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Tuesday, December 3, 2013



The broad areas of application for marketing research are sales and market analysis, product research, advertising, business economics and corporate research, and corporate responsibility. 

A. Sales and Market Analysis  

a) Determination of market potential: The market potential is the total amount of a product or product group which could be sold to a market in a specified time period and under given conditions. Market potential is applicable in case of a new product, a modified version of an existing product, or an existing product to be introduced in a new geographical market.

b) Determination of market share: In case of an existing product, a company may be interested to know the percentage share of the market which their brand commands.

c) Sales forecasting: Sales forecasting is an attempt to predict the sales level at a given point in the future on the basis of the existing information. Sales forecasting is applicable to both existing products as well as new products. The sales may be calculated either in units or in value. Basically, there are two types of forecasts - short-term and long-term. The short-term forecast takes into account seasonal variations, seasonal trends and cycles. The long-term forecast has its basis more in the growth pattern of the industry to which the product belongs and the business cycle operating in the industry.

d) Design of market segmentation studies: A market is a group of potential customers which has something in common. The common factor may be a geographical area, sex (after shave lotion is used only by men), age (toys for children under 5, between 5-7, etc.), physical characteristic (weak eyesight, over weight), income, life-style.  

Children comprise the market for toys. But in this broad category, the market can be viewed to be made up of many smaller markets or segments: one market for pre-school children, another for school-going children, one market comprised of educational toys, one for mechanical toys, one for electrical toys, one for indoor games, etc. The choice before the marketing manager is whether to cater to the broad market of toys or to only one or two of the specific market segments. MR can help answer questions such as "To what extent should the market segmentation strategy be pursued?" and "What should be the basis for segmentation?"

e) Test market: This is a controlled experiment to predict sales or profit consequences of the various marketing strategies. It refers to trying out something in a particular market before extending it on a larger scale. You may have noticed advertisements for soaps, or snack foods which sometimes carry the message ‘available only in Hyderabad' or ‘available only in Calcutta'. The firm selling these product is probably test marketing the product. The results of the market test provide the research data for taking a decision whether to extend the marketing to other areas or drop the idea totally. Test marketing also yields information which helps to modify the product and marketing strategy to give it a better chance for success.  

Test marketing is used not only for new product but also for researching into the impact on sales of retail level promotional displays and promotional schemes such as coupons and discounts.

f)  Distribution channel studies: Market research can be used to determine the most effective and profitable distribution channels for different types of products.

g) Determination of market characteristics: Research surveys can be conducted to collect information about the market characteristics which would help a new entrant plan his entry or help an existing company focus its strategy more sharply for increasing market share. Information can be collected on the number of brands competing in the market, state-of-technology prevailing in the market, geographical concentration and dispersal of customers, nature of outlets selling the products, number of such retail outlets, etc.

h) Determination of competitive information: Research can provide information on the marketing strategies used by various competing brands and the `unique selling proposition' of each.  

B. Product Research

     This can be used for:

a)   Evaluation of new product ideas
b)   Testing for new product acceptance
c)   Evaluating the need for change in product formulation
d)   Testing package design in term of aesthetic appeal., protection for the product, and ability to withstand transportation and stocking ordeals.
e)   Testing for product positioning. Should a new brand of tea be positioned on the basis of its fragrance and taste, or colour and strength, or price:

C. Business Economics and Corporate Research  

a) Studies of business trends to determine industries with growth potential and those facing a stagnant future.

b) Pricing studies to estimate the demand level at different prices. Such studies reveal the extent to which customers are sensitive to price changes, and provide valuable clues to the market or in assessing the impact of price increase or decrease on the sales.

c) Diversification studies: These provide information on the profitable new opportunities of business growth which a firm can consider for diversification. The diversification may be into totally new and unknown areas or into allied areas.

d) Product-mix studies: If a firm is considering diversifying into allied product areas, it may like to find out the product-mix combinations which would optimise its existing resources and provide synergy for growth. A company in the business of cooking oil would like to do research into one or more of the following products for arriving at a `synergistic' product-mix: butter, vanaspati, ghee, spices, dehydrated foods, frozen foods, instant food mixes, custard powder, branded wheat flour and rice.

e) Plant and warehouse location studies: Research is also needed to determine the best possible location for setting up a new plant. Before arriving at a decision, a firm would need to research into factors such as availability of raw material and labour, proximity to market place, telecommunication and transport infrastructure, financial, taxation and other incentives applicable to each location. In case of warehouse location, you would research into movement patterns of goods to different cities, high sale potential areas versus low sale potential areas, number of checks for quality needed en route the destination to final customer, benefit of conducting these checks against the cost of acquiring and maintaining a warehouse and convenient rail/road connections.  

D. Advertising Research  

a) Audience measurement for advertisements appearing in different media such as newspapers, magazines, journals, radio, TV, outdoor hoardings, kiosks, bus side panels; etc. The objective of this type of research is to estimate the audience size of each media channel (e.g. press) and within that the specific media vehicle (India Today, Readers Digest, The Indian Express, etc.). Given the audience size, you would be interested in knowing its age, sex, socio-economic and cultural profile to focus your advertising strategy.

b) Determining the most cost-effective media plan: Each media channel has its unique advantages and disadvantages, and each media vehicle has its own cost structure. Research can be used to find out the best media vehicle by matching your product characteristics with the audience profiles of different media vehicles and the respective cost of advertising in these.

c) Copy testing: One approach for researching into the effectiveness of the copy is to test the following elements:

- basic themes, ideas, appeals
- headlines baseline, pictures, jingle, story sequence
- pre-testing whole advertisements in rough or finished form
- pre-testing the effect of repetition to simulate a campaign (all the above can be tested under simulated conditions)
- after the advertisements have been released, post-testing them individually in their normal media
- The other approach for conducting research is to assess the copy or the entire advertisement/campaign for the following:
- assessing for its attention value, interest value and arousal,
- test for communication clarity;
- test for their effect on consumer attitudes,
- test for their effect on purchase behaviour.

d) Determining advertising effectiveness: After the advertisements have been released, it is important to monitor their impact in terms of achieving the intended objective (s). To what extent has the advertising achieved its objective of creating brand awareness, creating corporate image, educating the customers about the product usage, and so on. The effectiveness is always determined in relation to the cost incurred.  

E. Consumer Behaviour Research  

a) To determine who the customers of the product (men, women, children, working women, housewives, retired people) are and profile them in terms to their socio-economic background, age, religion and occupation.
b) To find out where the customers are located.
c) To determine their motivations to purchase your brand of product.
d) To determine their buying behaviour pattern in terms of identifying sources of information and influence, and sequence of purchase decision.
e) To find out the post-purchase satisfaction level of customers.  


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