Core Concepts of Market Intelligence and Its Practical Application in the Supermarket Industry - Report Example

REPORT ON CORE CONCEPTS OF MARKET INTELLIGENCE AND ITS PRACTICAL APPLICATION IN THE SUPERMARKET INDUSTRY Introduction This report is presented to a new client of ISR who needs to know and understand some basic elements and aspects of market intelligence. Therefore, the report will provide information about important elements and aspects of marketing intelligence and how it can be gathered and utilised under a number of different headings 1.1 The Main Stages in the Consumer Purchase Decision-Making Process There are five main stages in the consumer purchase decision-making process. The first stage is a need-recognition or a problem recognition phase. It includes the identification of the need for a given product. This includes the desire to satisfy a particular need or requirement. The second stage is an information search phase. This includes the acquisition of internal and external information about the various options that are available on the markets. The internal information includes what is in the customer’s memory, like brand. The external information search includes the quest for information about possible products on the market. The third stage of the consumer purchase decision-making process is an alternative evaluation. Here, the consumer examines and reviews the options on the market. This includes the consideration of different variations of the same product. The fourth stage is a purchase decision which is the choice of one product over another on the market. The final stage of the purchase decision-making process is the post-purchase behaviour. This is about loyalty and other connections that the client builds to the product. Therefore in the supermarket industry, a consumer might have the need for a given bathing soap. Once that need is recognised, the consumer gets to the first phase. After that, the consumer moves to search for information. In the beginning, he is going to remember some popular brands that he has used and find new products. This is the second stage. In the third stage, he will have to assess the options. And this will lead to the fourth stage of making a choice. After choosing, the last stage of building a perception on the product and making future choices will follow. 1.2 Theories of Buyer Behaviour in terms of Individuals The individual purchasing behaviour theory states that there are three core elements that determine what and how a consumer purchases – time, money and effort. These three pointers play a significant role in defining the extent to which a consumer can spend time on the markets to examine possible products for meeting a particular need. Also, the amount of money at the disposal of a consumer determines the kind of niches the consumer will want to search. A very wealth consumer might search upmarket niches whilst a medium-wage earner might want to go for ostentation or less expensive products. On the other hand, a poor consumer might be limited to the cheapest brands available. Finally, effort refers to the extent to which a consumer is willing to go to secure the best product. This is strongly related to value and importance of the product. For instance, a consumer might want to visit many supermarkets before purchasing a washing machine because it will be used for a longer time. On the other hand, a consumer might be okay with just a few searches for an everyday soap. 1.3 Evaluate the Factors that Affect Buyer Behaviour The primary factors that affect a buyer’s behaviour various social features of the consumer that varies across various features including buying habits, living standard, social environment, income status, social status and other desires (Kotler, 2010). This includes different pointers that vary across the circumstances of the individual in question. These sociological factors define the personality of the consumer and they intervene in the life of the consumer in an interesting way and manner. The main factors that affect buyer behaviour include (1) set of motives (2) alternative courses of action and (3) decision mediators (Baker, 2011). A buyer’s behaviour will first of all be affected and influenced by his or her motive. What a writer wants and what he desires is an internal motivation that strongly influences the things and requirements a writer has or expects of a given product. The second element includes the alternative options and the alternatives available to the consumer. Therefore, the consumer will look at the different possibilities of getting the product and pursue it. Finally, the main factors and issues relevant to the decision to purchase and buy the product will be another important factor that will affect the behaviour of a given consumer. This is because the relevant matters and the important pointers relating to the product or decision to buy the product defines the way and action a consumer will want to invoke or utilise in getting the product in question. 1.4 Relationship between Brand Loyalty, Corporate Image and Repeat Purchasing Brand loyalty refers to a measure of the degree within which a buyer recognises, prefers and insists upon a given brand (Motiwala, 2012). It refers to a strong connection and linkage that a consumer builds to a given brand or product. A brand loyalist is one that is satisfied with a given product. Hence, the individual continuously purchases the given brand. This is where repeat purchasing plays a role in brand loyalty. This is because consumers continuously purchase from a given producer and this producer provides a given service or value that the consumer cannot get anywhere. Corporate Image refers to the feelings, moods, emotions and connotations, evoked by a brand (Motiwala, 2012). This includes the kind of sentiments that induces brand loyalty. 