The Role a Marketing Research Could Play in Understanding the Market - Essay Example

A MARKETING RESEARCH PROPOSAL This proposal outlines the role a marketing research could play in understanding the market and of promoting a businesswith the help of the right market strategies, such as consumer behaviour and market segmentation. It contains the details of a market study that will be conducted to investigate the markets of North east regions and the ways in which the market can be segmented. It also contains the details about how a market survey conducted can be used to gauge a consumer’s behaviour and attitude towards high risk sports holidays. THE PROBLEM AND OBJECTIVES The know-how of how to target markets or segment markets based on consumer’s preferences is a relatively tough job to do but it is crucial for the company of Graham Elliot, who has the required experience and knowledge about high risk sports and the location where he wants to introduce adventure holidays. However, he is unsure about how to segment markets in the region and is also relatively unaware of the consumer’s attitude towards the business. The segmentation of a market will allow the company to know the prospects of the business and to allow it to know the group of people who will be most interested in the business. This detail about the market will enable the company to work on gaining the highest return on its investment. The trends in purchasing, attitudes and behaviour of consumers also needs to be studied. The company also needs to know how the business of adventure holidays can be promoted once it is established. HYPOTHESIS The research conducted in the North East Market will help the company to know which types of consumers prefer adventure holidays. It will help the company of Graham Elliot to target markets to maximize their profits. The research will state whether skiing and mountain biking in the Isere and Drome Valleys will be feasible and the responses of the consumers in Ardeche and Verdon Gorges of introducing canyoning and climbing in the region. It will help in segmentation of the market and target marketing for road biking in areas of Les Deux Alps and Mount Ventoux. The research will also give a general idea of the kinds of adventurous sports that can be also introduced in the later years to promote the growth of the business and to gain a competitive advantage over the rival companies. The research will also enable the company to know the pricing strategies to be used in comparison with the rival company’s. TYPE OF STUDY Exploratory research will be carried out to help with the investigation. Consumers will be interviewed one by one as to their opinions, preferences, the changes they would like to see and their general attitudes towards adventure holidays. The adventurous sports of skiing, bungee jumping, canyoning, mountain biking, sailing, snowboarding will be compared according to the tastes of people and their age brackets. The marketing research will then turn to a descriptive level. Descriptive level research deals with market characteristics. The number and size of market segments will be studied and the attributes and features of competitive companies will also be investigated. There can be a relationship between the geographical location of consumers and their tendency to go on and enjoy adventure holidays. The areas in South of France are blessed with a warm and sunny Mediterranean Sea. St.Tropez, Port Grimaud and St Maxime are some of the locations that are considered picturesque. The northern and northwestern parts of France have a moderate climate. Because of the sea, a coastal climate prevails in the south east of France. Near the sea, the land experiences high level of rainfall, mild winters and cool summers. As the inland of France, people experience hot summers and less rainfall, there can be a tendency in people of going to adventure and activity holidays in the northern areas. The mountainous regions remain covered with snow for months and experience freezing temperatures which can allow for snowboarding. TIME SCALE AND COST The time scale will be of around 4-5 months with the costs being incurred will be as follows: Website forms: $ 500, Organization and analysis: $700, Questionnaires: $300, Telephone charges: $500, Postal service charges: $400 and the use of extra labour: $ 1100. Total cost incurred will be around $3000. SAMPLING Carrying out a survey of every single potential consumer of the company’s product would be impractical, time-consuming and costly. However, the need of primary data still exists and this can be collected by taking a sample of the population. This sample group will be made up of consumers that are representative of all potential buyers of the product. There are a number of ways in which different samples will be chosen. Random sampling will give each member of the group an equal chance of being chosen. It means, the sample of people will be selected randomly, with everyone having an equal chance of being chosen. Its main advantage is that bias cannot be introduced when choosing the sample. However, not all members of the population of the same, as this method assume. A small sample may not have the characteristics of the population so a large sample may need to be taken but it would costly and time consuming. Stratified random sampling is when the sample taken is divided into segments or strata based on previous knowledge about how the population is divided up. Here, the sample can be divided into different income groups, such as higher managerial and professional occupations, small employers and “own account” workers etc. A random sample will then be chosen from each of these groups making sure that there is the same proportions of the sample in each category as in the population as a whole. Quote sampling involves the population being segmented into a number of groups which share specific characteristics. These will be based on the age and gender of the population. The target will be to interview 10 males between the ages of 18 and 25 and 15 females between the ages of 15 and 30. This method is cheaper to operate than many others. It is useful when the proportions of different groups within the population are known. It is not randomly chosen, however and the results are not statistically representative of the population. Cluster sampling will also be appropriate which involves separating the population into clusters, in different geographical areas in this case. A random sample is taken from the clusters, which are assumed to be representative of the population. This leads to quick results. For sampling of people in this case, cluster sampling and quota sampling will be a better choice than the other methods as it will be quick and cheap. RESEARCH DESIGN Field or primary research involves collecting primary data. This is the information which does not already exist. The data going to be collected is not known by any other firm or source so it can be used to gain a marketing advantage over other companies. However, it is time consuming and can be a bit misleading. A sample of people will be selected from the region that will be thought of as representative of the total market for adventure holidays. The study will be limited to a particular age group of people. Normally, 3 age groups will be formed. People with their ages between 0- 15, 15- 40 and people with their ages over 40 will be interviewed accordingly. This will give us a broad idea of how to segment the market. The general attitudes, likes, interests and lifestyles of consumers will be asked in a questionnaire or a survey in one of the northern cities. On the spot interviews will help us to know the opinions of the consumer in a very cheap way. However, it will be a limited