All this serious research and investigation is done by The Marketing Department that every large firm or business contains. The typical layout of the department is the following;
- Regional Sales
-
Research and Development (‘R and D’The main sector of the Dept.)
- Promotion and Advertisement
- Distribution
This department’s objectives are to increase sales and revenue, maintain market share, improve product image, develop and improve products. This department is the most important part of any competent business. The ‘R and D’ sector works as the brain of a firm.
Marketing Objectives:
- Increase profit and sales revenue.
- Target a new market/ market segment.
- Improve and Develop Products.
- Provide a customer service.
S.W.O.T. Analysis:
This is a technique used to access a product in the market. The abbreviated term, “S.W.O.T.” stands for ‘Strengths, Weaknesses, Opportunities and Threats’.
Market Segmentation:
Very crucial for market research, as it breaks down the market as a whole into sub-groups;
Categories are:
- By income
- By age
- By region
- By gender
- By use of product
- By lifestyle
When a new product is set for a market and does not meet all of the above categories of the customer, a ‘gap’ is left in the market.
Now suppose Sainsbury wants to release a new product and wants to win over its rivals (Asda, Tesco, and Morrisons), the special or unique in one way or another. It must have something more, other stores do not provide or make the consumer think that he is buying the same kind of product from this store, but for better value (bargain) as it has more features. What they can do is to give it a Brand name, which no one else can copy or make a unique packaging and advertising style.
All these activities can be summarized into the ‘4 P’s, which are:
1.Product(-Itself, design and quality)
2.Price
3.Promotion
4.Place
5.Packaging; Economists still debate over whether to add the 5th P or if its included in Product and Pricing.
All these activities take place in The Marketing Mix, i.e.; term used for the total activities talking place in a market. All the information in the previous pages is eventually used to carry out a market research.
Market Research:
Market research is used to find information about demand of consumers about a product in the market. Information achieved can be of 2 types;
- Quantitative Information:
Answers questions about quantity of something. For example: What quantities of children have PlayStation2s’?
-
Qualitative Information:
Answers questions where an opinion or judgment is necessary. For Example: Why do more women than men shop at B.H.S.? .
Information is like the medium in which research is carried out, but research itself has 2 types;
- Primary Research(Field Research):
Collection of original data via direct contact with existing customers. Primary research is costly and involves,
- Questionnaires : A set of questions answered by potential customers.
- Interviews : Face to face talks and rendezvous.
- Observations : Studying consumer spending behavior or recordings.
- Consumer Panels: Group of people who agree to provide information on a specific product over a specific product over a specified period of time.
- Secondary Research(Desk Research):
Use of primary research data or ‘potential data’ and making it available for others to use.
Coursework Relativity:
My coursework is investigation of how supermarkets compete for custom. For this I am going to design a questionnaire. Questionnaires are usually expensive to carry out, provide consumer opinion about a specific product and detailed information can be gathered, but it can be misleading if the questionnaire is carried out by incorrect means and also is time consuming. I shall include two strategies in my questionnaire;
- Firstly I am using either a Random Sample or a Stratified Sample, as this will prevent bias or unfair results.
- Secondly I am using the rule of market segmentation through which my questionnaire can include categories of Age, Income etc.
Accuracy and Error Prevention:
I must be extremely cautious on the ways I ask the chosen questions.
- One has to be not too direct but not completely blunt either.
For Example when questions are directly asked like,” Can you afford this product?” or “Would you buy our product instead of Tesco’s?”, the customer would likely say, “Yes I can afford it and I may buy it.” As he/she does might feel insulted/degraded saying, “No I can’t afford it.” Or may say,” Yes” not to offend (the questioner) you.
- Questionnaires must be kept simple, meaning short easy questions.
- One cannot expect the customer to give detailed answers. So, Multiple Choice Questions (M.C.Q.s) are designed where the customer simply tick or circles according to choice.
- Straight forward! No more than 12 questions.
- Another point I myself have predicted is that try not to make the consumer nervous or degraded, for instance I know I felt weird when this lady in town was asking questionnaires and was talking as if she’s my mum and then even ticking the answers for me herself!?
- My point is that public who answer the questionnaires would rather do it when you yourself are not around. (Anyone would) I feel awkward when someone stands right behind me waiting for me to finish, more like an exam.
Give more privacy!
- It may also be wiser to leave a stack of the questionnaires at the checkout where consumers can pick and answer at will and then drop it in a box.
It may be more time consuming but this way more accurate and honest replies . and honest replies can be achieved.
- On the contrary if you stand at the exit and ask customers to fill the papers, many might just take it off you because they do not want to offend you by saying, “No” or make you feel rejected. They may feel sort of forced into it.
Accuracy and Reliability of Results:
- Even though Information from the results is obtained, it must not be used straight forward and assumed it’s correct.
- The result is never 100% truth, but the nearest estimation, therefore a very large sample (80) can be collected at first then 40 of them can be picked randomly from the total result of 80.
Example of a good question:
Circle your choice:
Q: If Asda, Sainsbury, Tesco and Morrisons are nest to each other, where would you go?
