Welcome to my “Market research academic.”
Market research - consistent actions to collect information about markets or consumers. It is a very important component in developing a business strategy. It is necessary to distinguish market research from marketing research, since marketing research refers to the marketing process, while market research only applies to markets.
The study of the markets has been going on since the mid-1920s [3], when the advertising boom began on radio programs in the US. Advertisers began to understand the importance of demography when choosing the radio programs sponsored by them.
Market research for business planning
Market research should provide answers to the questions that consumers want, what they need, what they trust. The research may also include the study of consumer behavior, behavior at various stages of the purchasing process, etc.
When starting a new business, especially important:
Market Information
The main market information is the prices of the suppliers of the market under study, the situation of demand and supply. Such information should be obtained from independent sources, in various formats.
Segmentation of the market
Segmentation of the market is the division of the market into subgroups, united by one or several essential features. The following segmentations are often used: geographic, sex, demographic, etc.
Market Trends
It is necessary to take into account trends in the growth or decline of the market under study in a certain period of time. It is quite difficult to estimate the size of the market at the start of a new business since historical statistics and expert data of insiders are needed. In this case, you can try to get derived figures from the number of potential consumers, dividing them into segments.
Stages of market analysis
The universal sequence of any market analysis: (Source: How to make a qualitative market analysis? Review of best practices
Define the objectives of market research
Draw up a market analysis plan
Determine the timing and budget of the market analysis
Select market research methods
Carry out the necessary market research
Prepare analysis of collected information on the market
Prepare market overview
Make a presentation on the analysis of the market
Market research for business planning
Market research should provide answers to the questions that consumers want, what they need, what they trust. The research may also include the study of consumer behavior, behavior at various stages of the purchasing process, etc.
When starting a new business, especially important:
Market Information
The main market information is the prices of the suppliers of the market under study, the situation of demand and supply. Such information should be obtained from independent sources, in various formats.
Segmentation of the market
Segmentation of the market is the division of the market into subgroups, united by one or several essential features. The following segmentations are often used: geographic, sex, demographic, etc.
Market Trends
It is necessary to take into account trends in the growth or decline of the market under study in a certain period of time. It is quite difficult to estimate the size of the market at the start of a new business since historical statistics and expert data of insiders are needed. In this case, you can try to get derived figures from the number of potential consumers, dividing them into segments.
Stages of market analysis
The universal sequence of any market analysis: (Source: How to make a qualitative market analysis? Review of best practices
Define the objectives of market research
Draw up a market analysis plan
Determine the timing and budget of the market analysis
Select market research methods
Carry out the necessary market research
Prepare analysis of collected information on the market
Prepare market overview
Make a presentation on the analysis of the market
Market research is the most common trend in marketing research. It is conducted to obtain data on market conditions for determining the activities of the enterprise. The term situation is derived from the Late Latin situation - position. The market situation is a combination of conditions and circumstances that create a specific situation, or position on the market. As experts emphasize, without market research it is impossible to systematically collect, analyze and compare all the information necessary for making important decisions related to market activities, market selection, sales volume determination, forecasting and planning of market activities.
The objects of market research are trends and processes of market development, including analysis of changes in economic, scientific, technical, demographic, environmental, legislative and other factors. The structure and geography of the market, its capacity, sales dynamics, market barriers, the state of competition, the current situation, opportunities, and risks are also studied.
The main results of the market research are forecasts of its development, assessment of market trends, identification of key success factors. The most effective ways of conducting competitive policy in the market and the possibility of entering new markets are determined. Segmentation of markets is carried out, i. choice of target markets and market niches.
The most important areas of market research are the determination of the magnitude of demand for different types and market share indicators for specific markets (market segments). The process of choosing target markets is based on the study of such a basic indicator as market demand. Market demand is the total volume of sales in a certain market of a certain brand of goods or a set of commodity brands for a certain period of time. The magnitude of demand is influenced by both uncontrolled factors of the external environment, and marketing factors, which represent a set of marketing efforts, applied on the market by competing firms. Depending on marketing efforts, primary demand, market potential, and current market demand are distinguished. Primary or non-stimulated demand is the total demand for all brands of the product sold without marketing. Market potential is the limit that market demand seeks when marketing costs in the industry approach such a magnitude that their further increase no longer leads to an increase in demand under certain environmental conditions. With certain assumptions, the demand corresponding to its maximum value on the life-cycle curve of a product for a stable market can be considered as a market potential. In this case, it is assumed that competing firms make the greatest possible marketing efforts to support demand. Environmental factors have a significant impact on market potential. For example, the market potential of cars in a period of economic decline is much less than in the period of its prosperity.
In addition, they identify the absolute potential of the market, which should be understood as the limit of market potential at zero price.
