This sample essay on Brandmap Customer Research reveals arguments and important aspects of this topic. Read this essay’s introduction, body paragraphs and the conclusion below.
There are over 50 marketing research studies that were made available for our team to utilize. For the first three quarters many of the research studies were ordered, however it was discovered early on that not all the studies were useful to us. The research studies that our firm found most useful were ordered on a permanent basis which ended up saving us valuable time.
Such permanent studies included customer brand awareness, brand satisfaction ratings, operating statistics reports, brand quality ratings, balance sheets of the other competitive firms, the amount of market shares we have in the industry, our overall performance report along with preference testing.. Besides the permanent studies, there are three important research studies in which our team had to make specific decisions on every time. These decisions included the conjoint analysis and both advertising and promotion experiments. The importance of the conjoint analysis and can not be emphasized enough.
Having an understanding of how conjoint analysis can be useful for successful product reformulation. Further explanation of conjoint analysis is explained in the new product development section of this memorandum. Another research study we had to do individually is the advertising experiment. Whenever we introduced a new product, we had to make decision on the amount of money we needed to spend on advertising, as well as determine the best media content and mix in order to receive the highest % of customer awareness. We also tried varieties of media content and mix in the experiments.
For example, in Canada, a combination of price, product uses, together with heavy weighs on radio, newspaper and magazines yielded a very high percentage of customer awareness (around 85%). Conducting advertising experiments is an inexpensive task, which can result in grand results. At times, trying to find the right advertising strategy becomes frustrating, however, by continuously changing up variables, eventually, a suitable result can be obtained. It took our firm several quarters before finally finding a good advertising strategy for the Pacific region. Promotion experiments are another essential part of marketing research.
Like the advertising experiment, we had to determine the amount of money to allot and the promotional type for each specified region. We found for the most part that our dealer awareness experiments yielded us very positive results, as there seemed to be less variables to play around with in order to figure out the right “mix”. Some of our experiments conducted resulted in very high percentages for awareness, many in the 90 to 98 percent range. At times, these results came from little spending in the promotion department, however with a useful promotional mix.
Marketing research is an invaluable tool, which should be fully utilized by all firms. It’s costs are minimal compared to the possible end benefits of the results, when interpreted correctly. A firm should never try to cut costs on their budget at the expense of ordering marketing research. Having a fully informed firm outweighs the few thousand dollars, which may have otherwise been saved from not ordering specific research. Knowing exactly where your competitors stand in the market and your environmental situation is the bottom line. Our philosophy is that if in doubt, order the marketing research.
New Product Development Deciding on whether or not to introduce a new product into a new or existing market is like playing with a double-edged sword. There are many possible ways to look at the situation and whether or not it is a worthwhile activity. Market and competitor analyses are two very important factors when making this critical decision. We found off hand that the more competitive and unstable the market is, the less worthwhile it is entering a new product there. Probably the most important decision that has to be made is the conception of the new product.
It was discovered that creating a new product specifically tailored for a market is the best way to enter a new product. Utilizing preference testing to find out what volume of attributes are most preferred along with conjoint analysis to discover the relative importance of each attribute is what has to be used when deciding on how your new vaporware product is going to look. Ensuring that your product does not infringe upon others patent zones is equally important, as this avoidable mistake could prove costly. There are various trade-offs when deciding how to compose your new product.
In order to keep costs low and stay away from stepping in another firms’ patent zones , one may want to cut a few costs, with a huge cost saver being reducing the warranty and compatibility, especially if the relative importance of that specific attribute within that specific targeted market is not considered important. In the end, having a conducive product which meets the needs of the consumer is the bottom line when taking all new product decision variables into consideration. Introduction of a new product can be quite costly.
A wise firm would initially do some prior research as to what activities are taking place within the particular targeted region, including industry growth and potential and other product formulations by competing firms. A firm would not be wise as to introduce a new product into an already over saturated or weak market. Reformulation bids are another testy item which requires intense scrutiny. Using some applicable aspects of game theory, one must anticipate what the competitors are doing in the particular targeted region, as a high Reformulation may be a complete waste of expense.
This is where some calculated risk must be made. Introduction of a new product also experiences other divisional expenses which may add up, including the hiring of a sales force. Careful capacity planning should be done ahead of time so in the best possible scenario, a company will have enough capacity to produce all future ordered. In the worst possible scenario, full capacity will not be utilized and it can be sold to recover some of the capacity adding expenses incurred.
Capacity planning is a touchy subject which quite frankly requires accurate long term forecasting in order for it to be cost efficient. At times, with the introduction of a new product, some short term pain must be experienced. Quite often, due to the lack of experience curve savings and presence of substantial smoothing effects, the initial cost of the product may be enormous and profit margins may be slim. Along with reformulation, sales force, initial intensive advertising and promotion expenses, there may stand to be little profit gained during an introduction.
Negative profits during introduction are not a rare occurrence and a company should not be afraid to experience this. Do not worry, things will probably get better. There are a few more tips a firm can use in order to have a successful introduction of a new product. Our firm found that initial large expenditures in advertising during the roll-out of the new product is necessary for creating awareness of the product. From our advertising experiments we found that spending more money will always increase awareness of a product. If people like this new product, they will buy it.
Increasing incentives for the sales force to work harder on selling the product is another feasible technique, such as increasing sales commission or salary. Dealers can initially be pushed to carry the product by providing temporary rebates. One must remember not to give these rebates for too long of a time or they will lose their effectiveness. A firm newly introducing a product must be brave and not scared to lose a bit of money during the first small stretch of existence and should not compromise their price at the expense of generating increased initial sales as this could be detrimental for long term profit.
The last very important factor which should be taken into consideration is whether or not the product should be introduced into one or several markets. Our firm’s advice is that a company should try to create a product that is perfect for one market but can be accepted within others. We found that one of our newly introduced products was perfect for the Pacific market but also was preferred in the Canada market. As sales in the Pacific area shot up, product costs decreased, which lowered the price of the somewhat less suitable but still well-liked product in Canada, making it preferred.
Our advice is that a firm should try not to create a product which partially meets the needs of multiple markets or if a firm does, don’t expect it to become a grand success as it may end up flopping in all of your targeted markets. Good luck! Sales Forecast A good sales forecast is very important because it helps avoid stockouts on the one hand and high inventory levels on the other. To find out which sales forecast seems to be reasonable for the next term, you should first take a look at industry sales volume forecasts (#31). This study gives an overview of the past and future sales volume for all market regions.
As mentioned in the book the study gives an overview, and therefore the major problem is, that it assumes current marketing activities of all firms in the industry to stay at the same level, or to continue their present course, which most often is not the case. Another problem with this study is, that especially when entering a new market the forecasts are often to optimistic. You should take a look at your marketing program and those of rivals. Furthermore one should also consider that the marketing research study # 31 doesn’t account for unfilled orders.
Consideration should be given to the population growth and the economic figures of the region. A knowledge of the stage for the product life cycle of your product, or the market, and how accepted the product composition is, are all important points of concern. To get information about your brand sales forecast you can use brand sales volume forecast (#32). You can also make your own calculation by multiplying the industry sales forecast with your market share forecast. In general it’s better to be a conservative in your forecasts. This is because it is better to gain more profits than forecasted than visa versa.