Imagine your company is considering launching a new product. After much deliberation, brainstorming, and consideration - your team has decided your company should move on to the next step of the process....marketing research. What exactly is marketing research? According to Entrepreneur.com encyclopedia - "The process of gathering, analyzing and interpreting information about a market, about a product or service to be offered for sale in that market, and about the past, present and potential customers for the product or service; research into the characteristics, spending habits, location and needs of your business's target market, the industry as a whole, and the particular competitors you face."
Internal and external factors are two items which will have an effect on the sample results. An example of internal factors which may influence your marketing research accuracy include: budgets, organizational desire to grow, internal resources to handle and process the research, and a companies manufacturing ability to create a new product. External factors which may influence market research include: the current status of the industry, actions of competitors, and the responsiveness of the target market. Considering these factors, a productive marketing team will determine the best way to proceed.
Future trends also need to be taken into consideration when creating a marketing sample.
These trends may include: economic recession, advances in technology, or the introduction of new products. When marketing research is conducted, it may have valuable insight to industry trends. The marketing research quote from Steve Ferrante which fits really well with this topic, "If you want to know ho to sell more, then you better know why customers buy." When a company conducts marketing research, they are diving deeper into the customer's mind. A company may find out communication trends, if the particular product is viable, where the industry is trending, or the perception of your brand. This type of information could help a business understand what direction your industry is headed. Are the customers excited about the product you are researching? If not, why are they not interested? Do the respondents have ideas or recommendations to make the product better? What are the customer's perceptions of the brand? How can your business evolve with the trends?
Following your moral compass and ethical standards as set by the American Marketing Association (AMA) are critical for the credibility of your research. According to AMA Statement of Ethics, a marketer must:
Do no harm. This means consciously avoiding harmful actions or omissions by embodying high ethical standards and adhering to all applicable laws and regulations in the choices we make.
Foster trust in the marketing system. This means striving for good faith and fair dealing so as to contribute toward the efficacy of the exchange process as well as avoiding deception in product design, pricing, communication, and delivery of distribution.
Embrace ethical values. This means building relationships and enhancing consumer confidence in the integrity of marketing by affirming these core values: honesty, responsibility, fairness, respect, transparency and citizenship.
A companies marketing strategy should address any ethical issues prior to launch. For example - if I worked for Nike and were a part of a team collecting marketing research information in a sample of respondents, we would need to make sure we were gathering the information in an ethical manner. To ensure Nike is following marketing ethics and values, I propose that the marketing for the new product follow the below guidelines:
Test marketing group leaders must identify themselves as Nike employees who are seeking feedback on the new product. Group leaders must be transparent and open with all participants so trust can be built through the testing process
Fully and accurately describe the new Nike Women’s Athletic Underwear line, describing features, benefits, materials, and purpose.
Create an environment of honesty, void of coercion
Protect all participant information with the highest regard
Value participant’s opinions and values, avoid stereotyping and any type of racism, discrimination, or ageism
Promote a diverse group of women who are devoted to influencer marketing and holding positions as ambassadors
Making sure that your marketing proposal is approved by your company and does not violate any ethical issues is very important. It is important to be honest, responsible, fair, respectful, transparent, and a good citizen. (AMA, Codes of Conduct, 2020). This also means avoiding any type of harassment, bribery, and exercising due diligence.
I am able to identify some limitations to my example marketing proposal for Nike. To conduct marketing research in several geographic areas will have a high price tag. For example: if Nike sends two marketing representatives to Dallas to conduct marketing research over the course of a week, a large amount of money would need to be spent on this one demographic. Here is a preliminary breakdown of charges:
Employee wages: $25 per hour x 40 hour week = $1000
Employee per diem: $150 per day (GSA.gov) x 7 days = $1050
Hotel rooms: $120 x 7 days = $840 x 2 rooms = $1680
Airfare: $300 x 2 passengers = $600
Total cost for two employees to go to one location to conduct surveys = $4330
If Nike moves forward with entertaining six test markets, the costs alone could reach $25980. For a large company like Nike, this cost may seem small in comparison to the benefit it could receive from sales of the new product. The new line of Women's Athletic Underwear plans to sell for $13 per pair, or $30 for three pairs. To cover the cost of the marketing research for one location, the company would only need to sell 145 three-packs of underwear at each location.
References:
American Marketing Association. (n/d). Codes of Conduct - AMA Statement of Ethics. Statement of Ethics. https://www.ama.org/codes-of-conduct/
Entrepreneur. (n/d). Encyclopedia. Market Research. https://www.entrepreneur.com/encyclopedia/market-research
General Services Administration. (2020). FY 2020 Per Diem Rates for Dallas, Texas. https://www.gsa.gov/travel/plan-book/per-diem-rates/per-diem-rates-lookup/?action=perdiems_report&state=TX&fiscal_year=2020&zip=&city=dallas
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