In modern business, information has emerged as a key tool in not only doing business but also remaining competitive in the market. The 21st century managers and leaders of organizations and corporations can only ignore the potential of information in their businesses at their own peril. Today’s business environment is growing at a faster pace, thanks to technological advancement and globalization. The traditional business and marketing practices is being challenged by the new developments in information technology and the ease with which necessary data and information can be gathered, refined, evaluated, and applied to daily business operation. Undoubtedly, the current developments in information technology and the growth of globalization, has consequently led to the emergence of the concept of knowledge economy. Knowledge economy is defined as an economy in which knowledge generation and exploitation has become a key element in wealth creation. Knowledge economy is not just about the pushing back the frontiers of knowledge; it also involves effective exploitation and use of all manner of knowledge in every kind of economic activity. In essence, in knowledge economy, knowledge is not only a product, but also a key resource and driver of daily economic activities.
Knowledge economy plays a central role in daily economic activities; however it is neither a new fact nor a new idea. All businesses and organizations, however small or simple, base their daily activities on knowledge about what, when, and how to produce, distribute, and sell their products and services. The concept of knowledge utilization in economic activity has tremendously increased over the decades, since the turn of Industrial Revolution. However, there has been an increased interdependence between economic activity and knowledge in recent times, in a level that has profoundly induced changes in both qualitative and structural operation of the economy as well as the transformation of the conventionally known basis of competitive advantage. As the intensity of knowledge utilization and the ability to spread such knowledge in today’s business environment continue to increase, the value of knowledge and information has become important to all players in economic activities. However, business managers and marketers have a lot to gain than to lose in utilizing the opportunities presented by the knowledge economy in order to define, generate, and utilize information critical in their firms’ continued profitability and growth.
More than before, business leaders and managers have the opportunity to generate and exploit information and knowledge efficiently and in a timely manner. The implication of knowledge economy is more profound in business marketing as it helps businesses and firms to strategically plan their operations and to gain a competitive advantage over rival companies and products and services. For instance, marketers and marketing managers are presented with numerous opportunities to conduct marketing research whose outcomes can profoundly change the course of business growth. With the relevant, accurate, and reliable information, marketing managers would be able to strategically plan their marketing programs, thus, enhance their firms’ chances of survival in competitive markets and continue their upward growth.
Moreover, information is needed in marketing so as to help marketing managers make sound decisions about their products and services in real time. Without relevant and accurate information on the market trends and customer behavior, marketing managers may assume that their new products or services are popular and useful for their customers. However, this may not be the case, as information may reveal that customers are satisfied with the services or products offered by a rival company or sometimes, they do not even need a new product or service. In essence, relevant and accurate marketing information would be imperative in identifying and meeting the needs of the customers. In addition, marketing information provides the marketers with numerous options to as successfully introduce a new product or service into the market. This, in effect, lessens the risks associated with introduction of new products and services.
Through appropriate marketing research, marketing managers are able to generate and implement important information for the survival of the product in the market. Marketing information helps in identifying and understanding the information about competitors including their identities, customer focus, scale of operations, and marketing network. This kind of information is critical to the survival of a business in a competitive market, since it’s put a firm ahead of its competitors. Marketing information aids in deciding the appropriate target market. Information is critical in identifying location, gender, age, and buying behavior of the target market. In so doing, marketing managers are able to zero in on a particular target market as well as on customers.
Marketing information can be generated through a number of ways. Database marketing and marketing research are identified as the frequently used forms of research for purposes of marketing. Database marketing is considered a type of direct marketing whereby mareters use their customers’ (or potential customers) databases to develop personalized communications intended to promote the firm’s products or services for the purposes of marketing. Once the appropriate customers have been identified, the marketers can use any medium including direct marketing to communicate with their customers and potential customers. The difference between database marketing and direct marketing lies primarily in the focus put on data analysis. Database marketing relies on statistical techniques of data analysis so as to develop a model and draw conclusions on the behaviors of customers, which would be used in selecting customers for communication. It is important to note that the wider the data is used, the higher the chances of drawing a more conclusive and accurate model.
Customer databases and business databases have been identified as the two major types of marketing databases. Consumer databases are normally associated with the businesses that sell directly to consumers, also known as B2C. Business databases on the other hand, are more advanced in terms of the information they provide. Due to less restriction of privacy laws on business databases, they are able to provide a wide range of data. These databases normally comprise of names, address as well as transaction history between the firm and its customers as detailed in the internal sales or delivery notes. Sometimes, the data may be obtained from a compiled list brought in from a different firm or organization. Charity donations forms, subscription forms, product warranty cards, credit application forms, and application forms for contest or free products are also considered compiled lists. Communications initiated by the marketer are known to be sent as spam or junk mail and in most cases are unexpected and unwanted by the receiver. The main purpose of database marketing is to help the marketer to directly communicate with the customers as well as potential customers and at the same time request them to respond appropriately.
Another form of generating marketing information is through marketing research. Bradley (2007) defines marketing research as the function that joins up the public, the consumers, in addition to the customers, with the marketer through information. The information in this case seeks, to identify and define problems and opportunities in marketing; generate, refine and assess actions in the market; improve understanding of processes of marketing; and monitor performance in marketing. In general, marketing research spells out the necessary information needed to address a number of issues related to marketing. In addition, marketing research is important since it designs appropriate methods of information gathering, manages and applies the processes of data collection, analyses the outcomes, and most importantly communicates the results, and result implications to the relevant people and operations of the business. In other words, marketing research entails the systematic collection, recording, and assessment of data on matters related to the marketing of goods and services. Marketing research is mainly concerned with the identification and evaluation of how changes in the components of marketing mix affect consumer or customer behavior.
