The Use of Statistics in Marketing - Term Paper Example

Statistics for Managers Project wk3: The Use of Statistics in Marketing Dawn Chamberlain Everest Statistics in Marketing Introduction Organizations have been using the statistical data to compare markets, production, finance security controls and almost every aspect of a business since the numbers act as a clear indicator for the company. It is important for companies to come up with the proper statistical tools depending on the specific role or purpose that they aim to derive from the statistical data. The data are also easily analyzed since the numbers are compared against past figures or with the industry as a whole to evaluate the strength of the company as a whole (Balakrishnan, 2010). Marketing is one of the most important functions within the organizations and as a result, the data collected on the marketing tool needs to be inclusive and properly structured in order to gain from the marketing policies and mechanisms employed. Statistical data on marketing is essential for a company and should be well-tabulated to ensure that the data is used in the marketing research applications that the data is meant to improve. The company may conduct a survey on advertising and other marketing tools such as product promotion and measure the level of sales that has been influenced by the marketing tools (Balakrishnan, 2010). The company needs to conduct customer surveys and come up with the best structure and techniques in marketing that are not only attractive to the customers in the market but also offer a competitive advantage over the competitors (Balakrishnan, 2010). The methods employed by the company need to be assessed statistically to measure if they are working within the company and also measure if they have worked in other companies through their records. The analysis part is particularly simpler since the statistical data ensures that the information is properly structured and therefore easy to analyze. Data Sources in Marketing In marketing data forms a critical part of research where it provides the information crucial in determining the research area. Acquiring the right data needs the research to identify the data collection method critical in the research and that provides sufficient information regarding the subject under the study (Mazzocchi, 2008). Before discussing the data sources available, it is important that one understands that there are two types of data that is critical to the research. These are primary and secondary data. These two types of data are crucial in the research work and should be utilized for the perfection of the results. In addition, the two types of data helps in confirmation of the existing theory from the primary data perspective and secondary data analysis. Primary data are collected through the use of ad-hoc surveys that are built for the study purposes while the secondary data is collected from previous studies and official statistics in the given area (Mazzocchi, 2008). There are four main sources of data where the researcher can collect information critical to the research, which includes secondary sources, respondents, natural and controlled experiments and simulation. Secondary information refers to the data collected in a previous research in the area under investigation (Johnson & LeBreton, 2004). Even though in most cases the research in the secondary sources does not directly collate with the intended research, the secondary research contains valuable information that guides the research in carrying out the research successfully. Secondly, the researcher may acquire the data for the research through the respondents who may answer the questions in the marketing area through interviews or questionnaires depending on the methodology applied either qualitative, quantitative or mixed research methods (Balakrishnan, 2010). This provides information by analyzing the Customers’ verbal and behavioral responses that give the data on the level of satisfaction and the areas they believe should be considered in the research or a given product. The natural and controlled experiments are another source of data in marketing research that can provide the desired information (Balakrishnan, 2010). The research in these experiments is required to get the results without forcing the experimental process. In carrying out this type of data source, it is essentially important that the researcher identifies the various variables that exist in the research work (Dawar & Parker, 1994). The researcher may decide to alter some variables and make the other variable constant in testing the effects of a given variable in the marketing process. There are two kinds of manipulation of variables that is important in marketing, which are manipulation of at least one of the causal variables and random assignments of the subject to the experiment and the controlled groups. This research experiment provides credible information regarding the effects of giving variable by controlling the others and alternating one of the variables (Dawar & Parker, 1994). This helps on measurement of the dependent and independent variables in the experiment. Simulation is another source of data critical to the marketing research. These are cost effective and also utilizes less time in the modelling. They are important, especially when the project under the study requires a bigger scope than what the experiment may be able to investigate. They contain complex interactions and also nonlinear relationships that influence the research area in the study, hence providing the interrelationships that are crucial to the research (Black, 2008). This indicates that simulations help in making the comparison effective and efficient during the research saving on time and resources. The data source to use in the research is merely determined by the methodology that the researcher has selected. This is an indication that the type of data depends on the research purpose and method to be