Current market demand characterizes the volume of sales for a certain period in certain environmental conditions, with a certain level of use of marketing tools by industrial enterprises. Current market demand is determined by the formula Q = n * q * p
n - the number of buyers of this type of product in this market
q - the number of purchases of the buyer for the period under study
p is the average price of the item
Another important indicator, the magnitude of which must be determined and predicted, is the market share indicator. Market share is the ratio of the sales volume of a certain product of a given organization to the total sales volume of a given product, carried out by all organizations operating in this market. This indicator is key in assessing the competitive position of the organization.
The objects of market research are trends and processes of market development, including analysis of changes in economic, scientific, technical, demographic, environmental, legislative and other factors. The structure and geography of the market, its capacity, sales dynamics, market barriers, the state of competition, the current situation, opportunities, and risks are also studied.
The main results of the market research are forecasts of its development, assessment of market trends, identification of key success factors. The most effective ways of conducting competitive policy in the market and the possibility of entering new markets are determined. Segmentation of markets is carried out, i. choice of target markets and market niches.
The most important areas of market research are the determination of the magnitude of demand for different types and market share indicators for specific markets (market segments). The process of choosing target markets is based on the study of such a basic indicator as market demand. Market demand is the total volume of sales in a certain market of a certain brand of goods or a set of commodity brands for a certain period of time. The magnitude of demand is influenced by both uncontrolled factors of the external environment, and marketing factors, which represent a set of marketing efforts, applied on the market by competing firms. Depending on marketing efforts, primary demand, market potential, and current market demand are distinguished. Primary or non-stimulated demand is the total demand for all brands of the product sold without marketing. Market potential is the limit that market demand seeks when marketing costs in the industry approach such a magnitude that their further increase no longer leads to an increase in demand under certain environmental conditions. With certain assumptions, the demand corresponding to its maximum value on the life-cycle curve of a product for a stable market can be considered as a market potential. In this case, it is assumed that competing firms make the greatest possible marketing efforts to support demand. Environmental factors have a significant impact on market potential. For example, the market potential of cars in a period of economic decline is much less than in the period of its prosperity.
In addition, they identify the absolute potential of the market, which should be understood as the limit of market potential at zero price.
Current market demand characterizes the volume of sales for a certain period in certain environmental conditions, with a certain level of use of marketing tools by industrial enterprises. Current market demand is determined by the formula Q = n * q * p
n - the number of buyers of this type of product in this market
q - the number of purchases of the buyer for the period under study
p is the average price of the item
Another important indicator, the magnitude of which must be determined and predicted, is the market share indicator. Market share is the ratio of the sales volume of a certain product of a given organization to the total sales volume of a given product, carried out by all organizations operating in this market. This indicator is key in assessing the competitive position of the organization.
Market conjuncture is a set of market conditions under which the market is currently operating. Belyaevsky I.K. writes: "The conjuncture is essentially a market situation that has developed at some point or a short time" (1, p.107) Market conjuncture (from Latin conjugate - I connect, connect) - the state of the market or the specific economic situation that has taken shape on the market at the moment or a limited period of time under the influence of a complex of forces, factors and conditions. It is characterized by a certain ratio of demand and supply for goods of this type, as well as the level and correlation of prices. The market conjuncture has four principal distinctive features or properties: dynamism, proportionality, variability, and cyclicity.
The state of the market can be characterized through a system of quantitative and qualitative indicators, each of which reflects a certain side of the market situation. Main indicators of the market situation:
· The scale of the market - its capacity, the volume of operations for the purchase and sale of goods (turnover), the number of enterprises of various types acting on the market;
· The degree of market balance - the ratio of supply and demand;
· Market type - competitive, monopolistic, etc .;
· Market dynamics - changes in key market parameters, their vectors, speed and intensity, main trends;
· Degree of business activity - fullness of the company's business portfolio, number and size of orders, volume and dynamics of transactions, etc .;
· Level of stability/volatility of the main market parameters in the dynamics and space geographic and economic;
· Market risk level - an estimation of probability to be defeated in the market;
· The strength and scope of competition - the number of competitors, their activity;
· Cyclicality of the market - the position of the market at a certain point/stage of the economic and seasonal cycle;
The · Average rate of return - the sum of gross and net profit and profitability indicators.
Three levels of market research are considered: general economic, industrial and commodity. The collection of information is the most important stage in the study of the market situation. There is no single source of information on the conjuncture, which would contain all the information about the processes under study. The study uses different types of information obtained from various sources. Distinguish information common, commercial and special. General information includes data characterizing the market situation as a whole, in conjunction with the development of the industry or this production. The sources of its receipt are data of state and sectoral statistics, official forms of accounting and reporting. Commercial information is the data extracted from the business documentation of the enterprise, on the marketing of products produced and received from partners in the order of information exchange. These include applications and orders from trade organizations, materials from market research services, etc. The special information represents the data obtained as a result of special events to study the market: population surveys, expert assessments, exhibitions, and sales, etc.
