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Marketing Research, Applications of Product Development and Test Marketing, Sale forecasting and Ethical Issues in Marketing Research
The document provides an overview of marketing research, outlining its definition, objectives, types, and processes involved in new product development and test marketing. It emphasizes the importance of understanding consumer needs, effective market research, and ethical considerations within marketing practices. Lastly, it addresses the limitations of marketing research and the complexities of sales forecasting, highlighting the necessity of accurate and ethical approaches to decision-making in marketing.
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Marketing Research, Applications of Product Development and Test Marketing, Sale forecasting and Ethical Issues in Marketing Research
- 1. Presented by, Saneem Nazim, S4MBA, Roll No: 12 CHMM College
- 2. “Marketing research isthe systematic gathering, recording and analyzing of the data about the marketing problems towards the end of providing information useful in marketing decision making.” -Still and Cundiff Definition
- 3. Research includes: Sales research Productresearch Advertising research Motivation research Service marketing research Micro environmental research
- 4. Product Research Product marketresearch serves several goals: new product design and market validation research, or assessing existing product strength and line extension potential. Concept Testing Concept testing research evaluates advertising concepts, ad theme concepts and appeals, new product concepts, pricing, brand concepts, brand names, and positioning strategy concepts. Applications of Market Research
- 5. Branding Research Branding decisionsdrive branding marketing research strategy. Brand Management and Research services help to understand the brand's value, strengths and vulnerabilities and increase the brand position Brand Equity Research Brand equity research measures the breadth and depth of brand power in the target markets. A key to research design is the goal of a brand equity measurement study.
- 6. Advertising Research Advertising researchdesign is determined by specific advertising goals and the stage of ad development, or campaign. Pricing Research Various types of research used to explore the role of price, optimal pricing, and pricing demand curves Sales Analysis An analysis of sales by period or year to project trends, identify problems and measure a retailer's performance
- 7. Positioning Research Studies designedto help identify the optimal positioning for a brand or service Market Segmentation Market segmentation is a process by which market researchers identify key attributes about customers and potential consumers that can be used to create distinct target market groups Customer Satisfaction Research It is area of marketing research which focuses on customers' perceptions with their shopping or purchase experience.
- 8. I. Defining theproblem and setting the objectives: The definition of the problem helps in determining the techniques to be used, the extent of information to be collected. After defining the basic problem, the researcher must specify the objective of the study. II. Conducting situational analysis: It means collecting the information about the business environment. Marketing Research Process
- 9. III. Conducting aninformal investigation: The researcher must conduct an informal investigation with the people outside the company, like wholesalers, advertising agencies, consumers etc. IV. Planning and conducting a formal investigation: It includes a) Selecting the source of information b) Deciding methods of data collection c) Preparing frames and forms d) Pre-testing the forms e) Planning the samples f) Collecting the data
- 10. V. Analyzing andInterpreting data: Data analysis and interpretation is the process of assigning meaning to the collected information and determining the conclusions, significance, and implications of the findings. VI. Preparing a written report Making the written report clearly presented and highlighting the findings and the decision maker should be able to take decision effectively after going through the findings and recommendations.
- 11. Research is notguarantee of success Lack of adequate knowledge of marketing research Research is based on sample and sampling research lacks the complete accuracy Trained personnel and a lot of time is required for marketing research It is difficult to evaluate the economic benefits derived by marketing research Limitation of Marketing Research
- 12. It can't give100% accurate results It provides suggestions and not solutions. Marketing research is a costly affair. It can't predict consumer behaviour.(changing the behaviour of consumers) Long time is required in the marketing research procedures
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- 14. Introduction Market researchis the process by which businesses find out about customers' needs, wants and desires. It makes possible the successful development of new products. New product development should start with an insight based on consumer needs. Throughout the NPD process and test marketing, market research is a valuable tool to check viability and minimize the risk of the product launches.
