Marketing Research as an Essential Tool for Effective Marketing - Essay Example

MARKETING RESEARCH BY Executive Summary Marketing research stipulates the information needed to deal with these issues, formulates the techniques for collecting information, directs and implements the data collection process; interprets the results and communicates their findings and implications. Basically marketing research is the arrangement, gathering and interpretation of data related to marketing decision making and the communication of the results of this interpretation to the management. Marketing research has two basic parts in the marketing of an organization. First, as an element in the marketing feedback progression, marketing research offers decision makers with information on the usefulness of the existing marketing strategies and provide comprehension of the required modifications. Second, marketing research is the most important instrument for discovering new opportunities in the marketplace. Research plays a significant role in the development of marketing strategies for all kinds of organizations. Similarly, marketing research is essential for recognizing the target market for a product or service along with the effectiveness of pricing strategy, promotional activities and distribution of the products and services. Thus, marketers should consider marketing research an essential tool for effective marketing. Businesses, in the cotemporary world, are very different from those of the past. Business today is far more aggressive in their search of success. With the development of the Internet, competitiveness has gone global. A business that wants to continue to be competitive and be successful will need to understand the products and services that their target market needs and desires. This kind of information can only be obtained from marketing research. Not only will they need to understand what products and services should be introduced in the market, but also the success of their existing products and services. Information regarding what the company is doing right and what it could use to make their products and services better is fundamental to a business’ success. Therefore, it is only with the accurate information that companies can develop their marketing strategies or adjust the existing ones (Pride & Ferrell 2007). Philip Kotler (2006) defined marketing as “a social and managerial process by which individuals and groups obtain what they need and want through developing, providing, and exchanging products and services of value with others. It is the process of planning and performing, pricing, promotion, and delivery of ideas, goods, and services to generate transactions that fulfill consumer and organizational objectives.” This definition suggests that marketing entails more than just an individual activity such as a sales or promotion. Effective marketing needs managers to understand the interrelatedness of these numerous activities and how they can be combined to develop an effective marketing program. Therefore, Kotler again suggested that marketing management is achieved by conducting marketing research, planning, execution, and control. Consequential marketing and strategic planning depends on management’s capability to develop and uphold an information collection system and have the capacity to conduct successful marketing research (Kotler & Keller 2006). According to McDaniel and Gates, marketing research is the “process which connects the consumer, customer, and the public to marketer through information; information used to discover and define marketing opportunities and problems; produce, improve and assess marketing actions; examine marketing performance and enhance understanding of marketing as a process.” Marketing research stipulates the information needed to deal with these issues, formulates the techniques for collecting information, directs and implements the data collection process; interprets the results and communicates their findings and implications. Basically marketing research is the arrangement, gathering and interpretation of data related to marketing decision making and the communication of the results of this interpretation to the management (McDaniel & Gates 1998). Managers require data for the purpose of launch products and services that have significance in the customer’s mind. But the perception of value is a subjective one, and what customer value at present might be fairly different from what they value in the future. As such, the characteristics that generate value cannot merely be assumed from common knowledge. The aim of marketing research is to offer details and guidelines that managers require to make their vital marketing decisions. Conducting marketing research before introducing a campaign allows companies to swiftly make well-informed decisions regarding where their marketing budget should be spent, rather than using the best guess approach. It is an influential instrument that makes a marketing campaign successful. It is a great starting point in the establishment of marketing strategies and tactics.  