MARKET RESEARCH

Introduction and Some Basics

 Introduction and Some Basics
1. Marketing as both a business function and a process.
2. Major elements of marketing.
3. Marketing mix and product mix.
4. Products and services and identifying the marketing
elements that differentiate them.
5 . Product life cycle.
6 . Advantage of marketing and its impact on business success.
7 . Market segmentation, market positioning, sales forecasting
and market forecasting; their impact on marketing
efficiencies; and their integration into the strategic market-
planning process.
8. Various approaches to product/service pricing and discuss the
development of pricing strategy.
 Introduction and Some Basics
9 . The relationship between marketing and marketing research
1 0. The difference between a consumer and an organizational buyer
1 1. Product accessibility, marketing channels, examples of several
typical channels for both consumer products, business products
and channel conflict.
1 2. Ways to create customer awareness.
1 3. Customer service and customer satisfaction affect the various
elements of marketing
1 4. The differences and opportunities associated with domestic and
international marketing.
1 5. The societal and ethical dimensions of marketing.
1 6. The role of the marketing professional in the corporate
environment.
1 7. Applying marketing concepts and practices in marketing decision-
making.
 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.
 Introduction and Some Basics

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.
 Introduction and Some Basics

Marketing is a powerful tool in growing a business

because it provides the vehicle to get and keep
customers.
An important role of marketing research is to help
marketers:
1 . Define the individual (consumer) or organizational buyer
who has the need, desire, and ability to buy the product or
service;
2 . Identify unsatisfied customers' needs and wants that
might provide new business opportunities for the firm;
3 . Attract new customers to existing products, services, and
brands.
 Introduction and Some Basics
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,
• packaging,
• pricing,
• distribution,
• warehousing,
• order-taking,
• selling,
• advertising
• many other functions
 Introduction and Some Basics
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,
 packaging,
 pricing,
 distribution,
 warehousing,
 order-taking,
 selling,
 advertising
 many other functions
 Introduction and Some Basics
• Marketing research plays a key role in:
 determining needs and wants;
 testing new product ideas; and
 and understanding how one brand measures up against
another brand in the customer's mind.
• In other words, marketing, assisted by marketing
research, 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.
 Introduction and Some Basics

• Success in business is also highly dependent on a firm's

ability to generate, maintain, and use information,
especially to measure customer behavior.
• Marketing Professional, with the aid of marketing research,
are capturing more information than ever before. But
having descriptive data is only one side of the equation.
Marketing Professional must also be able to draw
appropriate conclusions from this information.
• Thus, marketing strategists and marketing researchers
must work together to collect, interpret, and apply
information to business decisions.
 Introduction and Some Basics

• In order to be an effective marketing researcher and to

contribute more than information to a client, those who
conduct research must be familiar with marketing theory
and practice.
• Marketing researchers must understand the firm's
objectives in seeking information, its strategic vision and
relevant marketing concepts, its products and services, and
its competitive position.
• Only then will they be equipped to participate in decisions
about applications and courses of action based on their
research.
 Introduction and Some Basics
• Marketing management involves the coordination of all of the
marketing functions within the firm.
• In planning marketing activities, the manager's responsibilities
include:
 Setting marketing objectives that are measurable and consistent with
corporate objectives
 Determining marketing strategy, including selecting the target market
and developing the marketing mix
 Developing implementation programs that put the marketing plan
into operation
 Measuring and monitoring results, 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.
 Introduction and Some Basics
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":
 Product
 Price
 Promotion
 Place (distribution)
Marketing mix decisions cannot be made in a vacuum. At the center of
all decisions is the customer, and influencing the customer's needs as
well as the firm's capabilities is the marketing environment.
In determining the combination of elements in the marketing mix, a
manager must respond to the changing environment by adjusting to
environmental influences and by anticipating changes in customer
demand.
By clearly defining each of the 4 P's in relation to the customer and the
environment, the firm can achieve an advantage over its competition.
 Introduction and Some Basics

Products and Services

Products and services are the offerings a firm brings to the market.
Ideally, these are developed in response to an identified customer
need.
Products cannot be defined only in terms of physical attributes
(such as size, shape, or color), since often they may be purchased
for intangible reasons (such as status, security, or service).
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.
 Introduction and Some Basics
Products and Services
Services (such as a haircut, brokerage advice, or a car rental) are
largely intangible and are defined by the benefits received, the
method of performance, and the overall experience. The
relationship between the provider and the customer is the key to
successful service marketing. This relationship is established during
service delivery and may be reinforced through follow-up activities.