- Sainsbury
- Asda
- Tesco
- Morrisons’
- When designing a questionnaire, you should have in mind that you are designing a ‘Questionnaire for Dummies’.
Questionnaire
Your choice can make a difference!
Sainbury-Asda-Tesco-Morrisons’
- How many times do you shop?
- Over once every week
- Every week
- Every month
- Over 2 months
- Where do you usually shop?
- Sainsbury
- Asda
- Tesco
- Morrison’s’
- Other
- You go there because its’
- Cheap
- Quality
- Convenient(near)
- Other(If so, please state):_______________
_______________
- You Usually spend each time:
- Over 5
- Over 15
- Over 30
- Over 50…
- The worst supermarket is:
- Sainsbury
- Asda
- Tesco
- Morrison’s
- It’s the worst because its’
- Too far
- Too expensive
- Poor service
- Lacks quality
- Other(If so, please state):________________
________________
- If Asda, Sainsbury, Tesco and Morrisons are nest to each other, where would you go?
- Sainsbury
- Asda
- Tesco
- Morrison’s
- Oadby
- Grange
- Evington
- Beaumont leys
- High fields
- Meadows/Dales
- Other
- More than 500
- More than 1,000
- More than 3,000
- More than 6,000
- More than 10,000
- Undisclosed/-
- Foot/cycle
- Bus/taxi(public transport)
- Private transport
- Other
- You are in the age group of:
- 10+
- 16+
- 20+
- 35+
- 40+
- 55+
Market Exchange Rate:
An exchange rate is the price of one currency in terms of another.
This is very important to perform a business of import or export between countries with different currencies. Currencies are changed by people importing or exporting goods and services or by speculators(people who study fluctuations in currency rates and buy them when low /sell when high, therefore making profit).
The Exchange Rate changes because of;
- The interest rate changes.
- Problems in balance of payment
- Political/Economical changes
- Inflation
If these differ or any one of these factors differs, then drastical changes occur in money value. For example; If the value of the Sterling Pound falls then traveling abroad (holiday packages) become more expensive. Therefore in Economic Theory or Marketing Mix, if the value of the British Pound (Sterling Pound) falls, then imports will become more expensive hand exports will get cheaper.
I myself call this the Pound rate-exchange rule and personally have developed a formula, i.e.:
- Pound Price of Export----(eq1)
- Pound Price of Import----(eq2)
The Effective Exchange Rate:
The trading partners of Pound may include the Dollar, Euro, Yen, and Riyals. Hence the value of Pound against all the trading partners is called the Effective Exchange Rate. One of the very important competitors is the American Dollar, so the value of Pound (Sterling) against the Dollar is known as the Sterling-Dollar Exchange Rate.
The effective exchange rate tends to fall against other currencies like the $Dollar and the Yen.
Economic Cycle:
Also known as the Business Cycle is the ups and downs that somewhat occur simultaneously in most parts of an economy. The ‘Cycle’ refers to the shifts over time between periods of rapid growth (success), alternating with periods of decline (stagnation).
These cycles do not have a regular pattern of ups and downs and no two cycles are the same (or identical), hence they ‘fluctuate’.
It’s hard for economists to predict these economic cycles. The main types of Economic/Business cycles enumerated by Joseph Schumpeter and others have been named after their success and discoveries:
- Kitchin ‘ Inventory Cycle’
- Juglar ‘ Fixed Investment Cycle’
- Kuznets’Infrastructure Investment Cycle’
- Kondrateiv Wave or Cycle
Price Elasticity of Demand:
Also abbreviated as P.E.D., is a kind of elasticity which measures the responsiveness of quantity demanded of a good to its price. The formula used to calculate the coefficient of the price of demand is:
Price elasticity of demand is measured as the percentage change in quantity demanded that occurs in response to percentage change in price. For Example: If in response to 10% the fall in price of good, the quantity demanded increases by 20%. The price elasticity of demand would be 20% / (-10%) = -2.
So, the P.E.D. is negative;
Background for Supermarkets in the United Kingdom:
The UK supermarket sector is dominated by Sainsbury, Asda, Tesco and Morrison’s, which are the only chains which operate full scale superstores of 40,000 square feet (3,700 m²) or more. They are all fully national; there are no regional supermarket chains left in the United Kingdom which operate superstores, just a few small ones which operate smaller stores. The "Big 4" had a combined share of 74.4% of the UK grocery market in the 12 weeks to 24 April 2005 according to retail analysts TNS SuperPanel Tesco is becoming so dominant (its market share passed 30% in mid 2005, nearly double that of second placed ASDA) that it is beginning to be seen as being in a tier on its own, followed by three runners-up.
Somerfield is the fifth largest United Kingdom food retailer, as verified by Wikipedia Encyclopedia but it does not operate superstores. In February 2005, the Baugur Group, which is already the controlling minority shareholder of the Big Food Group, parent company of Iceland, made a takeover proposal for Somerfield. At least one other party has since made a counter offer.
Marks and Spencer and Waitrose are the most upmarket national supermarket chains (although the former is also the UK's largest clothing retailer, and is often not perceived as a supermarket at all). They trade from medium and small sized stores.
