Marketing Research as a Base for Formulating Marketing Decisions - Assignment Example

1). Explain the ways that Internet has affected and changed how marketing research is undertaken. Marketing research is fundamental in formulating marketing decisions – the decisions of what consumer segments to serve with what products/services, at what price, through which channels, and with what type and amounts of promotion. (Wrenn, Loudon & Stevens, 2002, p. 1) It builds extensive internal database so that decision makers can identify marketing opportunities and problems as well as plan programs, and evaluate performance. Today, particularly in the backdrop of globalisation, marketing research has been revolutionized by technology, mainly via the Internet. This is specifically highlighted in the role that the Internet plays in data-mining – the most important aspect in marketing research. Key approaches to marketing research offered by technology are the opportunities it offers to the firm to collect information from customers and other stakeholders. According to Wind, Wind and Mahajan (2001): Many sites collect data on consumer Internet shopping paths, options they consider, the information they seek, and their final choices. This information not only provides deeper insight on how to design products and service offerings and marketing strategies, but also is a new source of revenue for firms that sell the collected data. (p. 19) Harris Black International found that online research could indeed predict population behavior. This has been documented by Duboff and Spaeth (2000), and to quote: In 1998 the company attempted to forecast the outcome for gubernatorial and senatorial races in 14 states by using both its traditionally successful telephone survey method and comparing its results with those of an online survey… The result: The Harris Election 1998 Experiment correctly predicted the winner in 21 of 22 races. The average error projections for the 44 main candidates came out slightly less than 4 percentage points, which they reported is nearly identical to the average error for telephone polls for similar elections. (p. 266) The above information are just few of the data collected about market behavior. And the huge amount of data gathered could be processed, accessed and analyzed with the speed unimaginable thanks to data management applications offered by technology and the Internet. This process could take years when done manually or the services of an army of analysts. A case in point: The Barbie Web site allows a young girl to customize-design her own Barbie doll. This feature is called Section Fun and all the activities herein, as with all websites, are logged – from the demographics to the visitors’ preferences. This fact helps Mattel to effectively offer designs that meet the diversity and individuality valued by its contemporary market. In the 21st century, for instance, Mattel is able to offer NASCAR Barbie and veterinarian Barbie based on popular Barbie makeovers within its website. The Internet also provides unique means for targeting market segments and gathering information about their preferences. For instance, www.minority.net assist companies in their minority marketing and research efforts; www.americandemographics.com helps companies determine the potential size of the African American, Hispanic American, and Asian American web-user markets. The speed of the Internet communication addresses the changing consumer preferences, competitive dynamics, and other interrelated aspects of the global business environment decreasing the risk of a business organization’s marketing strategies. 2). To what extent does international marketing Research differ from Domestic Marketing Research? Businesses adopting international marketing strategies have decided to take their existing products and services to markets away from their domestic base, or to develop different products and services for these non-domestic markets. In doing so they have to respond to opportunities and threats in markets exhibiting different characteristics and behaviour to the domestic market. Sally Dibb and Lyndon Simkin (2004) said that international marketing involves understanding how business responds to environmental opportunities and threats in markets of very different configurations and underlying behaviour to home markets. (p. 219) The processes and decisions that international marketing requires is the identification of what the customer needs and wants, to produce products or services that has a differential marketing advantage – one that communicates information about these assets and to distribute and exchange them internationally through one or a combination of exchange modalities’, outside the organization’s domestic market. Marketing can be conceived as an integral part of two processes – technical and social. So far as technical aspect is concerned, international and domestic marketing are identical. This area includes non-human factors in marketing such as product, price, brand, packaging, warehousing, costs etc. What this tells us is that the basic principles regarding variables have universal applicability. On the other hand, the social aspect is a different story as we talk about the involvement of human elements, namely, the behavioural pattern of the consumers and characteristics of the society such as customs, attitudes, values, etc. And so while international marketing may be the same as domestic marketing in terms of technical aspect, it is visualised as a social process, an area wherein the two differ According to Harris and McDonald (2004), the main difference between international marketing and domestic marketing relate to the barrier to cross-frontier trade particular those relating to legal, economic, geographic and cultural considerations. (p. 71) They underscored the fact that with the former, the main drivers are the