Systematic Gathering, and Analyzing of Data about Customers - Essay Example

Introduction The future of all successful businesses tends to be heading in the global direction. In order to enter and do business in other countries, a company must develop an international marketing plan, or strategy. A marketing strategy requires market research which allows the company to analyzing a country’s markets, its customers and environments, its spending habits, etc. and knowing the marketing and management methods of the dynamic world market. Market research can be used to determine which portion of the population will purchase a product/service, based on variables like age, gender, location and income level.” Market research involves the systematic gathering, recording and analyzing of data about customers, competitors and the market. This links marketers to consumers by supplying essential information to solve marketing challenges and help with marketing decisions. This market research provides companies with up-to-date information about consumer needs and desires, current trends in the market, and what consumers desire. This can lead to a win-win situation as consumers get the opportunity to talk to the providers of products and services and products are developed and improved accordingly. This leads to increased sales. It is crucial that one addresses global issues such as viewing domestic business activities from an international and global point of view before entering a market. An international marketing strategy also assists in cross-cultural communication, cooperative decision-making, and collaborative problem-solving in a multinational corporation management. This leads to cultural homogeneity. Interaction and integration, global norms, and ideas or practices all become united. It is important that the management of a multinational corporation work together to overcome boundaries and differences and to be able to communicate, cooperate, and collaborate in order to effectively work together, communicate, make decisions, and solve problems as a single entity as a successful marketing plan increases globalization which in turn brings the world together. This case study analyzes Beiersdorf, an international company and innovation leader, combining market research with new product development on its NIVEA Deodorant brand to provide exciting new products that better meet consumer requirements. Case Study In today’s world, there are numerous of products on the market. In fact, there are too many products and brands to mention as it seems that just about every single thing imaginable has already been invented and available for sale. Due to technological advances, the Internet has provided tools for that businesses can use to create their brand and deliver the image that it wants consumers to have regarding their products like never before. So competition is fierce and companies must come up with new ideas that will make their products more desirable to consumers. Combining marketing research with new product development allows a company to develop products that will meet the needs and wants of consumers, which in turn will help increase demand and sales. Wikipedia (2008) defines market research as “the process of systematically gathering, recording and analyzing data and information about customers, competitors and the market. Its uses include: to help create a business plan, launch a new product or service, fine tune existing products and services, and expand into new markets. Market research can be used to determine which portion of the population will purchase a product/service, based on variables like age, gender, location and income level.” Market research involves the systematic gathering, recording and analyzing of data about customers, competitors and the market. This links marketers to consumers by supplying essential information to solve marketing challenges and help with marketing decisions. Market research helps a company create and develop an up-to-date and relevant portfolio of products. To reiterate, the market research and new product development was extremely interlinked in the development and launching of NIVEA’s new deodorant for young females. This case study explains how Beiersdorf, an international company, formed a Market Research Team with dedicated Research Managers to be the voice of consumers within the organisation. This Research Team was the key in the development of a new NIVEA Deodorant called Pearl and Beauty which was aimed at young women (ages 18-35). They employed top-quality market research, analyzed, and used the data which was gathered on consumer behaviour, needs, attitudes and opinions. This assisted in minimizing the risks involved in making marketing decisions. Businesses exist in a fast-moving world with increased consumer choice. Nowadays, many companies are driven by the wave of globalization to bring their brands in to the international arena. Entering new countries requires companies to develop an international marketing strategy which is geared specifically for the country that the company wishes to enter. Due to computer mediated communication (CMC), such as the Internet, 3G phones, and WAP, information of fashion delivery from country to country is now quicker and quicker. CMC has allowed companies to develop marketing strategies and to enter international markets. Across countries, consumers are different in terms of culture and lifestyle. NIVEA’s challenge was to find similar insights from consumers across different countries. Along with market research and the latest technology, Beiersdorf could optimize product development. Beiersdorf’s deodorant brand NIVEA already had a strong presence throughout the world. A brand is also considered to be a trademark or a product line. It is a distinctive name which addresses, or identifies, a product, service, or a manufacturer. People purchase a certain brand in order to acquire a distinctive category and to show ownership of the brand that they favor. People purchase a certain brand in order to acquire a distinctive category and to show ownership of the brand that they favor. The name of the organization can also serve as a brand. The brand value reflects how a products name, or company name, is perceived by the marketplace, whether that is