Marketing Research, Applications of Product Development and Test Marketing, Sale forecasting and Ethical Issues in Marketing Research
Roll No: 12
“Marketing research is the systematic gathering,
recording and analyzing of the data about the
marketing problems towards the end of providing
information useful in marketing decision making.”
-Still and Cundiff
Service marketing research
Micro environmental research
Product market research serves several goals: new product
design and market validation research, or assessing
existing product strength and line extension potential.
Concept testing research evaluates advertising concepts, ad
theme concepts and appeals, new product concepts,
pricing, brand concepts, brand names, and positioning
Applications of Market Research
Branding decisions drive branding marketing research
strategy. Brand Management and Research services help
to understand the brand's value, strengths and
vulnerabilities and increase the brand position
Brand Equity Research
Brand equity research measures the breadth and depth of
brand power in the target markets. A key to research
design is the goal of a brand equity measurement study.
Advertising research design is determined by specific
advertising goals and the stage of ad development, or
Various types of research used to explore the role of price,
optimal pricing, and pricing demand curves
An analysis of sales by period or year to project trends,
identify problems and measure a retailer's performance
Studies designed to help identify the optimal positioning for
a brand or service
Market segmentation is a process by which market
researchers identify key attributes about customers and
potential consumers that can be used to create distinct
target market groups
Customer Satisfaction Research
It is area of marketing research which focuses on customers'
perceptions with their shopping or purchase experience.
I. Defining the problem and setting the objectives:
The definition of the problem helps in determining the
techniques to be used, the extent of information to be
collected. After defining the basic problem, the researcher
must specify the objective of the study.
II. Conducting situational analysis:
It means collecting the information about the business
Marketing Research Process
III. Conducting an informal investigation:
The researcher must conduct an informal investigation with
the people outside the company, like wholesalers,
advertising agencies, consumers etc.
IV. Planning and conducting a formal investigation:
a) Selecting the source of information
b) Deciding methods of data collection
c) Preparing frames and forms
d) Pre-testing the forms
e) Planning the samples
f) Collecting the data
V. Analyzing and Interpreting data:
Data analysis and interpretation is the process of assigning
meaning to the collected information and determining
the conclusions, significance, and implications of the
VI. Preparing a written report
Making the written report clearly presented and
highlighting the findings and the decision maker
should be able to take decision effectively after going
through the findings and recommendations.
Research is not guarantee of success
Lack of adequate knowledge of marketing research
Research is based on sample and sampling research lacks the
Trained personnel and a lot of time is required for marketing
It is difficult to evaluate the economic benefits derived by
Limitation of Marketing Research
It can't give 100% accurate results
It provides suggestions and not solutions.
Marketing research is a costly affair.
It can't predict consumer behaviour.(changing the
behaviour of consumers)
Long time is required in the marketing research
Market research is the process by which businesses find out
about customers' needs, wants and desires. It makes
possible the successful development of new products.
New product development should start with an insight
based on consumer needs.
Throughout the NPD process and test marketing, market
research is a valuable tool to check viability and minimize
the risk of the product launches.
NEW PRODUCT PLANNING PROCESS
The new product planning is the function of the top
management personnel & specialists drawn from sales &
marketing, research & development, manufacturing &
PHASES OF NEW PRODUCT DEVELOPMENT
Idea generation:- The first stage is on searching for new
product ideas. An important source of new product
ideas is customers.
Screening of ideas:- It means critical evaluation of
product ideas generated. The main objective of
screening is to abandon those ideas which are
inconsistent with the product policy of the firm.
Concept testing:- At this stage the product concept itself
is tested. It helps the company to choose the best among
the alternative products.
Market analysis:- Estimates of sales, costs & profits are
important components of market analysis.
Product development:- The product is shaped
corresponding to the needs & desire of the buyers.
Test marketing:- By test marketing we mean, by trial &
error method when a product is introduced into the
Commercialization:- At this stage production starts,
marketing programme begins to operate & products are
into the market for sale.
CONSIDER THE FOLLOWING BEFORE LAUNCHING
Effective market research
Ensure product policy
Identification of consumer needs
Proper distribution system
Correct pricing strategy
Test marketing is an application of a controlled
experiment, done in limited but carefully selected
parts of the marketplace called test markets.
Test marketing procedures may be classified as follows:-
Standard test market:- In standard test market the
products are sold through regular distribution channels.
Controlled test market:- In controlled test market the
entire test-marketing program is conducted by an outside
research company. The research company guarantees
distribution of the product in retail outlets that represent a
percentage of the market.
Application of market research in product
development and test marketing
Market research involves the systematic
gathering, recording and analyzing of data about
customers, competitors and the market. This links
marketers to consumers by supplying essential information
to solve marketing challenges and help with marketing
decisions. Market research helps a company create and
develop an up-to-date and relevant portfolio of products
Identifying consumer insights and
product needs - where to start?
Market research should start with the consumer and
serves two purposes:
1) To inform companies about consumer needs and
desires. What are the trends in the market? What do
2) To give consumers the opportunity to talk to the
providers of products and services so that their views
are taken into account.
Turning consumer insights into
The team generated ideas on how to address the
consumer need. From these ideas the marketing team
created 'product concepts'. These describe the product
benefits and how they will meet the consumer needs.
Several concepts were written in different ways. These
explained and expressed unique product attributes
APPLICATION OF TEST MARKETING
How large a plant is needed for national sales?
Which cities should be selected to run the test?
