Surveying the market
It is very important to have the facts about how many potential buyers are in your projected sales area and to know their needs and wishes before you invest. It is better to have the facts than to merely have a feel for how your products will sell. This requires thorough study of the market you propose to serve.
The total marketing concept involves matching the firm's products or services with the needs and desires of those people who will buy them whether now or in the future. Marketing planning must include all the ingredients necessary to satisfy customers, including producing the product they want, picking the proper location for your firm, determining the correct promotion and advertising plans, and many other factors that lead to customer satisfaction. Marketing costs for small firms can be as much as 50 per cent of total business costs. Planners may employ an outside firm to study their suggested market; advertising firms and market research firms often specialise in such surveys.
Objective of a market survey is to determine a reasonably attainable sales volume in a specific market area for a specific type of business. This means finding out how many potential consumers for the planned merchandise or service there are in this market and how many of them can reasonably be expected to become customers of the firm under consideration.
The market or trading area for a particular firm is the area that it seeks'" to serve with its products or services. From the buyer's point of view, it is the area within which the buyer knows he or she can find desired goods and services at desirable prices. Sellers may desire to expand their market beyond the limits that are normally recognised by buyers. Market areas may change with the development of new shopping centres in adjacent areas. At any given time, a market has its limits set by the area within which the firm can economically sell its goods or services
The procedure* for making a market survey wilt vary from factory to wholesaler to retailer. In all cases, however, it will seek to determine the number of customers in the market area who may become customers for the planned business. For retailing the steps should include the following:
1) Determine the limits of the market or trading area;
2) Study the population within this area to determine its potential sales characteristics;
3) Determine the purchasing power of the area;
4) Determine the present sales volume of the type of goods or services you propose to offer;
5) Estimate what, proportion of the total sales volume you can reasonably obtain.
One effective method for gathering market information is the use of «people surveys», which are made by surveying the population in a designated market area. Such surveys can rarely attempt to reach all persons in the area, instead the market researchers select a representative group of persons to be contacted. Even the highly important national
television ratings for example, involve the use of only about 1,200
homes.
Small firm planners may use 3 different types of people interviews. These are: 1) telephone surveys; 2) mail surveys; 3) personal interviews. Specific questions that will provide meaningful answers that can then be analysed should be built into each type of interview questionnaire. Each type of interview has characteristics that can be summarised as follows:
1) Telephone surveys. This type of interview offers the advantage of economy and speed in the collection of desired data. To be effective, telephone surveys demand short, clear, and easily understood' questions. A sound questionnaire, a truly representative sample group, and courteous telephone interviewers are the only requirements for gathering the key data, which are then analysed.
2) Mail surveys. Using the mail to gather basic data is more expensive than telephone interviews but still much less expensive than personal interviews, especially when a large market area is being studied.
The rate of return is the key to whether or not it is successful. Today a
40 per cent return on such mail survey is considered excellent.
Experience has shown that the shorter the interview sheet, the higher the rate of return.
3) Personal interviews. Personal interviews require much more time than other types and, accordingly are the most expensive kind of survey to conduct. But when a broad section of opinion is being sought they are usually considered the most reliable. They enable the interviewer to interpret questions, to explore the respondents' opinions, and to identify areas of information that although not anticipated may be valuable in the final analysis of data collected.
What concepts stand behind the following terms?
1) marketing planning;
2) marketing costs;
3) market survey;
4) market;
5) purchasing power;
6) people survey;
7) sales characteristics of an area
What do you think?
1) Compare telephone surveys, mail surveys, and personal interviews for cost, coverage, and effectiveness. Which is the most efficient? What does the choice of the "people survey" method depend on?
2) What advantages would a professional market survey have, even if it shows that the planned firm should not be established?
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3) What kind of knowledge should one have to make a market survey? Do you think you possess this knowledge? If not, what should you study?
4) Would you like to work in the field of professional market research? Why (not)?
DISCUSSION
1) Could you give examples of a market with a fierce / cut throat
competition?
2) How do you understand the expression "market-oriented company"?
3) What does marketing planning involve?
4) What are the key-players in drinks market in St Petersburg?
5) What is your attitude as a customer to telephone surveys?
6) Could you plan a marketing program for Harper & Grant?
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