interactions between buyers and sellers as they seek to establish networks for production, promotion, distribution and after-sales service that deliver outcomes which are acceptable in an environment that is fast changing because of developments in the competitive and technology environments as well as the cultural dynamics involved. Indeed, there is a more complex marketing environment in international marketing than in domestic environment because of the differences in legal, economic and cultural conditions of the countries where a business organization operates. Besides the differences in government systems, legal systems, monetary systems, and mobility of factors of production, there is a huge discrepancy in terms of market characteristics. Kumar stressed that each country must be taken as a separate market with differing characteristics (i.e. in terms of culture and geography) that are accentuated by the existence of government controls and regulations. (p. 7) The marketing of tobacco products, represented principally by cigarettes, illustrates for us a case where international marketing techniques are employed: Applying marketing methods successfully honed in advanced economies, marketers transform local markets, creating new demands and increasing cigarette sales. In the US, the tobacco campaign is different with the growing concern among consumers regarding health and the adverse effects of tobacco for consumers. In developing countries, however, consumers are attracted to anything American, and promoting the Western lifestyle and linking these cigarettes to the United States became the focus of marketing campaigns. 3). Do reference groups influence buyers purchase decisions? Use examples to illustrate your answer. Different people influence each of us and we particularly value the opinions of others as we formulate our own decisions. Thus, each of us has our own reference groups that serve as benchmarks in marketing for evaluating purchase decisions. Peter and Donnelly (2002) referred to the reference groups as the groups that an individual looks to (uses as reference) when forming attitudes and opinions. (p. 45) Reference groups may on occasions be far more influential than mass advertising in determining what brand of product is bought, because such process carries more credibility and perhaps more pressure to conform. A person normally have several reference groups and technically they are classified into primary or direct and secondary reference groups. Primary reference groups include family and close friends, while secondary reference groups include fraternal organizations and professional associations. (Parks, Quarterman & Thibault, 2007, p. 233) The extent of reference-group influence varies widely among individuals. According to Boone and Kurtz (2005), strong influence by a group on a member’s purchase require two conditions: 1. The purchased product must be one that others can see and identify. 2. The purchased item must be conspicuous; it must stand out as something unusual, a brand or product that not everyone owns. (p. 163) Here, I underscore the fact that a person normally has several reference groups or reference individuals for different purchase decisions. For instance, someone may consult one reference when buying a camera and another reference when buying an mp3 player. Reference-group influence would significantly affect the decision to buy a Jaguar but it would have little or no impact on the decision to purchase a loaf of bread. The status of the individual within a group produces three subcategories of reference groups: a membership group to which the person actually belongs, such as a political party; an aspirational group with which the person desires to associate; and a dissociative group with which the individual does not want to be identified. (Boone & Kurtz, p. 163) The nature of the product and the role the individual is playing during the purchasing process, wrote Peter and Donnelly, influence which reference group will be consulted and that such influence is generally considered to be stronger for products that are public or conspicuous - products that other people see and appreciate the individual using such as clothes and cars. (p. 45) Children are the easiest to persuade in the context of influence exerted by reference groups. Boone and Kurtz argued that they usually base their buying decisions to outward forces such as what they see on television, opinion of friends, and fashionable products among adults. (p. 163) This is perhaps the reason why celebrity endorsements are regarded to be more effective in children, in part because children want badly to belong to aspirational groups. Culture or the membership in it is also considered as reference group. One must not forget that each of us is embedded in a national and ethnic culture. As a personality of the community we live in, it colors our values, expectations, attitudes and opinions. References Boone, L. and Kurtz, D. (2005). Contemporary Marketing. Thomson South-Western. Dibb, Sally and Simkin, Lyndon. (2004). Marketing Briefs: A Revision and Study Guide. Butterworth-Heinemann. Duboff, Robert and Spaeth, Jim. (2000). Market Research Matters: Tools and Techniques for Aligning your Business. John Wiley and Sons. Harris, Phil and McDonald, Frank. (2004). European Business and Marketing. SAGE. Kumar, N. (not dated) International Marketing. Anmol Publications PVT, Ltd. Parks, J., Quarterman, J., and Thibault, L. (2007). Contemporary Sport Management. Human Kinetics. Peter, Paul and Donnelly, James. (2002). Preface to Marketing Management. McGraw-Hill Professional. Wind, Jerry, Wind, Yoram, and Mahajan, Vijay. (2001). Digital Marketing: Global Strategies from the Worlds Leading Experts. John Wiley and Sons. Wrenn, Bruce, Loudon, David and Stevens, Robert. (2002). Marketing Research: Text and Cases. Haworth Press, Inc. Read More