Market Research Aids Marketing Strategy

Marketing strategy is a method of focusing an organization’s energies and resources on a course of action which can lead to increased sales and dominance of a targeted market niche. A marketing strategy combines product development, promotion, distribution, pricing, relationship management and other elements; identifies the firm’s marketing goals, and explains how they will be achieved, ideally within a stated timeframe.

Marketing strategy determines the choice of target market segments, positioning, marketing mix and allocation of resources. From the above definition it is very clear, for any marketing strategy to be successful; a lot of information is required. This information can come in the form of secondary or primary data. However, it is important to note the difference between secondary and primary data.

Secondary data is data collected by someone other than the user. Common sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research. Whereas, Primary data, by contrast, are collected by the researcher conducting the research.

Both primary and secondary data are useful in aiding the formulation of an effective marketing strategy. It is important to note that market research in this case plays an integral part by providing the much needed market insights to aid formulation of an effective marketing strategy which is customer/client oriented.

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Market research an integral part of business strategy

Market research is an integral part of any business process. It is critical to comprehend one’s business thoroughly and this can be done by collecting and analyzing information that contributes to a more holistic understanding of consumers, market niches, and marketing programs. Market research aids in providing important information and in guiding business strategy.

The essence of a good business strategy cannot be over emphasized. All firms, from one-person start-ups to global conglomerates, should have a strategy.

Following a good, distinctive strategy will ensure that a business builds, maintains, and continually strengthens a specific identity in the marketplace.

Market research information (market insights) will aid in coming up with a market oriented business strategy. In order to succeed in your business, it is prudent to ensure every decision you make in growing your business is supported by market insights (market research). In order to stay ahead of your competition this year, you may need to consider commissioning the following surveys:

Perception Survey

The purpose of conducting a Perception survey is to understand how your brand is viewed in the market, what brand attributes are preferred by customers, and to identify how your customers competitively position your products/services.

Customer Satisfaction Survey

Customer satisfaction is essential to the survival of every business. The question is how do we find out whether our customers are satisfied? The best way to find out whether your customers are satisfied is to speak to them. When you conduct a customer satisfaction survey, it is important to address all key service and product areas. This way you will get important feedback regarding on how you are faring in terms of meeting your customers’ needs.

Employee Perception Survey

An Employee Perception Survey (EPS) is an employee attitude survey that provides an important view of your company through the eyes of your employees. This survey allows employees to give honest, confidential input about their job and your company. This discreet feedback provides a powerful tool for understanding and meeting employee needs. Employees that are satisfied and motivated perform better, leading to improved customer loyalty.

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How to write an Effective Market Research Brief

Market is defined as the systematic and objective collection and interpretation of data to help reduce risk in marketing decisions. In order for marketing research to effectively address identified marketing problems, the problem definition must be clearly spelt out. This means before you put pen to paper to write a research brief you need to be clear on what you want to achieve by carrying out market research survey.

This means you need to have a well defined marketing problem, with clear and concise objectives. There are several reasons why companies conduct market research; a company may decide to do market research to identify opportunities for business growth and expansion. A good research brief must clearly address the following elements:

Research Background – under this section you need to give a brief synopsis of the company and its product portfolio. This should be detailed enough to give enough information to the researcher to understand your company and what business it is involved in.

Research Objectives – every research project should have defined and explicit objectives which clearly states why the research is being carried out. All other aspects of planning and carrying out the research flow from these objectives; in other words if they do not contribute towards achieving the objectives they almost certainly should not be undertaken. The objective should relate to the marketing decision which will have to be made or the problem that needs a solution (and decision).

Remember a problem well defined or understood is a problem half solved. Your research objectives must be clear and well articulated, to ensure the core issues of the marketing problem are well understood by the researchers. Remember if the research objectives are not well defined, the research output will not address the marketing problem, thus the information will not be useful.

Research Scope – This section you need to again clearly define the research scope in terms of geographical coverage, sample size and your target respondents. You need to be as precise as possible to ensure when the research is done the researchers will be able to speak to the right respondents, i.e. your target market. It is important to be precise with regards to target respondents in terms of descriptor variables. Specify age, gender, Income level, Religion, Social Economic Class and residential status i.e. high or low density locations, Urbanization i.e. urban, semi urban or rural.

Research Methodology – Depending on your level of market research knowledge, you can suggest the methodology you would like the researchers to apply. But if you are not very sure, it is important to ask the research agency to propose a suitable methodology that will help in addressing the marketing problem.

Action Standards – Under this section you will state what you intend to do with the research output. For instance if you are conducting a customer satisfaction survey, you may use the research output to come up with a Customer Satisfaction Index (CSI), which you will be tracking over time.

Having stated the above, I think you should be able to get a good proposal from a research agency clearly stating how they would be able to address your marketing problem. In the next post I will be talking about what a good market research proposal should address in response to a market research brief. As usual your comments and suggestions are welcome.

