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Introduction to Business

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Introduction to Business ­MGT 211
VU
LESSON 24
MARKET RESEARCH
Market research is the process of systematic gathering, recording and analyzing of data
about customers, competitors and the market. Market research can help create a business
plan, launch a new product or service, fine tune existing products and services, expand into
new markets etc. It can be used to determine which portion of the population will purchase the
product/service, based on variables like age, gender, location and income level. It can be
found out what market characteristics your target market has. With market research
companies can learn more about current and potential customers.
The purpose of market research is to help companies make better business decisions about
the development and marketing of new products. Market research represents the voice of the
consumer in a company.
A list of questions that can be answered through market research:
What is happening in the market? What are the trends? Who are the competitors?
How do consumers talk about the products in the market?
Which needs are important? Are the needs being met by current products?
A simple example of what market research can do for a business is the following. At the
company Chevrolet they brought several disciplines together in a cross-functional team to
develop a concept for a completely new Corvette. This team enabled the marketers to come
up with an alternative concept, one that balanced 4 attributes: comfort and convenience,
quality, styling, and performance. This was considered radical because comfort and
convenience were not traditional Corvette values. However, market research demonstrated
that consumers supported the alternative concept. As a result the new Corvette was a huge
success in the market. [Burns 2001]
With market research you can get some kind of confirmation that there is a market for your
idea, and that a successful launch and growth are possible.
Market research for business planning
Market research is discovering what people want, need, or believe. It can also involve
discovering how they act. Once that research is complete it can be used to determine how to
market your specific product. Whenever possible, try to reduce risks at the earliest possible
stage. For example you could carry out market research early on and not wait until you are
almost ready to enter the market. If early market research reveals that your business idea has
real potential, you can use this information in planning the build-up of your business. [Ilar
1998]
For starting up a business there are a few things should be found out through market research
in order to know if your business is feasible. These are things like:
Market information
Market information is making known the prices of the different commodities in the market, the
supply and the demand. Information about the markets can be obtained in several different
varieties and formats. The most basic form of market information is the best quotation and last
sale data, including the number of shares, with respect to a particular security at a given time.
[Market research 2006]
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Introduction to Business ­MGT 211
VU
Examples of market information questions are:
Who are the customers?
Where are they located and how can they be contacted?
What quantity and quality do they want?
What is the best time to sell?
What is the long-term or historical price data over a number of years?
What is the expected production in the country?
Is there more demand for one product or another? Etc.
Market Segmentation
Market segmentation is the division of the market or population into subgroups with similar
motivations. Widely used bases for segmenting include geographic differences, personality
differences, demographic
differences, use of product differences, and psychographic differences.
Market Trends
The upward or downward movements of a market, during a period of time.
The market size is more difficult to estimate if you are starting with something completely new.
In this case, you will have to derive the figures from the number of potential customers or
customer segments. [Ilar 1998]
But besides information about the target market you also
need information about your competitor, your customers, products etc. A few techniques are:
Customer Analysis
Competitor analysis
Risk analysis
Product research
Advertising Research
In the last chapter you can read how to perform market research, with interviews and
questionnaires, but there is already a lot of information available. Ma
rket research firms and industry experts publish much of their information on websites, and in
trade and business magazines. Reference sites index these magazines, many offer the texts
online and if not the libraries stock them. Trade associations publish any listings and statistics
on their websites as well as in hard copy publications. So there is already a lot of information
available.
102
Table of Contents:
  1. INTRODUCTION:CONCEPT OF BUSINESS, KINDS OF INDSTRY, TYPES OF TRADE
  2. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:THE ECONOMIC ENVIRONMENT
  3. BUSINESS ORGANIZATION:Sole Proprietorship, Joint Stock Company, Combination
  4. SOLE PROPRIETORSHIP AND ITS CHARACTERISTICS:ADVANTAGES OF SOLE PROPRIETORSHIP
  5. PARTNERSHIP AND ITS CHARACTERISTICS:ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP
  6. PARTNERSHIP (Continued):KINDS OF PARTNERS, PARTNERSHIP AT WILL
  7. PARTNERSHIP (Continued):PARTNESHIP AGREEMENT, CONCLUSION, DUTIES OF PARTNERS
  8. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:ETHICS IN THE WORKPLACE, SOCIAL RESPONSIBILITY
  9. JOINT STOCK COMPANY:PRIVATE COMPANY, PROMOTION STAGE, INCORPORATION STAGE
  10. LEGAL DOCUMENTS ISSUED BY A COMPANY:MEMORANDUM OF ASSOCIATION, CONTENTS OF ARTICLES
  11. WINDING UP OF COMPANY:VOLUNTARY WIDNIGN UP, KINDS OF SHARE CAPITAL
  12. COOPERATIVE SOCIETY:ADVANTAGES OF COOPERATIVE SOCIETY
  13. WHO ARE MANAGERS?:THE MANAGEMENT PROCESS, BASIC MANAGEMENT SKILLS
  14. HUMAN RESOURCE MANAGEMENT:Human Resource Planning
  15. STAFFING:STAFFING THE ORGANIZATION
  16. STAFF TRAINING & DEVELOPMENT:Typical Topics of Employee Training, Training Methods
  17. BUSINESS MANAGERíS RESPONSIBILITY PROFILE:Accountability, Specific responsibilities
  18. COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
  19. COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE
  20. STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE
  21. MANAGERIAL STYLES AND LEADERSHIP:Changing Patterns of Leadership
  22. MARKETING:What Is Marketing?, Marketing: Providing Value and Satisfaction
  23. THE MARKETING ENVIRONMENT:THE MARKETING MIX, Product differentiation
  24. MARKET RESEARCH:Market information, Market Segmentation, Market Trends
  25. MARKET RESEARCH PROCESS:Select the research design, Collecting and analyzing data
  26. MARKETING RESEARCH:Data Warehousing and Data Mining
  27. LEARNING EXPERIENCES OF STUDENTS EARNING LOWER LEVEL CREDIT:Discussion Topics, Market Segmentation
  28. UNDERSTANDING CONSUMER BEHAVIOR:The Consumer Buying Process
  29. THE DISTRIBUTION MIX:Intermediaries and Distribution Channels, Distribution of Business Products
  30. PHYSICAL DISTRIBUTION:Transportation Operations, Distribution as a Marketing Strategy
  31. PROMOTION:Information and Exchange Values, Promotional Strategies
  32. ADVERTISING PROMOTION:Advertising Strategies, Advertising Media
  33. PERSONAL SELLING:Personal Selling Situations, The Personal Selling Process
  34. SALES PROMOTIONS:Publicity and Public Relations, Promotional Practices in Small Business
  35. THE PRODUCTIVITY:Responding to the Productivity Challenge, Domestic Productivity
  36. THE PLANNING PROCESS:Strengths, Weaknesses, Threats
  37. TOTAL QUALITY MANAGEMENT:Planning for Quality, Controlling for Quality
  38. TOTAL QUALITY MANAGEMENT (continued):Tools for Total Quality Management
  39. TOTAL QUALITY MANAGEMENT (continued):Process Re-engineering, Emphasizing Quality of Work Life
  40. BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks
  41. NON-VERBAL COMMUNICATION MODES:Body Movement, Facial Expressions
  42. BUSINESS ORGANIZATIONS:Organization as a System
  43. ACCOUNTING:Accounting Information System, Financial versus Managerial Accounting
  44. TOOLS OF THE ACCOUNTING TRADE:Double-Entry Accounting, Assets
  45. FINANCIAL MANAGEMENT:The Role of the Financial Manager, Short-Term (Operating) Expenditures