Think over the main functions of market research in marketing and the process of selling in general.

Market Research

 

           

 

 

Lead-in.

Think over the main functions of market research in marketing and the process of selling in general.

Key Vocabulary

1) market research

2) an entrepreneur  

3) to make a decision

4) feasibility

5) annual budget

6) annual report

7) coherent

8) to do smth in response to smth

9) a survey

10) chamber of commerce

11) to solve a problem

12) to decide on smth

13) primary and secondary information

14) emotional appeal

15) target audience

 

Consult a dictionary and write out the transcription and Russian equivalents of these words. Then practice reading them.

Reading

Read the article and compare it with your ideas to the second task of Lead-in.

Market Research

The term ‘market research’ encompasses a number of activities that are designed to connect marketers to consumers through information gathering and evaluation. Market research provides businesses with information about their customers, their competitors, and their overall industry. It is commonly used to identify marketing problems and opportunities, as well as to develop and evaluate the effectiveness of marketing strategies. Market research can help entrepreneurs evaluate the feasibility of a start-up venture before investing a great deal of time and capital, for example, as well as assist them in effectively marketing their goods and services.

Employing such marketing strategies as market segmentation and product differentiation would be nearly impossible without first conducting market research.

Although market research can be costly, it is often even more costly to make erroneous decisions based upon bad or inadequate information. In fact, an average business spends between 25 and 50 per cent of its annual marketing budget on research activities. There is a great deal of helpful information available to entrepreneurs who know where to look, and there are many consultants, advertising firms, and market research specialists who offer their services to businesses.

The information gathered through market research can be divided into two main categories. The first category – primary information – generally does not exist in a coherent form before the marketer gathers it in response to a particular question or problem. The most common methods of gathering primary market research information are through direct mail, telemarketing, and personal interviews.

The other category – secondary information – has already been compiled and organized by a source other than the marketer. Rather than looking at a specific marketing problem faced by an individual company, secondary information generally tracks trends within a market, an industry, a demographic group, or a geographic region. Some possible sources of secondary market research information include government reports, trade association records, newspaper and magazine surveys, university-sponsored research, local chamber of commerce records, on-line services, and competitors’ annual reports.

Market research can provide business owners with the information they need to answer a wide range of questions, including: Who are my customers? Where are they located? How much and how often will they buy? and What product attributes do they prefer?

Given the importance of market research – and its potential cost – experts recommend that businesses follow a step-by-step approach in order to gain the most benefits from their research activities. The first step in the market research process is to define the marketing problem to be addressed. Next, a marketer should determine what information is needed to solve the problem, as well as what sources should be used to acquire the information. Many businesses make a preliminary investigation at this early stage in order to give their definition of the problem more focus and to develop tentative answers that can be tested during the next stage of the process. The third step involves planning the research. This step includes selecting the techniques to be used for gathering data and deciding on an appropriate group, or sample, to be included in the research. Fourth, a marketer actually gathers the necessary data. The fifth step involves analyzing and interpreting the information that has been gathered. Finally, the marketer reaches a conclusion about the marketing problem and translates the findings into changes in the firm’s overall marketing strategy.

Comprehension Check

1) Refer closely to the article and answer the following questions:

a) What information can market research provide business owners with?

b) What is the difference between primary and secondary information gathered through market research?

c) Name some possible sources of primary and secondary information. Which of them are more accurate and useful?

2) Discuss the following statements from the text, illustrating your arguments with examples:

a) “Although market research can be costly, it is often even more costly to make erroneous decisions based upon bad or inadequate information.”

b) “… experts recommend that businesses follow a step-by-step approach in order to gain the most benefits from their research activities.”

 

Vocabulary Development

Types of Market Research

1) _________ is a research on who is listening, watching, and reading is important to marketers of television and radio programmes and print publications – as well as to advertisers who wish to reach a certain target audience with their message.

