MARKET RESEARCH

OF A
NEW PRODUCT

INTRODUCTION

Some decades before the advent of machines, of labor and global markets, the
producers and consumers knew one another very well.
The producers produced well according to the preferences of the consumers. In
modern times there are many agencies in between the costumers and the actual
producers with the result that there is no direct contact between the producers of the
products and the actual consumers. The buyers are spread over throughout the world.
The company has to fulfill its responsibility to satisfy the need of innumerable varied
customers and therefore, it undertakes marketing research.
It's impossible to sell people what they don't want. That's obvious. Just as
obvious is the fact that nothing could be simpler than selling people what they do
want. Market research is essential in helping you find out what people want. Market
research provides what you need to get sound information about your food
product, service or market so you can develop good marketing and business
strategies.

MEANING AND DEFINATION OF MARKETING REASERCH

What is market research?

Market research is an orderly, objective way of learning about people - the
people who buy from you or might buy from you. In common words, market research is
finding out if people will pay one-third more for your natural, organic produce rather than
buying produce at the local grocery store, calculating if you can make a profit if it costs.
It can provide unbiased answers to questions such as: Who will buy your
product? Will people other than family and friends buy your homemade dilled carrot
pickles? What are the requirements of your customers? What price will they pay for your
pickles? What size of jar do they prefer? What are their requirements for shipping that
would affect jar size and/or shape? Where do they want to be able to buy your pickles?
Are there other types of pickles they would buy? Are they looking for new and different
pickle products? Is the combination of dill and carrot an appealing one? Who else is
producing the same or similar product - at what cost? Can you compete with their price
or quality? If no one else is producing such specialty pickles, why? What advantages
can you offer that your competition can't or doesn't? It may be that your carrots are
organically grown or that your pickles are an Macedonia made product. What marketing
constraints exist? Are there expensive start-up costs involved with going into pickle
production? Are there major legal requirements needed to get the name or label
information you want? Is the market saturated or is there room for your company? Will
you be one of many companies selling pickles to people in your market area? Is this an
area with an expanding market or one that is declining? In other words, can you make
a profit at it? Does trend data indicate increased consumption of pickled products? Is
there a growing or shrinking body of scientific evidence about possible health risks
associated with eating too many pickled foods? How might this affect people's
consumption of pickles? What do you see as the future for your business? Do you

visualize your pickles to be on the shelves of all supermarkets in Macedonia? ...maybe

in Serbia?!

Marketing research may be defined as the application of scientific method

to the solution of marketing problem.
According to Philip Kotler, marketing research is the systematic problem
analysis, model building and fact finding purpose of improved decision making and
control in the marketing of goods and services, in words of crisp, marketing research
is a systematic objective and exhaustive search for study of all facts relevant to any
problem in field of marketing.
The above definitions indicate clearly that marketing research embraces all
research activities carried on in connection with the managements of marketing work.

SCOPE OF MARKET REASERCH

Introducing a new product or service
Again, a good idea, experience and intuition aren't enough when it comes to
predicting success. Without market research at this stage of a business, you could
end up with a basement full of jars of your gourmet mustards, which didn't sell
nearly as well as your popular line of flavored vinegars. Or, you might face
competing products sold at local delis, supermarkets, gift shops and farmers'
markets that you didn't even know existed. Or, adding a fried pastry product to your
existing line of healthy muffins may damage your company's reputation for healthy
snack foods.
The following activities (in short) are included in market research.

Analysis of the market size according to age, sex, income, profession, and
standard of living of customers.

To know about prospective customers.

To get the knowledge of competitors share in the market.

Estimating the territorial demands of different markets.

Studying the market changes and market conditions affecting market changes .

Knowing about the profitability of different markets and market segment.

Analyzing the working of various channels of distribution.

To know all about competitors and various products.

