Market Research Issues - Case Study Example

MARKET RESEARCH BENEFITS AND DRAWBACKS (An Analysis) Table of Contents INTRODUCTION RESEARCH METHODOLOGIES Qualitative research methodologies Quantitative research methodologies MARKET RESEARCH BENEFITS · Greater Communication with (Current and Potential) Customers · Identifying Opportunities · Minimizing the Risk · Detecting a Problem at an Early Stage · Tracking Progress · Evaluating Success and Failure DRAW BACKS OF MARKET RESEARCH · Desk Bound Research Problem · Problem with the Interpretation · In-accurate Surveys THE ROLE OF MARKET RESEARCH IN NEW & INNOVATIVE PRODUCTS CONCLUSION REFERENCE INTRODUCTION Market research is defined as an organised attempt to collect and analyse data about the target market to achieve a better understanding. Market research enables to process the data and create useful information to guide the business people in making useful decision. Market research has been growing at a steady rate of 10 percent for the last 30 years and has been recognised by managers as a powerful tool to achieve their objective. When it comes to launching new products, the market research is inevitable tool to be used by big or small companies. Market research is essential for three key areas as described below: Before starting a new business; To maintain the current business and understand the changing trends and needs of the market. And before introducing a new product in the market. RESEARCH METHODOLOGIES The two key research methodologies are as following: Qualitative research methodologies Qualitative methodology focuses on "quality” a term referring to the essence or ambience of something. Qualitative methods are used to understand complex social phenomena. They are suitable to seek knowledge about the fundamental characteristics of a phenomenon under study. It includes focus group among small group through exploratory or explanatory study and gathers information. It tries to understand and answers how and why through discussion and in-depth face-to-face, telephone or online interviews. Quantitative research methodologies Quantitative research is gathering data in quantity. The goal of the quantitative research approach is to find out the truth by using statistical procedure. Quantitative methodology allows readers to understand facts easily by looking at charts and graphs. The use of statistics reduces contradictions, which may exist in research. MARKET RESEARCH BENEFITS Greater Communication with (Current and Potential) Customers Market Research helps in creating better communication with current and potential customers. A good research enables a company to tailor effective and target marketing through various marketing campaigns towards its desired segment. It allows a firm to directly interact with its current and potential customers to understand their needs. Identifying Opportunities Market research helps the businesses to identify potential opportunities, for example before opening a retail outlet or restaurant, the location is very important, especially if there is no competitor in that area. This would be called identifying opportunity. Another example can be offering a service in a location which need such service, such as Amazon, identified an opportunity of online booking selling and in no time, it became successful due to niche in the market.. Minimizing the Risk Market research gives greater confidence in starting a venture as extensive research shows the potential risk and benefits of starting up a business. Even if there is potential opportunity, a good prior research about the product is essential among the potential customers to know the true value of the product. One such kind of example is the launch of famous Viagra, the company identified the opportunity, but for any drug there is a lengthy trial period to know the drug side effects. The company did enough homework and it is no surprise that Viagra is the biggest success in the pharmaceutical industry history. Detecting a Problem at an Early Stage Market research enables the firms to uncover the potential problem in their business. For example a restaurant located in an area which according to new city developmental plan will come under an over fly bridge in two years time. This foreknowledge for management gives time to think ahead of the trouble and find a solution, before it is too late. Tracking Progress Market Research enables a firm to constantly monitor and track its progress by doing constant comparison with the competitors in the marketplace. This examination of progress provides knowledge to the management that where does it stand in the market at a particular time. For example Samsung arrived in plasma TV manufacturing relatively late, but after checking its competitor price, it lowered its price by 20 percent and today its selling the highest number of plasma TV in the market. Evaluating Success and Failure Market research allows business to evaluate their success. The data gathered through market research allows the firms to evaluate their success. If they meet failure still market research tells the reasons of failure. For example one main reason for the failure of the American cars in 1980s was their inability of understanding the consumer mind in the wake of small and smart Japanese cars. Ford recently has to close down a huge bulk of its plants with dismissing 30,000 workers out of work, due its mis-understanding of the auto market. On the other hand Nissan made a record in selling due to study of consumers and market. DRAW BACKS OF MARKET RESEARCH Internal Research Problem One problem with research especially desk based research is that it is done in quite simplistic ways. Normally, the company staff has to conduct study, some times overzealous staff in order to please management bring the study closer to management thinking, even