The results of market research can be presented in the form of various analytical documents:
1. Consolidated review or report - the main document with generalized indicators of the market, goods, which analyzes the dynamics of general economic and industry indicators, special conditions of the market; a retrospective is held and the forecast of the conjuncture indicators is given, the most characteristic tendencies and interrelations are revealed.
2. Thematic or problematic review of the market situation - a document reflecting the specifics of a particular situation or a separate commodity market; reflect the most pressing problems of this market.
3. Operational or signal market information - a document containing operational information about individual processes of the commodity market.
The analysis of market conditions involves studying the characteristics of the scale and type of the market. The scale of the market is determined by the volume of sales of goods, as well as by the number and size of firms acting on it as sellers, both producers that bring their goods to the market, and trade intermediaries. At the same time, the functional specialization of enterprises is characterized: the type of goods, its range, basic properties. The volume of sales is determined by the size of the sales of manufactured products, wholesale-mediated goods turnover, wholesale-consumer turnover, retail turnover. The firm's share in the market is defined as the ratio of the firm's turnover to the total sales volume in the market. Qualitative characteristics of market share (large, medium, small, etc.) are derived from the comparison of the share owned by the firm and the share of the largest competitors.
Determining the capacity of the market is also an important task of market research. Under the capacity of the commodity market is understood the possible volume of sales of goods at a given level and the ratio of different prices. The capacity of the market is characterized by the size of the population's demand and the size of the commodity supply.
The state of the market can be characterized through a system of quantitative and qualitative indicators, each of which reflects a certain side of the market situation. Main indicators of the market situation:
· The scale of the market - its capacity, the volume of operations for the purchase and sale of goods (turnover), the number of enterprises of various types acting on the market;
· The degree of market balance - the ratio of supply and demand;
· Market type - competitive, monopolistic, etc .;
· Market dynamics - changes in key market parameters, their vectors, speed and intensity, main trends;
· Degree of business activity - fullness of the company's business portfolio, number and size of orders, volume and dynamics of transactions, etc .;
· Level of stability/volatility of the main market parameters in the dynamics and space geographic and economic;
· Market risk level - an estimation of probability to be defeated in the market;
· The strength and scope of competition - the number of competitors, their activity;
· Cyclicality of the market - the position of the market at a certain point/stage of the economic and seasonal cycle;
The · Average rate of return - the sum of gross and net profit and profitability indicators.
Three levels of market research are considered: general economic, industrial and commodity. The collection of information is the most important stage in the study of the market situation. There is no single source of information on the conjuncture, which would contain all the information about the processes under study. The study uses different types of information obtained from various sources. Distinguish information common, commercial and special. General information includes data characterizing the market situation as a whole, in conjunction with the development of the industry or this production. The sources of its receipt are data of state and sectoral statistics, official forms of accounting and reporting. Commercial information is the data extracted from the business documentation of the enterprise, on the marketing of products produced and received from partners in the order of information exchange. These include applications and orders from trade organizations, materials from market research services, etc. The special information represents the data obtained as a result of special events to study the market: population surveys, expert assessments, exhibitions, and sales, etc.
The results of market research can be presented in the form of various analytical documents:
1. Consolidated review or report - the main document with generalized indicators of the market, goods, which analyzes the dynamics of general economic and industry indicators, special conditions of the market; a retrospective is held and the forecast of the conjuncture indicators is given, the most characteristic tendencies and interrelations are revealed.
2. Thematic or problematic review of the market situation - a document reflecting the specifics of a particular situation or a separate commodity market; reflect the most pressing problems of this market.
3. Operational or signal market information - a document containing operational information about individual processes of the commodity market.
The analysis of market conditions involves studying the characteristics of the scale and type of the market. The scale of the market is determined by the volume of sales of goods, as well as by the number and size of firms acting on it as sellers, both producers that bring their goods to the market, and trade intermediaries. At the same time, the functional specialization of enterprises is characterized: the type of goods, its range, basic properties. The volume of sales is determined by the size of the sales of manufactured products, wholesale-mediated goods turnover, wholesale-consumer turnover, retail turnover. The firm's share in the market is defined as the ratio of the firm's turnover to the total sales volume in the market. Qualitative characteristics of market share (large, medium, small, etc.) are derived from the comparison of the share owned by the firm and the share of the largest competitors.
Determining the capacity of the market is also an important task of market research. Under the capacity of the commodity market is understood the possible volume of sales of goods at a given level and the ratio of different prices. The capacity of the market is characterized by the size of the population's demand and the size of the commodity supply.
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