2) ___________ includes simple, in-person research such as taste tests conducted in malls and in the aisles of grocery stores, as well as elaborate, long-term ‘‘beta testing’’ of high-tech products by selected, experienced users.

3) ____________ helps advertisers to find out whether consumers have strong brand loyalty, whether the brand has any emotional appeal and what the consumer thinks could be improved about the brand.

4) ___________ tries to determine why people buy certain products based on a profile of the way the consumers live their lives.

5) ___________ records what was actually purchased. This is valuable information an advertiser can use to help plan an ongoing marketing strategy.

6) ___________ shows up on thousands of lists and databases that are regularly cross-referenced to mine nuggets of marketing research. It allows companies to build personal relationships with people who have proven from past purchases that they are potential customers.

7) Many companies now wait a fewdays or weeks, then contact customers with survey, questionnaires or telephone calls. Companies want reassurance that the customer enjoyed the buying experience and that the product or service has met the buyer’s expectations. The reason behind ___________ is to ensure that current customers are happy, will consider themselves future customers, and will spread positive word-of-mouth messages about the product and company.

 

8) ___________ includes such common activities as filling out a comment card at a restaurant or responding to a telephone survey. The person being surveyed cannot expound on their answers. Such surveys usually ask for ‘‘yes’’ or ‘‘no’’ responses or for measures of multiple choice opinion.

9) Over time, market researchers have grown increasingly aware that people often have opinions that do not fit into a multiple-choice questionnaire. To capture these opinions and try to analyze them, researchers are shifting toward ________ - asking people to say exactly what is on their minds.

10) In-person, sit-down discussions around a table with groups of consumers, would-be consumers, never-buyers, or any other demographic group a company wishes to bring together are called __________. This allows executives to observe the proceedings unobtrusively or to videotape the session for further study.

 

Market Segmentation

         

 

Lead-in.

Key Vocabulary

1) market segmentation

2) to fit

2) homogenous

3) a market niche

4) feasible

5) to divide the overall market into segments

6) to match smth to the needs of smth

7) to implement a strategy

8) to fall into distinct clusters

9) to yield

10) a trait

11) a benefit

12) a pitfall

13) an approach

 

Reading

Market Segmentation

Market segmentation is the science of dividing an overall market into key customer subsets, or segments, whose members share similar characteristics and needs. Because it involves significant market research, market segmentation can be costly. But it is especially important for those businesses, which lack the resources to target large aggregate markets or to maintain a wide range of differentiated products for varied markets. Market segmentation allows a business to develop a product and a marketing mix that fit a relatively homogenous part of the total market. By focusing its resources on a specific customer base in this way, a business may be able to carve out a market niche that it can serve better than its competitors.

Market segmentation uses the strategies that range from mass marketing – in which a single product is offered to all customers in a market – to one-to-one marketing – in which a different product is specifically designed for each individual customer in a market. Most businesses realize that since no two people are exactly alike, it is unlikely that they will be able to please all customers in a market with a single product. They also realize that it is rarely feasible to create a distinct product for every customer. Instead, most businesses attempt to improve their odds of attracting a significant base of customers by dividing the overall market into segments, then trying to match their product and marketing mix more closely to the needs of one or more segments. A number of customer characteristics, known as segmentation bases, can be used to define market segments. Some commonly used bases include age, gender, income, geographical area, and buying behavior.

 

Segmentation bases

In order to successfully implement a market segmentation strategy, a business must employ market research techniques to find patterns of similarity among customer preferences in a market. Ideally, customer preferences will fall into distinct clusters based upon identifiable characteristics of the population.

To be pursued by a marketer, according to Alexander Hiam and Charles D. Schewe in “ The Portable MBA in Marketing”, the customer segments should be:

1) identifiable and measurable;

2) large enough to be profitable;

3) reached effectively (for example, its members must tend to view the same television programs, read the same publications, or shop in the same places);

4) responsive to marketing; 

5) stable and not expected to change quickly.

