Market Research and Consumer Behaviour

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Question: Describe the interrelationship between market research and the consumer behaviour discipline. The importance of marketing research and consumer behaviour in understanding customers and markets.

Introduction

In a modern society, marketplaces are becoming extremely competitive. This makes it essential for companies to recognise the needs of consumers and ensure that their customers are satisfied with the goods or services provided in order for their organisation to survive and grow. A company that is able to meet the needs of consumers and identify consumer behaviour better than the competition is more likely to be successful. Market research is the best method used by organisations to find out what the consumer wants. This essay will discuss what consumer behaviour is, what market research is, how they interlink with each other and why they are so important towards helping an organisation understand customers and markets.

Market Research

Marketing Research can be defined as the process of collecting, collating and analysing data about a market and about products and services available for sale in that market. Market research is an integral part of an organisations planning process, therefore it goes hand in hand with decision making. In order for an organisation to make effective and smart decisions it is essential that they preform market research to reduce the risk of their decision negatively impacting the market, their sales, their reputation and their profit. There are many different types of market research. Many organisations carry out market research on the ‘4 P’s of Marketing’: product, price, promotion and place. Product research is a vital part of new product development. It helps organisations identify key issues and avoid expensive mistakes. Examples of product research include testing ideas out on potential customers, measuring consumer satisfaction level with current trends, and identifying gaps between current products and perception. Price research aims to find out what consumers in a market are willing to pay for a product or service. By discovering this it determines the optimal price point at which organisations will maximise profit, revenue and market share. An example of pricing research includes the organisation comparing the prices of all competitors or researching how much it will cost to provide the product or service. Promotional research is any research that helps the development, execution or evaluation of advertising or promotion. Examples of how an organisation would use this research include listening to the language used by customers when talking about the product or investigating the demographic profiles of segments. Finally, place or distribution research is used for the organisation to find the most effective routes or channels for the product or service to be sold. An example of this would be carrying out research to identify the demographics of consumers in a certain area and then analysis the results to see if the product or service would thrive in that particular area. Organisations use two types of data information: primary data and secondary data. Primary data is whereby new information is compiled by the organisation itself or by someone the organisation has hired. Secondary data which makes use of research that somebody else has already carried out.

Consumer Behaviour Discipline

Consumer behaviour can be defined as the study of how individual customers, groups or organisations select, buy, use, and dispose goods and services to satisfy their needs and wants. It refers to the underlying motives for the actions that consumers make in the marketplace. The actions that consumers have all stem from psychology, sociology, social psychology, anthropology and economics. An organisation needs to invest a lot of effort and time towards trying to understand the behaviours of consumers in their target market. This is because they need to make sure these consumers see their good or service as desirable and ticks all of their boxes that makes them want to buy it. Therefore, leading to more sales which will result in a profit for the organisation. Many different factors influence consumer behaviour. For example, consumers are influenced by marketing factors such as product design, price, promotion, packaging, distribution. Personal factors such as age, gender, education and income level. Psychological factors such as buying motives, perception of the product and attitudes towards the product. Situational factors such as physical surroundings at the time of purchase. Finally, Social factors such as social status, reference groups and family. Cultural factors, such as religion, social class—caste and sub-castes.