Marketing M2 free essay sample

Explain the limitations of marketing research used to contribute to the development of a selected organisation’s marketing plans (M2) In this task I will be looking at the limitations of marketing research, and to do this I will be discussing how marketing research can help develop a marking plan. I will also be looking at the weakness of development in a marking plan. I will also be comparing the two techniques, SWOT and PEST in terms of their usefulness. From this task I will be using the Business level 3 Book 1 and a few websites which will be referenced in brackets at the end of each paragraph which needs referencing. How market research can help develop a marketing plan? Market research can help a marketing plan because it will give you the precise and exact information on what is needed to create something successful. An example of marketing research helping a marketing plan is when Sainsburys are bringing out a new flavoured crisp. They are doing this because the old flavour is in decline and not selling anymore. Before Sainsburys unveil their products on their shelves, they need to be sure that the new product will sell, so they do research such as surveys, questionnaires, focus groups etc. With the information they have collected from the research, they then can bring out a product that they are sure many people would buy. Doing research helps because , they are so sure that people would like the product and this will increase the sales drastically if they use this strategy for other products as well. What is a marketing plan? A marketing plan is system used when bring out a new organisation, product, feature etc. Following a marketing plan can turn the thing you are creating into something successful. For example, Sainsburys uses the marketing plan when they are diversifying. Diversifying, means creating a new product for a new market. This is risky as you are not sure, if the product is going to be successful or if it will be a complete failure. Limitations of market research- costs effectiveness, and validity of data collected No matter how small or large a market research project may be, any type of research performed poorly will not give relevant results. In fact, all research, no matter how well controlled, and carries the potential to be wrong. There are many reasons why research may not give good results but a common problem is deciding whether the research is really measuring what it claims to be measuring. Marketers must decide how reliable is the information obtained. Would similar results be obtained if another group containing different respondents or a different set of data points were used? For example, if 50 customers participate in a research study focusing on customer service, is the information obtained from these 50 customers sufficient to conclude how all customers feel about the company `s level of customer service? What if the same study was done again with 50 different customers would the responses be similar? Reliability is chiefly concerned with making sure the method of data gathering leads to consistent results. (Reference : Business level 3 Book 1) Budgetary limitation Budgetary limitation is an important factor when it comes to marketing research. It is important because it involves keeping within a limit when trying to research a successful product. Sainsburys main factor of making a product successful is through advertising. The marketing sector of Sainsburys budget them equally. For example, they would put money aside for advertising, put money aside for primary, secondary, and put money aside for material and labour costs. It can be expensive for Sainsbury’s to gather and process data, many organisations may lack the expertise to conduct surveys to collect primary data whatever the benefits are which would be beneficial to the business. They also may lack the funds to pay special market research groups to collect such data for them. This will mean that organisations including Sainsbury’s will rely on data which is from secondary sources which can be inaccurate but would use them as it would be cheaper. Time limitation When doing research for a new product it is important that you have a period in completing your product. With a big and successful company such as Sainsburys who bring out new products every week, it common that before they start the set out aims and objectives. With the aims and objectives, you can stay on task and bring out a great product. (Reference: http://www.  managementstudyguide. com/limitations-marketing-research. htm) Sainsbury’s have to ensure they make changes regarding customer needs as quickly as possible. This is important because if Sainsbury’s don’t act on customers’ needs they will possibly decline and lose their current market position because customers will go to its competitors such as Asda or Morrison’s etc. This shows that Sainsbur y’s have to make decisions as soon as possible in order to maintain their position in the market and to be better than its competitors through improvement. This will also contribute to Sainsbury’s keeping a good reputation which will also help to attract new customers. Reliability of the data When bringing out a new product for an organisation like Sainsburys it is important that primary and secondary market research that you have collected is reliable and true. If the data that has been collected unreliable, then this could lead to bringing out a new product that will go in decline straight away. Furthermore, there will be a loss in income as the money used to research was a waste. Reliability is an important limitation for market research because any research which Sainsbury`s collect or have collected has to be accurate or it can cause Sainsbury’s to make unnecessary changes or