Sunday, 14 September 2014

Marketing Insight - learn by others experience 1

This week – fruitsofsuccess- is celebrating Marketing Week. There will a new post each day on a marketing related topic . Today’s subject is....

Marketing Research part 1

"Fools say that they learn by experience. I prefer to profit by others experience" 
 - Otto Von Bismarck

It is a powerful quote by a famous political leader and both an argument for education and training. Elsewhere I have heard 'experience' defined as merely mistaken related competence. Bismark's approach is also a useful attitude for marketers to adopt.

 The military have always known the importance of spies and intelligence.

 The quotation " Time spent in reconnaissance is seldom wasted" is attributed to many military leaders, Clausewitz, Wellington and Montgomery to name just three.

 We marketers may not have to fight wars in the military sense but competing in markets requires similar approaches when in comes to developing marketing insight.

I guess this the reason why many of the classic book lists on MBA courses are likely to include the classics of military strategy Sun Tsu, Clausewitz et al.

Marketing insight involves reconnaissance into

·         what HAS HAPPENED in the market

·         what is HAPPENING NOW in the market

·         what people THINK and FEEL

·         what people SAY WILL HAPPEN

"If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle." 
- Sun Tzu, the Art of War

Some Information Marketers Require

·         your buyer's needs, preferences and requirements

·         size of (potential) market in terms of buyers, sales volume and sales value

·         geographical distribution of the market

·         types and classifications of buyers

·         competitor details (e.g. market shares, pricing policies, promotional methods etc.

·         environmental details (e.g. taxes, laws etc.).

Sources of Information

Information can be obtained from a variety of different sources including:

·         your sales force

·         other employees (e.g. service engineers)

·         distributors, agents etc.

·         competitors

·         trade associations

·         government bodies

·         internal market research departments

·         market research consultants

·         general or specialist publications

·         buyers and potential buyers themselves

Methods of Obtaining Information from (Potential) Buyers

Information can be obtained by web surveys e.g. Survey monkey, mail surveys, telephone surveys, personal interviews or focus group discussions.  Usually this will require statistical sampling methods to minimise error:

a)       Random Samples are based on totally random selections from the target population; to allow for the resultant potential error, random samples usually need to be larger than other kinds.

b)       Quota Samples are carefully designed to ensure that the sample include a fair selection of the different types of buyer in the market.

c)       Customised Samples are even more precisely designed so that the final sample is as nearly exactly representative as possible of the actual buyer population (in terms of things like age, wealth, education, type of industry, size of company etc.).

d)       Multi Stage Samples are carried out regularly over a longer period of time so that the information is constantly being kept up to date, and allowance is made for any changes in attitudes or preferences over time.

A different approach which can be used is Test Marketing where a product is actually offered to a section of the market to test demand and buyer reaction.  This approach has the benefit that it is not dependent on what people say they will do, it is based on what they actually do do.

When choosing a method it is necessary to trade off the cost of the method against the accuracy and reliability of the result.

Sources of Error in Surveys

Quite apart from any inherent mathematical sampling errors there are several potential practical sources of error.

·         people saying what they think they should say rather than what they really feel.

·         biased or distorted samples.

·         inherent communication problems which exist in all human communication processes (e.g. different interpretation of words).

·         questions or questionnaires being biased in the way they are phrased.

·         varying degrees of conscientiousness or subjectivity in researchers or respondents

·         respondents with certain characteristics replying more readily than other types of people.

·         poor timing of surveys.

Managing Your Marketing Research

All marketing research must be cost effective and so it must be well planned and well managed.  Here is a suitable sequence.

1)       Identify the problem and the exact objective(s).

2)       Clearly agree terms of reference with the parties involved.

3)       Plan the timing of the research itself and potential actions resulting from it.

4)       Carry out the actual research activities.

5)       Analyse and interpret the data carefully, looking for inconsistencies, biases, errors, time distortions etc.

6)       Summarise and report as quickly as possible.

7)       Make decisions and implement action where appropriate.

8)       Review the accuracy of the research in retrospect so that future research can be improved.

9)       Continue the research and update the information wherever possible.

In the 1962 movie " Lawrence of Arabia", General Allenby (Jack Hawkins) says to T. E. Lawrence (Peter O'Toole) that "I fight like Clausewitz, you fight like Saxe", to which Lawrence replies, "We should do very well indeed, shouldn't we?"

Maurice, count of  Saxe  "It is not big armies that win battles, it is the good ones!"

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