The ground truth is that the success of any business by and large depends on market research (Greenstreet, 2006). First and foremost, it is critical to understand marketing so as to be able to appreciate why market research is crucial for viability of any business. Market can be said to refer to “the process of planning and carrying out the plan, pricing, promotion as well as sharing of ideas, goods and services to create exchanges that satisfy individual (customer) and organizational objectives” (Kotler & Armstrong, 2007). In simple terms marketing is nothing more than the process undertaken; purposely to retain and satisfy customers on the one hand while on the other hand the business earns profit (Kotler & Armstrong, 2007).
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From the above definition, it is possible for a person to ascertain that it is only through carrying market research that a company can be able to know the type of products or services that can be profitably introduced into the market (Greenstreet, 2006). In addition, through market research of products or services already in the market, a company is capable to deduce whether customer demands are met and the nature of changes or modifications required concerning the product so as to fully satisfy customers (Tony, 2000). Thus, a company can only recommend changes, in the way a product is packed or delivered, or the product itself, after carrying research of the products’ market (p. 7).
The importance of marketing and marketing research can not be trivialized. In essence, the importance of marketing can be construed from the words of Philiph Kotler, an acknowledged guru of marketing who defines marketing as being “a social and managerial process by which individuals and groups obtain what they need and want through creating, offering and exchanging products of value with others” (Kotler and Fernando, 2003). Thus it is impossible to have a complete market management where there is lack of marketing research. This is also affirmed by Kotler et al (2003) when they state that “marketing management is accomplished by carrying out marketing research, planning, implementation and control”. Therefore, for marketers marketing research is a crucial tool pertinent to business success.
During the initial stages of business, an entrepreneur first researches in order to have a good plan for the business. This initial plan is vital for the startup since in business those who fail to plan; plan to fail (Marder, 1997). Therefore, before launching any business, it is important to have a well conceived business plan. Likewise, it is important to have customers to buy the products (Greenstreet, 2006). Whereas a good business plan identifies where and how sales will be achieved in order for a business to succeed, the future of the business depends entirely on undertaking a comprehensive market research (Marder, 1997).
Once a business kicks off, it only requires customers in order to maintain its operations. Market know-how (insight) entails identification and analyses of the customers with a view of soliciting them to buy the products (Marder, 1997). The implication is that, for an entrepreneur to realize increased sales, he has to market his products. Marketing of the products can consequently require research in the market via a workable market plan (Kotler and Fernando, 2003).
A business needs to identify anticipated sales as well as customer turnover. Market analysis can be achieved through studying other similar businesses so as to acknowledge how prices of their products are affected by the competition (Greenstreet, 2006). Study, how customers are attracted by your products, how satisfying are these products to the customers. Evaluation of other similar businesses in terms of their pricing structure, customer base and services is critical for an entrepreneur to evaluate the type of pricing structure he/she will adopt, in as well as to evaluate possible changes that can make significant market price niche for his products (Kotler & Armstrong, 2007).
Having dealt with the issue of competitors, an entrepreneur now focuses on the customers through identifying who his customers are, what they need, what they will buy as well as what they will pay for the product (Tony, 2000). It is after doing such analysis that an entrepreneur can plan out how to bring out his products/services to the marketplace (Tony, 2000).
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As Karyn Greenstreet remarked “if a man does not keep pace with his companions, perhaps it is because he hears a different drummer” (Greenstreet, 2006). With the current settings, of businesses assuming global dimensions, market research is crucially vital for sound market decisions (Marder, 1997). In addition a company that utilizes market research gains advantage over its competitors. A case in hand is Starbucks coffee, when it capitalized on changes in consumer behavior to gain foothold in the competitive coffee market (Tony, 2000). In a similar move, through market research, Chrysler successfully entered Minivan market that had been viewed by the general manager and as being risky (p 47).
The need for marketing research can not be dispensed with in any business undertaking. Its importance varies from market decision making, to that of enabling a company to maintain a competitive advantage over its opponents.
Greenstreet, K. (2006). Ground Truth, and the Importance of Market Research. Web.
Philip Kotler and Fernando Trias de Bes, Lateral Marketing: A New Approach to Finding Product, Market, and Marketing Mix Ideas, Wiley, 2003.
Marder, Eric The Laws of Choice – Predicting Customer Behavior (The Free Press division of Simon and Schuster), 1997.
Tony, P – Essentials of Marketing Research: Prentice Hall, 2000
Kotler, Philip and Armstrong, Gary Principles of Marketing Pearson, Prentice Hall, New Jersey, 2007