Marketing Research

Read the text and answer the following questions:

a) What is the meaning of correct marketing research?

b) Is marketing research more necessary for big companies or small firms?

Marketing research — what it is and how it can make money for you

Marketing research is the gathering, recording, and analyzing of information about problems relating to marketing. It will help you to identify who your market is as well as which methods will best satisfy the needs of your market. But it encompasses many other aspects of marketing, including new product introductions, pricing, advertising, consumer behavior, and so on. So important is marketing research that certain basic marketing strategies such as market segmentation, in which you identify a specific portion of the market and concentrate your resources on selling to that one segment, or product differentiation, in which you differentiate your product from that of a competitor in such a fashion as to best appeal to potential buyers, would be absolutely impossible without it. Among the many things marketing research will tell you are the following:

1. Who are your customers and who are your potential customers?

2. What kinds of people are your customers? (This includes demographic categories, such as age, income, and education, and psychographic categories such as interests and preferences.)

3. Where do your customers live?

4. Why do your customers buy?

5. Do they have the ability to pay?

6. Are you offering the kinds of goods and services that your customers want?

7. Аre you offering your products or services at the best place, at the best time, and in the correct amounts?

8. Are your prices consistent with the value your customers place on the product or service that you are selling?

9. How are your promotional programs working?

10. What do your customers think of your business and its image?

11. How do your business and your business procedures compare with those of your competitors?

Correct use of marketing research can mean amazing profits for your business and tremendous advantages over your competitors. A famous example of correct use of marketing research took place in the early 1960s. Ford, along with two other major American motor companies, had developed cars to compete with foreign cars such as the Volkswagen. Ford's entry had been the Falcon, introduced in 1959. As the years passed, the numbers of Ford Falcons that were sold began to decrease as a percentage of Ford's total sales. This was also true for the competing cars offered by the two other American companies. Ford might simply have concluded that American small cars were no longer wanted. Instead, Ford did marketing research to find out more about the falling off of Falcon sales. During this research Ford discovered an interesting and important fact: while sales of the Falcon were declining, sales of sporty options such as bucket seats and a special interior were increasing. This was due primarily to the greater numbers of young adults who were purchasing the vehicle. Ford's careful study of the market research findings led the company to put out the Ford Mustang, introduced in 1965. This sporty vehicle demolished all previous records for sales and developed a new market after which competitors followed as best they could, some two to three years behind. The head of Ford's Mustang project was none other than a young engineer by the name of Lee Iacocca.

But successful use of marketing research is not limited to major companies such as Ford. Thousands of small firms and entrepreneurs have used marketing research successfully to carve out huge shares of their respective markets. An optical firm totally turned its company around and doubled sales within a year by identifying its customers. A mail order entrepreneur sold $10 million worth of a single product through marketing research techniques. A small computer firm successfully took on IBM a segment of the total computer market and won through the correct application of marketing research.