a target audience for a product or the marketplace in general. (Free Definition: Define Brand, 1998-2004.) The objective of branding is not to try and get potential clients and customers to select one company’s products over another. Its purpose is to make the company visible to the target market in order that the target market will see the company as being able to meet a need and provide a solution. Other words that are used interchangeably with the term branding include symbol, design, sign, and term. Knowing the target market is very crucial in determining the marketing plan and all the steps that are required in doing so. A company’s target market comprises of the people, which the company wishes to gain the attention and business of. The target market is the focus of the company. In this case, NIVEA’s target market was young females. An analysis can define their target market by characteristics such as psychographic, demographic, and geographic. Lake (2006) lists questions that are helpful in conducting a marketing analysis: 1. Who is your target audience? 2. Where is your target audience located? 3. What do they think about your current brand? 4. What would you like them to think about your brand? 5. How will you attract them to your products or services? 6. Who else is competing for their loyalty and devotion? 7. Are you targeting business or consumer sectors? A marketing analysis requires that the condition of the market be evaluated. Market conditions create barriers that get in the way of a company’s success. Barriers prevent the company from achieving its aims and goals. These include: supply and demand (particularly lack of demand), location, competitors, financing, and timing. NIVEA used many secondary research sources to discover consumers’ views and their need for deodorants. Secondary research can be defined as research that has been completed by another person(s). The limitations include the availability of data is not available everywhere as compared to primary research and data. Language differences can limit the understanding of data especially when comparing different markets in two or more countries. Information, text, and reports can be hard to locate as secondary data is not very well classified and organized. Also, secondary data may not provide correct information especially compared to primary data. The secondary research used by the Market Research Team included a consumer Usage and Attitude study. This had been conducted a few years earlier across various markets (UK, France and USA). An external study by Fragrance Houses was also used. This covered the importance of scent and fragrance to people’s well-being and mood. Primary research was also used as the secondary research did not provide enough current consumer information and primary qualitative research focused on key markets (Germany, France, UK and USA). The aim of this research was to understand the motivations for using deodorant amongst the female consumer. Research was in the form of small discussion groups of females. Researchers wanted to learn the beliefs and motivations of their target market. The main findings include: • There is steady growth in females shaving. These young women wanted to look after their underarms throughout every season and not just the months of summer. • Women cared increasingly about the condition of their underarms. • Women desired attractive, neat underarms as this his symbolises sensuality and femininity. • The deodorant segment remained focused on functional rather than beautifying products. The market research from primary and secondary methods revealed an unexplored market potential for NIVEA Deodorant. The brand did not have a specific product that addressed ‘underarm beauty’ for the female consumer. No direct competitor was offering a product to meet these needs. So there was a clear opportunity to develop a new product. This would fit across different markets and with the current NIVEA Deodorant range. The company can turn these consumer insights into product concepts. Consumers showed a need for a ‘beautifying, caring deodorant’. The team generated ideas on how to address the consumer need. From these ideas the marketing team created ‘product concepts’. These concepts describe the product benefits and how they will meet the consumer needs. Several concepts were written in different ways. These explained and expressed unique product attributes. Women ages 18-35 were found to beauty-orientated, followed fashion, and looked for products with extra benefits. Because Beiersdorf is an international company, it must perform testing in more than one country and must determine the best international marketing strategy to employ in order to best appeal to its global market. Quantitative research on the concept was carried out in two test markets--France and Germany. Monadic testing means that the respondent of the test is only shown one concept. This stops the respondent being biased by seeing many variations of the same product concept. Monadic Revisited (n.d.) defines it as “one product is evaluated for a specified period of time after which respondents are asked to evaluate the product over a range of criteria.” The criteria that were used to test the concepts included: 1) Deodorant category performance measures: wetness, dryness, and fragrance. The new concept must deliver generic core benefits. 2) Product attributes specific to the new product and NIVEA core values. The new Pearl and Beauty product has additional benefits to a ‘regular’ deodorant; i.e., it leaves your skin feeling silky and gives you beautiful underarms. Consumers needed to understand and see these benefits. 