Consumer Buying Habits for the Products and Services - Assignment Example

? The report has to be prepared in Times New Roman 12, with 5 spacing and page numbering. Table of content must be changed accordingly to the new content Harvard referencing style must be used. Please follow the text according to red marked instructions. You have to improve all the points of this assignment. Table of Contents External Agencies 9 Recommended Option 9 4.1Sample planning process 10 REPORT To: Marketing Manager From: Marketing Assistant – Elena Date: 3rd May, 2012 Subject: Market Research 1.0 Introduction I am the marketing assistant at Heinz, Pennsylvania and I have been asked by the marketing manager to prepare a report on the marketing research strategies of Heinz and the consumer behavior in buying the products of the company. This report is designed to have an insight about an organization that is about to conduct some market research into consumer buying habits for the products and services that this company has for sale. Henry John Heinz, the founder of this company said that he learned from his parents’ idea of business which was, “Deal with the seller so justly that he will want to sell to you again.” He believed in fair play in the business and this quality of him had made him a successful businessman. Heinz is a $10.7 billion global company. The products of Heinz enjoy #1 or #2 market share in more than 50 countries. Every year the company sells 650 million bottles of its iconic Ketchup. Heinz's top 15 power brands are counted as more than two-thirds of its annual sales. There are about 35000 people that are employed by Heinz in almost 50 countries around the globe. Heinz is a responsible corporate citizen dedicated to safe practices, environmental stewardship and giving back to the society (Heinz Company, Pittsburgh, 2012). 2.0 Research Options What is the correct option for doing research either through external consultancy agency for the market research or the option of doing the research in the company itself. 2.1.0 External Consultants Many organizations take the assistance of external consultants in identifying, recommending and implementing change. There have been companies which have been successful while there are some which have failed after having consultancy from external consultants. First, there needs to be cooperation with the consultant from the entire top management and not merely the CEO or a few directors/managers. Next, there cannot be any information that is out of action from the external consultants. The solution to transformation is that complete information about the organization and its strengths and most prominently, its flaws must be visible. The other feature that makes organizations rely on external consultants is since these consultants have knowledge in dealing with companies in similar industries and hence can relate their expertise and experience to advise specific changes. 2.1.1 Advantage of External Consultants 1. External Agencies have research skills that are industry specific. These niche considerations are such that the organization can customize different external agencies to specific internal needs as a means of maximizing their marketing strategy (Joshi 2005). 2. External Contractors have access to target sectors; hence they have underlying knowledge of best practices. Accompanied within this spectrum of understanding are recognitions that industries niches aren’t only accompanied by a specific skill set, but also industry contacts and statistical research that can advance their marketing goals (Joshi 2005). 3. External Agency contractors bring objective viewpoints. The nature of institutional culture has been theorized to have a significant and profound impact on decision-making and company practices. While such uniformity of perspective has noted strategic advantages, oftentimes the external viewpoints that are accompanied with outside agencies can add these fresh and much needed insights (Joshi 2005). 4. They are much quicker as compared to internal research. These agencies have developed streamlining techniques that allow them to more efficiently target specific marketing concerns than an internal agency would. While on a small-scale level an external agency may be cost prohibitive, for larger-scale marketing efforts such streamlining and efficiency functions to make the external agency a better option (Joshi 2005). 2.1.2 Disadvantage of External Consultants 1. External Consultants have possible lack of control inside the organization in which they perform. While organizational culture differs between organizations there is the recognition that an internal agency functions under the direct auspices and directives of the organizations and as such encounters less institutional barriers to knowledge gathering. Conversely, an external organization, while having advantages in terms of niche marketing focus, has the added challenge of navigating internal organizational challenges (Joshi 2005). 2. They have lack of knowledge about the product or service offered. Although many organizations involved in mainstream product advertisements – one considers Coca-Cola or Nike – have services that are fairly simply ascertained, other organizations have more complex products. For instance, CISCO is responsible for marketing oftentimes-complex high technology systems. In these situations the complexity of the system places challenging burdens on external agencies, such that teams of individuals intimately connected with the product development more be more suited to marketing it (Joshi 2005). 3. Agency dynamics can cause bias under specific circumstances. The process involved with niche streamlining, while efficient and effective in many circumstances, also has potential biases. One of the most pervasive recognition is that the external agency has operated so trenchantly within the field of advertising and marketing that are less receptive to out-of-the-box insights that internal agencies could potentially establish (Joshi 2005). 4. The incurred cost of external agents is always high; hence it is a costly decision. There is the recognition that in most situations the external agency costs are higher than internal agencies. While the internal team is composed of salaried individuals that implement internal organizational elements, external agencies operate under their own auspices resulting in overriding costs that exceed the agencies regular practices (Joshi 2005). 2.2.0 Internal Research / In-House Research Market research is any prepared effort to assemble information about markets or customers. It is a very crucial constituent of business strategy. Market research gives important information to recognize and analyze the market need, size and competition. Hence if such research is conducted in house it is more favorable for a company as less secrets and confidential information is leaked out. Hence it gives a broad scope of designing any product that cannot be perceived by any other competitor company (Keller 2009). 2.2.1 Advantages 1. Marketing research captures the data needed to assist shape product features, production counts, customer-service needs and effective advertising strategies. Within this perspective the internal research is not simply developed as a means of product marketing, but an extension of the process of product development (Keller 2009). 2. Working with research firms requires somewhat rigid guidelines and research requirements. As mentioned earlier the rigid guidelines associated with research firms can oftentimes create an atmosphere of tunnel vision. The internal agency is able to adopt a more free form style of development that in many situations is more open to creative insights and new approaches (Keller 2009). 