A company might elect to serve a single market segment or attempt to meet the needs of several segments.

Determining how to segment a market is one of the most important questions a marketer must face. Creative and effective market segmentation can lead to the development of popular new products, but unsuccessful segmentation can cost a great deal of money and still not yield the desired results. There are three main types of segmentation bases for businesses to consider – descriptive bases, behavioral bases, and benefit bases – each of which breaks down into numerous potential customer traits.

Descriptive bases for market segmentation include a variety of factors that describe the demographic and geographic situation of the customers in a market. They are the most commonly used segmentation bases because they are easy to measure, and because they often serve as strong indicators of consumer needs and preferences. Some of the demographic variables that are used as descriptive bases in market segmentation might include age, gender, religion, income, and family size, while some of the geographic variables might include region of the country, climate, and population of the surrounding area.

Behavioral bases for market segmentation are generally more difficult to measure than descriptive ones, but they are often considered to be more powerful determinants of consumer purchases. They include those underlying factors that help motivate consumers to make certain buying decisions, such as personality, lifestyle, and social class. Behavioral bases also include

factors that are directly related to consumer purchases of certain goods, such as their degree of

brand loyalty, the rate at which they use the product and need to replace it, and their readiness to buy at a particular time.

Businesses that segment a market based on benefits hope to identify the primary benefit that consumers seek in buying a certain product, then supply a product that provides that benefit. This segmentation approach is based upon the idea that market segments exist primarily because consumers seek different benefits from products, rather than because of various other differences between consumers. One potential pitfall to this approach is that consumers do not always know or cannot always identify a single benefit that influences them to make a purchase decision.

Many marketers use a combination of bases that seem most appropriate when segmenting a market. Using a single variable is undoubtedly easier, but it often turns out to be less precise.

С omprehension Check

Vocabulary Development

Segmentation process

Hiam and Schewe have identified six steps that companies should take in the market segmentation process.

The          step in the market segmentation process is to decide which segment or segments to serve. In targeting a particular segment, a marketer should look for opportunities           (i.e., customers with unsatisfied wants and needs) that provide a good match for the organization and its resources. It is important that the marketer consider not only the size and potential profitability of a market segment, but also whether the company’s skills, technologies, and objectives would enable it to meet the needs of that segment better than its competitors.

The          step in the market segmentation process is actually collecting and analyzing data, which involves applying market research tools. The goal in analyzing the data is to identify market segments that are internally homogeneous, yet are distinctly heterogeneous with respect to other segments.

The           step is to develop a product and marketing plan that will appeal to the selected market segment. This involves identifying the product attributes that are most important to consumers in the segment, and developing a marketing strategy that will attract their attention. In fact, market segmentation can be usefully applied during the earliest stages of product design, when a company first identifies who its target customer will be in terms of demographic, geographic, and behavioral characteristics.

The           step in the process is to decide which variables to use in segmenting the market. Many companies fall into the trap of collecting data on as many variables as possible and then attempting to sort through it later to draw meaningful conclusions. Instead, Hiam and Schewe recommend that marketers use their knowledge of the market to select a few relevant variables in advance. This approach is generally less expensive and will likely provide more useful results.

The          step is to determine the boundaries of the market. In completing this step, a marketer should use a formal business plan to develop a broad definition of their business, and then consider the offerings of both direct and indirect competitors to gain information about the basic needs of consumers in the market.

The           step is to develop a detailed profile of each market segment, which involves selecting those variables that are most closely related to consumers’ actual buying behavior.

In general, customers are willing to pay a premium for a product that meets their needs more specifically than does a competing product. Thus marketers who successfully segment the overall market and adapt their products to the needs of one or more smaller segments stand to gain in terms of increased profit margins and reduced competitive pressures.

 

 

Lead-in.

1) In pairs, discuss the following questions:

a) Why do people sometimes need to plan their life?

b) Do you often make plans? Why?

c) What do you usually plan?

d) Does planning always help you achieve your goals?