What should be the optimum expenditure on
What would be the return on investment?
What time period is required to run the test?
What specific information should be collected during
What action should be taken after the test?
The process of dividing the market into homogeneous
markets with similar characteristics is called market
CRITERIA FOR MARKET SEGMENTATION
Identity :- There must be clear differences between
segments. Members of such segments can be
identified by common characteristics which display
Accessibility :- It must be possible to reach the
different segments in regard to both promotion &
Responsiveness:- A clearly defined segment must react
to changes in any of the elements of the marketing
Size:- The segment must be reasonably large enough to
be a profitable target.
Nature of demand:- It refers to the different quantities
demanded by various segments.
Measurability:- The purpose of segmentation is to
measure the changing behavior pattern of consumers.
Refrigerators: The market can be segmented on the
Geographical:- North India,South India,East India
Size of refrigerators:-65 Litres,90 Litres,165 Litres
Nature of consumers:- Households, Indusrial
Sales forecasting is a difficult area of management. Most
managers believe they are good at forecasting. However,
forecasts made usually turn out to be wrong!
Market Forecast refers to the estimates of future sales of a
company’s products in the market.
Sales forecasting is very popular in industrially advanced
countries where demand conditions are always uncertain than
the supply conditions.
Reasons for undertaking Sales Forecast
Businesses are forced to look well ahead in order to
plan their investments, launch new products, decide
when to close or withdraw products and so on.
The sales forecasting process is a critical one for most
Key decisions that are derived from a sales forecast
- Employment levels required
- Promotional mix
- Investment in production capacity
Types Of Forecasting
There are two major types of forecasting, which can be
broadly described as macro and micro:
Macro forecasting is concerned with forecasting markets
in total. This is about determining the existing level of
Market Demand and considering what will happen to
market demand in the future.
Micro forecasting is concerned with detailed unit sales
forecasts. This is about determining a product’s market
share in a particular industry and considering what will
happen to that market share in the future.
Selection Of Forecasting
The selection of which type of forecasting is used
depends on the several factors which can be described
(1) The degree of accuracy required – if the
decisions that are to be made on the basis of the
sales forecast have high risks attached to them,
then it stands to reason that the forecast should
be prepared as accurately as possible. However,
this involves more cost
(2) The availability of data and information - in some
markets there is a wealth of available sales information
(e.g. clothing retail, food retailing); in others it is hard to
find reliable, up-to-date information.
(3) The time horizon that the sales forecast is intended to
cover. For example; forecasting next weeks’ sales, or
trying to forecast what will happen to the overall size of
the market in the next five years?
(4) The position of the products in its life cycle.
For example, for products at the “introductory” stage of
the product life cycle, less sales data and information
may be available than for products at the “maturity”
stage when time series can be a useful forecasting
A common method of preparing a sales forecast
has three stages
1) Prepare a macroeconomic forecast – what will
happen to overall economic activity in the relevant
economies in which a product is to be sold.
2) Prepare an industry sales forecast – what will
happen to overall sales in an industry based on the
issues that influence the macroeconomic forecast.
3) Prepare a company sales forecast – based on
what management expect to happen to the
company’s market share.
Evaluate Result versus
Gather & analyze
Make & finalize
METHODS OF FORECASTING.
Some of the methods used in forecasting are:
sales force composite
jury of executive opinion
Time series analysis method
Purposes Of Forecasting
Appropriate production scheduling
Reducing cost of purchasing raw materials
Determining appropriate price policy
Setting sales targets and establishing controls and incentives
Evolving a suitable promotional program
Forecasting short-term financial requirements
Planning of a new unit or expansion of an existing unit
Planning of long-term financial requirements
Planning of man-power requirements
What are Ethics?
Ethics are a collection of principles of right conduct
that shape the decisions that people or organizations
Practicing ethics in marketing means deliberately
applying standards of fairness, or moral rights and
wrongs, to marketing decision making, behavior, and
practice in the organization.
What is marketing research?
Marketing Research is the systematic and objective
identification,collection,analysis,and use of
information for the purpose of improving decision
making related to the identification and solution of
problems and opportunities in marketing.
Importance of ethics in research:
Promote the aims of researcher
Accountable to public
Types of organization
when an organization behaves ethically, customers
develop more positive attitudes about the firm, its
products, and its services.
Not employing ethical marketing practices may lead
to dissatisfied customers, bad publicity, a lack of trust,
lost business, or, sometimes legal action.
Three key areas where problems often arise in
1. In the relationship between the researcher and the
2. Between the researcher and the research subject
3. Between the researcher and the marketing research
Ethics and Marketing Research
• AMA Code of Ethics
• Prohibiting and selling (sugging) or fund
raising (frugging) under the guise of
• Maintaining research integrity by avoiding
misrepresentation and omission of pertinent
• Treating others (buyers and suppliers) fairly
Ethical Issues in Marketing
The application of morals to behavior related to the
Principles that reflect beliefs about what is ethical
and what is unethical.
A situation in which one chooses from alternative
courses of actions, each with different ethical
Ethical Issues in Marketing
A term that reflects the degree to which one rejects
moral standards in favor of the acceptability of some
This way of thinking rejects absolute principles in
favor of situation-based evaluations.
A term that reflects the degree to which one bases
one’s morality on moral standards.
example: the Golden Rule
Ethical Issues in Marketing Research
Lack of consideration
Abuse of respondents
Delivering sales pitches
under the guise of
Ethical Issues in Marketing Research
Use of data and the
confidentiality of information