OBJECTS OF MARKETING RESEARCH

ASSESSMENT OF BUYERS: - the marketing research is conducted to know the

consumers of the product. It finds out the various marketing segments where the
consumers are located.
SALES FORCASTING: -sales forecasting is another area where marketing
research helps the organization. Marketing research helps in knowing the potential
consumers to make correct sales forecast.
FORMULATION OF PLANS: -marketing research helps in preparing marketing
plans programmers and policies of the enterprise.
ADVERTISING AND SALES PROMOTION: -marketing research helps in
knowing the impact of advertisement and other promotional activities undertaken by the
enterprise to increase sales. This also helps the company to reduce the cost on
advertisement and promotions.
QUALITY OF PRODUCT: -marketing research helps in knowing the taste and
preferences of the consumers and also what improvement in the quality of the product
they desire. The quality of the product can be improved as required by the consumer.
MARKETING PROBLEMS: -the various problems relating to the product:
advertisement, market, competition, promotion, packaging, branding, designing,
grading, distribution are studied through marketing research and solutions can be found
out. It also helps in knowing the good will of the firm and comparing it with that of
competing firm.
TO KNOW GOODWILL OF THE FIRM: -marketing research helps in knowing the
goodwill of the firm in comparison with the competing firm. It further helps in deciding
marketing strategy to combat competition and introducing new products in the market.
REDUCTION IN COST: -it is used for reducing marketing cost. Specially it aims
at minimizing promotion and distribution cost, advertising and selling costs .

NEED OF MARKET RESEARCH

When the new product is to be introduced in the market.

When sale of product us to be introduced in the markets or in a specified market but
reasons for fall are not known.
When the figures and facts about the demand of the product are not available.
For having the knowledge of consumers habits and preferences and of the market in
order to design the advertisement program.
When product development is needed to make the product more suitable to the
needs of the consumers. Market research determines the area of improvement.
When the income, habits, fashion, and preferences are changing fast.
For making a purposeful study of the policies and strategies of the competitors
regarding their products, advertisements, sale promotion and price so that the
company may also make the necessary changes in its policies.
When companies own pricing policies are not competitors pricing policies and needs
changes.

MARKET RESEARCH PROCESS

IDENTIFYING THE FIELD OF RESEARCH:

It is necessary to recognize the field or area for research. This is essential to recognize
the problem to go ahead with the research activities. The area of research may be
related to product, its need and development, size of market, promotion, advertisement,
and its effectiveness, distribution
channels, pricing policies, marketing policies, consumers demand, market segments
etc. out of these where the marketing research is to be conducted must be identified
first.

DATA COLLECTION:
The second step is to collect the entire information from all sources regarding the
problem of research. The sources of data and information are of two types, primary and
secondary. The direct collection of data refers to the primary source while the secondary
source refers to the data available through readymade materials like bulletins.
Government and private publications, international publications etc.
ANALYSIS OF DATA:
After collecting data is to be analyzed i.e. it is to be compiled and tabulated form is
thoroughly studied and analyzed. What the information indicates is studied. The
analysis of data reveals some new information, which helps in taking some appropriate
actions.
RECOMMENDATIONS:
After analyzing the data the conclusions is drawn. This forms the basis of making
recommendations to the management, which are submitted, in the form of report.

TYPES OF MARKET RESEARCH

The research on product or services covers the following aspects:

Acceptance of the companys new product by the consumer.
Studying the standing of the competitive product.
Estimating the demand for the product.
Knowing the present uses of the product and finding new uses of
the product.
Research on packaging and physical characteristics features of the
product.
Studying market trends and position of companys product.

RESEARCH ON MARKET: The research on market covers the following aspects:

Analyzing size of the market.

Development of market potential for a specific product.

Estimating demand for the product and its profitability.

Establishing sales quotas in various territories and

regions.

Studying the consumers behavior.

Studying distribution channels.

RESEARCH ON SALES METHOD AND POLICIES: This include the aspects like:

Studying pricing policies.

Segmenting the market.

Studying sales promotional activities.

Appraisal of salesmen.

Selecting advertising media and their effectiveness

Estimation distribution cost.

Studying competitors strategies and determining ways and means to multiply

their influence.

