Customers & Marketing Research
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    • Customers & Marketing Research

    Ashok Vasant Edurkar

    Consultant Stork Vienna Austria
    A mistake that many entrepreneurs make is to assume that their product or service will sell. Inventors often become infatuated with their own products and assume that everyone else would also be equally infatuated. Only rarely will entrepreneurs find themselves in such favorable situations. Consequently they should question whether their products will sell and good marketing research will help provide the answer.Where is your customer?Part of your customer research will involve locating their base. There are obvious categories such as big cities, towns and villages. Other categories include regional areas of south, east, north and west India. It is important to determine the potential for current and future sales. Local markets differ significantly because of their population size, economic development, industrial profile, ethnic groups, weather, legislation and culture. A product that sells well in one area may sell poorly elsewhere. For example, a two-wheeler that is successful in Pune may not sell that easily in rural India.Who is your customer?Developing a clear profile of potential customers is a basic element of market research. Customers may be young or old, married or single, teachers or students, homeowners or tenants, poor or wealthy, or some combination of these or a thousand other characteristics. One entrepreneur made a product for men, but could not sell it. Then he put up a sign saying ‘Unique gift for the man in your life’ and it was a big success with women. He ended up selling more products than he had ever dreamed of ! A process known as market segmentation helps classify / segment potential customers on the basis of a large number of demographical, geographical or behavioral criteria. For example : a) Gender and Age – These are two essential characteristics to identify the customer. There could be a segment such as women in the age group 30 to 45 and you may target certain magazines, cosmetics, apparel or home products at them.

    b) Income – Consumers must have the ability to buy and the amount of money will influence the product or service concept, price, nature of promotions and method of distribution. Perhaps a higher price may be essential to reinforce a premium image.

    c) Occupation and Education – Both these factors can significantly influence an entrepreneur’s product decision. Trade magazines will find customers only from that occupation. Professionally educated people may want magazines with a focus on international news and business in English.

    d) Other customer characteristics – These include family profiles, marital status, lifestyle, ethnic group, religion, personality etc. Home appliances that save labour and time would sell more in families where both parents are working.

    A market segment is one distinct customer group on which a business will concentrate its efforts. A tiny, small market segment, also called a market niche, keenly focuses an entrepreneur’s efforts on product characteristics, pricing, promotions, and channels of distribution related to that specific customer group. Companies try to establish segmentation strategies so that efficient use of resources can be achieved without ambiguity. Every niche will have characteristics defined partially by the customer and partially by location.Some of these characteristics are :

    a) Growth characteristics – For any market segment, there will be ups and downs. Changes reflect economic conditions, evolving competition or possibly a stage in the product life cycle. Investors and lenders will want to see hard data on growth trends and they will take a dim view of weakly supported market information.

    b) Sales forecast – The result of good marketing research will be a well-defined sales forecast. A sales forecast is the quantified volume and value of projected sales within a market segment for a specific time period. In addition, a sales forecast helps determine human resources, production and management system requirements. It will also reveal seasonality, the pattern of variation in sales over a calendar year.

    c) Competition – Competition is always on an entrepreneur’s mind. At the moment a new idea is conceived, one asks, ’’I wonder if anyone else is doing this?’’ And that question continues to be asked as long as the business exists. In most instances, existing competitors can be accurately identified. There are many commercial directories from where names can be found out. But researching products is usually more difficult because inventors are unlikely to disclose their ideas until they are ready to go commercial.

    d) Products or substitutes – The question of what products or substitutes exist now is an adjunct to finding out which competitors exist. The crucial question is one of availability. Are products or services available to my target customer group? An associated question is whether these customers buy substitutes. For example, would they buy chicken in place of fish?

    Sources of market intelligence :Existing competitors – Data can be gathered from their marketing literature. Start by asking yourself, ‘’I want this, where will I get it?’’ Act like an interested consumer. Use their products and find out yourself. Try to understand why they are so successful.Trade publications – There is ample printed material available about the product that you are interested in. A great deal can be learned about trends and changes from these publications. Daily newspapers also give ample information about products.Government sources – Many government, semi-government and local authorities
    collect large information on business and industry. Your government office or Chamber of Commerce is a treasure chest of valuable information.    Potential customers – This is the most important source of market information. Communicate with potential customers. You may make use of a formal questionnaire and conduct a market survey.Importance of marketing research :Once an enterprise has been established, the question is no longer whether the product or service is feasible, but whether the enterprise can reach its growth potential and compete effectively. Fresh entrepreneurs make assumptions about customers, pricing, quality, image, product uthorised, style, packaging, etc. Competitors will not be idle bystanders when you enter the market. They would want to avoid your entry and can adopt certain means like price-cutting. Entrepreneurs need to collect data on this as well and be prepared for such an eventuality.In conclusion, if entrepreneurs set about doing marketing research with a strong interest in getting answers to their questions, they will reduce the risk of early failure. If they go about this task frivolously, they are leaving their future to fate and they might as well roll dice with their resources.
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