The value of marketing research to organizations - Essay Example

The value of marketing research to organizations Introduction Marketing research is a function that provides an organisation with the necessary information about the consumer. During the research process, organizations identify new opportunities in the market, evaluate and monitor market trends and evolve marketing strategies to serve the interests of the customer. This paper evaluates the concept of marketing research with a focus on its value to the organisation (Roberts, 2000, P.12).The value of marketing research to organisations Marketing research provides firms with marketing information, which is important in improving marketing intelligence, and capacity to enhance both strategic and tactical decisions.

As a strategic tool, marketing research provides strategic marketing information for corporate growth decisions, in addition to guiding strategic thinking that precedes strategic planning and decision making. Xu asserts that marketing research is critical to assessing an organization strengths and weaknesses. It is also useful in establishing opportunities and threats as well as informing organizations on what to prioritise (Xu, 2005 P.234). Marketing research is key to implementing the marketing concept of an organisation as it reflects the genuine market orientation of an organisation through extensive and regular studies of customer, competitors and environmental trends.

Market research helps firms become more market oriented, as such, the firm is able to implement its market concept and shape its cultural orientation in a way that focuses its efforts to the needs of the market (Xu, 2005 P.234). Market research informs the organisation on the current consumer needs enabling it to develop future products that will tap latent needs thus strengthening the organizations position over time. Using market research data, the organisation is able to execute value-based differentiation strategies that drive product development processes, communication programs and delivery processes.

For example, McQuarrie asserts that when AT&T entered the credit card business in 1990, its most important competitive advantage was an in-depth knowledge of its prospective customers. This enabled it to launch the highly successful Universal card ( McQuarrie, 2006, P.167). Research has indicated that the most important factors in developing new product is understanding user preferences and incorporating them into the design of the new product. McQuarrie in his research on new products asserts that users are an alternative source of new ideas ( McQuarrie, 2006, P.167). Pride and Ferrell argue that market research provides organizations with an opportunity to understand customer needs both latent and expressed.

Organizations can use this information to expand inventive solutions that create better customer worth ( Pride and Ferrell, 2012, P.198). For instance, ABB Electric, which provides power transformers to small electric utilities, undertook extensive market research of small U.S. electric utilities in an effort to increase its market share. The company developed a product strategy with a promise of 5-year retrospective warranty and customized modular features based on individual customer needs.

Its competitors with larger installed bases opted out of the business turning its weakness to strength and enabling it to consolidate the customer base. The strategy was highly successful driving competitors out of the market, and improving its market share from 6% to 40% (Roberts, 2000, P.12). Conclusion Market research is important for both well established companies and companies wishing to venture into a new market or introduce new products. It enables companies keep in touch with market trends and informs future developments.

Market research is especially important when introducing new products as user input inspires product design. Bibliography:Roberts, J., (2000). Developing New Rules for New Markets. Journal of the Academy of Marketing Science; 28 (31) 1-17. Xu, J., (2005). Market Research Handbook: Measurement, Approach and Practice. Lincoln: Iuniverse. McQuarrie, E., (2006). The market research toolbox: a concise guide for beginners. Thousand Oaks, Calif.: Sage Publications. Pride, W. and Ferrell, O. (2012).

Marketing. Mason, Ohio: South-Western Cengage Learning.