used in carrying out the research (Black, 2008). For example, if the researcher has selected a qualitative type of study, they will most prefer using interviews as the method for collection primary data. On the other hand, if the research requires numerical data, they will mostly use the quantitative research method for the analysis (Balakrishnan, 2010). Marketing Research Marketing concentrates more on the customer satisfaction rather than profit maximization in the research area. This indicates that marketing research is mainly oriented to measuring factors that lead to customer satisfaction and customer requirements in order for the product or brand to remain competitive in the market (Balakrishnan, 2010). This is an indication that the researcher should identify the needs of the customers, level of satisfaction from given product and provide marketing intelligence information essential to the research area. In marketing research, statistics, form a vital component in determining the level of satisfaction on the given brand and factors influencing it. In other words, marketing research is statistical since it utilizes the information collected in drawing conclusions on what is the customer preference and level of satisfaction (Mazzocchi, 2008). Statistics forms one of the major inputs that is important in marketing research that provides the researcher with facts about the marketing practices of a given product or brand. The statistics help in creating numerical summaries to provide insight into the effectiveness of certain variables in the marketing process (Johnson & LeBreton, 2004). There are several numbers of statistics that available in marketing research. Descriptive statistics help in the analysis and characteristics of data where one can detect assumptions that are made in a given statistical techniques. In addition, the statistics assist in addressing the specific elements in the research question. Statistical analysis is an important tool in marketing research. It provides the type of analysis that compares and contrasts different variables in the marketing area. In addition, the data analysis using the statistical tools is sensitive to violations that may arise in the analysis and presentation of data (Dawar & Parker, 1994). The descriptive statistics comprise of methods such as mean, standard deviation, skewness and range of scores. In facilitating this form of analysis, SPSS is a software that is used in testing the data and using present it in different forms for ease of analysis. This is an indication that marketing research is dependent on statistics when investigating a given variable or research question in the area of study (Balakrishnan, 2010). In running a successful business, the entrepreneur is required to identify the potential and existing customers in the business environment. In addition, one is required to assess the behavior of the customers and market environment in order to assess the competitors, weaknesses and strengths in the market (Balakrishnan, 2010). This indicates that a successful business requires research on the various factors that are influencing the marketing environment and market structures available for effective and efficient customer satisfaction that promotes customer loyalty to the given product or brand. The research is expected to acquire as much information as possible in order to make decisions from the statistical representation available (Dawar & Parker, 1994). This is an effective way of ensuring that the business continues to experience competitive advantage in the market and is able to meet the needs of the customers. Furthermore, the use of statistics in marketing research is an effective tool that analyses factors such as economic and industry trends, the customer requirements and the newly introduced products and their influence on the existing products in the market (Mazzocchi, 2008). Understanding the changes occurring in the market such as what new the competitors are doing to earn competitive advantage is crucial in ensuring that one is competitive in the market and their products are renewed when the need arises (Balakrishnan, 2010). For example, research has identified that the American hotel industry is changing due to migration to organ products. This information would help the business organization in the industry to analyze the opportunities that arise in green or organic products. This would be used to create awareness to the customers on the value of these products and their effects on their body, ensuring that the brands are sensitive to the needs of the customers and to their health, social and cultural settings. There are risks and uncertainties that are associated with businesses that require marketing knowledge in order to overcome them (Balakrishnan, 2010). This shows that marketing research is important in the policy formulation process in the organization. Marketing Planning Planning is a crucial activity in the marketing process that requires statistical analysis and interpretation (Mazzocchi, 2008). The figure below represents a marketing model that is essential in the marketing research. The traditional marketing planning was a complicated process that hindered its full realization in the actual market. However, with the new planning tools, statistics are applied in drawing conclusions on the marketing plan that will achieve the desired goals in accordance with the available information. Table 1.1 The Components of the marketing plan Traditional New Statement of Organizational Mission Statement of Organizational Mission ↓ ↓ Environmental Analysis Environmental Analysis – Research ↓ ↓ Competitor Analysis Competitor Analysis – Research ↓ ↓ Buyer Motivation Buyer Motivation – Research ↓ ↓ Segmentation Segmentation – Research ↓ ↓ Research Plan Product Analysis – Research ↓ ↓ Product Analysis Distribution Analysis – Research ↓ ↓ Distribution Analysis Pricing Options – Research ↓ ↓ Pricing Options Promotional Plan – Research ↓ Promotional