The above have been placed into what Marketeers classify as consumer models; of which there are simple and complex models.
Simple – attempts to analyse only certain key influences on demand.
Examples of Simple Models
➔ ➔
Based on observed behaviour and are guided by external models
➔ ➔
Based on observed behaviour and are guided by internal models
As the black box – but having your own input – e.g. if you want to buy a coat and you see a style you want and is at a price you want to pay, then under the black box version you would buy it, however in this version if the coat was of Leather and your beliefs were against using animal products then you wouldn’t buy it.
Complex – use a more comprehensive approach into include all aspects of the buying process.
We also need to look at why customers will buy from GDI. What are their motives?
Psychological - They may have a loyalty to the company
Socio-Psychological - These may be affected by a number of factors
- family / friends / work groups / motivation etc
Sociological - Again a number of influencing factors
- Status / Social Class / Mobility
Economic - Price / can I afford it / its it value for money
Cultural - Will it have an effect on our cultural beliefs or values
Do they have brand loyalty?
Research Techniques
What is market research?
Businesses striving for excellence and success require objective, reliable and evaluative information about:
- what their stakeholders know (awareness or familiarity)
- what they think and value (opinions and beliefs)
- what they feel (attitudes and emotions)
- what they do, and are likely to do (usage and behaviour)
- drivers, motivations and reasons for the above
- emerging issues which could impact your organisation
This enables organisations to improve their planning and decision making.
Primary Sources
Information that is original and obtained outside the firm. Obtained by research conducted by or on behalf of a company. Information gathered can be described as ‘qualitative – information about the opinions and preferences’ or ‘quantitative – produces figures that can be examined statistically’
Examples : Telephone Interviews / Face to Face Interviews / Questionnaires /
Cold Calling / Experiments
Advantages : Relevant Information Disadvantages: Time consuming
Up To Date
Unwanted results
Expensive
Secondary Sources
Information obtained from internal sources.
Examples : Databases / Knowledge Sharing / Intranet & Internet / Consultants /
Catalogues / Directories
Advantages : Cheap Disadvantages : Irrelevant data
Quick Out of Date
Compare data Slow
Data Analysis and Customer Satisfaction
Dependent on the kind of information you require will determine the data to be supplied.
Example Number of questionnaires sent out and received back
From the answers various output can be retrieved.
Number of responses
Numbers of people answer the different questions and how.
All this kind of information can be analysed by graphs and percentages. (see appendix A)
It is difficult to quantify customer satisfaction, but if you use the Market Research company again indicates you were happy with the results.
Task 1. Consider what issues must be researched by the company. Include such items are the Product, Location and Competition
Because Glue Dots, within the Craft Sector are new concept, we can look at the Innovation and Diffusion of the product,
Within Innovation there are 3 different forms.
Within Diffusion there are 5 different areas
As we can see from the above tables, GDI are very well placed to venture into a new market. It is a very simple process to adapt the quantity / size / adhesive of the Dot to accommodate all prospective customers. This will enable them to become market leaders within the Craft Sector.
What areas topics we need to research and why? - What products do ‘Crafters’ currently use
Before time and money are wasted on producing new products for the Craft Sector we need to look at what products Crafters currently use and the pro’s and con’s of each product. If a Crafter has been using the same product with good success for a long period of time, then it is going to be a challenge to sway them into purchasing your product. You need to know your market and tailor your product to suit their needs and requirements, with the minimum of financial input.
Who are our target Market and Customers
Since GDI have attended recent Craft Fairs and from talking to the people attending the Fairs, the decision of who is the Target Market has already been decided by Mr Bennett, this being the Retail Outlets. As already identified, GDI are not aiming at the end user but the Retailers where the customer would purchase the product from.
Who are the competition?
Within the Dot industry there are very few competitors in the UK, US or Europe. The main competitors are :-
Task 2. Consider what target markets the company would investigate to complete the
market research and how these potential buyers would be expected to act
What buyer behaviours are involved and how can we investigate this and can these be represented by buy behaviour models.
As already identified, because GDI are not targeting individuals but Retail Outlets of the Craft Sector their buying behaviour is different than if the product was being bought by an individual. More influences are placed on the buyer and the DMU is larger, more people having a say in what is bought but generally the motive is the cost and how much mark-up they can put on a product. It can be represented by the ‘Black Box Model – please see page 4’.
