BEM 314
Chapter 1: perspectives on marketing research
Introduction
For an organization many questions need to be answered in order to make the best
decisions
Decision making is an important component of the management of an organization
When making decisions in dynamic environment, having info about all internal and external
environment reduces risk
Marketing research is a scientific process of gathering and processing info to help marketing
management make decisions
The need for marketing info
‘knowledge is power’ common phrase in business world
Knowledge comes from info which comes from data which in turn comes from marketing
research
Marketing info is crucial for organization if it is to develop products and strategies that keep
pace with the changing environment
Marketing research has 2 important purposes:
1. Provides the organization with info about customer demand for products and services
2. Gives customers the opportunity to express their views and needs and thus influence
decision making to ensure they get the product and service that they want
Management tasks of an organization are commonly identified as planning, organizing,
leading and control
Primary activity that differentiates managements from other workers is decision making.
Does not mean that non-managerial staff do not make decision, but rather that decisions
taken by management are of strategic importance and can influence success of organization
Marketing management, in both developed and developing communities should be directed
at the future. It must:
1. Anticipate environmental changes
2. Predict the direction and impact of these changes
3. Plan accordingly
Marketing in a changing environment
Nature of ever-changing conditions in the internal and external environments means that
the organization has to manage its marketing info as effectively as possible, especially in
large organizations where carefully planned marketing info is a prerequisite for effective info
management
Some broad changes in internal and external environment that are putting pressure on the
need for marketing info include:
1. Socio-cultural changes
Increasing urbanization, which affects demand and consumption patterns
2. Technological progress
Increasing use of computers
3. Increased consumer pressure
A result of consumers that are more informed and protected
4. Competitive activities
5. Short product life cycle. Expansion into new markets and management of multiple
distribution channels, which contribute to increasing complex marketing decision
1
Created by: Sabrina Dias
, Factors contributing to the development of marketing research
1. Shift from a production-to a marketing-oriented economy and management philosophy
Until 1930s the emphasis was on production and the development of better
production methods
After great depression an oversupply of goods led to the emphasis shifting gradually
from production to marketing
Today marketing is generally accepted as a managerial philosophy, and
organizations are more attuned to satisfying the consumers’ needs
Risk involvement has increased in decision making, therefore a greater need for info
to decrease risk
2. Change on the cost structure of organizations
Fixed cost component had increased due to mechanization
To justify this capital investment, high production and sales are needed, therefore
the best available market knowledge for the product is needed
3. Shift in emphasis from price to non-price competition
Example: advertising, product differentiation and packaging
This is due to various factors such as: the cost structure and changing consumer
preferences
4. Expansion of the production process
Labor specialization has led to lengthening the production process
Production process that used to be handled by one manufacture is now split among
various manufacturers, each specialized in a part of the process
5. Increase in discretionary buying power
In general, the standard of living in western countries has risen sharply this mean
that a smaller percentage of consumers income is pent on necessary goods and
more money is available to spend on unnecessary and luxury goods
6. Increasing differentiation in supply
To gain competitive advantage, new products are developed continuously, resulting
in consumers having a wider range of options to choose from
7. High cost of marketing
Factors such as geographical extent of the market and low population density
contribute to high cost of marketing
Info provided by marketing research can make it possible to rationalize markets and
cut costs
8. Emergence of the professional manager
Shift from owner-manager to professional manager
Managers are better trained to manage in a more scientific manner
Technological development and marketing info
The development of computers, the internet and more recently the rapid growth in mobile
technologies and social media, has made it easier, quicker and cheaper to collect data
Over 20 years ago most organizations did not have sufficient info available to make effective
decisions, but this has changed. Today we have info explosion
A result of info explosion, management often finds that making decisions is more difficult
because of the volume and not the lack of data.
Due to the enormous increase in data the emphasis is no longer on data collection but
rather data management
Data = all available statistics, opinions, facts and predictions
Info = data component that is relevant to the decision in question
Increasing complexity of data is another reason why data management is so critical
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Created by: Sabrina Dias
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