study and may be biased. Lengthy questions will have to be kept aside for questionnaires. For other geographical areas, telephone will be used to interview people and to ask about their comments on introducing adventure holidays and to gauge the current trends in the buying of adventure holidays. Telephone interviews are cheap and can be a good way of randomly knowing the opinions of customers. Postal surveys may also be used to send questionnaires to people who were not interviewed on the spot. Questionnaires will also be prepared with some of the leading questions being “Do you prefer activity holidays more than adventure holidays”. “Suggest some of the ways in adventure holidays can be made to appear more attractive to people” or “How many adventure holidays have you taken in the past?” Secondary research can also be helpful if IT-based research is also carried to better the knowledge about the geographical conditions of the area and spending patterns may also be analyzed from the use of credit cards and loyalty cards. Consumer’s views can also be known in an interactive way through websites and forums and both the positive and negative views can be assessed informally. Qualitative and quantitative research will both be used for a better interpretation and conclusion of the results. The company of Graham Elliot can consider segmenting the market by age. There could be a vast variation in tastes between different age groups. People falling in the 15-40 categories are most likely to benefit from adventure holidays. People who are older than 40 might consider it too risky while the people who are younger than 15 might consider it too dangerous. The company could also consider segmenting the market in the north by gender. Most of the adventure holidays may be enjoyed by males but the company can focus on special holiday packages for female to target the market. Most importantly, the market can be segmented by income. People earning above a certain level will be able to afford the adventure holidays so they should be the target market for the company. However, special discounts can be offered to the other group of people to strengthen the stance of the company in comparison to the rival company’s. One of the most obvious segmentation is through geographical region. People living in the northern areas are more likely to take advantage of these adventure holidays then people living in the inland. Segmentation by family characteristics is also possible by observing the lifestyle of certain families and considering what type of families are more into sports and holidays while what kind of families are the indoor types. Purchasing trends can also be considered to segment the market. This segmentation of market along with consumer behaviour will lead us to the results that will enable the company to measure from which portion of the market it will earn its highest benefit and its increasing attention should be towards retaining their portion, while also designing new ways to attract the rest of the market share. EXPECTED RESULTS The results those are likely to show up after the primary and secondary research will be that people within the age bracket of 15-40 will be the one who will look forward to having adventure holidays, with the larger number of people being male. They are likely to belong to high income groups who can afford the holidays and who have been going to such holidays in the past. Geographically, people living nearer to the locations will be the ones who would like to benefit from the holidays, as it will save them the cost of travelling. However, people living in other regions might be equally enthusiastic about the idea of adventure holidays, despite the added cost of transportation. BENEFITS The benefits of conducting a marketing research are many. It is an aid to decision making. It allows the business to make informed decisions, which is a requirement in the fast-changing world markets. Businesses operating in such markets need to be flexible, responsive and need to adjust their operations accordingly. Market research reduces risk for the business that would otherwise grope in the dark for the launching of a product or entering into a new market. Even though the results are not guaranteed, but it does give a general and broad picture of the market demand and response for the product of the business. This way, businesses are less likely to employ unnecessary capital and waste resources on failed activities if proper market research is carried out beforehand. Market research is way businesses can interact with their potential consumers. Without proper research, a business may never know about the needs and wants of their consumers and their views. They will find it difficult to identify future trends in their existing markets and they might even lose their potential customers if they fail to take account of their changing needs and requirements. Market research is also important for the growth of the business in an ever increasing international market. In global markets, it is practically impossible for a business to survive without a proper market research. The vast number of customers and their tastes are likely to have a big impact on the working of the business and it will be better for its operations to know what these tastes are. Market research will also improve the public image of the business. The consumers will feel wanted and are more likely to bring their friends and families into buying the product. It will also create brand loyalty which will ultimately benefit the business by increasing its returns on investment. LIMITATIONS If market research was totally dependable, businesses could use marketing research when introducing or changing products and then be completely confident as to how consumers would respond to them. This would mean that all new products launched onto the market which had been launched in advance, would be a success. Similarly, no products would flop because business would receive advance warning from their research and take any necessary measures. Businesses want to be sure that the data they collect is reliable. One way of checking the reliability of data is to pose the question, ‘If the information was collected again would the same of broadly similar results be obtained?” Thus businesses need to be completely sure of the data they collect, in order to act on it. There are a number of reasons why primary data may not always be accurate and reliable. One of the factors is of human behaviour. Market research involves, observing, inquiring and reporting about consumer behaviour but that varies considerably with time. The sampling discrepancy may also occur which will render the data collected unreliable. If a sample is not large enough, it may not be a representative of the whole population. Bias could also creep in through questionnaires, sampling and interviews. Unreliability may also occur with secondary data which may be out-of-date and inaccurate. The company of Graham Elliot should know the details of the market research before acting on it. The idea of venturing into adventure holidays may be risky as the target market is limited but the experience of knowing about high-risk sports and the suitable locations might help. References: Day, G. (1980) “Strategic Market Analysis: Top-down and bottom-up approaches”, Marketing Science Institute, Cambridge, Mass. Green, P.E., Tull, D.S and Albaum, G (1893), Research For Marketing Decisions, 5th edition, Prentice-Hall Kerlinger, FN. (1994) Foundations of Behavioural Research, 1st edition, Holt, Rinehart and Winston McKenna, R.(1988) “ Marketing in the age of diversity”, Harvard Business Review. Pine, J. (1993) “Mass customizing products and services”, Planning Review Read More