TERM PAPER ON IMPORTANCE OF MARKETING AND THE ROLE

Cover page

Dedication

Acknowledgements

Table of contents

Introduction

The Importance of Market

Why is market research important for new business ideas

The objectives of market research

The Role of Marketing

The Marketing Process

Relationship of Marketing

Conclusion

                                          CHAPTER ONE

Just the phrase market research can make people feel overwhelmed, by understanding what it is and why it’s important you can be relieved of those tensions.  I think most people get confused, by not understanding that there is a difference in market research and marketing research, let me explain. Market research is when you have narrowed down a specific “target, ” and you are delving into the behavior of that target. In other words, its research into a very narrow group of consumers. Marketing research is different. Different because it’s dealing with a broader range of consumers. Marketing research includes “market” research, but it also delves into new product research and distribution methods. The best way to differentiate the two is to understand that marketing research is really about researching the marketing process of a company, not just who they are targeting.

Market research while daunting and can be a lot of work it also provides many benefits. It takes the guesswork out of marketing and gives you data that you can use to drive your marketing strategy and accomplish your objectives and goals.   It’s a systematic approach that with an investment can make your marketing not only easier but more effective.

Market research benefits include:

• Communication Driver: It drives your communication with current customers and target prospects.

• Identifies Opportunity:  Market research will show you where the opportunities are and help you identify not only the high-level opportunities but will also assist in showing you the more immediate “low hanging fruit” opportunities.

• Lowers Risk: Detailed data can help you in lowering risk. It shows you where the opportunities that will produce results are and keeps you focused and voiding the “squirrel syndrome” when it comes to your marketing.

Why is market research important for new business ideas?

Market research should never be underestimated. Many successful new businesses enjoy longevity because their owners conduct regular market research to understand their target market, identify consumer problems and pinpoint realistic competitors. It’s the simplest way for entrepreneurs to keep up with market trends and maintain a competitive edge by sizing up your business opportunity. Market research can be carried out at various stages of a business life cycle, from pre-launch and beyond. Having a greater understanding of your marketplace from the very start will enable you to create a sound business strategy to establish and grow your brand into one that’s better than the competition.

The objectives of market research

The scope of the market research you’ll undertake is influenced by your overall objectives – what do you want to learn about your market and the external factors influencing it?

The objectives will also determine the types of market research that you need to undertake in order to be successful:

Primary market research covers the following:

• Monitoring the effectiveness of sales

• Ascertaining the quality of services provided by competitors

• Understanding the channels of communication used by competitors

• Assess the active competition within the market

Secondary market research covers the following:

• Published company reports data

• Existing surveys and studies

• Newspaper reports

• Government data

Primary market research is a kind of market research that can be carried out individually or as a business, with the aim of collecting unique data that can be used to improve products, services and overall functionality.

The key steps of successful market research

There are four important steps to any successful market research study:

• Investigate whether similar research has previously been carried out

• If so, analyse the existing relevant data that meets your objectives – providing it meets your budget

• How will the existing data be used and by whom?

• Do you need to conduct your own primary market research too? If so, with whom?

Understanding the types of customer you’ll encounter

Most new businesses will encounter three different types of customer; market research gives you the ability to understand how your target customers think and adapt to their needs in order to turn them into regular customers and brand advocates.

The ‘savvy’ purchaser

This type of customer is someone that’s not necessarily concerned with the quality or effectiveness of a product or service, but is intent on getting the best possible value. A ‘savvy’ customer is someone that’s likely to be aware of all the prices offered by your major competitors, so you’ll need to carry out secondary market research to understand whether your products or services will be priced competitively. If it transpires that your products or services will not be the cheapest it’s best to know now in order to provide compelling evidence to potential purchasers why they should continue to buy through you; perhaps based on quality and reliable

Marketing plays a critical role in the business world today and is central to the success of any business. Enterprise, Trade and Employment Minister, Micheál Martin is quoted as saying it is almost impossible to overstate the importance of marketing and sales expertise to business growth stressed the important role that marketing and sales personnel play and described them as the true wealth creators and the drivers of innovation. Yet marketing is very much misunderstood and seen by many as a combination of advertising, gimmicks and ‘snake oil’ salesmen, tricking customers into buying something they don’t want. So what is marketing and why is it so important to weave it into the fabric of business today?

The following definition describes marketing succinctly.

