These market tests allow the business tp see how the product is accepted in various market segments before it is rolled out to the mass market, and before the business invests in a full-blown release of the product.
While test marketing is viable for producers of products that do not involve millions of dollars in production costs for production facilities, it may be cost-prohibitive for businesses producing large, expensive goods. Soap detergent is easily test-marketed for a relatively inexpensive price tag; the cost of test marketing jet airplanes, on the other hand, is not cheap.
Pricing Research Marketing research can be used to evaluate the acceptability of product or service prices in the marketplace. While businesses must price their products to make enough money to cover production and operating costs, often the formula they use for achieving a given profit margin causes them to price their products or services above or below acceptable market levels.
Pricing research activities conducted by marketing researchers to determine buyers' perception of price and quality factors in a given product can be used to determine acceptable price levels that will allow businesses to achieve desired profits and gain market share.
Marketing research can help to determine acceptable price levels. Because of the competitive marketplace, however, businesses frequently do not have the time to conduct an elaborate pricing research study; therefore, they often enter the marketplace without conducting one. Advertising Research Advertising can be a costly endeavor for businesses.
To determine the potential effect their advertising might have on a target audience, businesses often conduct research into the content, the media, and the effectiveness of advertisements before they invest heavily in the advertising campaign. Marketing research may be used in the area of product planning and development like, to evaluate new product ideas, to evaluate the need to change existing product mix , for testing the new product acceptance, testing product positioning, package testing in terms of aesthetic appeal, protection for the product, and Ability to withstand transportation and stocking.
It comprises the study of product design, features, quality, brand tracking, brand preferences, product lines, and rationalization of product lines. Marketing research may be used in many ways in the area of advertising. It may be used for copy testing. Marketing research may be used to examine the important element of advertising copy like the basic theme, ideas, appeals, headlines, assessment of its attention value, communication clarity, memory value, conviction value, etc.
Marketing research may be applied to determining the most cost-effective media plan for ascertaining advertising effectiveness and audience measurement. It may also be used for media research, motivation research , and measuring the effectiveness of the advertising campaign. The broad areas of distribution research include identification of existing and potential distribution channels , selection of appropriate intermediaries, determination of channel Expectations, reduction of distribution cost , motivation for channels of distribution, measuring and evaluating the performance of the channels and different intermediaries, measuring relative effectiveness of different channels, assessment of dealer support and reason of conflict.
Related: What is the importance of transportation in marketing? The objective of this research is to find out the price Expectations of consumers and their reactions and responses to different price levels of products to ascertain elasticity of demand. The first stage is the development of a concept and its testing. The concept for a new product may come from several sources. The idea may be from a brain-storming session consisting of company employees, a focus group conducted among consumers, so the brainwave of a top executive.
Whatever may be its source; it is generally researched further through what is termed as concept testing. A concept test takes the form of developing a description of the product, its benefits, how to use it, and so on, in about a paragraph, and then asking potential consumers to rate how much they like the concept, how much they would be wiling to pay for the product if introduced, and similar questions.
Product Research: Apart from product concept, research helps to identify which alternative packaging is most preferred, or what drives a consumer to buy a brand or product category itself, and specifics of satisfaction or dissatisfaction with elements of a product.
These days, service elements are as important product features, because competition is bringing most products par with each other. An example of product research would be to find out the reactions of consumers to manual cameras versus automatic cameras. In addition to specific likes or dislikes for each product category, brand preference within the category could form a part of the research.
The scope of product research is immense, and includes products or brands at various stages of the product life cycle — introduction, growth, maturity and decline. One particularly interesting category of research is into the subject of brand positioning. The most commonly used technique for brand- positioning studies though not the only one is called Multidimensional Scaling.
Pricing Research: Pricing is an important part of the marketing plan. In the late nineties in India, some interesting changes have been tried by marketers of various goods and services. Newer varieties of discounting practices including buy-backs, exchange offers, and straight discounts have been offered by many consumer durable manufacturers. An interesting area of research into pricing has been determining price elasticity at various price points for a given brand through experiments or simulations.
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