IV. Varying Alertness and Perception
16.4.3 Market research for new venture
Future Goals Current strategy
Competitors’
Response Profile
• Is the competitor satisfied with its current position
• Where is the competitors vulnerable
• What likely t t
Assumptions Capabilities
Fig (13.2.2.1) Components of a competitive Analysis
A ‘market’ is a group of potential consumers who have purchasing power and unsatisfied needs. A new venture will survive only if a market exists for its products or services. This is so obvious that it would seem every entrepreneur would prepare thoroughly the market analysis is need to establish a target market.
Thus “Marketing research” involves the gathering of information about a particular market, followed by analysis of that information. The first step in marketing research is to define precisely the informational requirements of the decision to be made. In addition, specific objectives should be established like:
• Identify potential consumers go to purchase the goods in question.
• Why they choose to go there?
• What is the size of the market?
• What impact does the business promotion?
• How does the business compare with competitors?
The process of marketing research starts with collection of data. The data collected can be of primary nature or secondary nature. Primary data is defined as the data collected by researcher him on first hand. Secondary data may be defined as information that has already been compiled. Generally, collection of secondary data is less expensive to gather than new or primary data.
16.5 Sources of data collection Sources of primary data collection
To collect primary data, several techniques can be used. These are often classified as observational method and questioning method. Observational method avoids contact with respondents, where as questioning method involves respondents in varying degree.
Questioning method can be used by two ways, (1) survey method, and (2) is experimentation.
Survey includes contact by mail, telephone, and personal interviews. Mail surveys are often used in case of dispersed respondents. Experimentation is a form of research that concentrates on investigating cause-and-effect relationship. The goal is to establish the effect an experimental variable has on a dependent variable.
Sources of secondary data collection
Secondary data is readily available data. Secondary data may be internal or external. Internal secondary data consist of information that exists with in the venture.
For example, the various records of the business are containing useful information.
External secondary data are available in numerous periodicals, trade association literature, and government publications. Sometime one problem can be faced by researcher that the secondary data may be outdated and, therefore less useful.
Interpreting and reporting the information
After the accumulation of necessary data, it should be developed into usable information. Large quantities of data are only facts. They must be organized and molded into meaningful information. The methods of summarizing and simplifying information for users include tables, charts, and other graphic representation. Descriptive statistics, such as the means mode, and median, are the most helpful in this step of the research procedure.
Limitations of marketing research
1. Cost: Marketing research can be expensive, and some entrepreneurs believe that only major organizations can afford it.
2. Complexity: Marketing research is a collection of various steps involving sampling, surveying and statistical analysis. The quantitative analysis is most
complex technique and entrepreneurs have to depend upon the expert for reliable results.
3. Strategic decisions: Some entrepreneurs feel that only major strategic decisions need to be supported through marketing research. This idea is tied to the cost and complexity issues already discussed.
4. Irrelevancy: As marketing research is concerned with collection of data. The collected data may be relevant or irrelevant. Many entrepreneurs believe marketing research data will carry information, which is already known to entrepreneurs. Thus, most of entrepreneurs inhibit the use of marketing research.
Marketing stages for growing ventures
Most emerging ventures will evolve through a series of marketing stages.
In each stage the marketing function will differ; thus each requires a specific type of marketing strategy. A growing venture has four distinct stages; entrepreneurial marketing is called as stage – I, opportunistic marketing is stage – II, responsive marketing is stage III, and diversified marketing is stage IV.
Stage I, describes a strategy of developing a market niche and a goal of attaining credibility in the market place.
Stage II, seeks a strategy of strategy of market penetration for the purpose of attaining sales volume.
Stage III, seeks to develop product- market to create customer satisfaction.
Stage IV, focuses on new business development and seeks to manage the product lifecycle.
The following table is useful to explain each stage in relation to marketing strategy, marketing organization, marketing goals and critical success factors.
The Evaluation of Marketing Research
Stage I
Entrepreneurial Marketing
Stage II Opportunistic Marketing
Stage III Responsive
marketing
Stage IV Diversified marketing Marketing
Strategy
Market niche Market Penetration
Product Market development
New business development Marketing
organization
Informal, Flexible
Sales
management
Product- market Management
Corporate and divisional levels Marketing
Goals.
Credibility in the market place
Sales Volume Customer satisfaction
Product life cycle and portfolio management Critical
success factors
A little help from your friends
Production economies
Functional coordination
Entrepreneurship and innovation