Importance of Marketing Research and Planning Essay
Importance of Marketing Research and Planning
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Before an organization or individual brings the product to the market it analyses the product from the customer’s viewpoint from every aspect by taking into account marketing mix that is the product, price, promotion, placement, packaging - Importance of Marketing Research and Planning Essay introduction. Also the competition, market structure communication and distribution channels, customer’s expectations, wants and needs, government regulations, technological advances, economic trends and other factors comprising the business environment are kept in mind. This is done so that the business profitably acquires and retains customers. To make this possible a through market research is needed to learn about the customer’s demographics, geography, and psychographics.
Essential Management Tool
The fact is that a company can’t be successful without having the right data about customers, products and the market in general. For a company to survive and to thrive in the fiercely competitive market, market research is an essential management tool that must be adopted.
Market research consists of a plan that depicts how relevant data is to be collected, sorted, filtered and analyzed so that the results are useful, accurate and relevant for making marketing decisions. The results are then communicated to the management which provides the management with in-depth information relating to crucial factors that have an impact on the target market and existing marketing mix. Market research enables the management to make necessary changes by adopting a proactive approach.
The company should therefore start marketing research with formulating a new plan or revising its existing plan. Marketing plans are the foundation and the basic structure for any product or service. The approach taken to planning may differ but what remains is that for any product or service to be successful planning needs to be done.
The purpose of a plan is to provide the business with a guideline that it can always review and to ensure that market research is focused and according to the requirements.
The marketing plan collects all the relevant facts about the organization, the markets it operates in, and its products, services, customers, competition, and so on.
The plan provides timelines, budget constraints, and availability of company resources. It specifies objectives that are based on the company’s goals and mission statement that are followed by all the departments within the organization. E.g. the company may specify if it plans the market research to identify the problem that has resulted in the drop in sales of a company’s product or it may just plan to identify new customer preferences.
A plan helps the business to compare its achievements with the targets set that is benchmarking. Any variances can be reasoned out and problems can be resolved. This makes market research more effective.
Inter-relatedness of Marketing Research and Plan
The planning of market research clearly indicates its purpose, whether an exploratory or conclusive research is needed. If the company is conducting a research to explore a problem to get some basic idea about the solution at the preliminary stages of research then it is exploratory research. This may be used as the input to conclusive research. Conclusive research is conducted to draw some conclusion about the problem.
A company can conduct market research by carrying out primary or secondary data depending on the budgets and timeliness of data set in the plan. E.g. a company with low budget would try to extract as much information as it can from secondary data.
As spelled out in the plan the market research can be quantitative or qualitative in nature. A qualitative research is unstructured in nature and allows a lot of flexibility and it can be one of the following:
· Focus groups
· In-depth interviews
· Projective techniques
A quantitative research can be to test a hypothesis to draw conclusions. It is structured in nature unlike the qualitative research. It can be one of the following:
The market research works hand in hand with the plan. The plan ensures that all the departments, product, production, distribution, research and development focus on the customer. Increasingly there is a shift toward a more customer oriented approach rather than a product oriented one.
Market research for a product is done for a certain period of time and the plan is also for a specified period of time. It may be short or long termed. The goals and objectives set lays out strategies and tactics for that period of time. Market research needs to be completed within the time boundaries chalked out in the plan. Outdated data is irrelevant to the organization and will just end up increasing costs of the firm.
Importance of Marketing Research and Plan
Appropriate target market is selected, market mix is determined and then the product is positioned. Based on the strategy, marketing tactic which is the action plan is determined which specifies actions to be taken both internally and externally by whom and when.
Marketing plan and research have an effect on Advertising. They help managers to analyze the existing operations and improve them. They dictate roles of advertising according to the marketing mix of the product and service. It leads to better implementation of advertising programs and keeps a check by controlling them.
Plans also specify rule of thumb to be used. E.g. a market research conducted to find out how many consumers would be interested in buying the new fragrance deodorant that the company wishes to launch. Hypothetically, a survey of 3000 people suggests that 1800 people would buy the new deodorant. As a rule 80% of the result will be assumed as potential consumers i.e. it will be assumed that 1440 will go for the new deodorant.
Knowing the importance of marketing plan and research, companies must chalk out clear, detailed planning before taking the next step of marketing research. The two go hand in hand and it is impossible for a business to be successful without taking both into consideration. For security of organization’s vision and image planning is significant.
Kotler, Philip and Armstrong, Gary (2007). Principles of Marketing Pearson, New Jersey: Prentice Hall.