We can investigate this further by asking relevant questions when conducting the Market Research.
i.e. Who is the buyer
Is Cost a major factor when looking at new products
Task 3. Discuss how you would go about completing the research. Include such factors
as the research methods, quantitative and qualitative techniques, and also
primary and secondary data sources.
Because GDI are part of Viking and they have been established for over 20 years, they have a vast database which could be utilised when conducting Market Research
Below are some examples of the techniques and sources we would utilise to conduct the Market Research, which will then enable us to produce facts and figures to support our recommendations.
Importance of researching a potential product.
By conducting quality and in-depth research could eliminates the possibility of producing goods that the anticipated target market will not purchase
Costs and Benefits
In man hours and product research costs the benefits of conducting such research into the new target market will significantly benefit GDI, reducing costs from producing products that won’t sell to being able to target your audience with the product they will and will want to buy
Task 4. What would be the expected results and how would you analyse them? Consider the response rate, answer quality and time scales.
Results
By questioning not only the Retailers but the Crafters themselves, will give a comparative set of answers that will not only be qualitative but quantitative.
Expectations: From a questionnaire we would expect a 30% response rate
We would expect a better answer quality from the telephone interviews
A timescale of 3 weeks should be allowed for questionnaires to be returned.
Getting the questions right – the importance
If you do not ask the right questions then the answers may not actually generate a result.
I.e. If you ask too general a question then instead of getting an answer that can be quantified you get an essay this is very hard to present in an analytical.
So it is vital to ask DIRECT questions – How much? When? Where?
Analysing the results
Because we would target the Retailer and the end user and by asking similar questions, then we would be able to produce comparative figures.
i.e. Is the cost a major factor
Retailer End User
Yes 75% 40%
No 35% 60%
You can deduce that even though the retailer thinks the price is a major factor and may affect what the end user purchases, they themselves are not as concerned because it could mean that the are prepared to pay a little extra for a product that will same them time and thus money in the long term.
CONCLUSION
Why use us?
Because we have the skills and ability to produce cost effective and reflective results quickly and easily. We have the contacts to enable the process to be as smooth as possible and the tools to produce the data in a format which best suits your own companies needs.
Advantages
- Quicker
- Cheaper than using in-house staff who will have to incorporate this within the working day
- Expertise on what is relevant data
- Produce measurable and comparative data
- Because the target market is comparatively small, then we can target all the retailers without having to do sampling
Disadvantages
- You know your product better than anyone
- The research will be compiled off-site
Market Research Companies – Benefits / Reliability
Many companies prefer to have an outside company, as they do not have any hidden agendas. If you study data gathered by your own company then the information may be biased towards the new product/service etc. To measure the reliability of a product you must first specify exactly what you are trying to achieve in your survey, if you are unclear then the results are more than likely to be unclear.
The diagram below sets out how we would carry out a research study
Recommendations
The following is a simple list of our recommendations :-
- Utilise your existing databases to carry out telephone research of your customers to find out if any of their businesses supply to Craft Retailers
- Send out literature on the new products
- Compile a list of Craft Retailers – possibly buying a list from Yell.com or a similar database company
- Send out a questionnaire asking if they had heard of the product
- Who would make the decision in buying the product
- What would make them stock your products
- Would a display box encourage them to buy your products – because it would come in the same box that could then be displayed
- Is the cost of the product a major factor
- Of the 4 products produced is there 1 that the retailer thinks would be the better seller
- Conduct telephone research of the Craft shops asking similar questions as you would the Retailer – obtaining this information from either the internet, database lists bought / craft magazines. Asking :-
- Do they know the product
- Is price a big factor of purchase
- What do they currently use
- What problems have they encountered with their current choice
- Out of the 4 products produced is there 1 that the Crafter thinks is the better product.
Once all the information is gathered then we can produce comparative analysis between the Retailer themselves and the Crafters.
This will then enable you to produce the product the customer wants and will buy.
Glue dots are a simple product that has a great potential
Bibliography
Books
Engel et Al - Consumer Behaviour - 1st Edition - The Dryden Press – 1986
Kelly, FJ & HM, What They Teach You At Harvard Business School – (1987)
Marketing for Higher Awards – 1st Edition – 1999 – Heinemann
Internet Sites Accessed
http://www.mori.com/ - accessed May 2003
http://www.statistics.gov.uk/ - accessed May 2003
http://www.felixent.f9.co.uk/hnc/home.html - accessed May 2003
http://www.marketingteacher.com/Lessons/lesson_promotion.htm - accessed May 2003
http://www.bized.ac.uk/ - accessed May 2003