 

Key Vocabulary

1) to achieve/attain/accomplish objectives/goals

2) a broad set of interrelated choices

3) to be implemented through smth

4) a loan

5) personnel

6) to enhance

7) to foster

8) personal commitment

9) morale

10) utilization of scarce resources

11) fiscal

12) a prerequisite

13) to assert a plan

14) to persuade

 

Reading

Benefits of planning

Planning provides a means for actively involving personnel from all areas of the business enterprise in the management of the organization. Company-wide participation improves the quality of the plans. Employee involvement enhances their overall understanding of the organization’s objectives and goals. The employees’ knowledge of the broad plan and awareness of the expected outcomes for their responsibility centers minimizes friction between departments, sections, and individuals. Involvement in planning fosters a greater personal commitment to the plan and to the organization. These positive attitudes improve overall organizational morale and loyalty.

Managerial performance also benefits from planning. Planning focuses the energies and activities of managers in the utilization of scarce resources in a competitive and demanding marketplace. Able to clearly identify goals and objectives, managers perform better, are more productive, and their operations are more profitable. In addition, planning is a mental exercise from which managers attain experience and knowledge. It prepares them for the rigors of the marketplace by forcing them to think in a future- and contingency-oriented manner.

 

The planning horizon

Basically, there are two timetables for planning. The first is long-range, extending beyond one year and normally less than five or ten years. Often called the strategic plan or investment plan, it establishes the objectives and goals from which short-range plans are made. Long-range plans support the organizational purpose by providing clear statements of where the organization is going.

The second planning horizon is short-range, covering a period of up to one year. Short-range plans are derived from an in-depth evaluation of the long-range plan. The annual budget is a quantified expression of the enterprise’s plans for the fiscal year. It generally is divided into quarters, and is used to guide and control day-to-day activities. It is often called the tactical plan

because it sets priorities, in the near term, for the long-range plans through the allocation of resources to specific activities.

 

Comprehension Check

1) Refer closely to the article and answer the following questions:

a) What are the reasons for the increase in the use of formal long-term plans over the past few decades? Give comments and your own examples.

b) What is the difference between strategic and tactical plans?

c) Which step in the planning process you consider to be the most important? Give reasons.

 

2) Discuss the following statements from the text, illustrating your arguments with examples:

a) “The planning process is directly related to organizational considerations, management style, maturity of the organization, and employee professionalism.”

b) “Able to clearly identify goals and objectives, managers perform better, are more productive, and their operations are more profitable.”

 

Vocabulary Development

Across

1. An impressive display or collection; an orderly or regular arrangement.

3. A person or group responsible for the administration of a project, activity, or business.

5. A word relating to a goal or aim.

7. To promote the growth or development of smth.

9. Relating to government finances; involving financial matters.

10. A ____ plan is used to guide and control day-to-day activities.

12. A number of objects or people grouped or belonging together, often forming a unit or having certain features or characteristics in common

 

Down

2. Something required as a prior condition.

4. The people employed in an organization.

6. Some property lent, esp. money lent at interest for a period of time.

8. An obligation, promise, etc. that restricts one's freedom of action; a future financial obligation.

11. The process of making practical or worthwhile use of smth.

 

Elements of a business plan

other details market analysis financial plan description of business  contingency plans executive summary   production plan description of management and organization structure

description of products and/or services implementation schedule      sales and marketing plan

1. __________

This is usually a two- to-five page summary of the entire business plan. It is an important part of the plan, in that it is designed to capture the reader’s attention and create an interest in the company. It usually includes the company’s mission statement and summarizes its competitive advantages, sales and profit projections, financial requirements, plans to repay lenders or investors, and the amount of financing requested.

1. __________

This section of a business plan includes not only a profile of the company, but also a picture of the industry in which the company operates. Every business operates within a specific context that affects its growth potential. The data of the section may cover new products and developments in the industry, trends and outlook for the industry, and overall economic trends.

