Applications of Marketing Research, Sales, and Market Analysis

October 3, 2023 Globalinfo247

The broad areas of application of marketing research are sales and market analysis, product research, advertising, business economics, corporate research, and corporate responsibility.

Sales and Market Analysis

Determination of Market Potential

The market potential is the total amount of a product or product group which could be sold to a market in a specified time period and under given conditions. The market potential is applicable in the case of a new product, a modified version of an existing product, or an existing product to be introduced in a new geographical market.

Determination of Market Share

In the case of an existing product, a company may be interested to know the percentage share of the market that their brand commands.

Sales Forecasting

Sales forecasting is an attempt to predict the sales level at a given point in the future on the basis of the existing information. Sales forecasting is applicable to both existing products as well as new products.

The sales may be calculated either in units or in value. Basically, there are two types of forecasts – short-term and long-term. The short-term forecast has its basis more in the growth pattern of the industry to which the product belongs and the business cycle operating in the industry.

Design of Market Segmentation Studies

A market is a group of potential customers who have something in common. The common factor may be geographical area, sex (after-shave lotion is used only by men), age (toys for children under 5, between 5 & 7, etc.), physical characteristics (weak eyesight, overweight), income, lifestyle, etc.

Children comprise the market for toys. But in this broad category, the market can be viewed to be made up of many smaller markets or segments: one market for pre-school children, another for school-going children, one market comprised of educational toys, one for mechanical toys, one for electrical toys, one for indoor games, etc.

The choice before the marketing manager is whether to cater to the broad market of toys or to only one or two of the specific market segments. MR can help answer questions such as ‘To what extent should the market segmentation be pursued?’ and ‘What should be the basis for segmentation?’

Test Market

This is a controlled experiment to predict the sales or profit consequence of the various marketing strategies. It refers to trying out something in a particular market before extending it on a larger scale. You may have noticed advertisements for soaps, or snack foods which sometimes carry the message available only in Lagos’ or ‘available only in Onitsha’.

Test marketing is used not only for new products but also for researching the impact on sales of retail-level promotional displays and promotional schemes such as coupons and discounts.

Distribution Channel Studies

Market research can be used to determine the most effective and profitable distribution channels for different types of products.

Determination of Market Characteristics

Research surveys can be conducted to collect information about the market characteristics which would help a new entrant plan his entry or help an existing company focus its strategy more sharply for increasing market share.

Information can be collected on the number of brands competing in the market, state of technology prevailing in the market, geographical concentration and dispersal of customers, nature of outlets selling the products, number of such retail outlets, etc.

Determination of Competitive Information

Research can provide information on the marketing strategies used by various competing brands and the ‘unique selling proposition’ of each.

Product Research

This can be used for:

Evaluation of new product ideas
Testing for new product acceptance
Evaluating the need for change in product formulation
Testing package design in terms of aesthetic appeal, protection for the product, and ability to withstand transportation and stocking ordeal
Testing for product positioning. For example, should a new brand of tea be positioned on the basis of its fragrance and taste, color and strength, or price?