‘Marketing is the management process responsible for identifying, anticipating and satisfying consumer requirements profitably’. (Chartered Institute of Marketing) There are many definitions of marketing but there is no single recognised precise definition or way of practising marketing. However a common thread throughout is the requirement to meet customer needs and provide benefits. Philip Kotler the distinguished professor and the world’s foremost expert on the strategic practice of marketing states ‘Today’s smart marketers don’t sell products; they sell benefit packages. They don’t sell purchase value only; they sell use value’

The key requirements of successful marketing contained in the various definitions might be summarised as follows

a) The need to be capable of satisfying customers.

b) The ability to identify and recognise marketing opportunities in the marketplace.

The need to know and understand target customers or market segments for products and/or services, their needs and wants, the difficulties, hindrances and disappointments they experience and what they might pay to have them either removed or reduced?

c) The ability to create and deliver a compelling value proposition or promise to customers that meets their needs or solves a problem for them i.e. a package of benefits from which customers believe they get superior value than what they might get from a competitor.

d) The capacity to differentiate a business from the competition and build competitive advantage. This involves establishing where the main competition is coming from, from a customer’s point of view, what their value proposition and package of benefits is, and how well they meet market requirements.

e) An aim or goal to increase market share in carefully selected and clearly defined

target markets.

f) The ability to manage for value, allocating and reallocating resources as required,

based on insights into customer needs and improvement in economic profit, where if money can be put to better use, then the capital is freed up and reinvested where value generated will be better.

g) The know-how to deliver a sustainable bottom line that can contribute to propelling the company forward.

The importance of a rigorous marketing process cannot be overemphasized. The four stages of the process are set out in Figure 1. In practice it is the phase one analysis that frequently gets insufficient attention. Clearly the better informed a company is about its environment, the better decisions it is likely to make. The process sets out to discover customer needs and wants and to develop products and services in response to those needs. It involves understanding the external

marketplace and the internal company situation. A strategy is then formed which clearly sets out a customer value proposition and priority target markets. Tactical decisions are made using the marketing mix, the plan is then implemented and the results monitored

Not all companies subscribe to the marketing concept. In practice companies have different orientations to the marketplace of which there are four main types.

1) Marketing orientation

2) Product orientation

3) Sales orientation and

4) Production orientation

Relationship of Marketing

However, like most things today, marketing is evolving. Business partners now handle many things that were previously completed in their own organization and as a result the basic definition of what is and what is not a company has become somewhat obscure. This involves temporary workers, consultants, and even complete outsourcing of manufacturing and production etc, in an environment penetrated by all sorts of information and communications technology with the consumer taking centre stage in strategic considerations. Businesses are no longer closed behind high walls creating value in isolation; they are partners in an integrated value chain.

Customer value is the route to survival for most companies and requires the ability to out-think and out-value the competition. The value equation is: Customer Value = Total Benefits – Total Costs. The task of marketing is to satisfy customers by maximizing the delivery value to them. It is not surprising therefore that marketing plays such a critical role in today’s business world, is considered so central to the success and should be woven into the fabric of any busin

1 Micheál Martin T.D. MII National Conference 17th Feb 2005.

2 O’Driscoll, Eoin, Choosing to Run a Different Race, MII Quarterly, Issue 2, 2005.

3 Kotler Marketing Group, www.kotlermarketing.com/resources/philipkotler.html

4 S, Dibb, L Simkin, The Marketing Casebook, Thomson Learning 2nd edition 2001.

5 The Times 100 Case Studies. www.thetimes100.co.uk

6 Kotler, Philip, Marketing Management, Prentice Hall 2000, page 19.

7 Aldrich, Douglas F, Managing the Digital Marketplace, John Wiley & Sons Inc, 2000.119-139

8 Gummesson, Evert. From One-to-One to Many-to-Many  Marketing in the Network Society

, Academy of Marketing and AMA Conference, DIT, Dublin, July, 2005.

9 Scott D. Nelson, Management Update: The Eight Building Blocks of CRM, Gartner, June 25, 2003.

10 Peck, H., Payne, A., Christopher, M. and Clark, M. (1999) Relationship Marketing: Strategy and Implementation, Oxford: Butterworth-Heinemann.

11 Gummesso n, E. (1987) ‘The New Marketing: Developing Long Term Interactive Relationships’, Long Range Planning 20 (4), pp. 10-20.

12 Coyle, Dominic, The Irish Times Business This Week, November 25, 2005