2.1 Different Types of Market Research Techniques There are different approaches and views through which marketing research can be construed. One approach is to view marketing research as exploratory research or conclusive research. Exploratory research is about the gathering of primary information about various factors on the market. Conclusive market research is about gathering information to confirm a given research. This includes the gathering of information about a matter for which some basic information is already known. There could also be qualitative and quantitative marketing research. Qualitative uses theoretical and conceptual ideas to formulate information. On the other hand, quantitative marketing research is steeped in the need for facts and figures to confirm different ideas and concepts. 2.2 Secondary Data for the Achievement of Marketing Research Objectives Secondary data refers to information that are presented by research works and conclusions that are done by third parties. This could include information from other people’s research as well as intelligence from books, journals and other studies. These provide important information and data that can be of significance or construed to deal with a given project or activity. The advantage of secondary data is that it is cheap and does not require too much research experience to gather data. However, the downside is that the data is very general in outlook and sometimes, it could be misleading and might not even be relevant to the issue at hand, but a mainstream process or procedure that is too general to lead to logical conclusions. 2.3 Assessing the Validity and Reliability of Market Research Findings Validity is about the extent to which the findings of a given research reflect the realities or the relevant factors on the ground. Validity has to do with the processes and the approaches utilised in studying the variables of a given research – this is the internal validity of a market research. External validity on the other hand refers to the actual processes and activities that were conducted in order to gather information and interpret the information in order to draw a conclusion. Reliability is about the extent to which the methods and approaches provide a conclusion that is consistent and can be replicated over similar variables in future. In other words, a reliable market research system is one in which the researcher get a kind of finding that will be the same as other findings if the same methods and instruments are used to study the same phenomenon over and over again. 2.4 Marketing Research Plan to Obtain Specific Information in a Supermarket If a supermarket needs to conduct a market research there is a format that this market research should follow. This includes the following five steps: Step1: Problem Definition In the first place, there is the need for the writer to create awareness. This includes the identification of general matters and trends and the generalization of these processes to fit the supermarket industry. From there, there will be the definition of the core aims and objectives of the research and this will include the identification of real and actual measures that are necessary for the conduct of the study. The aims and objectives will translate into specific, measurable, attainable, realistic and timely targets that ought to be met by the researcher within the resource constraints allotted. Step 2 Research Design and Scope At this point, the specific variables of the study and the research will have to be defined and discussed. This will culminate in the design of a research and a study of the matter in order to evaluate the process and conclude it. The scope of the study and the extent to which the research work will be conducted will follow. Step 3 Field Work It is rare for a researcher to cover 100% of the entire population of a marketing research. Therefore, there is the need to examine and critique a section of the population that represents the total. This includes the definition of an appropriate sample and the definition of a logical and systematic pattern for gathering the data and analyzing it. Once this is done, the research must go to the field and gather data in order to present it for further analysis. Step 4 Data Analysis When a fieldwork is completed, there is the need to classify the data and group it into different segments. From there, there will be the identification of major patterns and processes in the data in order to show logical trends. Step 5 Findings/Conclusions When the patterns are grouped and presented, they are reviewed and analysed in order to draw a conclusion that answers the fundamental research questions and meets all the aims and objectives of the research. 3.1 Assessing Market Size and Trends Market size is measured by the total volume of sales in a given market. Market size is about the total volume or value of trade or sales in a given market. This is done by examining the number of units of goods and services that are sold in a given industry. This is done by assessing the sales value and the worth of sales of these goods and services. Market size gives rise to the concept of market share which shows the percentage of sales that are attributable to various competitors or players in the industry. Market trend is about major patterns and major movements that are relevant to the market due to the change of material factors and variables. Market trends are defined as per the relevant circumstances of a given market. The UK’s grocery market is worth £174.5 billion as of April 2014 (IGD, 2014). Asda holds 17% of the market share whilst Sainsbury holds 16.6% of the market share. However, the main trends in the market include convenience stores, discounters and other online sales outlets. 