Plan ↓ Source: (Balakrishnan, 2010) Statistical evidence is an important tool that guides the planning process in the marketing research. It provides clear information on the behavior of the customers, competitors, performance of a given product and selling rate, which are key to the planning process (Balakrishnan, 2010). Planning also gives the guideline that should be followed while carrying marketing research to ensure that the data available is able to benefit the organization. Statistics assist in presentation of clear knowledge and accurate description of the marketing process, and provides an environment for the professionals in preparation for the implementation process (Johnson & LeBreton, 2004). This identifies the value of statistics in the marketing process and the impact it has on the business environment in the market. Hence the section provides a comprehensive outline of the relevance of statistics in the marketing process. Statistical analysis is the major determinant of the marketing planning process that guides the business organization on trends in the market. For example, statistical analysis would give information on the future trends of a certain product or brand that will guide the organization in the planning process for its production to meet the demand in the market. With technological advancement and access to information on products, marketing research is an important component that ensures that the organization remain competitive and normally utilizes the marketing plan tools that are derived from statistical data available (Balakrishnan, 2010). This shows the major role that statistics play in marketing planning. When preparing for the marketing plan for various activities such as designing new products, changing the production process, planning for customer satisfaction from a given brand or analyzing market trends, statistics play an important role in all these activities that are essential in the marketing process. Statistics provides the marketing planners with the information essential in dealing with the uncertainties that exist in the marketing plans. This helps the planners in preparing marketing plans that are all inclusive and effective once implemented (Dawar & Parker, 1994). This is a critical marketing plan consideration in ensuring that the marketing process is streamlined towards a given goal or objective. It is through statistical analysis that this information is processed and presented to help in the marketing planning process. Decision Making The decision making process is one of critical process in marketing that determines whether marketing process is successful or not. The fist step in decision making in marketing is identification of the information required (Black, 2008). This information is processed using different statistical tools that help in the realization of the behavior in the market. Businesses and organizations can only make the right marketing decisions when there is plenty of statistical information being processed. Incorrect presentation and analysis of information may lead to taking of the wrong decision on marketing. (Black, 2008) This shows that the process of decision making should have a comprehensive evidence that is tested using the various statistical tools that are available before drawing conclusions on these elements. In addition, if information is presented and analyzed in the right form, there is the likelihood of obtaining the right decision for marketing. Competitive advantage and market analysis provide data that is possible using statistics hence influencing the decision making process (Mazzocchi, 2008). The changes and advancement of technology has complicated the market, hence require deeper analysis before a decision can be formulated. With respect to this, statistical evidence provides the researcher with the required information in the research area. Statistics does not only provide information on the current market trends, but also facilitates if forecasting the future trends in the market (Mazzocchi, 2008). This influences the decision making process and ensures that the organizations are able to accomplish the given goals in marketing. In addition, the statistical evidence helps in the derivation on the causes of differences existing in the market for the past, current and future trends (Black, 2008). This indicates the value for increased emphasis on statistical evidence in the marketing decision making process for effectiveness and efficiency implementation of the recommended decisions in an organization. Conclusion From this study on marketing research, it is evident that statistical analysis and presentation of available data is a crucial component of the marketing process (Balakrishnan, 2010). The study concludes that statistics is important and should always be incorporated into any marketing research in order to ensure that the marketing decision made is effective in the given market. This will ensure that the organization will remain competitive in the market despite the increase in competition in the industry today (Black, 2008). Ensuring that statistical data are considered in marketing research is a step forward enhancing competitive advantage and good performance of the firm in the competitive environment (Black, 2008). References Balakrishnan, N. (2010). Methods and Applications of Statistics in Business, Finance, and Management Science. New York: John Wiley & Sons, Inc. Black, K. (2008). Business statistics: For contemporary decision making. Hoboken, NJ: Wiley. Dawar, N., & Parker, P. (1994). Marketing universals: Consumers" use of brand name, price, physical appearance, and retailer reputation as signals of product quality. The Journal of Marketing, 81-95. Johnson, J. W., & LeBreton, J. M. (2004). History and use of relative importance indices in organizational research. Organizational Research Methods, 238-257. Mazzocchi, M. (2008). Statistics for marketing and consumer research. New York, NY: Sage . Read More