1. __________

The goal of this section is to differentiate a company’s products or services from those of the competition. It describes specific customer needs that are uniquely met by the firm’s products or services. Product features are translated into customer benefits. Product life cycles and their effects on sales and marketing can be described. The company’s plans for a new generation of products or services may also be included in this section.

1. __________

This section presents the strengths ofthe company’s management team by highlighting relevantexperience, achievements, and past performance.Key areas include management’s ability to provideplanning, organizational skills, and leadership.The section also contains information about the company’sownership and work force. It may present anexisting or planned organizational structure that willaccomplish the goals set forth in the business plan.

1. __________

It serves as the basis for a company’s sales and marketing plans and generally covers the company’s competition, customers, products, and market acceptance, its strengths and weaknesses, providing a basis for discovering market opportunities. This section of the business plan provides a picture of who buys and uses the company’s products or services and highlights how the latter satisfy previously unfulfilled market needs. It also includes evidence of market acceptance of the company’s unique products or services.

1. __________

This section delineates the methods and activities that will be employed to reach the company’s revenue goals. It describes the company’s customer base, products or services, and marketing and sales programmes.

1. __________

It is usually included if the business is involved in manufacturing a product and covers production options that are available to produce a desired mix of products. In non-manufacturing companies, this section would cover new service development.

1. __________

This section covers the financing and cash flow requirements implicit in other areas of the business plan. It contains projections of income, expenses, and cash flow, as well as descriptions of budgeting and financial controls. Financial projections must be supported by verifiable facts, such as sales figures or market research. Monthly figures are generally given for the first two years, followed by annual figures for the next three to eight years. If the business plan is written for investors or lenders, the amount of financing required may be included here or in a separate section.

1. __________

This section provides key dates pertaining to finance, marketing, and production. It indicates when specific financing is needed, when specific aspects of a particular marketing campaign will take place, and delivery dates based on production schedules.

1. __________

This section defines problems and challenges that the company may face and outlines plans for overcoming unforeseen obstacles that might arise. Specific topics that may be explored are competitive responses, areas of weakness or vulnerability, legal constraints, staffing, and continuity of leadership.

1. other details

Most business plans include a table of contents and a cover sheet containing basic information about the company. An appendix may include a variety of documentation that supports different sections of the business plan. Among the items that may be found in an appendix are footnotes from the main plan, biographies, graphs and charts, copies of contracts and agreements, and references.

 

6. Render into English the following passage:

a) Разработке плана предшествует системное осмысление ситуации, более четкая координация усилий фирмы, более точная постановка задач, что должно привести к росту сбыта и прибыли. Основными этапами планирования являются стратегическое и тактическое.

b) Стратегическое планирование состоит из выработки программы фирмы, формирование ее задач и целей, анализа хозяйственного портфеля и перспективного планирования роста организации.

c) Для обеспечения роста фирмы используются следующие стратегии: интенсивного роста, интеграционного роста, диверсификационного роста.

d) На основе стратегических планов фирма разрабатывает тактические планы (планы маркетинга). Основными разделами плана маркетинга являются: сводка контрольных показателей, изложение текущей маркетинговой ситуации, перечень опасностей и возможностей, перечень задач и проблем, изложение стратегий маркетинга, программы действий, бюджеты и порядок контроля.

e) Фирма использует три типа маркетингового контроля: контроль за выполнением годовых планов; контроль прибыльности; стратегический контроль.

 

 

 

Market Research

 

           

 

 

Lead-in.

Think over the main functions of market research in marketing and the process of selling in general.

Key Vocabulary

1) market research

2) an entrepreneur  

3) to make a decision

4) feasibility

5) annual budget

6) annual report

7) coherent

8) to do smth in response to smth

9) a survey

10) chamber of commerce

11) to solve a problem

12) to decide on smth

13) primary and secondary information

14) emotional appeal

15) target audience