It offers rich insights to facilitate businesses to recognize how target audiences view the company, brand, category, product, service or idea (and those of the competitors) (Aaker, Kumar & Day 2001). Marketing research has two basic parts in the marketing of an organization. First, as an element in the marketing feedback progression, marketing research offers decision makers with information on the usefulness of the existing marketing strategies and provide comprehension of the required modifications. Decisions that hold a huge amount of risk such as new product launches need a great deal of research. Second, marketing research is the most important instrument for discovering new opportunities in the marketplace. Segmentation research and new product research help recognize the most profitable opportunities for an organization (Pride & Ferrell 2007). As the word research suggests, it is a process of gathering information not presently available to decision makers. The purpose of marketing research is to notify the organization about the customers’ needs desires, marketing prospects for certain goods or services, and shifting attitudes and purchase patterns of consumers. Market information enhances marketers’ capacity to react to customers’ needs, which results in improved organizational performance. Become aware of changes in buyers’ behaviors and attitudes, allows organizations to keep in touch with the constantly changing marketplace. Fast-food marketers, from example, would be very interested to be acquainted with the fact that young men of ages 18 to 24 average 20 trips a month to fast-food restaurants, in comparison to 15 trips a month for all fast food diners. The huge amount of money that consumers spend dining out, demonstrate a tremendous prospect for those organizations prepared to invest the resources to appreciate this market segment. Thus, strategic planning needs marketing research to enable the process of evaluating such prospects or threats (Pride & Ferrell 2007). Research plays a significant role in the development of marketing strategies for all kinds of organizations, both large and small, and for profit and nonprofit. The effects of globalization have transformed the world market rules which give confidence to a number of organizations to expand their sales to international markets with the purpose of entering new and potential lucrative market. Even through, marketing research has conventionally been viewed as just one part in the marketing plan, but it is better to think of research as a part of the whole process of developing a marketing strategy (Aaker, Kumar & Day 2001). As previously mentioned, all types of organizations use marketing research to enable them develop marketing mixes to deal with the needs of customers. Marketing research can help an organization gain an improved understanding of market opportunities, determine the potential for effectiveness for new products and services, and verify the viability of a certain marketing strategy. Similarly, it helps in understanding the target market, regarding their demographics, that is, age, income, geography, gender, etc. or their psychographics, that is, leisure activities, values, likes-dislike, etc. Research is the only method marketers can utilize to understand buyer motivation. Once the organization understands its target market and how they think, it can market to them much more effectively. JC Penney, for example, carried out an extensive marketing research to find out more about an important segment of shoppers who were not being effectively reached by department stores; middle-income mother between the ages 35 and 54. The research comprised of asking a huge number of women about their casual clothes preferences. Afterwards, the firm conducted in-depth interviews with the women regarding their clothing requirements, feelings about fashion, and their shopping experiences. The research allowed the company to recognize that this ‘omitted middle’ segment of shoppers was annoyed with the options and quality offered in their price range and stressed out by the experience of shopping for clothes for themselves. Equipped with this information, Penney introduced two new lines of reasonably priced, quality casual women’s clothing. Similarly, a research by SPSS Inc. revealed that most frequent reasons for carrying out marketing research surveys entails determining customer satisfaction, product development, branding, segmentation, business markets, and knowledge, trend tracking and idea testing. Thus, marketing research enables companies to devise more effective and targeted marketing campaigns that talk directly to the individuals they are attempting to reach in a manner that attracts them (Pride & Ferrell 2007).  Similarly, marketing research is essential for a number of reasons, the first is to recognize the target market for a product or service. Rather than wasting billions in conducting extensive advertising and promotional campaigns intended at the greater public, marketing research can help discover sub groups who could not only have the purchasing power but also have other needs or wants. For example Rolex watches are quite expensive and are not as common as Timex watches, by conducting research it is easy to understand that only a small segment of the population can manage to pay for such a luxurious item. In order to get in touch with their target market, Rolex marketing teams have their advertisements placed in magazines such as the economist, Robb Report, GQ, and Forbes, that is, magazines read by industry leaders and professionals, also known as high earners. By targeting the small faction of people, Rolex does not have to throw away cash advertising in local newspapers and magazines but is instead focus on a segment of the market where demand for their product is present (McDaniel & Gates 1998). Another reason why customer needs have to be recognized is the fact that it is not only preferences that are diverse, but that individuals have a diverse perception of quality, an illustration of this is the Auto industry. In Europe the quality and comfort of a car is exemplified by the quality of its interior: leather seats, accessories and fuel consumption. On the other hand, in America the quality is exemplified by the size of the vehicle and engine power. Also in Europe public transportation is more efficient, bicycles are more popular and gas or petrol is more costly, due to which people do not drive a lot and the demand there is for smaller, fuel efficient cars. Previously, American car manufacturers attempted to sell their SUVs in Europe but there was little or no demand for their vehicles, they did not conduct proper research and failed to understand that their products were not cost effective for the European markets (Pride & Ferrell 2007). As previously mentioned, marketing research is an excellent means for finding out opportunities in the market place. It frequently concentrated on discovering and defining market prospects or changes in the environment. When an organization comes across a market opportunity, it might need to perform research to be aware of the situation more specifically so it formulates a suitable marketing strategy. That is what precisely what Dunkin’ Donuts is doing to stay competitive against Krispy Kreme and Starbucks as well as McDonald’s which only just entered the espresso-drink market. A survey of Dunkin’ Donuts customers suggested that they welcomed menu alterations such as iced beverages, espresso drinks and scrambled eggs and cheese on a bagel. The organization’s research also indicated that it should maintain its strategy of focusing on workday busy customers and not compete with Starbucks directly. The company can employ this information to concentrate its efforts on particular target markets and improve its marketing strategies accordingly. Thus, marketing research offers marketers with several opportunities to bond with the consumers and find out about their preferences. These multiple touch points give marketers a chance to generate complete brand experiences through their products and services. As a result, marketing research has revealed an opportunity for marketers to communicate their messages in the drastically changing marketing environment (Pride & Ferrell 2007). Similarly, it is essential to know, for future evaluations, the position of the company at specific moments in time. Constant market research permits companies to make comparisons against benchmark measurements as well as record the companies’ progress between research intervals. Thus, information collected through marketing research facilitates organizations in determining whether they are achieving their objectives (Solomon et al. 2009). Marketing research aids in determination of the composition of existing customer segment. It can study customers’ reasons for buying and it is vital to both expanding the existing market segment and discovering new target markets. Furthermore, it can be carried out to find out if the product is being sold at the right locations. Organizations also need research to verify if a certain product has the benefits that consumes want. Another significant factor that can be determined through research is that whether the product is being promoted successfully. Lastly determining the right price for a product can make the difference between successful and unsuccessful product introduction. Information gathered on all of these dimensions will facilitate organizations to discover where and how they need to get better (Solomon et al. 2009). In due course, the marketing mix must be changed because of modifications in the environment in which consumers and businesses live, operate, battle, and make buying decisions. Some new consumers and companies will become part of the target market, while others will leave the market; those who stay might have diverse preferences, needs, earnings, ways of life, and purchase behaviors than the initial target consumers. Even though managers can manipulate the marketing mix, they cannot manipulate elements in the external environment that constantly change the perception of the target market. Marketing research offers organization the link between its internal structure and the external environment in which it exists. Research is an instrument by which organizations can be aware of how the external environment will influence the organization’s strategies. Unless management is not aware of the external environment, the organization cannot intelligently plan its future, and organizations are generally unconscious of the forces that influence their future. Thus, marketing research is an important tool for recognizing the changes in the environment. Understanding of the environment enables an organization to change its existing marketing mix, according to the needs and wants of the customers (Kolb 2008). Quality and customer satisfaction have turned out to be the most significant competitive weapons over the past few years. Few organizations can flourish in today’s environment without a focus on quality, constant improvement, and customer satisfaction. Businesses around the world have executed quality enhancement and satisfaction plans in an attempt to cut down expenses, keep hold of customers, expand market