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shielding your company from global recession through market research

Many adjectives have been used to describe the current economic turmoil gripping the world. Some people have described it as the worst economic down turn of this century, while some have likened it to past epidemics that ravaged this planet many years ago.    What is this thing called Global Recession? A global recession is a period of global economic slowdown. The International Monetary Fund (IMF) takes many factors into account when defining a global recession, but it states that global economic growth of 3 percent or less is “equivalent to a global recession”. By this measure, three periods since 1985 qualify: 1990-1993, 1998 and 2001-2002.With the current economic situation, many businesses need to understand consumer purchasing behaviour. As household and personal incomes continue to shrink due to increasing prices of basic commodities, a lot of consumers are now operating on a shoe string budget, which means spending habits are also changing faster than anticipated by sales and marketing people. The best way to understand and keep in sync with consumer habits is to keep in touch with the pulse of the consumer in order to understand product categories that are being affected by this sudden shift in their spending behaviour.

The economy has altered buying habits – creating more price sensitive consumers, who are looking for less expensive alternatives, reducing spending and increasingly buying only necessities. However, the question most marketing executives should be asking is whether these trends are secular, in other words are there permanent; or cyclical, meaning likely to revert to previous patterns once the economy improves? Moving forward, consumers are starting to replace some of that lost wealth by increasing their savings, and some of this increase in savings is often cited in one of the causes in the dip in consumer spending. As consumers reduce spending to recoup and reinforce their investments, it is important for businesses to be on top of their game to ensure that they get a share of the consumer’s purse. There are several cheap ways of keeping abreast with what is happening in the consumer’s world. The cheapest way is to use self completion forms to establish customer satisfaction levels. However, this method has its own pitfalls, most customers may not have time to complete the forms or staff may tamper with the forms. The best way is to hire a market research agency to run an independent survey to gauge customer satisfaction levels, establish existing gaps in terms of service and product offering. This data will help management in coming up with strategies that will ensure customers patronize the business despite  limited resources at their desposal.

Market research during global recession

Recession is defined in the marketing literature as a “process of decreasing demand for raw materials, products and services, including labor” (Shama 1978) or as a “state in which the demand for a product is less than its former level” (Kotler 1973). Recession calls for marketing managers to use strategies to stimulate consumer demand. Such strategies often require a redefinition of the target customers and the marketing mix. This may include narrowing the product line, offering cheaper products and quantity discounts, lowering prices, increasing promotion, and offering products directly to consumers.

In order to know which direction to take, marketing managers will need to be guided by market research. This is very important as marketing budgets are becoming tighter due to constrained resources. The concept of marketing is defined as a process that is intended to find, satisfy and retain customers in order for the business to make a profit. However, it is important to note that central to all these definitions is the role of the customer and his relationship to the product (i.e. whether he considers the product or service to meet a need or want). Market research is imperative for a company to know what type of products or services would be profitable to introduce in the market. Also with respect to its existing products in the market, good market research enables a company to know if it has been able to satisfy customer needs and whether any changes need to be made in the packaging, delivery or the product itself. This enables a company to formulate a viable marketing plan or measure the success of its existing plan.

As the global recession takes a toll on businesses worldwide, market research is key in helping managers sustain their brands. Research will assist managers to create blue occeans in order to sustain their businesses. 

Role of Market research in business

The task of marketing research is to provide management with relevant, accurate, reliable, valid, and current information. Competitive marketing environment and the ever-increasing costs attributed to poor decision making require that marketing research provide sound information. Sound decisions are not based on gut feeling, intuition, or even pure judgment.

Marketing managers make numerous strategic and tactical decisions in the process of identifying and satisfying customer needs. They make decisions about potential opportunities, target market selection, market segmentation, planning and implementing marketing programs, marketing performance, and control. These decisions are complicated by interactions between the controllable marketing variables of product, pricing, promotion, and distribution. Further complications are added by uncontrollable environmental factors such as general economic conditions, technology, public policies and laws, political environment, competition, and social and cultural changes. Another factor in this mix is the complexity of consumers. Marketing research helps the marketing manager link the marketing variables with the environment and the consumers. It helps remove some of the uncertainty by providing relevant information about the marketing variables, environment, and consumers. In the absence of relevant information, consumers’ response to marketing programs cannot be predicted reliably or accurately. Ongoing marketing research programs provide information on controllable and non-controllable factors and consumers; this information enhances the effectiveness of decisions made by marketing managers

Traditionally, marketing researchers were responsible for providing the relevant information and marketing decisions were made by the managers. However, the roles are changing and marketing researchers are becoming more involved in decision making, whereas marketing managers are becoming more involved with research. The role of marketing research in managerial decision making is explained further using the framework of the DECIDE model:

D’ —- Define the marketing problem

E’ —- Enumerate the controllable and uncontrollable decision factors

C’ —- Collect relevant information

I’ —- Identify the best alternative

D’ —- Develop and implement a marketing plan

E’ —- Evaluate the decision and the decision process

The DECIDE model conceptualizes managerial decision making as a series of six steps. The decision process begins by precisely defining the problem or opportunity, along with the objectives and constraints. Next, the possible decision factors that make up the alternative courses of action (controllable factors) and uncertainties (uncontrollable factors) are enumerated. Then, relevant information on the alternatives and possible outcomes is collected. The next step is to select the best alternative based on chosen criteria or measures of success. Then a detailed plan to implement the alternative selected is developed and put into effect. Last, the outcome of the decision and the decision process itself are evaluated.

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