3.2 Plan and Carry out a Competitor Analysis for an Entity (Sainsbury’s) Competitor analysis is normally carried out by the utilisation of the Porter’s Five Force Model. Therefore, to examine Sainsbury’s position, which makes it a leading firm in the UK supermarket industry, the five force model can be employed to provide some logical conclusions and trends. Threat of New Entrants: It is quite easy for businesses to enter the supermarket industry. However, for a supermarket to grow to the level of Sainsbury would take many years and a lot of resources and effort. This means the threat of new entrants destabilising Sainsbury’s is very low. Threat of Substitutes: This implies consumers will look for other means to acquire their groceries and products through other means like online shops and other small sales outlets that provides products and services. Sainsbury’s offers very good prices for its products. This is because they control production systems and cycles and can dictate prices by presenting very good offers to consumers. To this end, the threat of substitutes is highly minimal. Buyer Integration: This includes the possibility of buyers of their services, integrating and forming a firm as powerful as Sainsbury’s this is also minimal. Supplier Integration: This is very minimal and less likely because Sainsbury’s relies on a large group of many buyers who cannot possibly cooperate in the foreseeable future. Competitive Rivalry: On the other hand, the main rivals of Sainsbury’s are the large supermarket chains like Tesco, Asda and others who control similar levels of capital and exert similar levels of influence on the markets. 3.3 Evaluate an Organisation’s Opportunities and Threats (Sainsbury’s) Opportunities Sainsbury’s sits on a huge capital base and an asset base. That makes it a company that has enough resources and can expand significantly to other parts of the world without issues. They made a profit of 40 billion British Pounds and that makes it one of the most viable business. This gives them the chance to expand. Another opportunity is to expand and take over the online marketing framework and online markets through the sales of their products over the Internet. Threats The main threat to Sainsbury’s is a lock up of vital capital and assets in environmental and green issues. This does not seem to have an immediate financial value. There are threats relating to numerous regulations and rules that could change the company’s affairs and this could lead to major requirements and problems on the market. 4.1 Evaluate Techniques for Assessing Customer Response There are numerous techniques and processes necessary for gauging and evaluating consumers’ responses. This includes: 1. Monitoring of sales trends: Here, a firm will be able to examine the volumes of sales and the preferences of consumers in order to deduce the kind of products consumers want and those they do not really want; 2. Consumer Feedbacks: This can be taken from surveys and other processes that will enable a seller to understand the kind of feelings a consumer gets by consuming a product; 3. Industry Specialist Interviews: There are numerous interviews that can be conducted by allied industry authorities that can give a fair view of what consumers want and need. 4.2 Customer Satisfaction Survey This is a customer satisfaction survey for consumers of the new in-house brands of a supermarket chain called UK Super. In line with this, the following questionnaire will be presented to consumers with five questions. Dear Sir/Madam, In our quest to promote an improved service for UK Super consumers, we will like to take your submissions of what you think about the Super House brands which are the new in-house brands we are offering for sale. We will appreciate if you take time to fill out the questionnaire. You have to answer each question by ticking a point from 1 to 5. 1 is very low whilst 5 is the highest. And this is expected to take just 3 minutes of your time. Question 1: How do our in-house products compare to other products in terms of quality? Question 2: How do you compare our in-house products in terms of the prices? Question 3: How do you like the packaging of our in-house products? Question 4: To what extent do we need to improve the quality and appearance of our products? Question 5: How do you compare our in-house products to other in-house products of a firm. This was sent out in a mock interview and there were 20 responses. This is presented below 1 2 3 4 5 Comment Q1 3 1 3 7 6 Our Products have a very high quality Q2 5 7 4 2 2 Our prices are very low Q3 3 4 2 8 3 Our packaging is also good Q4 2 4 3 5 6 It is commendable that we improve the quality and appearance Q5 4 7 3 2 4 The quality we have is lower and we have to improve it in relation to our competitors 4.3 Review of the Success of a Completed Survey The survey of UK supermarkets was conducted by Which, a UK industry reviewer (Which?, 2013). This culminated in the following results: This survey culminated in over 11,000 responses. This was measured according to the Likert scale which placed consumers’ opinions from 1 to 5 with one being the lowest and 5 the highest. The findings reflect the realities on the grounds because the participants were carefully chosen and they were vetted appropriately. The questions were arranged to present information on value for money and other ends. This showed a clear pattern that led to grading of the findings. References Baker, M. J., 2011. Marketing: Critical Perspectives on Business and Management. 3rd ed. London: Taylor and Francis. IGD, 2014. UK Grocery market to be worth 203 biolion pounds by 2019. [Online] Available at: http://www.igd.com/about-us/media/igd-news-and-press-reseases/uk-grocery-market-to-be-worth [Accessed 31 March 2015]. Kotler, P., 2010. Principles of Marketing. London: SAGE . Motiwala, P., 2012. The Dictionary of Marketing. London: Lulu Publishing. Which?, 2013. Best and Worst Supermarkets Revealed. [Online] Available at: https://press.which.co.uk/whichpressreleases/best-and-worst-supermarkets-revealed/ [Accessed 31 March 2015]. Read More