if the market does not favour company wishful thinking. This type of research provides inaccurate knowledge and provides wrong direction to the company, which if not solved can cost the company a lot in the long term. Problem with the Interpretation In the case of qualitative research normally the result of research is not clear. Often there is chance of bias even in the interviews and focus group. For example the interviewer can ask only those questions which are simply meant to extract the answers, which the management want to listen. Normally, this kind of research is done in media or by governments when they desire to propagate specific propagandas among the people. Similarly a few aggressive speakers can easily bully and change the course of focus group discussion leading in the wrong direction with inaccurate data. In the case of qualitative research the data is not based on clear facts and figure and there is greater chance of personal opinion in interpreting the data and reaching a wrong conclusion. In-accurate Surveys Surveys are meant to portray a true sample of population; however again it depends what kind of population is picked during survey. Picking up a wrong segment for survey can also give wrong information. For example if some one wish to open a hardware shop, the better idea would be pick up from the randomly selected population in a given area, rather than asking friends and neighbours to complete the survey form. Or imagine the target population for a survey is 35 to 50, instead of this range, a zealous surveyor who is too desperate picks up any available age group, just to have more surveys form will naturally collect wrong data and without any doubt analysis of this kind of survey will not fulfill its desired objective. THE ROLE OF MARKET RESEARCH IN NEW & INNOVATIVE PRODUCTS Consumers are normally better to comment about the products they like or don’t like, which is very important factor for new products. Market research can uncover such needs and motivations, which are satisfied by the prevailing successful products and could be further satisfied by developing new products. Normally the essential factors for launching new products include consumer characteristics, product category and the intensity of marketing communication. For example it has been observed that consumer try new and innovative products, because some consumers like innovation, which they try in buying new products due to knowledge and usage of the existing products. It has been found through research that the association between innovativeness and new product trail is stronger and new products are normally purchased on impulse. Normally new products have better packaging or they portray newer features, which the current products lack. Marketing research enables the development of new products and services, which meet the consumers needs. The market research methods try all kind of tools to explore the needs of the consumers ranging from surveys to multi-attribute need analysis and collect potential consumers information to identify needs for new products. The next step involves understanding the data and identifying these needs. Thus the fulfillments of these new needs are converted into a new product, which means profitably for the business. Normally it is through preliminary market research and data analysis that manufactures better understand the needs of consumers. Often a few trails of the new product is done to check the variation in customers response. In the case of any shortcoming the new product is re-designed to meet the customers expectation. CONCLUSION The basic principal behind the market research is to help the businesses to make more informed and evidence based decision through knowing the market. Market research is about asking genuine questions to the current and potential customers about the products or services, which a company wishes to launch. It comes through understanding customers opinions and experiences, and interpreting this data to comprehend, how will it impact a firm over all business. In the age of information age, the problem is not lack of information but the interpreting the information. In the hands of skillful analyst, information can become an important asset, which can change a business fortune but in the same data in the hand of journalist may become a creative expression. Market Research is an essential factor to determine a business success. Today world is changing at a fast pace and in this rapid shifting environment, things are changing more quickly, ranging from technology to customers and needs, marketing research meets the need and wants of the people, even though if they are in constant flux. Market research is based on true interpretation, which is utilized to help organisation in reducing uncertainty decision-making. Thus, the real issue about marker research is not being useful or harmful, but how the collected data is interpreted. Thus the present challenge for market researcher is to develop the skills and techniques with a combination of approach and make a smooth story, which is not contradictory, no confusing, but interpret the gathered information in its true essence. REFERENCE: Asher, William (1990), The Role of Statistics in Research, Journal of Experimental Education, Volume: 61. Issue: 4,Page Number: 391 Morgan, George (2000), Research Methods in Applied Settings: An Integrated Approach to Design and Analysis, Mahwah, NJ . H. Fletcher, D. V.L. Smith; (2004), The Art & Science of Interpreting Market Research Evidence, Wiley. Veal, A.J (2000), Business Research Methods: a managerial approach, University of Technology, Sydney, Australia Shaker A. Zahra (1993), New Product Innovation in Established Companies: Associations with Industry and Strategy Variables; Entrepreneurship: Theory and Practice, Vol. 18, 1993 Read More