improvements. This means that data quality has to be accurate so in order for Sainsbury`s to achieve the interviewers and representatives should have balanced results and not biased ones as this will lead to inaccurate/anomaly results. Some methods which can be done by Sainsbury’s to insure accurate data is collected can be expensive but will give Sainsbury`s a higher chance to get reliable data. For example if Sainsbury’s conduct a project to gather research it would take them many months in designing it which would lead to a long process for the marketing manager to make any decisions. This means that any research project which is needed to be carried should be organised appropriately and the results/data should be made available to the marketing manager to make any key changes. Legal and ethical constraints The data protection act that was enforced in 1998 is a good example for the legal and ethical constraints when it comes to marketing research. Sainsburys has many competitors, which means that all the information that they collect can be secured. If any competitor was to use the information, they can be taken to court and ultimately be sued. (reference: http://www. tutor2u. net/business/marketing/research-limitations-constraints. html) The data protection act would be a good example for this particular constraint. This is because Sainsbury’s researchers have to be careful when collecting and holding personal data. They have to be sure they keep the data safe and only use it for lawful purposes and also should only be kept for a necessary time period. Furthermore it has to be clear to why data has been collected and the consent of participants must be obtained. There are also various guidelines which are laid down by different organisations as the Market Research Society. This is although not legally binding will encourage Sainsbury’s to deal with members of the public ethically The weaknesses of marketing research in the development of the marketing plan Many weaknesses occur when collecting market research. The types of research that Sainsburys uses are focus groups, face-to-face interviews, surveys and questionnaires and secondary research such as research from the internet. The weakness in focus groups is that if you ask the wrong questions you will get the wrong answers. If you get the wrong answers then you will end up creating a product that people do not want. The same weakness happens to face-to-face interviews. Surveys and questionnaires is an important feature when it comes to creating a new product. However, there are a few weaknesses when it comes to doing it. For example, if Sainsburys want to find out what new flavours of crisp the public would want then they would create surveys and go on the streets. If they go on a miserable Monday at eight oclock in the morning, the likelihood of getting reliable information is very slim. The weaknesses of secondary research is that wherever you got the information from, whether it be from the internet, leaflets etc there is a chance of the information being false and unreliable. Comparison of SWOT and PEST The SWOT and PEST analysis are both very effective, simple methods to show business managers what situation they are in. Using these two analytical techniques they can determine where to go and what to do in future for the company. They must always be used together at all times as when they are used like this they can be put to maximum use. This is because the SWOT looks at all of the internal factors of a business such as the strengths of their marketing operations and also the weaknesses in the business, this could be poor sales in a particular month for example. The SWOT helps identify what the weakness is and how to improve upon it. The PEST is different and looks at the external factors of the business such as the political views and economic state of a country or specific area. When looking at the external factors it gives a stronger sense of security for the business as it knows what is happening outside of the organisation. Like I stated previously, these analytical techniques must always be used together to get an overall view of the business and its problems or achievements. The downside of the PEST analysis is that if you are looking too much at the external factors of your market and not putting enough focus on your internal factors you could end up losing profits and lose focus of the core goals of the business. The PEST requires enormous amounts of market research to get a clear view on what is happening but even when you have gathered this information and put it to use it could still be incorrect because the external factors of any business change all the time and this could be a really frustrating and hard way to evaluate your business. The SWOT analysis also has its downsides as because you have to look at the individual strengths and weaknesses of the business the chances are that the manager will be very biased and won’t want to expose many weaknesses as it may reflect badly upon him. When conducting the SWOT analysis you need someone who is willing to put their hands up and expose the weaknesses of the business and also to not over exaggerate their strengths. It is only this way that a business will really gain anything from the SWOT analysis. Looking at the two in comparison you can clearly state that there is no ‘better’ analysis as without each other they will leave themselves at risk of losing profits. Both require an extensive upkeep, PEST more than SWOT, and constant evaluation of what to do and how to look at the results. There is no doubt that the results for the market research will have to be done monthly or maybe even less than that. When used correctly in coordination they can make up for promising marketing decisions in the future.