Market Research
To undertake marketing effectively, businesses need
information. Information about customer wants, market demand, competitors,
distribution channels etc. Marketeers often complain that they lack enough
marketing information or the right kind, or have too much of the wrong kind.
The solution is an effective marketing information system.
The information needed by marketing managers comes from three
main sources:
(1) Internal company information (e.g. sales,
orders, customer profiles, stocks, customer service reports etc)
(2) Marketing intelligence: this can be
information gathered from many sources, including suppliers, customers,
distributors. Marketing intelligence is a catch-all term to include all the
everyday information about developments in the market that helps a business
prepare and adjust its marketing plans. It is possible to buy intelligence
information from outside suppliers (e.g. Mintel,
Dun & Bradstreet, Mori)
who set up data gathering systems to support commercial intelligence products
that can be profitably sold to all players in a market.
(3) Market research:
Management cannot always wait for information to arrive in
bits and pieces from internal sources. Also, sources of market intelligence
cannot always be relied upon to provide relevant or up-to-date information
(particularly for smaller or niche market segments). In such circumstances,
businesses often need to undertake specific studies to support their
marketing strategy - this is market research.
Approaches to Conducting Market Research
Depending on the situation facing a company, particularly the
resources allocated to marketing research, there are four main ways of
carrying out market research:
(1) Do it yourself - personally
This is often the case in smaller businesses. Here, the
marketing staff do the research themeselves. Sample sizes tend to be small -
which may be appropriate if there are a relatively small number of customers.
(2) Do it yourself - using a marketing research
department
By employing a marketing research manager, a business may
benefit from specialist research skills.
(3) Do it yourself - using a fieldwork agency
Often the design of a piece of market research can be
completed using internal resources - particularly if the business employs a
marketing specialist with knowledge of research techniques. However, the
scope of the research (for example, interviewing a large sample of consumers
in various locations) may be beyond the resources of a business. In this
case, the fieldwork can be carried out by a marketing research agency.
(4) Use the full services of a marketing research
agency
Where resources permit a business can invest in the full
range of skills offered by marketing research agencies. A complete service
would include:
Preparation of the market research
proposal (survey design, costs, timetable, method of feedback)
Conduct exploratory research
Design the research questionnaire
Select the sample
Choose the survey method (e.g. telephone, postal, face-to-face)
Conduct the interviewing
Analyse and interpret the results
Prepare a report
Make a presentation
There are thousands of market
research agencies in the UK alone who provide such services.
Types of Marketing Research
The main distinction between the different
types of market research is between "ad-hoc" and "continuous"
research:
Ad-hoc Market Research:
Ad-hoc research studies focus on specific
marketing problems. They collect data at one point in time from one sample of
respondents. Good examples of ad-hoc studies include:
Product usage surveys
New product concept tests (where consumers are asked to trial new brands,
product prototypes etc)
Advertising development (how does the sample of consumers respond to a
specific advertising campaign? Most TV adverts are researched in this way)
Corporate image surveys (often quite enlightening)
Customer satisfaction surveys (these can often turn into continuous research)
Continuus Research:
Continuous studies interview the same
sample of people, repeatedly. The major types of continuous research are:
Consumer panels: formed by
recruiting large numbers of households who provide information on their
buying over time. Research agency AC
Neisen has one of the largest consumer panels in the world, continuously
interviewing 125,000 households in 18 countries. The main competitor for AC
Nielsen is TNS
which runs panels in 20 countries.
Retail Audits: By gaining the
cooperation of retail outlets, sales of brands can be measured (using
barcoded sales data) to track changes in brand loyalty, market share and
effectiveness of different retail formats.
Television Viewership / Radio Listening
Panels: these panels aim to measure viewership or listening minute by minute.
This data is critical information for broadcasters to determine their
programme strategy (what kinds of programmes to produce and when to broadcast
them) as well as for advertisers (who is watching, listening, and when?). In
the UK, the main source of such data is produced by the Broadcasters'
Audience Research Board ("BARB").
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