METHODS OF MARKETING RESEARCH

Market research can take many different shapes and forms. It can be as
simple and inexpensive as going to the local library to do some research or
checking out your competition at the local farmers' market. It can also be something
more complicated and expensive like test marketing your product at a local grocery
store or doing a telephone survey.
Market research can be divided into two basic types:
Indirect is inexpensive and fairly easy to obtain (information that is

already there for the taking or buying such as government reports and trade
association surveys).
Direct is often more complicated and can be more expensive. Because it is
custom made, it allows you to answer specific questions and concerns about your
business and thus make business decisions more effectively (information you
generate yourself such as surveys and focus group testing). There are also two
general types of information market research can give you. One is quantitative.
This is information expressed as quantities, percentages or numbers (e.g., 4,200
women live in Skopje's trading area and profits in the Macedonia restaurant industry
rose by seven per cent between 1985 and 1993). The other is qualitative. This is
information about people's feelings and perceptions (e.g., the main reason men
shop in the City Mall is convenience). Both types can be useful.
Specifically the methods you can use to conduct the market research are:
THE OBSERVATION METHOD:
Data are collected on direct observation. No talks take place. By observing the
person the analysis makes the inventory as to product used by him at his home or kept
as retailers stocks. If a retail shop is to be established in a locality and the situation
traffic is counted on the road, this gives more accurate information than could be
secured by making calls on members of the family. No questioning work is done in this
method. If a departmental store, and observes record, the total number of people
passing by a display, number stopping, the number picking up, examining products,
making purchases, the method, express actions and behavior patterns. This method
simply involves watching or listening or both with no attempts of probing the reason.
THE EXPERIMENTAL METHOD:
This method is based on the concept that small-scale experiment is useful to
indicate the expectations of large-scale experiments. Two advertisements appearing on
the same paper with front page and last page, the people will get more attracted to front
page. This is known as split on test. These conclusions are adopted in shops where
things are kept in front position bearing more sales. so also the advertisement in black
and white. This experiment takes more time and is expensive. Nevertheless a welldesigned experiment even though it cannot replicate the total market conditions can
provide guidance and information for decision-making. Test conditions are never same
as the parallel conditions in the broader market.

THE SURVEY METHOD:

Information gathered directly from individuals in three ways :

a. Telephone.
b. Mails .
c. Personnel interview.

MAIL SURVEY:
Under this method a questionnaire is prepared and send by post to the informant.
The informants fills the information sought without anybodys help and send it to the
investigator by post. A care must be taken for preparing the questionnaire as it is to be
filled in by the informant himself without anybodys guidance. It must therefore be
pretested. This technique helps the researcher to those people whom it is not possible
to be interviewed. The informant gets sufficient time to answer the questions. He feels
comfortable in answering the questions. The information obtained in this way is more
accurate and reliable.

TELEPHONE SURVEY:
It is a suitable technique where the respondents are spread over a wide
geographical area. The researcher can contact them on telephone when they have a
leisure time and interview them. This will ease the interviewer from traveling. He can
reach informant quickly and interview many of them in a day. This technique is use to
reach only the selective people who have telephone facilities hence restricting
representative section of the people. It is too popular in India. Lengthy interviews cost
more. To be more effective this technique may be combined with personal interview.

PERSONAL INTERVIEW:
This is the most popular method of conducting market research. The information
is extracted from face to face encounter with the respondent. A trained interviewer can
create interest and seek the cooperation of the respondent and obtain the required
information. Personal interview technique is a tool through which maximum information
can be obtained. No other technique is as effective as this one in extracting information.
The interviewer by observing the physical characteristics of the respondents house and
person can classify him. This method suffers from interviewers bias.

CONCLUSION

The choice of any of the above method for conducting market research depends
upon many factors. The organization has to decide which method is most suitable for it.
However the factors governing the choices are the nature of research, i.e. whether the
local or national survey, the organization if it has a research department or not, the kind
of industry, time duration of research, cost factor, the available machinery for analysis
and interpretation of data, approach to consumers, attitude of management, i.e. positive
or negative towards market research findings. These factors will influence the decision
to adopt a kind of method most suitable for the organization.