What is Marketing & Marketing Research Processes?
What is Marketing?
Marketing can be defined as the process by which companies create value for customers and significant, strong customer relationships to capture value from customers in return,
Peter Drucker, who was one of the most widely known influential thinkers on management, says that business enterprise has two basic functions because its purpose is to create a customer. Marketing and innovation. Marketing and innovation produce results.
Marketing is the distinguishingly unique function of the business.
Another definition given by a marketing consultant states that the marketer must have expertise and strategies to engage customers and improve business opportunities, both through retaining existing customers and attracting new patrons.
The marketer should be fully involved in creating, evaluating, analyzing, and planning the products or services that accompany offers.
The marketer also has to know who the customer is, what they want, what they need, who the competition is, and their offerings.
The marketing mix is the set of tactical marketing tools that a firm uses to produce the response it once in the target market.
The marketing mix consists of everything the firm conduce you to engage the consumers and deliver customer value.
The many possibilities can be collected into four groups of variables.
4Ps of Marketing
This also concerns services to services such as banking, airline, and retail services are products.
Marketing has its own language, like B to B, which stands for business to business, and B to C is Business to the consumer.
B to B is like a company that makes semiconductors selling their products to a computer maker. B to C Is it like a company that makes paint selling it to a homeowner for painting his house.
Marketers also need to be concerned about 4C.
- Clients or Consumers.
These are important to marketing also and help the marketer better understand the target market. Marketers are very concerned about gaining and keeping their customers loyalty.
20 years ago, satisfaction alone was a good predictor of behavior, purchase rate, resistance to competition, etcetera.
But in today’s super-competitive environment, most companies are able to achieve high satisfaction scores.
Because of this satisfaction, measures alone were no longer sufficient. They were not effective predictors.
So, two additional questions were added.
- Would you recommend this product to others?
- And would you repurchase this product?
A loyal customer at the 15 levels, the highest score, also called the top box score, usually will give the brand more of his or her business and is usually more profitable than less loyal customers.
Also, it costs five times more to find loyal customers than to retain current customers, so it is important to keep your customers loyal.
There have been many studies that showed the link between customer loyalty and brand profitability. One of the clearest and best studies appeared in Harvard Business Review several years ago.
Loyal customers often cost less to serve because you can work out mutually beneficial efficiencies.
For one thing, finally, price premium loyal customers are willing to pay more. Why? Because they perceive that they received more value from your brand than alternatives.
What about you? What brands are you loyal to and why?
These brands have high loyalty scores year on year and do well at retaining their customers.
A marketing tool that is generally used when evaluating the current situation or market is the SWOT. The SWOT analysis goal is used to match the company’s strengths to attractive opportunities in the environment while eliminating or overcoming the company’s weaknesses and minimizing the threats.
It can be helpful to do this tool with a cross-functional team from your company who understands the market.
Strengths and weaknesses exist internally in your company, and opportunities and threats are from outside the company.
Segmentation & Market Research,
A marketer’s job is to create value for customers and build meaningful relationships with them.
Market research is any organized effort to gather information about your target markets or customers, and it is a very important component of business strategy.
To do this, they must gain deep insights into what customers really need and want and understand the environment. First, they need to assess what information is necessary to understand the market and then find out if it already exists or if they need to collect that information themselves.
Types of Market Research
This is information that would need to be created or collected for their needs. Primary research requires data collection and can be anything from surveys and observations to paying people to answer questions directly.
Secondary research information that already exists somewhere having been collected for another purpose
Secondary information could be out on the Web in reports or found on commercial online databases. If you are looking for information on a public company, searching the company’s websites and looking at annual reports or investor presentations can also be helpful.
Consumer packaged goods companies like Procter and Gamble, General Mills, or Unilever, for example, often employ the process of ethnographic research. They visit consumers and engage them in some activity while observing them or interacting with them for hours in search of a modification to an existing product or to come up with a totally new product.
What if there is no public information on what you are looking for and you can’t buy any information on a market, then you will have to create your own study, or you can try to be creative and combine data from a number of areas and come up with well-educated assumptions on the market.
Here is an example What is the market for corrective shoes for Mongolian children born with walking defects?
Assuming no statistics are available for Children born with walking defects in Mongolia, how would you get this information?
There are certainly several ways: One might be able to find out the number of children born in the past five years and then find some statistics on the number of adults with walking defects. Then compare to the total population and take a percent of the adult numbers to the percentage of the number of Children born in Mongolia, and you might get a plausible number.
This process is called triangulation, which is also a navigational term.
Triangulation is a powerful technique that facilitates data validation through cross verification from two or more sources.
In particular, it refers to the application and combination of several research methods to study the same phenomenon.
Qualitative and Quantitative Research
Qualitative research is primarily exploratory research. It is used to gain an understanding of underlying reasons, opinions, and motivations.
It provides insights into the problem or helps to develop areas or hypotheses for potential quantitative research.
Qualitative research is also used to uncover trends in thoughts and opinions and dive deeper into the problem. Qualitative data collection methods vary using unstructured or semi-structured techniques.
