Market Research

Perhaps the basic task of marketing is to form an understanding of the company's external environment and find potential for future growth within it.

The main difference between marketing as a functional area of activity in a commercial organization lies in its emphasis on the external environment. At the same time, marketing is primarily responsible for the sales area. Sales management in the short term is supported by marketing mainly through promotion tools, but in the long term, the focus shifts to the product itself, its price positioning, and sales channels. The information base for competent product management is marketing research of the market.

Goals and Content of Marketing Research

The goals of conducting marketing research are very diverse and depend on the characteristics of the organization itself, the market in which it already operates or plans to operate, the available research budgets, etc.

Despite their diversity, let's highlight several of the most common goals and try to consider the fundamental differences in the content of such market research.

Deepen presence in a specific market or niche.

Such marketing research usually has the most clearly defined tasks and a detailed program. This is not surprising, because company employees, including management, are well versed in "their" market and can competently set goals.

Marketing research of core markets and niches is usually conducted in-house as part of the ongoing activities of the marketing department. Its result is the collection of information that describes the "working" environment – the behavior of the company's customers and competitors. Using such data in current activities allows for increasing the efficiency of pricing policy, refining work in sales channels, and justifying promotion activities. To a lesser extent, such information will be useful for working on product policy, however, the same collection of customer feedback, especially in the service sector, provides some guidelines for improving the company's product.

Enter related niches or adjacent markets.

When a company plans expansion into related markets, it expects to find new growth points for the business there. In this case, the company's competencies can be used almost in full, but they require adaptation to new business conditions. Unlike the first case, marketing research here should be expanded to include the need to study the specifics of a particular market. With a high degree of relation, the macro environment of doing business will remain approximately the same and will not require full-fledged research, but the list of potential customers and competitors will be different here. In addition, marketing research will require searching for information about the features of products sold in new segments, applying benchmarking to justify the optimal market entry program. Thus, such work will require the formation of a wide range of private hypotheses that will be subject to verification within the research.

Expand geographical presence.

The complexity and content of marketing research for new geographical markets is determined by the list of potentially interesting territories and the breadth of their coverage. If we are talking about new subjects of the Russian Federation, such marketing research will be based on transferring the mechanism applicable to goal No. 1 to work with new territories. The research will include unfamiliar customer companies and, possibly, competitors, but the high degree of homogeneity of market conditions will only require expanding information bases without significantly changing the content of the work. In other words, such research is labor-intensive in terms of the volume of data processed, but does not require significant intellectual effort.

A different situation arises if the company aims to enter export markets, especially outside the Customs Union.

In this case, not only the micro environment of doing business changes, but also the macro environment, and therefore marketing research must be comprehensive and cover all aspects of the market. When analyzing foreign markets, only a small amount of information about the company's traditional market can be used. Often, within the organization, there may simply not be enough competencies to solve such a task due to its volume and complexity.

Conduct unrelated product diversification.

Entering unrelated markets for a company means a significant revision of the current strategy. Marketing research in such a situation is extremely important, as it allows finding areas that are optimal for the company in terms of the combination of applicability of existing competencies and the prospects of new markets and their segments. Such research a priori implies the implementation of a full range of analytical marketing tools, starting with strategic marketing methodologies. Deep knowledge of the home market, which distinguishes company marketers, is not of fundamental importance here, and is more likely to harm than help, as any specialization narrows one's horizons.

It will require the generation of many fundamental business hypotheses and their testing with market data within the framework of a step-by-step movement from the analysis of the macro environment to the working environment of the business. Such work is difficult due to the large volume of information processed, but, first of all, due to the intellectual complexity of its organization and conduct.

Combined goals.

Various combinations are possible, but the most common are combinations of goals 2 and 3, as well as 3 and 4. Such marketing research is characterized by increased complexity, which is even not the sum, but the product of particular complexities. It is advisable to avoid such large-scale analytical works on market research and achieve goals sequentially, taking into account available resources.

