Marketing as a way to meet demand through trade
Many Ukrainian businessmen of the older generation question the question: “Are you doing marketing research?” – shifted indecisively shoulders, and at best they would say that there is somewhere a department with such a name, attached, it seems, to advertising. Someone will say that the tremendous experience allows you to evaluate the market and conduct business, as they say, on the eye, and this method has never led him. However, the further “into the depths” the market economy develops, the clearer the fact that marketing research is not a tribute to fashion, but a real necessity. In order for the business to flourish, the new product has taken root in the market, for the very beginning this very market needs to be carefully studied and analyzed, which will greatly reduce the risk of making important decisions, will effectively distribute the potential of the firm. This is especially true in a situation where a new market segment is not yet formed or a new business direction has not yet been “debugged.” However, those who are just about to open their business should also pay enough attention to conducting marketing research that can help determine if there is a chance for a particular product to “survive” in the market, the competitiveness of the firm, potential consumers, etc.
Methods and directions of marketing research are quite numerous. In this article, we are not able to describe everything, so we restrict ourselves to basic concepts.
Why do you need marketing research?
Marketing researches for any enterprise are an important element of the strategy of successful development in a market economy, they allow to solve the following tasks (both in a complex and separately):
Determine the size of the market
Investigating the size of the market will help to objectively assess the market situation at the moment, to see the real opportunities for further development of business, to determine their potential in comparison with competitors, to develop a sales program, to choose new, effective business directions.
By the way, inexperienced entrepreneurs often confuse the concepts of “size” and “capacity” of the market, although this is far from the same. Capacity is the total amount of sales that can be achieved by existing companies in a certain territory and for a certain period. Of course, it is not possible to force all potential consumers to buy a particular product, so the concept of “market capacity” is theoretical and is used only to give an idea of the limits of its saturation. The size of the market is the actual sale of the product in this market for a certain period. Experts assert: to determine the size of the market appropriately with:
expansion of sales boundaries
improvement of already known product,
launching a new project.
Determining the market share
The market share is the ratio between the volume of sales of a product or company’s services and the volume of sales of products produced in this category of commodity by all companies operating on a particular market. To determine the market share – means to find out in a digital sense, which place a company or firm can claim. Sometimes, markets are classified according to the shares held on specific goods or services (for example: a monopoly is a company with a market share of more than 25%).
The goal of any marketing strategy is to increase the market share. The more it is, the more successful the business, the less the cost, the lower the cost of production. In this case, the company gets more opportunities, for example, to set higher prices for high-end products, dictate their terms to distributors, etc. Studying the market share of a company should be conducted in a dynamics for several periods and necessarily in comparison with other competitors. According to the results of the analysis, conclusions about the company’s position, trends of its competitiveness, as well as the reasons for changing the market share are found out and studied.
Marketing research in this direction will help you find out how much the consumer is loyal to this product group, and how well the market needs such products. In other words, it will be economically advantageous to promote it on the market. Having determined who (which category of people – with average, high or low income) buys a certain product, it will be possible to establish competitive prices for products, to change them according to the requirements or potential of potential buyers, as well as to choose a more effective advertising strategy.
Analysis of the proposal
The peculiarity of any market is that companies that produce identical goods or services can work on the same territory. Comprehensive analysis of the proposal (knowledge of products and marketing policy of competitors) are orienting you on the market. In other words, you will be able to determine your individual policy in the field of pricing, promotion of goods, which will ensure you win in a tough competition.
Analysis of possible sales channels
It will allow to determine the most effective of them and to form a ready-made chain of optimum product movement from pr