Marketing Research: Meaning and Importance
According to American Marketing Association “marketing research is the systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services.”
According to Green and Tull, “marketing research is the systematic and objective search for and analysis of information relevant to the identification and solution of any problem in the field of marketing”.
Professor Philip Kotler defines marketing research as “Systematic problem analysis, model-building and fact-finding for the purpose of improved decision making and control in the marketing of goods and services.”
Importance of Marketing Research
The following points explain the importance of marketing research:-
- Identifying problem and opportunities in the market
It helps in identifying new market opportunities for existing and new products. It provides information on market share, nature of competition, customer satisfaction levels, sales performances and channel of distribution. This helps the firms is solving problems.
- Formulating market strategies
Today, markets are no more local. They have become global. Manufactures find it difficult to contact customers and control distribution channels. Competition is equally severe. The consumer needs are difficult to predict. Market segmentation is a complicated task in such wide markets. The marketing intelligence provided through marketing research not only helps in framing but also in implementing the market strategies.
- Determining consumer needs and wants
Marketing has become customer-centric. However, large-scale production needs intermediaries for mass distribution. Due to prevalence of multi channels of distribution, there is an information gap. Marketing research helps in collecting information on consumers from structured distribution research and helps in making marketing customer oriented.
- For effective communication mix
In an era of micro- rather than mass-marketing, communication plays a vital role. Marketing research uses promotional research to study media mix, advertising effectiveness and integrated communication tools. Research on such aspects will help in promoting effectively a company’s product in the market.
- Improving selling activities
Marketing research is used to analyse and evaluate performances of a company within a market. It also studies effectiveness of a sales force. It helps in identifying sales territories. Such information helps the companies in identifying areas of shortcoming in sales. It also examines alternative methods for distribution of goods.
- For sales forecasting
The most challenging task for any production manager is to keep optimum levels of inventory. However, production is undertaken in anticipation of demand. Therefore, scientific forecast of sales is required. Marketing research helps in sales forecasting by using market share method, sales force estimate method and jury method. This can also help in fixing sales quotas and marketing plans.
- To revitalize brands
Marketing research is used to study and find out the existing brand position. It finds out the recall value of brands. It explores the possibilities of brand extension or prospects of changing existing brand names. The main purpose of marketing is to create brand loyalty. Marketing research helps in developing techniques to popularize and retain brand loyalty.
- To facilitate smooth introduction of new products
Marketing research helps in testing the new products in one or two markets on a small scale. This helps in finding out consumer response to new product and develop a suitable marketing mix. It reveals the problems of the customers regarding new products. Thus, it controls the risk involved in introducing a new product.
- Determine export potentials
The development in transport and communication has helped in globalization and digitalization of world trade. This has helped in boosting the growth of international markets. Marketing research helps in conducting market survey for export. It. collects information on marketing environment prevailing in a country. By collecting data on consumers from different countries, it indicates export potentials.
- Managerial decision-making
Marketing research plays a vital role in the decision-making processes by supplying relevant, up-to-date and accurate data to the decision-makers. Managers need up-to-date information to access customer needs and wants, market situation, technological change and extent of competition.