Research also helps in planning marketing programs through helping to identify new opportunities and thus to evaluate the potential for a new idea and also to identify the areas where the marketing efforts will be concentrated KnowThis LLC, 2012()
Research also helps to minimize risks. By the marketing managers being able to plan the marketing efforts effectively and they can then identify what is required and to ensure that the development of the programs is highly focused towards the demand in the market. Market research also helps to create benchmarks and to measure progress. Early research helps to highlight any major gaps in the marketing plan which need to be bridged and regular market research helps to show if there are any improvements in sales being brought about by the marketing efforts.
Segmentation and the marketing mix
Segmentation helps greatly in customer retention and acquisition of new clientele. This is because it helps the company to tag their customers based on three distinct values. First is whether the customers are at high risk of cancelling the services they are getting from the company. One of the most common indicators of these high-risk customers is a drop in the usage of the company's service. The second value is whether the customer is worth the efforts to retain them. This looks at the profits and income that this particular customer is bringing in. If the cost incurred in satisfying and retaining the customer is higher than the income or profit accrued, this relationship is not worth the effort. The last value is what the right tactics to retain the customer are. These include customer discounts, freebies, individualized attention, etc.
The basic components of marketing are embodied in the marketing mix which consists of the product or service, promotion, price and lastly, sales or distribution. The product or service is part of the marketing mix and it is important for the product to be well suited for the target market Vignali, 2001.
A good example is Starbucks which has several tea and coffee products which help the company target a large market based on the individual taste Stuhl, 2011()
The second component is promotion which represents all the communication between the marketing team and the target market. It includes advertising, sales promotions and public relations activities Vignali, 2001.
A good example is the TV and radio commercials that are undertaken by Starbucks in efforts to promote their products and brand awareness Stuhl, 2011()
The third component is price. This is what the customer pays for the service of product. There are various pricing strategies such as penetration pricing, line pricing and premium pricing Kotler & Keller, 2012.
Price is an important component of marketing since for example penetration pricing can help the company to penetrate a highly competitive market.
The last component is distribution of sales which requires the company to provide the goods and services to their customers. There are various sales techniques such as direct sales, agency-based sales, door-to-door, electronic (internet), mail-order, vending machines, etc. For example, Starbucks uses both internet selling to their customers and direct sales in their stores Stuhl, 2011.
Other companies such as Coca-Cola and Pepsi use vending machines in addition to agency-based sales and electronic (internet) sales.
Market segmentation creates recognition that people are different thus they have different tastes, lifestyles and needs. It also helps in creation of a marketing strategy that focuses on the marketing mix of the product. It can lead to changes in the product, the promotional tactics, distribution and pricing.
One form of segmentation is benefit or behavioral segmentation whereby the elements of the marketing mix are designed to suit the consumer's behavior and the benefits that they seek to attain from the product itself. Psychographic segmentation, on the contrary aligns the elements of the marketing mix to address the major interests and lifestyle of the consumers.
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