|
We live in a time when information is everywhere as it has never been before. There is nothing new in this. It is well known that the third technological revolution started not long ago but is well under way (agricultural and industrial were the first two). But, ironically, now that it has become such a commodity with companies sailing oceans of information, we all tend to ignore its real value. It is simply too much, too unfocused, too available. In other words, if before information was very difficult to find, today it is very difficult to filter.
Marketing is a relatively young business discipline that is constantly changing and growing as its techniques become more widely used and accepted. Most of the disciplines of the Marketing Mix are 'pure common sense' and their application should be the focal point of any business activity. In this context, market research is often seen merely as information gathering when, in fact, if done properly, it can make a huge contribution to a company's understanding of its products/services, its markets and its overall business strategy.
But, if market research is not just gathering information, what is it? If we define Marketing as the profitable satisfaction of market needs, then it is obvious that an understanding of both our markets and the needs of consumers is a requirement. Therefore, market research serves two clearly defined purposes:
- Reducing uncertainty when plans are being made
- Monitoring performance after plans have been executed
Market research applications
In the short term, all organisations need to keep up to date on a day-to-day basis with the complex and changing business environment. In the long term, all companies (that is those likely to survive) need to have the answers to the three classic strategic marketing questions embedded in their plans at all organisational levels. These are: Where are we? Where do we want to go? How do we get there?
Both short-term and long-term perspectives of the business reality ride on the same basic principle: to know you need to learn; to learn you need to discover; to discover you need to search.
Let's start by having a look at the different applications market research has from a broad marketing point of view:
- Market analysis
- Product performance analysis
- Marketing performance analysis
- Communications performance analysis
Note that all four applications contain the word 'analysis'. This suggests that the information has to be gathered and then used to make sensible business decisions. Areas therefore covered are:
|
The market
|
Size, segmentation, ...
|
|
The market structure
|
Players, branding, trends, ...
|
|
Consumers' perceptions
|
Needs, brands, …
|
|
Products
|
Availability, differentiation, life cycle, ...
|
|
New product development
|
Gap analysis, communication, ...
|
|
Pricing
|
Trends, sensitivity, predicted changes, ...
|
|
Distribution
|
Levels achieved, reseller requirements, ...
|
|
Advertising /promotion
|
Campaign planning, creative development, result evaluation, ...
|
|
The product life cycle
All these applications can be re-arranged to fit into the product life cycle. A different approach will be needed and a different set of questions have to be answered for each stage.
- Pre birth: Establishing needs - Concept testing
- Youth: Getting the product off the ground - marketing planning, pricing, communication strategies (see December 2001 issue for more on this stage)
- Maturity: Improving market performance - Customer satisfaction, brand value (It can be said that at this stage the goal of market research is one of rejuvenating the product life cycle)
- Old age: The next move - exit strategies (acquisition, ...)
Market research and Sales Process Improvement
Although the benefits of undertaking market research in the marketing space are well known, recent research techniques have proven very successful not only in investigating markets, but also in discovering more about the company's marketing methods, in particular in evaluating selling. There is growing interest in market research geared towards making sales activities more productive.
A very common mistake, though, is the interpretation some sales managers make of sales-oriented market research. Some are afraid that such (sales-oriented) market research will expose their lack of understanding or competence and show that they are not doing their jobs properly. It is now well accepted that a sales manager or sales team is unlikely to fully understand their customer base without good independent and objective market research.
Sales-oriented market research proves very useful in the following scenarios:
- Where or why should an action or decision be made?
- What type of action is required?
- What is the result of that action/decision and what implications will it have in the future?
The outcome of this type of research is twofold: it helps planning and managing the sales management activity to ensure it is in line with the overall marketing strategy and helps to control, to monitor and to change the chosen sales strategy if needed.
Who will do it for you?
There are a few issues that will help you decide on which research organisation is the best for your needs and problems:
- Make sure that the company is able to understand your market and your technology
- Look for details of work carried out in similar fields in a regular fashion
- Establish that your marketing problem and your company are important to the research executive and the decision-makers in the research organisation
- If quick action is vital check that the correct forms of communication are in place between you and the research organisation
- The research organisation’s membership/involvement with key industry/professional associations is always a good starting point
Why is market research often neglected?
If the need for market research is, as we have seen, so obvious, why is it not a fundamental weapon in each company's arsenal? The problem seems to lie in the fact that a company tends to outsource what is not part of its core competences, and this can be interpreted (and often is) as 'what is not strategically relevant'. This attitude leads to market research teams, however experienced and skilled, being seen as remote to those making the decisions. However, no amount of experience can predict the unpredictable, especially in a rapidly changing environment.
Conclusion
The need for researchers to be at the heart of the decision making process is a constant issue in industries as turbulent as the software industry. It needs to be understood that research is not just an information tool, or an add-on, but a way to provide guidance to help improve the abilities of the management within an organisation, as well as an aid to the success of the Marketing Mix.
After all, the future belongs to those able and willing to constantly learn.
|