3) The product needed to be relevant and motivate a consumer to purchase it. It is evident that the relationship between consumer insights and product concepts is very crucial. This can make or break the success of a new product. The team determined that the best concept would be to convey beauty while remaining relevant to the deodorant category and maintaining the NIVEA brand (and branding). Brand management, according to Wikipedia (Last modified 2006) is applying various marketing activities to a certain product, product line, or brand. The goal is to increase customer’s perceived value of the product or brand. A brand promises a level of quality and the job of marketers is to increase the perception of the brand and the level of quality that customers and potential customers have come to expect. The next step in this market research and product development was brand management which involved testing various name ideas for the product and working on package designs. Packaging design plays an important role in helping to communicate the image of the product. Pearl and Beauty was the name selected as it seemed to communicate femininity and sophistication. Pink was a natural colour choice for the packaging. They also used a soft pearlescent container to emphasise the ‘pearl extracts’ in the product. The decisions that were made were based on the goal to increase the perceived value of the new product and that is beauty with functionality and performance. Different design ideas were tested with quantitative market research. What is Quantitative Research (2006) define this type of research as “…to measure how many people feel, think or act in a particular way…There are various vehicles used for collecting quantitative information but the most common are on-street or telephone interviews.” This assisted in predicting the amount of sales, sales price, actions necessary in switching from the existing NIVEA deodorant, and analyzing the competition. Regardless of the amount of money spent on marketing and advertising, products that do not deliver and meet promises can cause a product launch to fail. Filek (2001) refers to Rackham (n.d.) stating the importance of focusing on what a product does above all else in order to have a successful launch. Filek states, “If you want your product launch to be successful, Rackham suggests that product marketing should concentrate on pointing out what the product does to solve the customer’s problems and meet his needs.” This supports the importance of products meeting up to their promises. A product usage test was implemented. The Dictionary of Marketing Terms (2008) states that the purpose of a product usage test “…involves giving a prototype or pilot plant product to persons or firms in the intended target market and asking them to use it for a time and report their reactions to it. The purposes of a product use test are (1) to see if the item developed by the organization has the attributes prescribed for it, (2) to learn whether it satisfies the market needs that were identified during the ideation process, and (3) to disclose information about how and by whom the item is used.” A de-branded sample of the proposed new product was given to the target consumer of females in several countries. De-branded means the deodorant was in a blank container so that the consumers did not know who made the product or what type it was. Neniaf (2008) posts a blog at yahoo! xtra answers her definition of the word debrand, “To brand something is to associate an identity (name, logo, set of qualities, etc.) with it, so to debrand something would be to remove such an identity.” Very often consumers form opinions about products and services from advertising and packaging. This can sometimes be very strong and creates a bias in what they think of a product before trying it. Tremblay (2005) reports, “Advertising influences consumers in different ways…advertising changes consumer tastes through persuasive means…” Nowadays it seems that the only way to avoid any form of advertising is to isolate oneself and live in a cave but not all advertising is negative and bad. It is found almost everywhere such as just by walking on the street, driving a car, or watching TV. Ference (2004) reports, “Every surface that could possibly have an ad slapped on it -- clothing, buses, taxis, myriad walls and billboards, even the snow you ski on -- now hawks something.” The directions for the participants were to apply the ‘de-branded’ deodorant under their right armpit and to continue to use their current deodorant under their left armpit. In doing so, the users could better gauge if it was as good as, or better, than the brand they normally used. This gave a measure of how likely the consumer would be to swap brands. The results of the test were positive. Most consumers loved the fragrance and the feel of the product on their skin. They felt it performed as well as their current deodorant. Most said they would swap their brands after trying the product. Now the marketing team had a new product idea that consumers liked. It had a name and packaging design that were well received. They now needed to check how this fitted with the rest of the NIVEA Deodorant brand positioning and range. Improving a brand helps to create a competitive advantage and gain more brand loyalty. Having customers who are loyal to a certain brand is the key to a company’s success. When a company can obtain customers who are loyal to its brand, this is extremely advantageous as the customers are the ones who will do the advertising and the selling. The company does not have to work as hard. The brand position is the specific niche in the market that the brand defines itself as occupying. The NIVEA Deodorant Pearl and Beauty adds a touch of feminine sophistication and elegance to the NIVEA Deodorant brands personality. This built on the core deodorant positioning and has made it more appealing, modern and unique to trendy, young female consumers. People are bombarded with advertisements, sales pitches, and offers to purchase every single day. Just take a look at newspaper and magazine ads, billboards, and radio and television commercials. Focus on telemarketing calls at the front door and on the telephone. Look at the posters at malls and stores. Surf the Internet for just a few minutes. View the labels on products. The demand for people’s business and money is a non-stop and competitive cycle. A strong brand strategy should cause the company to stand above the rest and be attractive to the target market. This is accomplished by grabbing the hearts and minds of the potential and existing customers. Hogeboom (2000-2006) discusses the tugging and pulling of the emotions, “Mountain Dew (soft drink), Roxy (surf culture fashion), Volcom (skateboarding), and Boost Mobile (cell phones) are examples of powerful, emotionally driven youth-oriented brands. The success of all of these companies is