersbehaviour vis-a-vis the product/company.Primary market research likesurvey, Focus groups, interviews ,observation, Experiments & fieldtrials.(b) Targeting - Target market selection. From the data obtained from marketsegmentation, the selection of the target market can be identified and accordinglymass marketing can be undertaken.(c) Positioning the product within the target market(d) Value proposition to the target market
  5. 5. 5. Marketing Mix Decisions. Target marketing tailors a marketing mix for one ormore segments identified by market segmentation. Marketing mix decisions arecategorised as the 4Ps. They are:-MARKETING PROCESSMARKETING RESEARCHTECHNIQUESProduct development - specifying, designing, andproducing the first units of the product.Brand nameFunctionalityStylingQualitySafetyPackagingRepairs and SupportWarrantyPrimary market research andanalysis is instrumental inobtaining information. Forexample, buyer intentions, taste,requirements wrt after salesservice sales and statisticaldemand analysis are useful fordetermining these factors.Pricing decisionsPricing strategy (skim, penetration, etc.)Suggested retail priceVolume discounts and wholesale pricingCash and early payment discountsSeasonal pricingBundlingPrice flexibilityPrice discriminationPrimary market research andanalysis is instrumental inobtaining information.Distribution contractsDistribution channelsMarket coverage (inclusive, selective, orexclusive distribution)Specific channel membersInventory managementWarehousingDistribution centersOrder processingTransportationReverse logisticsPromotional campaign developmentPromotional strategy (push, pull, etc.)AdvertisingPersonal selling & sales forceSales promotionsPublic relations & publicityMarketing communications budgetPrimary market research andanalysis is instrumental inobtaining information. Forexample, buyer intentions,customer requirements wrt aftersales service sales and statisticaldemand analysis are useful fordetermining these factors.
  6. 6. 6. Implementation and Control. This is the stage when the marketing plan hasbeen developed and the product has been launched. Given that few environments arestatic, the results of the marketing effort should be monitored closely. As the marketchanges, the marketing mix can be adjusted to accomodate the changes. Often, smallchanges in consumer wants can be addressed by changing the advertising message.As the changes become more significant, a product redesign or an entirely new productmay be needed. The marketing process does not end with implementation - continualmonitoring and adaptation is needed to fulfill customer needs consistently over the long-term. To accomplish this, continuous monitoring of the product and its performance inthe market regular surveys, Focus groups, interviews etc...are required to beundertaken to understand the customer response and future aspirations.7. Market research is one of the most important features of a marketing process of most ofthe companies. There are numerous benefits that are associated with market research. Marketresearch can help the businesses to communicate with customers. The experience of theexisting clientele of businesses is a valuable source of information. Market research can let thebusinesses analyse how well they are catering to the needs and specifications of the customers.One of the most interesting features of the market research is that it can tell you what are themodifications that can make your business grow and what are the practices that you shouldavoid while doing a business. Market research involves getting feedback from the customersregarding a product and service. This way the consumers can not only feel important but alsosatisfied as you involve them in your marketing process by asking for their feedback in theprocess of market research. Market research is done by almost every company so as to analysethe popularity and effectiveness of a brand launched by them among customers, analyse if thenewly launched product is catering to the needs and specifications of the customers or not.These questions can be answered by market research and thus facilitates decisionmaking, reduces uncertainty and highlights consumer problems towards undertakingeffective marketing process.

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