The Context of Marketing Decisions and Scope of Marketing Research

In the area of marketing, much of the information required for decision-making exists outside the firm e.g. information on why people buy only certain products and not other products; information about the competitor’s next move; information about new government rules and regulations which can affect your working, etc. 

The marketing manager faces a challenging task in attempting to improve his decision-making. The variables involved in the marketing decisions being external to the firm make the collection of information cumbersome and expensive. 

Since the variables are often qualitative and dynamic, their measurement is also difficult, and the results are not always accurate. Moreover, many of the variables interact with each other in a very complex fashion, which makes it difficult to isolate and measure specific variables. 

Thus, the pressure on the marketing manager is very strong to correctly choose the most critical decision variables and seek relevant information about them. The wrong choice of (information) variables will not only result in unnecessary expenditure but can also lead the decision-making process astray. 

The correct identification of variables requires at least a basic understanding of why people behave in the manner in which they do. 

The manager also needs to monitor what is happening in the marketplace and the general environment of the firm. The only way the manager can monitor all these is through regular market research.

Scope of Marketing Research

Marketing research (MR) is concerned with all aspects of marketing, relating to product design and development, product mix, pricing, packaging, branding, sales, distribution, competition, target customer segments and their buying behavior, and advertising and its impact. 

Read Also: Definition and Purpose of Marketing Research

Specifically, the scope of MR includes customers, products, distribution, advertising, competitive information, and macro-level phenomenon.

Marketing is concerned with identifying and fulfilling customer needs and wants. Thus, MR should precede marketing. 

The unfulfilled wants should first be identified and translated into technically and economically feasible product ideas, which then should be marketed to the customers. But mere identification of customer wants is not enough. 

Marketing requires continuous effort to improve the existing product, increase sales, and beat the competition. 

For this, it is important to know who the customers are for your products (whether housewives, teenagers, or children), what their socio-economic profile is (in terms of income, education, cultural, religious, and professional background), and where they are concentrated in terms of location. 

Besides this information, it is also important for you to know the process by which a prospective customer decides to buy your product. 

If you know the sequential steps in the purchase process and the influencing variables in each, you can design appropriate strategies to exert a positive impact on them, and thus ensure an actual purchase. 

The study of consumers and their purchase behavior is so important that there is a separate, special body of knowledge known as Consumer Behaviour.

The second area which is of direct concern for MR is the product and product design. MR helps determine the final design of the product and its physical attributes of color, size, shape, packaging, and brand name. 

It is useful in arriving at the right combination of product mix, the number of variations of the basic product, accessories, and attachments. It can also help decide the quantities to be produced according to the projected demand estimates. MR can also be used to gauge customer reactions to different prices.

Marketing research helps in discovering what types of distribution channels and retail outlets are most profitable for your product. 

Based on comparative information for different channels and different types of outlets, you can choose the combination most suitable for your product. 

Distributor, stockist, wholesaler, or retailer may represent one kind of distribution channel in contrast to another in which you may use only the distributor and retailer. Consider an example:

A firm is marketing refrigerators through distributors and retailers in the Eastern zone. The understanding between the firm and distributors is that the latter will provide the after-sale- service. 

Analyzing the sales figures, the firm finds that the sales level in the Eastern zone is much lower than in the other zones. 

Marketing research indent reveals that one of the reasons for this low sales performance is the poor after-sale service provided by the distributor. 

In a high-value, a durable product such as a refrigerator, the quality of after-sales service is an important factor influencing the customers’ purchase decision regarding the specific brand to buy. The firm decides to do away with the distributor and instead opens its own branch office. 

The new distribution channel comprising branch offices and retailers is operationally more expensive, but the company can now control the quality of after-sales service as well as the other marketing inputs. 

The result is improved sales and the incremental cost associated with the new distribution network is justified.

Most companies provide advertising support for their products. In some cases, the amount spent on advertising may be small, while in others, it may run into millions of naira. 

Irrespective of the actual amount spent on advertising, each firm would like to maximize the return on every naira that it spends. 

Marketing research can help the firm to do this. Research can provide information on the most cost-effective media, help determine the advertising budget, and measure the effectiveness of specific advertisements, advertising campaigns, and the entire advertising strategy. 

Research also provides information on the size and type of audiences for different advertising media channels. This information can be used to refine the advertising strategy to make it more relevant and sharply focused. 

Advertising research is also helpful in determining customer perceptions about the image of specific branches and companies.

Marketing research is being increasingly used at the macro level. The government of Nigeria spends colossal amounts on various socio-economic development schemes and projects. 

If the objectives of these projects are not in tune with the prevailing consumer tastes, attitudes, and values, the entire amount may prove to be a total waste. 

Just as a business organization needs MR to monitor the efficacy of its strategy in achieving its objectives, so do the government and its departments.

Read Also: The Sales Promotion Method and Why Rapid Growth?