share, and, most importantly, improve the overall performance. Ritz-Carlton Hotel is well-known around the world for its highest service standards resulting in customer satisfaction. The company constantly gauges customer satisfaction to ensure that it is matching the high standards that the company has set. And pleased customers usually mean repeat visits in luxurious hotels. Quality that holds not important to customers typically does not generate result in better sales, profits, or market share; it stands for wasted effort and expenditure (Kolb 2008). In the present day, the new theme is return on quality, which suggests that the quality provided is the quality required by the target market and the additional quality must have a positive influence on revenue. For example, banking giant NationsBank Corporation gauges every enhancement in service quality, from adding more tellers to providing new mortgage products, in terms of increases success (Solomon et al. 2009). An undeniable connection exists between customer satisfaction and customer loyalty. Long-term relationships do not just occur; they are based on the provision of service and value. Customer retention results in huge revenues for organizations. Powered by recurrent sales and recommendations, profits and market share increases. Expenses drop because organizations spend fewer resources and energy trying to replace defectors. Regular customers are easy to provide because they identify with the company’s operations and make lesser demands on employees’ time. An organization’s capability to keep hold of customers also increases job satisfaction and job security, which results in increased employee retention. In turn, long-term workforce attains further knowledge that improves productivity. A Bain & Company research estimates that a certain percent of reduction in the customer defection rate can greatly increase profits. Another research revealed that the customer retention has a huge affect on the value of the company. The ability to retain customers is founded on a personal understanding of their needs. This information comes chiefly from marketing research. Thus, understanding customer needs is significant in determining how best to provide value and create long-term customer relationships (Kolb 2008).  Understanding the nature of the marketing system is a requirement for a successful marketing orientation. By acquiring a detailed knowledge of dimensions that have influenced the target market and the marketing mix, management can be either act before changes influence the organization or afterwards. Proactive management changes the marketing strategies to suit the up-and-coming behaviors in socioeconomic and competitive environments. On the other hand, reactive management waits for transformation to have a significant influence on the organization before coming to a decision to take action. It is the disparity between seeing the unstable marketing environment as a threat (a reactive attitude) and as an opportunity (a proactive attitude). A number of firms around the world were mostly proactive in newer marketing techniques and customer satisfaction. Marketing research plays an important part in proactive management by enabling firms to predict changes in the market and customer wants and produces products and services to fulfill those changes and needs. A proactive organization not only explores up-and-coming markets but also looks to establish a long-term marketing strategy for the company. A marketing strategy directs the long-term use of the company’s resources based on the company’s existing and predicted internal capacities and on predicted modifications in the external environment. An effective marketing strategy is founded on effective marketing research. It enables the organization meet long-term revenue and market share goals (Solomon et al. 2009). Due to the rapidly changing market, marketing research has become a recognized professional field. Firms are expanding from small local or regional companies to larger multinational corporations. They are selling products and services over a broader geographic area which is making it harder for companies to identify and understand their customers. Therefore, marketing research is playing a significant role in recognizing the customer needs and wants. The real value of marketing research is gauged by enhancements in marketers’ ability to make decisions. Marketers should take care of information in the same way as they take care of other resources and they must weight the cost of acquiring information against the resulting benefits. Information should be considered valuable if it results in marketing activities that better satisfy the organization’s target customers, result in increased sales and profit, or assist the company in achieving some other goal. References Aaker, DA, Kumar, V & Day, G, 2001, ‘Marketing research’, John-Wiley & Sons, Inc., United Kingdom. Kolb, B 2008, ‘Marketing research: a practical approach’, Sage Publications, London. Kotler, P & Keller, KL, 2006, ‘Marketing management’, Prentice Hall, United States of America McDaniel, CD & Gates, RH, 1998, ‘Marketing research essentials’, Thomson South-Western, United States of America. Pride, WM & Ferrell, OC, 2007, ‘Foundations of marketing’, South-Western College Publishers, United States of America. Solomon, MR, Marshall, GW, Barnes, B & Mitchell, V, 2009, ‘Marketing: real people, real decisions’ Prentice Hall, London. Read More