- 15. PRODUCT DEVELOPMENT NEW PRODUCTPLANNING PROCESS The new product planning is the function of the top management personnel & specialists drawn from sales & marketing, research & development, manufacturing & finance. PHASES OF NEW PRODUCT DEVELOPMENT Idea generation:- The first stage is on searching for new product ideas. An important source of new product ideas is customers. Screening of ideas:- It means critical evaluation of product ideas generated. The main objective of screening is to abandon those ideas which are inconsistent with the product policy of the firm.
- 16. Concept testing:-At this stage the product concept itself is tested. It helps the company to choose the best among the alternative products. Market analysis:- Estimates of sales, costs & profits are important components of market analysis. Product development:- The product is shaped corresponding to the needs & desire of the buyers. Test marketing:- By test marketing we mean, by trial & error method when a product is introduced into the market. Commercialization:- At this stage production starts, marketing programme begins to operate & products are into the market for sale.
- 17. CONSIDER THE FOLLOWINGBEFORE LAUNCHING A PRODUCT:- Effective market research Ensure product policy Identification of consumer needs Effective promotion Proper distribution system Correct pricing strategy
- 18. TEST MARKETING Testmarketing is an application of a controlled experiment, done in limited but carefully selected parts of the marketplace called test markets. Test marketing procedures may be classified as follows:- Standard test market:- In standard test market the products are sold through regular distribution channels. Controlled test market:- In controlled test market the entire test-marketing program is conducted by an outside research company. The research company guarantees distribution of the product in retail outlets that represent a percentage of the market.
- 19. Application of marketresearch in product development and test marketing 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
- 20. Identifying consumer insightsand product needs - where to start? Market research should start with the consumer and serves two purposes: 1) To inform companies about consumer needs and desires. What are the trends in the market? What do consumers want? 2) To give consumers the opportunity to talk to the providers of products and services so that their views are taken into account.
- 21. Turning consumer insightsinto product concepts The team generated ideas on how to address the consumer need. From these ideas the marketing team created 'product concepts'. These 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
- 22. APPLICATION OF TESTMARKETING How large a plant is needed for national sales? Which cities should be selected to run the test? What should be the optimum expenditure on production? What would be the return on investment? What time period is required to run the test? What specific information should be collected during the test? What action should be taken after the test?
- 23. SEGMENTATION The processof dividing the market into homogeneous markets with similar characteristics is called market segmentation. CRITERIA FOR MARKET SEGMENTATION Identity :- There must be clear differences between segments. Members of such segments can be identified by common characteristics which display similar behavior. Accessibility :- It must be possible to reach the different segments in regard to both promotion & distribution.
- 24. Responsiveness:- Aclearly defined segment must react to changes in any of the elements of the marketing mix. Size:- The segment must be reasonably large enough to be a profitable target. Nature of demand:- It refers to the different quantities demanded by various segments. Measurability:- The purpose of segmentation is to measure the changing behavior pattern of consumers.
- 25. EXAMPLE Refrigerators: The marketcan be segmented on the basis of:- Geographical:- North India,South India,East India Size of refrigerators:-65 Litres,90 Litres,165 Litres Nature of consumers:- Households, Indusrial
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- 27. Sales Forecasting Salesforecasting is a difficult area of management. Most managers believe they are good at forecasting. However, forecasts made usually turn out to be wrong! Market Forecast refers to the estimates of future sales of a company’s products in the market. Sales forecasting is very popular in industrially advanced countries where demand conditions are always uncertain than the supply conditions.
- 28. Reasons for undertakingSales Forecast Businesses are forced to look well ahead in order to plan their investments, launch new products, decide when to close or withdraw products and so on. The sales forecasting process is a critical one for most businesses. Key decisions that are derived from a sales forecast include:- - Employment levels required - Promotional mix - Investment in production capacity
- 29. Types Of Forecasting Thereare two major types of forecasting, which can be broadly described as macro and micro: Macro forecasting is concerned with forecasting markets in total. This is about determining the existing level of Market Demand and considering what will happen to market demand in the future. Micro forecasting is concerned with detailed unit sales forecasts. This is about determining a product’s market share in a particular industry and considering what will happen to that market share in the future.
