Market research is a dynamic term. It has opened up to some fascinating techniques and innovative ideas. But at the same time it is costly and time consuming process. The first question arises as: Why to make BIG investments in Market Research?
It would have never occurred to the company that withdrawal of the age-old formula of Coke could be such a disaster.
Kellogg’s could not replicate its success story in India (1994) when it entered Indian market, even when most of the trade barriers prior to 1991 were withdrawn.
Pepsi Kona (Less heard name)-a highly carbonated beverage that tastes more like coffee than cola was a big time failure.
There are innumerable examples which point to the common reason of failure –Lack of substantial Market Research or it was more like a misleading market research that failed to reflect the actual consumer behaviour for the target market segment.
Albert Szent –Gyorgi very rightly said Research is to see what everybody else has seen, and to think what nobody else has thought.
Companies use market research to know the risk associated with the products and services, to keep a tab on who is their audience, to increase their sales/revenue, to cater to the needs of their consumers in a better way, to know the reaction of people towards their product/services.
It can also help carrying out an Advertising experiment: say how replacing Aishwarya in an ad with Katrina would increase in consumer preference for the brand, Carrying out a Pricing Experiment say can Zara improve the profitability of its fashion lining by increasing its price by 10 per cent or others like Sales Productivity Experiment, Shelf space experiment, Direct mail experiment, etc.
How to Carry Out an Effective Market Research
Ask the right set of questions.
Who is your target audience? It is very well required to know why and for which target group the research is being carried on.
According to ‘Interconnected World: Shopping and Personal Finance’, 2012, 61 percent of global users research the product online. With that being the case, business personnel need to revisit who their target audience are.
How well you know your competition? As they say Ignorance is not bliss. It is definitely a wise step to have detailed information of the competitor, what information you want about them, how you react or form strategies based on them.
Analysing & Observing: Very often Observation gives the true picture of people’s behaviour.
Interpretation/Enquiry: It is not surprising when a HUL guy stops us on the middle of the road asking for which soap do we use and why.
What Strategy to follow? Research results of ‘New Coke’ failure and the reasons behind it forced Coke to bring back the old coke as ‘Classic Coke’.
Framing the Research Problem and Objective
Need for Research: Defining the problem is complicated and half the battle. It needs to be viewed from perspective of different stakeholders.
Taking up the classic case of Cola wars where Pepsi encouraged consumers to take blind tests, continuing to creep in to take the market share of Coke. They agreed that once blind-folded they liked the taste of Pepsi better. Coke spent four years researching into this problem. The outcome was changed formula. But the public outcry forced them to take back the new Coke and launched the old formula as ‘Classic Coke’.
Here Coke incorrectly defined the problem as “How can we beat Pepsi in terms of taste” rather than “How can we gain market share against Pepsi”. It could have carried out the market research with the objective of identifying the key factors responsible for reduction in market share.
Once the problem is clear we define the research objectives. Once done with that we go for selection of research types, methods and techniques.
With the advent of technology, Market Research can be carried out much more efficiently. It has made job of market researchers much easier. The advent of social sites like Facebook, twitter, LinkedIn there has been expansion in the landscape in which research is carried out.
Market researchers can take advantage of the available capabilities.
Apart from the traditional methods of research techniques such as paper surveys, Delphi technique, focus group, there is a constant development in software area to collect data. Mobile communication giant O2 utilizes advanced analytics to power retain their customers and build on loyalty.
In short large pool of data coming from online and offline sources allow market researchers to analyse and formulate policies with much more accuracy. Thus, market research is a powerful tool, and in this age of competition and variable needs of consumers its difficult to do without it.
Section B _Group 7_Sonam Supriya_13PGP112
Other Members of Section B,Group 7: Amrit Jain, Ankit Saxena, Gugan N, Jyoti Kanwatia, Nitin Sonkar, Sumit Ranjan, Yogesh Sham Gupta