The Purpose of Market Research

Describe how a selected organisation uses marketing research to contribute to the development of its marketing plans In this section of the unit the investigation of the marketing research used by Kellogg’s will be shown through thorough research and evaluation also how it links in to the development of Kellogg’s marketing plans.

The Purpose of Market Research

Marketing research is what informs business’s make decisions by helping it to understand the changing dynamics of its market. This involves finding out more about customers, competitors and the overall marketing environment.

The purpose of doing this is to gather data on customers and potential customers. The pure definition of market research is systematically gathering, recording and analysing data and also about the issues relating to marketing products and services. There are two types of research’s that can be conducted:

Primary

Secondary
These research can then be formed into either quantitative or qualitative
Primary Research
Primary research is data and information that the business has gathered first-hand and has not been gathered before.

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Internal primary research data sources include:
Sales figures for the business’s own products
Customer data held on a central database.
External primary research methods include:
Questionnaires and Surveys
Interviews and Focus Groups
Mystery Shoppers,
And other observation techniques.
Secondary Research
Secondary research uses data and information that has been collected before, either from within the organisation which can also be seen as internal data or by another organisation which is mostly regarded to as external data.

Secondary research is sometimes referred to as ‘desk research’ and sources include:
Reports from sales and regional representatives
Previous marketing research (internal)
Trade journals and websites (external)
Books and newspapers (external)
Industry reports from industry associations and government departments (external)
Census data and public records (external).
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M2-Explain the limitations of marketing research used to contribute to the development of a selected organisation’s marketing plans For this sector of the report I will be identifying and explaining the limitations of the market research methods used in the Kellogg’s investigation. This should give a clear overview of how Kellogg’s develop. In the case study I have been studying I have acknowledged Kellogg’s uses four junctures of market research to ensure they have examined a product collectively which enable Kellogg’s to develop they’re products better and to better the product to suit its target audience. Firstly, we have a very important sector of market research which is seen as discovery, it is vital to identify a set of new food ideas that would be suitable for developing a new Crunchy Nut product. Secondary research was conducted from Mintel and Datamonitor and was used to find out about innovation trends in the cereal market. It was also used to find out about new products, flavours and foods from around the world. Food developers at Kellogg’s used this information to come up with a number of new food ideas.

Although secondary data is easy to access there are some limitations Kellogg’s need to take into consideration, this could be for instance the age of the documents and when the research had been operated. Also the size of the group the research was taken and how many people were involved. I have also accredited secondary research can be very vague and general this would prove difficult for Kellogg’s to make a decision. In market research there are different aspects a business can branch into, many in which are very beneficial. The next form of research Kellogg’s had fore taken was selecting the best concept for their product they ensured they could do this by overseeing a quantitative survey. This had then created specific statistical information that indicated that a new Crunchy Nut Bites idea was perceived as the most appealing amongst all the ideas tested. Although Kellogg’s manage to use the quantitative data efficiently there can be drawbacks to using quantitative data, the main hindrance of quantitative research is the context of the study is ignored.

Quantitative research does not study things in a natural setting or discuss the meaning things have for different people as qualitative research does. Another shortcoming is that a large sample of the population must be studied; the larger the sample of people researched, the more statistically accurate the results will be. Once the conception was formed Kellogg’s then had a job conform and construct the concept into a new product this involved usage of qualitative research which helped Kellogg's food technologists to explore the taste and texture of the new food idea in more detail. Kellogg's needed to understand the 'eating experience' of the consumer before a decision could be made about how to develop the recipe in more detail. Kellogg’s needed to take in to consideration even though the qualitative would help they’re market research they may be some downfalls, for example the researcher of the study is heavily involved in the process, which gives the researcher a subjective view of the study and its participants. The researcher interprets the research according to his or her own biased view, which skews the data gathered.

Another disadvantage is that this research method is very time consuming and can last for months or even years. Finally, it is always important to ensure the financial side of the product are understood and the product brings in a good profit also it is a good idea to set promotional prices to enable the customer to have a taster of the product. This meant Kellogg’s were required to predict a forecast of the product, Kellogg’s do this by undergoing one final test prior to the new product launch. This is called the 'In Home Usage Test’. The consumers are given the product to try for several days and this enables Kellogg's to capture how consumers interact with the product for the first time. As well as this being a very good technique to understand the consumer they can be negatives to this the obvious problem Kellogg’s would be facing is that markets are unpredictable. Any sales forecast, however rigorous its analysis of conditions, can be flat-out wrong.

Sales forecasts fall into two basic categories, each of which has distinct disadvantages. In this case this is a qualitative forecast so sales forecasts rely on experts’ opinions to predict upcoming sales performance. Which may be detrimental to Kellogg’s because qualitative approaches is subjective therefore opinions, even well-informed ones, can be wrong, especially if they don’t take into account relevant economic data. After overseeing Kellogg’s market research although the major drawbacks Kellogg’s can face, market research is very important for Kellogg’s as it previews what Kellogg’s can stumble upon when launching a new product. However market research that is gathered by any organisation could prove to be irrelevant and inappropriate.

D2-Make justified recommendations for improving the validity of the marketing research used to contribute to the development of a selected organisation’s marketing plans. After looking at all the limitations that effect Kellogg’s this has entitled me to make justification and recommendation for improving the validity of the marketing research used in Kellogg’s. Consequently I will be making three comprehensive recommendations with justifications to improve validity of the market research used to contribute to the development of Kellogg’s marketing plans. Market research is used by many organisations and is very fatal tool; however the data collected can sometimes not be as valid for various reasons, resulting in a business to make the wrong decision and highly affecting its market plans. The first recommendation I would like is to discuss to enhance the validity of the market research is for an organisation like Kellogg’s to choose the right amount of people to question.

Kellogg’s main objective is to improve their current product and to continue to create new products in order to carry this out they would have to carry research to find out what they lack in and what they need more of however if the amount of people questioned is too small the results would be invalid and will not do any justice to statistic therefore Kellogg’s should make the sample random and larger this will increase the accuracy of the information leading to the right decisions, Kellogg’s also need to be aware of setting themselves a goal and objective they would like to reach when choosing a people to take part in their research this increase validity as it gives and aim of what is required from conducting this research Secondly, I would like to recommend if Kellogg’s ask specific and objective questions, the people Kellogg’s survey should represent a cross-section of their target groups. This can extend the results to the whole group as long as Kellogg’s sample is representative.

Key factors in this matching process are sampling time and number of people surveyed. For example if they were to launch a new product of a similar range they need to question what they feel is missing from the existing products they can do this by asking feedback of existing customers this will make the data more valid and reliable because the right questions have been asked. Finally I would like to propose to Kellogg’s to avoid self-selection and use a valid samples with a representative view of Kellogg’s target group are based on random selection. If Kellogg’s allow survey respondents to decide whether to answer a survey, Kellogg’s can't be sure the respondents represent a random sample. You have to pick survey respondents at random and classify those who don't answer the questions as "did not respond."

If the non-responsive group is substantial, reducing it by adding people who volunteer adds self-selection bias to the result because the volunteers are likely to share characteristics not demonstrative of your whole target group. Kellogg’s may have to change how you conduct the survey to get enough samples from a random selection. All of the above suggestions are to improve the validity and reliability of market research used by Kellogg’s; however Kellogg’s should also make sure that the question it uses match its research objectives to ensure that information collected contributes to the development of its marketing plans. Recommendations mentioned above will improve the validity of the research and accuracy of the information that will help the business make the right decisions based on the information collected and results of the research.