MR - Marketing Research? [LESSON]

Marketing Research

What is marketing research?

Market research also known as the Marketing Information Management function involves the collecting, recording and analyzing of information.

Marketing Research is used to determine: • The type, quantity, and features of product to be produced. • The style of packaging to be adopted. • The size of the market, user characteristics and growth potential. • The effectiveness of an advertising campaign. • The strengths and weaknesses of competitors and competitive products. • The level of prices to be charged. • The outlets the product should be sold in. • Information on the current state of the economy • Consumers’ attitudes and preferences • Buying cycles • How the company is perceived by the public

There are two types of research that can be used: primary research and secondary research.

Primary Research - ''Also known as Field Research''

  • Data obtained for the first time and used specifically for the particular problem or issue under study.

It should only be undertaken after deciding that the information required cannot be gleaned from Secondary Research. It involves interviewing a representative group of people by means of a sample. It can be very expensive depending on the size of sample surveyed. Primary Data can be obtained by: questionnaires, focus groups, surveys, interviews.

Secondary Research - ''Also known as Desk Research''

  • Data already collected for some purpose other than the current study.

It involves collecting previously published information. It includes information on sales records, information from newspapers and magazines, the use of libraries and the Census. Though relatively inexpensive, it may be dated or have been gathered for a different purpose which may render the data worthless for your purpose.

Secondary Data can be obtained by:

Internal sources - Company accounts, internal reports, stock analysis, retail data (loyalty cards, till data)

External sources - Government statistics, trade publications, commercial data (Gallup, Mintel), household expenditure survey, magazine surveys, other firm's research, research documents (publications, journals), the Internet

Advantages and Disadvantages of Marketing Research

Advantages of Marketing Research Disadvantages of Market Research

Aids forecasting, planning and strategic development

Helps focus attention on what consumers want

May help to reduce risk of new product development

Helps to anticipate or solve problems in the marketplace

Helps a company keep track of what is happening in its markets.

Information only as good as the methodology used

Can be inaccurate or unreliable

Results may not be what the business wants to hear!

May stifle initiative and 'gut feeling'

Case Study

Juicy Fruit gum, the oldest brand of the Wm. Wrigley Jr. Company, wasn't chewing up the teen market, gum's top demographic. In 1997, the company found itself under pressure from competitors. Sales and market share were down. How could Wrigley make more kids chomp on Juicy Fruit?What qualities about Juicy Fruit might appeal to teens? Wrigley went to the source to find out. It found kids who chew five sticks or more of Juicy Fruit each week and promptly gave them a homework assignment. Find pictures that remind them of the gum and write a short story about it. From the focus group, Wrigley learned that teens chew Juicy Fruit because it's sweet. It refreshes and energizes them.

Their ad agency, BBDO, confirmed what the teens were saying. BBDO asked more than 400 heavy gum chewers to rate various brands by attributes that best represented them. For Juicy Fruit, respondents picked phrases such as "has the right amount of sweetness" and "is made with natural sweetness."

Another study by BBDO looked into why teens chew gum. Was it because they're stressed out-or because they forgot to brush their teeth before going to school? Nearly three out of four kids said they stick a wad into their mouth when they crave something sweet. And Juicy Fruit was the top brand they chose to fulfill that need (Big Red was a distant second).

Although the marketing research conducted by the Wrigley Co. was fairly simple, it provided a new direction for their marketing strategy. BBDO developed four TV commercials with the "Gotta Have Sweet" theme. Roughly 70 percent of respondents voluntarily recalled the Juicy Fruit name after watching the commercial (the average recall for a brand of sugar gum is 57 percent). Sales of 100-stick boxes of Juicy Fruit rose 5 percent after the start of the ad campaign, reversing a 2 percent decline prior to it. Juicy Fruit's market share also increased from 4.9 percent to 5.3 percent, the biggest gain of any established chewing gum brand during the year following the campaign.

Marketing research addresses the need for quicker, yet more accurate, decision making by the marketer. The impetus for this situation is the complex relationship between the business firm and the ever-changing external environment. In particular, most marketers are far removed from their customers; yet must know who their customers are, what they want, and what competitors are doing. Often the marketer relies on salespeople and dealers for information, but more and more the best source of information is marketing research.

It should be noted that most marketing decisions are still made without the use of formal marketing research. In many cases, the time required to do marketing research is not available. In other cases, the cost of obtaining the data is prohibitive or the desired data cannot be obtained in reliable form. Ultimately, successful marketing executives make decisions on the basis of a blend of facts and intuition.

You can google "Gotta Have Sweet Juicy Fruit commercials YouTube" to see these.

Primary and Secondary Research Activity

 

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