Professor Georgia Institute

Professor Georgia Institute of Technology (USA), Naresh Malhotra, in his book “Marketing Research and efficient analysis of statistical data ‘specifies that market research – the systematic and objective research, collection, analysis and dissemination of information that are being implemented to improve decision making related to marketing. Descriptive and predictive studies suggest not only a description of the behavior of consumers (markets), but also what factors influence this behavior, how it changed in the past. They shall, on the basis the data to construct a prediction about the behavior of consumers (market development). An example of the practice. The company – a major retailer of coffee. Objective: To understand what happens to the consumption of coffee in the next two years. Methods: The evaluation capacity of the market and its dynamics.

Focus groups with customers – and potential. In-depth interviews and a massive survey of coffee lovers, and conscientious in its consumption, the assessment of factors affecting their choice. Understanding motivation and description of the situations and acquiring coffee consumption, estimated demand for the segment, its price elasticity. Result: The construction of the model of coffee consumption over the past 5-7 years. Predicting 2-4 years in advance.

More precise positioning of the brand, clearly pricing, effective program of promotion, sales increase. Marketing research with supporting objectives are needed to confirm the information already available. For example, Your company already knows that it is the market leader in its region. However, not to be unfounded, use this argument to avoid publicity and accusations from competitors (in the dissemination of false information, etc. etc.), you need an official opinion of the independent research company. This would be exculpatory market research. Supporting market research may be needed to assess the effectiveness of advertising campaign. In this case, measurements are carried out before and after the conference. Change in market share, brand awareness, increasing the number of loyal customers and will show how successful advertising campaign. How much to spend for marketing research. The cost of conducting market research are part of the company’s budget on marketing and advertising. You can recommend a few basic approaches to formation of this budget. Cost Approach. The Company determines the cost of marketing and advertising as a percentage of production costs. For example, marketing costs should not exceed 10% of the total cost of the company. The share of profits. The company allocates a share of marketing profits. For example, budget expenditures on marketing and advertising for the next period is assumed to be 20% of the profits of the previous period. Competitive approach. Company focused on the competition. For example, if the market leader in spending on marketing and advertising $ 5 million per year and still has a turnover of up to five times more than your company, you have to comply with the parity must be provided for this purpose a million. Depending on the goals and objectives. The company in budget focuses on the specific challenges it faces. For example, several times the marketing budget increases in the conquest of new market.

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