- 30. Selection Of Forecasting The selection of which type of forecasting is used depends on the several factors which can be described as: (1) The degree of accuracy required – if the decisions that are to be made on the basis of the sales forecast have high risks attached to them, then it stands to reason that the forecast should be prepared as accurately as possible. However, this involves more cost
- 31. (2) The availabilityof data and information - in some markets there is a wealth of available sales information (e.g. clothing retail, food retailing); in others it is hard to find reliable, up-to-date information. (3) The time horizon that the sales forecast is intended to cover. For example; forecasting next weeks’ sales, or trying to forecast what will happen to the overall size of the market in the next five years? (4) The position of the products in its life cycle. For example, for products at the “introductory” stage of the product life cycle, less sales data and information may be available than for products at the “maturity” stage when time series can be a useful forecasting method.
- 32. A common methodof preparing a sales forecast has three stages 1) Prepare a macroeconomic forecast – what will happen to overall economic activity in the relevant economies in which a product is to be sold. 2) Prepare an industry sales forecast – what will happen to overall sales in an industry based on the issues that influence the macroeconomic forecast. 3) Prepare a company sales forecast – based on what management expect to happen to the company’s market share.
- 33. Forecasting Process Forecast Objective EvaluateResult versus forecast Determined independent and dependent variables Total forecast Procedure Select forecast Analysis method Develop Forecast Procedure Gather & analyze data Present assumption about data Make & finalize forecast
- 34. METHODS OF FORECASTING. Someof the methods used in forecasting are: user expectations sales force composite jury of executive opinion Delphi technique market test Time series analysis method
- 35. Purposes Of Forecasting Appropriate production scheduling Reducing cost of purchasing raw materials Determining appropriate price policy Setting sales targets and establishing controls and incentives Evolving a suitable promotional program Forecasting short-term financial requirements Planning of a new unit or expansion of an existing unit Planning of long-term financial requirements Planning of man-power requirements
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- 37. What are Ethics? Ethics are a collection of principles of right conduct that shape the decisions that people or organizations make. Practicing ethics in marketing means deliberately applying standards of fairness, or moral rights and wrongs, to marketing decision making, behavior, and practice in the organization.
- 38. What is marketingresearch? Marketing Research is the systematic and objective identification,collection,analysis,and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.
- 39. Importance of ethicsin research: Promote the aims of researcher Promote values Accountable to public Public support
- 40. Types of organization Ethical Base- when an organization behaves ethically, customers develop more positive attitudes about the firm, its products, and its services. Non-Ethical Base- Not employing ethical marketing practices may lead to dissatisfied customers, bad publicity, a lack of trust, lost business, or, sometimes legal action.
- 41. Problems: Three keyareas where problems often arise in marketing research: 1. In the relationship between the researcher and the client 2. Between the researcher and the research subject 3. Between the researcher and the marketing research industry
- 42. Ethical principles: Honesty Objectivity Integrity Carefulness Openness Respect for intellectual prosperity Confidentiality Social responsibility
- 43. Ethics and MarketingResearch • AMA Code of Ethics • Prohibiting and selling (sugging) or fund raising (frugging) under the guise of conducting research • Maintaining research integrity by avoiding misrepresentation and omission of pertinent research data • Treating others (buyers and suppliers) fairly
- 44. Ethical Issues inMarketing Research Marketing ethics The application of morals to behavior related to the exchange environment. Moral standards Principles that reflect beliefs about what is ethical and what is unethical. Ethical dilemma A situation in which one chooses from alternative courses of actions, each with different ethical implications.
- 45. Ethical Issues inMarketing Research (cont’d) Relativism A term that reflects the degree to which one rejects moral standards in favor of the acceptability of some action. This way of thinking rejects absolute principles in favor of situation-based evaluations. Idealism A term that reflects the degree to which one bases one’s morality on moral standards. example: the Golden Rule
- 46. Ethical Issues inMarketing Research Excessive interviewing Lack of consideration Abuse of respondents Delivering sales pitches under the guise of marketing research
- 47. Ethical Issues inMarketing Research Incomplete reporting of results Misleading reporting of results Nonobjective research Use of data and the confidentiality of information collected
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