Some common methods are focus groups, group discussions, individual interviews, and participation or observations. The sample size is typically small, and respondents are selected to fulfill a given quota.
Quantitative research is used to quantify the problem by way of generating numerical data or data that can be transformed into usable statistics.
It is used to quantify attitudes, opinions, behaviors, and other defined variables, and generalize results from a larger sample population.
Quantitative research uses measurable data to formulate, fax, and uncover patterns in research.
Quantitative data collection methods are much more structured than qualitative data collection methods.
Quantitative data collection methods include various forms of surveys, online surveys, paper surveys, mobile surveys, and chaos surveys face to face interviews, telephone interviews, longitudinal studies, website interceptors, online polls, and systematic observations.
Segmentation is the process of partitioning markets into groups of potential customers with similar needs and or characteristics who are likely to exhibit similar purchase behavior.
Once the market has been researched, it is important to break down that market into distinct groups of buyers who have the same needs, characteristics, or behaviors, requiring different marketing strategies or mixes.
This is called Market segmentation.
Segmentation is the first step in target marketing. There is not a specific science or specific rules to follow to dividing up the market into segments.
The better you know the needs of the market, and the more you understand the customers, the better you’ll be at segmenting the market.
And good business judgment is always helpful in segmentation.
The goal of segmentation is to increase the precision and effectiveness of our marketing mix activities in order to attract, satisfy and retain the target customers; getting the right product and the right message to the right customers is called targeted segmentation.
A good segmentation analysis not only helps to define attractive segments but also describes the unattractive segments.
The CEO of a large media company was quoted as saying. “I’ll know when our businesses are doing a good job, but segmentation when they can articulate who we shouldn’t sell to.”
Questions answered by segmentation.
Segmentation is done so the business can answer a variety of questions. Some of these include;
- Will one product meet the needs of the market, or
- Would the business opportunity be more attractive if we developed multiple products to suit individual segments’ unique needs?
- How can we most effectively communicate to our target customers?
- What is our message, and on what media will we communicate?
- Does our target segment listen to podcasts, or do their trade magazines?
- How do we get the most exposure for our products?
- Should we position our product differently with different segments to maximize its appeal?
- Can the same vital messages work for a number of the segments?
It would certainly reduce costs if you could have the same key messages, but only, if that is the most effective, a few other questions that should be asked are;
- Can we prioritize our efforts by targeting the segments that have the most pressing need are easiest or fastest to reach?
- Are you in the best position to buy or maybe the most profitable
That respond most favorably to our marketing mix elements.
Characteristics of Successful Segmentation
They should be identifiable; they should each be distinctly different on easily identifiable measures.
Substantial; large enough to matter and be served profitably
Accessible; reachable through marketing, advertising, and distribution efforts.
Stable; persists over time. The market segment will be around long enough for the business to be served and become a loyal customer.
Responsive; response of the targeted marketing efforts for success and
Actionable; differences can guide marketing decisions.
The best product is one that satisfies a real need of the customer, not just a want. So, a marketer should try to find customer segments that truly have a need for their product.
Typically, when doing segmenting, it is easier and less expensive to define segments with the same characteristics, such as demographics or geography, or even firmographics (which are similar attributes of companies) that the marketer uses to divide up their target market in order to discover their ideal consumers.
Demographics include age, gender, income, occupation, religion, ethnicity, generation, education, household size, etcetera.
Geographic segmentation includes city-state, ZIP code region population density, such as urban, suburban, rural, etcetera
Firmographic includes account size, number of locations, number of employees, technological sophistication, etcetera.
This does assume that the customers that have been segmented into one segment have the same need. That is the difficulty with segmenting by characteristics.
Just because all large companies are put into one segment, which would be a demographic segmentation because of their size, for example, they also need to have other attributes that would make them desire your product.
Continuing on this continuum, you see that being able to segment customers into either psychographic attributes or behavioral attributes is harder and often times more costly.
But the payoff in sales and profits is much bigger.
Psychographic attributes are things like attitudes and beliefs, Lifestyle, values, hobbies, risks, and political views.
Behavioral attributes are things like brand loyalty; the benefits sought sensitivity to price occasions of use, user status, responsiveness to the marketing mix, etcetera.
When the need for a customer is truly understood, and the way your product addresses that need is clearly articulated, you have a much greater chance of success with this customer wanting your product.
As you gather more data about the segments, driving toward needs-based segmentation, chances are improved for customers being interested in your product and purchasing your product; you are providing value to them.
Segmentation can take time for a new product, especially a new to the world product, and it is often difficult to know who will really be interested beyond your first few initial customers.
Good market research is key to success. Once you have segmented your market and know who is interested in your product, then you will target those segments with the value proposition, claiming the key benefits that your product possesses will meet that segment’s needs.
All of your key messages and communications will come from this foundation. The messaging can be very specific, such as to individual companies, or it can be very general, such as mass marketing.
Many of the soft during companies who advertise on television are mass marketing to huge segments.
For example, when Coca Cola markets to young people, the music, colors, activities, and words are all part of getting their message across to young people. Think about a fast-food company like McDonald’s.
Have you ever thought about how they segment their market as they appeal to a wide range of people here?