While products and services may differ in their definition, from a

marketing perspective the customer focus, environmental
considerations, and a firm's capabilities and objectives must all be
considered in designing effective marketing programs for both
products and services.
 Introduction and Some Basics

Life Cycles
Though life cycles for different products may vary in length, the life-
cycle concept generally identifies four stages:
Introduction
Growth
Maturation
Decline
There are recommended treatments of the 4 P's that correspond to
each stage. For example, as products move through maturity toward
decline, marketers must decide whether to plan extinction of the
product or revive it by improving and re-launching it to extend the
PLC. Such considerations as customer needs, competition, and the
firm's product portfolio its mix of new, growing and mature products
are important in this strategic decision.
 Introduction and Some Basics

Market Segmentation
In developing its target market strategy, a firm divides the
market into several subgroups or segments (segments can be
defined based on benefits sought, product usage, and
lifestyle, as well as demographic and geographic factors) and
assesses each group's need or desire and ability to purchase
its product. The marketing manager then makes a
determination whether or not to employ:
 Undifferentiated or mass marketing.
 Concentrated marketing that targets a specific segment, or
 Differentiated marketing that uses different approaches to two or
more different segment.
 Introduction and Some Basics

Market Positioning
In making its appeal to the defined market segment(s), the
firm positions the product relative to that of its competitors.
Positioning does not involve physically changing the product,
but rather it attempts to influence how the customer
perceives the product.
This is accomplished through marketing communication
(advertising, PR, promotion, and personal selling) and through
such product-related elements as pricing, packaging, and
distribution.
 Introduction and Some Basics

Sales Forecasting and Market Forecasting

Following market segmentation and target market selection, the
marketing planning process also involves the development of sales
forecasts.
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. Two basic methods
are used:
1 . The first method studies past purchase patterns of the same or related
products.
2 . The second method predicts future behavior using such methods as
customer surveys, market tests, and executive judgment.
 Introduction and Some Basics

Sales Forecasting and Market Forecasting

Forecasting helps the firm allocate 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
 Introduction and Some Basics

Market Forecasting

Market forecasting predicts what the future marketplace will

look like.
Market forecasting attempts to provide a picture of the
demographic, social, political, financial, and business
environments in some future time, usually three to five years.
 Introduction and Some Basics
Pricing
Price is considered one of the most important of the controllable variables
influencing a purchase.
As defined in the customer's terms, price is what the purchaser is willing to
give up to obtain the product or service.
Thus, the value of the good or service is not only a monetary one, but also
may include such intangible components as:
 reducing a perceived risk,
 providing time, or
 offering a future trade-in value.
Therefore, customer research can be an important component of pricing
decisions.
Pricing decisions should be tied to the positioning and target market.
The established price for a product or service should be integrated with the
rest of the marketing mix, so that, for example, the price establishes the
product's value, the channels of distribution add value, and the
promotional messages communicate that value.
 Introduction and Some Basics
Pricing
Pricing decisions should be tied to the positioning and target market.
The established price for a product or service should be integrated with
the rest of the marketing mix, so that, for example, the price establishes
the product's value, the channels of distribution add value, and the
promotional messages communicate that value.

Of course, profitability is also a strong component of pricing. Profit

includes the cost of developing, producing, promoting, and distributing
the product, and profitability goals must support corporate objectives.

In addition, demand factors such as elasticity (consumers' price

sensitivity), environmental influences, and competition must also enter
into the consideration of alternative pricing strategies.
 Introduction and Some Basics
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.
Through qualitative and quantitative studies, the researcher uncovers
problems and opportunities, identifies distinctive market characteristics,
and measures market potential, all of which help drive the development
of effective marketing strategy. Because businesses are highly dependent
on information, the marketing researcher and the marketer must work
closely to integrate their efforts to make and implement marketing
decisions.
Without information and data relating to the market, the environment,
customers, and competitors, each organization would not have been able
to make effective decisions or to develop appropriate marketing
strategies for these new products.
 Introduction and Some Basics
Consumers And Organizational Buyers
Consumers and organizational buyers are both customers. However, they
differ in the nature of their purchase decisions.
Consumers purchase goods and services for personal or household use.
Their interest is in satisfying the needs of one or a few people, and
sometimes they base purchase decisions on emotional considerations
(perceived status, peer influence, self esteem) as well as product features
and price.
Organizational buyers purchase goods and services which are used in the
operation of the firm, further production of goods and services, or for
resale to final consumers. Their purchase decisions are generally based on
more rational factors such as conformity to specifications (for example,
3/8-inch flathead aluminum pins), service from the vendor, delivery time,
and price. Such purchases are generally made in large quantities and are
repeated periodically.
Therefore, promotion and distribution strategies differ for these two types
of customers.
 Introduction and Some Basics
Channels Of Distribution

