There is a conceptual framework that can help interested marketing people to learn more about the many applications of marketing research. This conceptual framework is called the administrative process, and it consists of the four phases managers frequently go through: (1) settings and establishing strategies (2) developing marketing plan (3) putting the plan into action, and (4) evaluating the effectiveness of the marketing plan.
Phase 1: Setting Goals and Establishing Strategies: Useful information can be obtained on a variety of topics when managers attempt to select a new strategy to pursue. Changes in the size or trend of demand or changes in the structure or composition of the market may suggest that a new strategy is appropriate. Changes in media trends such as the growth of cable television may signal the emergence of an opportunity that might be exploited with certain new strategies. Needs, wants and/or dissatisfaction in relevant market segments may suggest that a problem exists, waiting to be solved, if the right strategy can be identified. After the Gillette Company discovered that consumers were dissatisfied with roll on deodorants (because they were too wet) the company went on to develop its successful “Dry idea” brand of roll on deodorant. These can be monitored through marketing research and the findings of such research often help managers identify new strategies to pursue.
Phase 2: Developing a Marketing Plan: When developing marketing plans, managers often use marketing research to identify key market segments. By measuring their attitudes and opinions towards the features of available products and how these products are used managers can identify important product and advertising considerations to include in their plans.
Marketing research can also be used to test how appealing certain proposed product attributes and advertisements are to the target market. The Campbell Soup Company’s search with children is an example of such an applicable of marketing research. Perhaps more marketing research is used in this phase of the administrative process than in any other.
Phase 3: Putting the plan into Action: When a plan is put into action, management must monitor the effects of the plan to see if it is achieving its objectives. Columbia Picture’s use of research to track the awareness level of its Star man movie is an example of using marketing research or such an application. In these types of application the research is likely to measure (a) if the plan is achieving the desired level of retail availability (b) if the target market segments are seeing the advertisements (c) if the copy is communicating the intended message, (d) if the promotions are achieving the desired trial rates, (e) how much consumers are using, and (f) the proportion of buyers who repurchase.
An interesting example of research designed to measure effectiveness of a new marketing program was that that carried out by the Hanes Company when it introduced L’eggs hosiery. Hanes used two sets of test markets with one set receiving twice as much advertising as the other. Five consumer studies were conducted in all of the test markets – 6, 13, 18, 26 and 43 weeks after advertising had begun. Some information obtained during the studies concerned brand and advertising awareness, trial and repeat purchase rates, the average number of units bought per purchaser and the average number of units bought per capita. Unit sales in each market were obtained from data on store deliveries and from audits by the A C Nielsen Company. All information was equally available from both high and low advertising markets.
Phase 4: Evaluating the plan’s Effectiveness: At the end of the operating period management want to reappraise the plan and compare results with the objectives. Such a reappraisal will involve an aggregation and compilation of most of the information obtained during planning and action phases, with a special emphasis on sales, market share, marketing costs, and contribution to profit. It will also measure brand awareness, trial rates, repeat purchase rates, preferred brands, and other measures of marketing results.