3. Hiring external firms for marketing research may be more expensive than using corporate employees. The recognition in these regards is that salaried internal employees provide strategic advantages to the specific internal agency, rather than contracted external agencies (Keller 2009). 4. Internal employees tap product, development and support staff for in-depth product knowledge, questions and advice. The internal agency has a built in organizational staff that has developed chains of communication with inter-organizational agencies (Keller 2009). 2.2.2 Disadvantages 1. An internal marketing division is exposed to employee beliefs about company offerings from the time products are conceptualized. Just as external agencies may be a victim of tunnel-vision internal organizational culture may create a singular belief on the company’s products that restricts growth and development (Keller 2009). 2. External marketing research firms may have access to proprietary software, research pools and expert analysis not available within the company. Oftentimes such software can be cost prohibitive to organization’s attempting to develop a single internal marketing campaign. Additionally, industry contracts and supply chains are developed over a period of time (Keller 2009). 3. External marketing firms have contacts in multiple geographic locations that can confine and conduct effective marketing research targeted at present or potential customers. Centralized marketing departments have difficulties conducting research in all markets where their products may be placed (Keller 2009). External Agencies External agencies include all the legal bodies that are in any way connected to the operations of the company. It defines the business laws and business regulations along with the corporate governance of the company. It has been viewed that the market has been open to Heinz as far as the legal issues are concerned. Heinz has been established to be clear of any legal charges and free of any litigation in all the countries where it operates. This clarifies the accountability of the company and indicates that the corporation is well aware of the regulations and operates in full accordance of the legal bounds (Saul Estrin, 2004 ). Recommended Option Ultimately, this report recommends that the market research advance through the implementation of an external research agency. This recommended option for the research therefore comes out to the technological and political issues. The consumer behaviors and the purchasing habits of the consumers are greatly affected by the changes in the political and technological factors. We observe that the people tend to buy more of a thing or a commodity if it is well advertised. Moreover, if a commodity is available at the same price even in great political commotion, the consumers are most likely to buy that product showing loyalty to the specific brand. These issues need to be managed in a way that it should become profitable for the company and that the company keeps maintaining its position world over (Pederson, 2008 ). The specific decision to advance with an external agency to accomplish these tasks is contingent on the recognition that the scope of the investigation spans multiple regions. Additionally, the product is not high technology and as such the general idea can be conveyed without much challenge to the research agency. These elements place a benefit over the internal approach, as the size of the operation would be logistically prohibitive to accomplish internally. 4.1 Sample planning process Step1 – Define the population of interest. Defining the population of interest involves a complex series of considerations regarding the research goals and the study’s validity. The underlining recognition is that the population of interest reveals direct insights into research problem (Keller 2009). Step2 – Determine whether to sample or census. The difference between sample and census is significant. While the census involves an examination of responses from the entire country, the sample size only considers a specific segment of the population. This decision is contingent on the ultimate goals of the research (Keller 2009). Step3- Check availability and suitability of sampling frame. The sampling frame refers to the specific part of the population from which the sample will be drawn. Concerns related to this include if sampling methods from this portion of the population are available, as well as how effectively they will directly contribute to the research problem (Keller 2009). Step4- Select appropriate sampling method -probability -non- probability The difference between probability and non-probability sampling are significant. While in probability sampling every individual in the population has the same chance of being sampled, in non-probability sampling it is not feasible to test every member of the sample population. Step 5- Determine the sample size. It is necessary to consider sample size as too large a sample is cost prohibitive and unnecessary, while too small a sample size will not establish accurate results. There are formulas implemented to determine the specific sample size needed (Keller 2009). Step6- Implement sampling procedure. There are a variety of different sampling procedures. The sampling procedure is chosen in relation to the specific research aims of the study, as well as feasibility concerns (Keller 2009). 5.0 Sampling Method The specific sampling method that will be implemented is quota sampling. While quota sampling has drawbacks in terms stringent accuracy and potential bias, in the context of this specific research it functions as both the most efficient and makes the most cost sense. Quota sampling occurs as the population is divided into exclusive sub-groups (Given 2008). The sampling professional then will use non-probability sampling in selecting specific members of the population from these subgroups. This non-random sample has weaknesses but in terms of Heinz’ overarching marketing research needs functions effectively. Within this context of understanding, Heinz is a multinational enterprise that must gain knowledge of the entire country as a means of product design and development. The non-probability quota sampling method will allow the marketing team to gain a strong perspective from the national sample population in a way that is both cost effective and operationally feasible (Given 2008). References Debbie J. K. (2006). H. J. Heinz Company. Arcadia Publishing. Boston. Given, L. (2008). The Sage encyclopedia of qualitative research methods. Los Angeles, Calif.: Sage Publications. Heinz Company, Pittsburgh. (2012). Heinz. Retrieved from Heinz: http://www.heinz.com/ Isobel R. L. (2004). International Marketing Strategy: Analysis, Development and Implementation. Thomson Learning. Pennsylvania. Joshi, R, (2005) Marketing, Oxford University Press, New Delhi and New York Keller, K. (2009). "1". A Framework for Marketing Management (4th ed.). Pearson Prentice Hall. New York. Bourlakis, M. (2004). Food supply chain management. John Wiley & Sons. New York. Pederson, J. P. (2008). International Directory of Company Histories. Gale. Illinois. Estrin, K. M. (2004). Investment strategies in emerging markets. Edward Elgar Publishing. Santa Clara. Urip, S. (2010 ). CSR Strategies: Corporate Social Responsibility for a Competitive Edge in Emerging Markets. John Wiley and Sons. New York. Read More