attributed to the weight that their brands carry in the marketplace and their ability to motivate purchase intent.” Regarding advertising, qualitative research was also employed. The team worked with an advertising agency in order to develop communication that would successfully launch the new product. Qualitative research was conducted on some advertising ideas that were gathered amongst various groups of the target consumers. It presented ideas in the form of ‘storyboards’ of what a TV advert could look like. The objective was to evaluate which advertisements were best ideas in terms of: • Did they stand out as exciting or different? • Were they relevant to the consumer? • Did they communicate the right things about the new product? • Did they persuade the consumer to want to purchase the product? Once the product is launched and the consumer can actually purchase it, the research process does not stop. Part of a successful research process/market strategy is constant monitoring, feedback, learning what works and what does not, making changes, and adjusting to a dynamic global worldwide. Strategies to measure the product’s performance, customer feedback, advertising success, and so on are crucial because this is a long-term issue and important to the continuous success of the launch. Monitoring, feedback, communication, and crisis prevention can be accomplished instead via the World Wide Web (WWW) and computer-mediated communication (CMC). The WWW is a hypertext communication system. This means that the text is not linear and is linked to other text. It includes graphics, sound, and video. The WWW is also a hypermedia communication system. This means a combination of text, video, graphics, audio, animation, etc. It incorporates multimedia into documents that contain imbedded hyperlinks. So the information that is available to the user is very vast and ongoing. Therefore, what is going on with the product and consumer trends can be found, examined, responded to, and monitored even more so due to the use of CMC. With all of this going on, we now have a virtual cultural that does exist. The virtual culture is based on text and it is known as being “virtual” because an individual does not actually go to the company and/or physical place of training but still can gain access to the training information. Mizrach (2000) defines the term virtual, “…the word carries a sense that what is going on is less than true, or, as it might be put another way, totally fake or unreal. Thus, "virtual reality" becomes a bit of an oxymoron. It might be better called "virtuality" - the state of being real-like”. Continuous consumer tracking can be carried out to find out consumers’ views of the new product. This involves interviewing people to find out whether they are using the product, what they think of it and why they would purchase it. Beiersdorf uses other, secondary data sources such as consumer panel data and EPOS (electronic point of sale) data. These monitor the sales effectiveness of the product throughout the launch phase and through the product life cycle. In conclusion, the qualitative research was extremely successful in helping NIVEA to develop the Pearl & Beauty brand. The company used the needs, desires, and insights from the direct source—the customers. They developed the product, its design, the advertising, the marketing strategy, and continuous monitoring and feedback from the customers. It started with the customer and will continue with the customer first in mind. Throughout the NPD process, market research is a valuable tool for Beiersdorf to check viability and minimise the risk of the product launches. Being an international company, it is essential that Beiersdorf develops new products using the insights of consumers across markets and cultures. This ensures the products are relevant to a large number of global consumers and will deliver the maximum return when launched. This maximises return on investment for the company and results in happy, satisfied and loyal consumers. By combining qualitative research in its new product development and using all of its resources (including CMC and more traditional forms of communication such as newsletters and mailings, etc.) the company has a top advantage over its competitors. However, right now there seems to be no competitor for this new line of deodorant. The company let the consumer determine what it is that they need and will want to buy. This truly is a win-win combination for all! Bibliography Brand Management (Last modified 2006). Wikipedia, the free encyclopedia. Retrieved December 3, 2006, from http://en.wikipedia.org/wiki/Product_management Dictionary of Marketing Terms (2008). Retrieved April 3, 2008, from http://www.marketingpower.com/mg-dictionary-view3671.php Ference, A. (2004). Advertising Sucks, It’s Everywhere…Do Something. The Black Table, 07/01/04. Retrieved April 5, 2008, from http://www.blacktable.com/ference040701.htm Filek, J. (2001). Why Most Product Launches Fail. March 2001 Presentation Newsletter. Neil Rackham. Retrieved April 2, 2008, from http://www.impactcommunicationsinc.com/pdf/nwsltr_2001/ICINwsltrpr0103.pdf Free Definitions: Define Brand. What is a Brand? (1998-2004). Retrieved April, 1, 2008, from Hogeboom, R. (2000-2006). Gen-Y Brand Strategy. Retrieved November 15, 2006, from http://www.marketingprofs.com/login/signup.asp?source=/4/hogeboom2.asp. Lake, L. (2006). How to Define Your Brand. Retrieved March 29, 2008, from Mizrach (2000). Annotated Webliography. Retrieved April 6, 2008, from http://selfneta.blogspot.com/2006/08/annotated-webliography.html Monadic Testing Revisited (n.d.). Retrieved March 29, 2008, from http://209.85.175.104/search?q=cache:aTEDVNubmHkJ:www.stratprice.com/articles/14Monadic_Testing_Revisted.doc+what+is+monadic+testing&hl=en&ct=clnk&cd=7&gl=us Neniaf (2008). Retrieved April 4, 2008, http://nz.answers.yahoo.com/question/index?qid=20080328122922AATdFnu Quantitative Research (2006). Retrieved April 2, 2008, from http://www.marketresearchworld.net/index.php?option=com_content&task=view&id=11&Itemid=64 Tremblay, V. (2005). Advertising, Price, and Supermodularity. Retrieved April 4, 2008, from http://oregonstate.edu/dept/econ/research/advertising.pdf Wikipedia.org (n.d.). 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