Analyze the relevance of market research and marketing strategy
In the contemporary world it is hard to imagine a company, which operates in the market blindly, without preliminary investigation and analysis. As the markets become more and more heterogeneous, the competition grows stronger and customers’ preferences at a particular instant of time determine the success of the product, the necessity to explore the market and define a well-structured strategy has become more and more significant. That is why more than 70 percent of the overall marketing expenditures on research are spent by 70 biggest US companies, such as Coca-Cola, McDonald’s etc. The total U.S. Market Research expenditures are growing every year, reaching $7.3 billion in 2004, which emphasizes the importance of it for the companies. Market research in the U.K. accounts for approximately 10% of the world marketing research expenditures (approximately £2.076 bln in 2009), with the largest users in food and drinks (16%) and other consumer goods sectors. The biggest spender in the UK in 2010 was Procter&Gamble with £195m used solely for advertising development. A lot of research in the UK is exploring new channels, such as social media, relying on the fact that the country has one of the widest social media user base in the world (e.g. it is 2nd after the US in the number of facebook users in 2010). The overall marketing research industry in the UK earned £1.22 bln. in 2004, with a remarkable growth rate of 2.2% per annum. The largest marketing research supplier in the UK was TNS Research International with the turnover in 2009 equal to 170.000 £m (updated on1 December 2010).This indicates the strong tendency of the companies to invest into research, as it is becoming more and more important for success.
Marketing research is usually defined as a systematic collection and evaluation of the information, which is further used to make marketing decisions. Nowadays, it is common to use sophisticated models in order to picture market behavior based on the research information. The most common areas of investigation include market size, customer attitudes, and shares of competition, evaluation of promotion effectiveness and customer satisfaction. Based on this information companies often determine the appropriate pricing strategy, develop brand image and conduct market segmentation for a more successful approach of the target audience. Market research is usually subdivided into 2 branches: qualitative and quantitative. Qualitative research is highly relevant on the first step of market analysis. It uses observations, focus groups and interviews to get the first insights into the current situation. Quantitative study is the next step of the market research. It is very useful for a more detailed analysis of customer behaviors. It allows creating various models of the market and thus, making more precise decisions about further marketing strategy.
Profound marketing research helps to create a marketing strategy of the company. In some sources it is defined as the logic, which helps business to reach its marketing goals. It is often derived from the analysis of the organization’s strengths and weaknesses, along with the external opportunities and threats of the market and customer preferences. The strategic objective for a company is to build strengths in the area most important for the customers and those, which can give advantage compared to the competitors. The marketing strategy should also identify and mitigate the risks associated with the potential threats and to combat the weaknesses of the business. Only having a clear marketing strategy can the company determine the most efficient sphere of operation and develop the most effective plan to approach the customers and to be better than the competition.
In order to find the right path, it is important to know where one is going. The situation is the same with the companies. In order to be successful, every organization should have a clear marketing strategy, consistent with their objectives and vision. However, formulation of such a strategy is only possible after prior in-depth market research and analysis. Marketing research allows evaluating and adjusting actions, monitoring performance and improving underlying processes. It helps to offset the unpredictable behavior of the market, identify consumer preferences and determine the most efficient pathway for the company. Therefore, today every company aiming for success has to emphasize the two elements of the marketing activities: marketing research and marketing strategy. While the former is a cornerstone of the future planning and orientation, and the latter is the tool for environment exploration, together they are an essential part of the company’s success.
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