Sunday, April 08, 2007

Conducting marketing research and forecasting demand

Marketing concepts -- Chapter 4



Summary



Companies can conduct their own marketing research or hire other companies to do it for them. Good marketing research is characterized by:

  • the scientific method
  • creativity
  • multiple research methods
  • accurate model building
  • cost-benefit analysis
  • healthy skepticism
  • ethical focus



The marketing research process consists of:

  • defining the problem and research objective
  • developing the research plan
  • collecting the information
  • analyzing the information
  • presenting the findings to management
  • making the decisions



In conducting research, firms must decide whether to collector and data or use data of the arty exists. They must also decide which research approach and which research instruments to use.

Research approaches -- observational, focus group, survey, behavioral data, experimental

research instruments -- questionnaires, mechanical instruments

in addition, they must decide on a sampling plan or contact method.



Analysis should ensure that the company achieves the sales, profits, and other goals established in its annual plan.

The main tools are:

  • sales analysis
  • market share analysis
  • marketing and expense to sales analysis
  • financial analysis of the marketing plan



Profitability analysis seeks to measure and control the profitability of various products, territories, customer groups, trade channels, and order sizes. An important part of controlling for profitability is assigning costs and generating profit and loss statements.



There are two types of demand: market demand and company demand.



To estimate current demand, companies attempt to:

  • determined total market potential
  • area market potential
  • industry sales
  • market share



To estimate future demand:

  • Company survey buyer's intentions
  • solicit their sales force input
  • gather expert opinions
  • engage in market testing.



Mathematical models, advanced statistical techniques, and computerized data collection procedures are essential to all types of demand and sales forecasting.

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