Frequency of Marketing Research

In the practice of Russian business, it is quite normal for research to be conducted on a case-by-case basis or, as they say, as needed.

As a rule, updating the development strategy, developing a business plan, conducting organizational changes in the format of M&A, and other global shifts in the company actualize the issues of marketing research of the market environment.

The problem in this case is that it is extremely difficult to perform several types of marketing research simultaneously. Therefore, some work must be carried out regularly in order to have a basic level of understanding of the functioning of the company's external environment at any time. The company's personnel involved in marketing must be trained and in a state of constant readiness to perform large-scale research tasks when they are set.

The goal of business development related to deepening one's presence in the traditional market is permanent for the company. Therefore, marketing research in this form should be conducted regularly, usually monthly, so that the company's management has access to up-to-date information on market dynamics and the state of its players, and the marketing unit hones its research skills and constantly has market data that can form the basis for solving more complex analytical tasks.

Related and adjacent markets should also be regularly "monitored" by the marketing service. Only the period here can be semi-annual or annual. Such markets are the main source of information about opening promising niches and practicing strategic marketing analysis skills. It is in the direction of new niches that the company's product range traditionally develops and areas of low-risk additional revenue volumes lie.

As for new geographical markets, within the Russian Federation, the frequency of their study should be approximately comparable to related markets and niches. For export markets, the situation is different. Such marketing research, due to its complexity, is usually performed for a specific request, that is, one-time. But for large companies, it is possible to systematize this type of research within the framework of drawing up a plan, when priority foreign markets are studied with a certain frequency and in various sections with the necessary level of specification of indicators.

There are quite a few directions for unrelated product diversification, and they are usually not predictable for managers at the level of the marketing service. At the same time, each such study is extremely complex, and often impossible to perform using internal resources. Therefore, marketing research of such markets is conducted only as needed and has no periodicity, except for cases where priorities have already been established, and the company collects information for a gradual transition to a new market for itself.

Executors of Marketing Research

In the most general terms, when organizing marketing research, the company faces a choice – to solve this task on its own, hire external consultants, or use combined options, that is, do some of the work independently, and outsource the rest.

There are at least several dozen factors that determine the optimality of a particular choice, and it will be problematic to consider all options.

Therefore, one can use the classification of goals for conducting marketing research, which will allow formulating practically applicable recommendations for organizing marketing research.

So, if a company is analyzing its traditional market, it is advisable to do it on its own – here competencies in knowledge of a particular market are more in demand than the general level of marketing analytical training of the executor.

For research aimed at studying related markets by product criterion or geographical ones within the Russian Federation, it is also better to organize your own marketing service. Moreover, in both this and the first case, regularity is required, so it is cheaper to work independently.

If marketing research of export markets and, especially, unrelated product markets for the company is needed, then in most cases it is worth paying attention to the possibility of attracting marketing agencies specializing in such work.

In addition, the study of such markets is almost always associated with the purchase of various databases – statistical, customs, data from industry surveys, etc., which are more accessible to research companies due to the effect of scale. A private organization may be sold primary databases at prices that exceed the cost of a full-fledged study with the processing of such information and the construction of forecast models.

In any case, it is implied that the company has a staff of qualified marketing analysts who are competent in conducting market research. If the management or owner of the company understands that the available human resources are not capable of solving analytical tasks, then even for the first two cases, it will be faster and cheaper to hire an outsourcing organization than to recruit a specialist and adapt him to the company's staff.

Not every marketer can organize marketing research. This is a certain specialization, often even a type of personality and character. There are very few examples where market marketing research is a feasible task for an advertising specialist or an Internet marketer. And if the manager or owner of the company himself does not understand the decomposition of market research tasks well, then he will not be able to control the effectiveness of its solution.

Inviting an external consultant almost always pays off, at least for conducting an express market analysis and setting tasks for performers. Losses of time and resources when implementing an incorrect market research program will many times exceed the costs of such a specialist.