The distribution function links the producer and its products with the customer.
Channels
involve all of the organizations and individuals who contribute to the distribution
function.

• From the customer's perspective, distribution makes the product available to be

purchased conveniently and when needed, and can actually enhance its value.

• From the firm's point of view, distribution is a highly complex activity that requires
careful planning and integration with the other elements of the marketing mix.

Costs as well as profits can be severely affected by the selection of an

inappropriate distribution channel.
 Introduction and Some Basics
Channels Of Distribution
Distribution channels are comprised of a series of channel members, each
of which plays a different role in the distribution function. Because
channel members operate somewhat independently, conflict may occur.

• Horizontal conflict occurs between different types of retailers who sell the
same product (e.g., the battle over price discounting).
• Vertical conflict occurs between channel members at different levels (e.g.,
a wholesaler boycotting a manufacturer who sells directly to large retail
discounters).

Channel conflict can have a negative impact on channel efficiency, cause

gaps in product availability, and/or cause price increases. Thus, it is in the
marketer's best interest to minimize channel conflict and maximize
cooperation among channel members.
 Introduction and Some Basics
Creating Customer Awareness
Products and services cannot be sold unless customers are aware of them.
Awareness can be created in many ways, most of which fall under the
category of promotion.
The role of promotion is to make sure that customers know about and
have positive feelings toward a company's offerings. Promotion
represents the communication elements of marketing, and is comprised
of four major activities:
1 . Advertising -- Paid-for mass communication through broadcast, print,
outdoor, the Internet, or other media
2 . Publicity/public relations -- Non-paid communication through the media
3 . Personal selling -- Face-to-face communication
4 . Sales promotion -- Paid-for communication activities such as giveaways,
coupons, and demonstrations
 Introduction and Some Basics
Creating Customer Awareness
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
This decision must also be coordinated with the other elements of the
marketing mix.
New channels of communication are entering the promotion mix as a
result of new technology, such as the Internet. In addition, where
advertising was once considered the primary form of promotion for most
consumer products, today direct marketing is advancing rapidly as an
effective means of creating customer awareness, particularly among
targeted customer groups.
 Introduction and Some Basics
Customer Satisfaction

In today's competitive environment, those companies that survive

and prosper will place an emphasis on customer satisfaction. In
doing so, they will meet or exceed customers‘ expectations.
Satisfaction can be defined as the difference between the
customer's expectations and the outcome of the purchase
experience.
Expectations are frequently established through marketing
communication (advertising, etc.) or word-of-mouth (friendly
advice).
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.
 Introduction and Some Basics
Domestic and International Marketing
Increasing competition in the domestic marketplace, as well as easier
access to existing markets and the opening of new markets overseas, has
caused many organizations to consider expanding internationally. I
In order to market successfully abroad, the skills and strategies applied at
home must be analyzed carefully and perhaps altered.
In order to develop an effective international marketing program, for each
new market the firm must consider several key areas:
 Competition
 Economy
 Culture
 Geography
 Technology
 Politics
 The legal system
 Introduction and Some Basics
Societal and Ethical Dimensions of Marketing

Marketing has been widely criticized from a variety of perspectives,

including poor product quality, misleading and deceptive advertising, too
many intermediaries in the distribution channel resulting in excessive
costs and higher prices, increasing price competition, etc. Some of the
objections do have merit and are being addressed through industry self-
regulation and consumer-oriented legislation. However, most problems
can be attributed to individual organizations.

In making marketing decisions, firms must consider the consequences of

their actions on all of their constituents, including customers,
competitors, stockholders, and society.

In general, the marketing system as a whole works very well, and, in fact,
contributes a great deal to the overall quality of life.