Marketing research is solely conducted in order to provide marketing managers with not only accurate and relevant information with the behaviors of customers, but also with current, reliable, and valid information that would have a positive impact on the business direction taken by the management. Competitive business environment compounded by huge costs associated with poor decision making, has prompted many businesses to adopt marketing research as a technique of providing timely and appropriate information for marketing purposes. However, the information generated by marketing research must be sound, since inaccurate research outcomes may greatly have a negative impact on the business operation.
Marketing managers are charged with a number of tasks including making tactical and strategic decisions as they strive to identify and satisfy the numerous needs of their customers. Some of these decisions include decisions on market segmentation, potential opportunities in the market, market performance, and selection of a target market, marketing control, as well as, planning and implementation of necessary marketing programs. The marketing managers’ decisions are subject to the interplays between controllable and uncontrollable variables of the marketing mix. On one hand, are the controllable marketing variables, which are associated with product, promotion, pricing, as well as distribution. On the other hand, the complication of the marketing mix is affected by uncontrollable variables related with environmental factors which include technology, political environment, public regulations and policies, socio-cultural factors, competition, and the general conditions of the economy. Equally important in this interaction, is the complications brought about by the behaviors of consumers. It is therefore important for marketing managers to conduct marketing research from time to time and to be up to date with the trends of marketing particular products. In so doing, they will be able to remain competitive and successful in business.
Marketing research has the potential of helping management to connect the controllable variables with the uncontrollable variables. In other words, it helps marketing maanagers to align their marketing objectives with the trends and changes in the environment as well as with the behaviors of customers. It assists marketing managers generate the necessary information related with marketing variables, customers, and environment variables thus, removing obstacles that may stifle successful operation in a particular market. Without the relevant information, marketing managers would find it hard to predict the response of their customers with their marketing programs. Continuous research in marketing programs provides managers with necessary information on both controllable and uncontrollable variables as well as on customer behavior hence, critical in effective decision making.
Marketing research requires adequate planning and techniques in order to produce accurate, reliable, and valid results that would have a positive impact on business operations. Marketing research primarily depends on primary and secondary data as its main source of data. Primary data is generated from scratch while secondary data is derived from already existing data documented from previous studies. While secondary research is widely considered less expensive and faster, it normally fails to conclusively answer the problems faced by the researcher unlike the primary research which can be designed to suit the needs of the researchers in answering a research problem. Methodologically, marketing research employs qualitative and quantitative research methods depending on the nature of the research problem.
Qualitative research in marketing is primarily employed when the researcher seeks to explore a particular issue that is not well known to the researcher. It generally draws a relatively small number of participants and thus its outcomes can never be generalized with the entire population. In addition, it provides no statistical significance and confidence. The essence of qualitative marketing research is to help the researcher explore a number of issues, which would lead to the identification of a problem or formulation of a hypothesis that can be studied for further research using a more conclusive research technique. Examples of qualitative marketing research method include in-depth interviews, focus group discussions, and among others. Quantitative marketing research on the other hand, seeks to come up with conclusive outcomes that can generally be generalized with the entire population. Additionally, it tests a particular hypothesis, involves a large sample, and employs random sampling techniques. Observational survey and experimental techniques may be used in collecting quantitative data.
In generating information for marketing purposes, a number of stages are passed when conducting marketing research. Marketing research process involves defining the research problem as well as research objectives, development of a research plan, implementation of the research plan and interpretation, and reporting of the research findings. A number of research methodologies may be used to identify and define the research problem. For instance, a secondary study may be done to provide background information for the research before using qualitative research to explore the issues. Finally, a full survey may be done to answer the research problem. In generating quantitative data, the research questionnaires are preferred.
Designing a questionnaire is an imperative process in establishing a marketing research plan and therefore, one must capture all the information expected from the respondents. The researcher must pay much attention to wording, forms of questions, ordering, and what to ask. Sampling is equally important and must capture all the representative of the population under the study, whether probability or non-probability technique is used. After the data is collected, it is important to prepare the data for analysis. The data should be checked for any error and coding should be in order, after which the data would be analyzed. Univariate technique should be employed to analyze single measurement of individual elements of the sample. In other cases, the researcher can use multivariate technique to analyze elements with multiple measurements. Upon completion, the information generated would be useless, if it has not been well documented and communicated to the relevant groups. In reporting the final outcomes of the study, the researcher should document all the processes used in carrying out the marketing research including a detailed description of the research question. The results should be easily understood for the purposes of decision making and where appropriate, the researcher should condense all graphs, figures and tables in an oral presentation to the management.
It is important to note that businesses have a lot to gain by having accurate and relevant information in both their marketing programs and environment in which they operate. Not only does such information offer important ideas for strategic planning, it is equally critical in gaining a competitive advantage. As demonstrated in this paper, a number of techniques such as database marketing and marketing research can be useful in generating such information; however, it is important to caution that the choice of a research design is directly related to the nature of information sought. Therefore, if the methodology is wrong, the information would also be wrong, thus, impacting negatively on business operation and objectives.
Related Marketing essays
- Paid-in-Capital and Retained Earnings
- Chevy Tahoe
- Intergrated Marketing Communications
- Marketing Strategy and Practice
- Marketing Myopia
- Marketing Research and Information
- Definition of Servicescape in Service Industry Marketing
- The Exchange Relationship
- Consumer Report
- Perfectively Competitive Market