Marketing managers often commission formal marketing studies of specific problems and opportunities. They may request a market survey, a product-preference test, a sales forecast by region, or an advertising evaluation. It’s the job of the marketing researcher to produce insight into the customer’s attitudes and buying behavior. Marketing insights provide diagnostic information about how and why we observe certain effects in the marketplace, and what that means to marketers. The system may be used for ongoing monitoring of the marketplace or on a step by step evaluation of a product concept.
Marketing research, however, is not limited to large companies with big budgets and marketing research departments. Often at much smaller companies, everyone carries out marketing research – including the customers. Small companies can also hire the services of a marketing research firm or conduct research in creative and affordable ways, such as:
(1) Engaging students or professors to design and carry Out projects –
Companies such as American Express, Booz Allen Hamilton, GE, Hilton Hotels, IBM, Mars, Price Chopper, and Whirlpool engage in “crowd casting” and are sponsors of competitions such as the Innovation Challenge, where top MBA students compete in teams. The payoff to the students is experience and visibility; the payoff to the companies is a fresh set of eyes to solve problems at a fraction of what consultants would charge. Marketing research gathers data accurately and objectively. It first collects reliable data and then analyses it systematically and critically.
(2) Using the Internet – A company can collect considerable information at very little cost by examining competitors ‘Web sites, monitoring chat rooms, and accessing published data. It continuously collects up-to-date data for solving marketing problems. This way, you’re receiving hard data and qualitative data that present more color and insight.
(3) Checking out rivals – many small businesses, such as restaurants, hotels, or specialty retailers, routinely visit competitors to learn about changes they have made. This will help your organization simplify the overarching difficulty or prospect, such as how to superlative address the loss of market share or how to initiate a new product to a particular demographic.
(4) Tapping into marketing partner expertise – Marketing research firms, ad agencies, distributors, and other marketing partners may be able to share relevant market knowledge they have accumulated. Those partners targeting small or medium-sized businesses may be especially helpful. For example, to promote more shipping to China, UPS conducted several in-depth surveys of the Chinese market to portray its complexities but also its opportunities for even small and medium-sized businesses. Most companies use a combination of marketing research resources to study their industries, competitors, audiences, and channel strategies. Companies normally budget marketing research at 1 percent to 2 percent of company sales and spend a large percentage of that on the services of outside firms. Marketing research firms fall into three categories:
- Syndicated-service research firms – these firms gather consumer and trade information, which they sell for a fee. Examples include the Nielsen Company, Kantar Group, Westat, and IRI.
- Custom marketing research firms – these firms are hired to carry out specific projects. They design the study and report the findings.
- Specialty – line marketing research firms – these firms provide specialized research services. The best example is the field-service firm, which sells field interviewing services to other firms. To take advantage of all these different resources and practices, good marketers adopt a formal marketing research process.