We continue to consider marketing research, its methods and procedures. As we have already said in the previous article, success requires the collection of certain information and its analysis.
Statistical methods of data analysis are used due to their compaction, identification of relations, dependencies and structures. Their classification is made according to the following criteria:
- The number of simultaneously analyzed variables – simple and multi-factor methods;
- The aim of analysis – descriptive and inductive methods;
- The level of scaling of variables;
- Dependent and independent methods of dependency analysis and methods of relations analysis.
Descriptive one-factor methods are:
- Frequency distribution (presentation on a graph or in a table);
- Graphical representation of distribution of a variable (for example, by using a histogram);
- Statistical indicators: arithmetic mean, median, variation, variance.
Inductive one-factor methods are designed to verify that the characteristics of a sample match the ones of a general totality. They are divided into parametric tests designed to test hypotheses about unknown characteristics of a general totality, and nonparametric tests designed to test hypotheses about its distribution. This method is used to formulate hypotheses, select a test, establish the level of significance, determine the critical level of a tested characteristic from a table, calculate the actual value of a test, as well as for comparison and interpretation.
Two- and multi-factor methods of analysis of dependencies help determine what relationship exists between the decline in price and the sale of a product, whether there is a link between the nationality of a person and the choice of a footwear style, etc.
Types of Analysis
- Regression analysis is a statistical method of data analysis used to determine the dependence of a variable upon one (simple regression) or several (multi-factor regression) independent variables.
- Variational analysis is designed to test the degree of influence of the changing independent variables on the dependent ones.
- Discriminant analysis allows to divide predefined groups of objects using a combination of independent variables and thereby to explain differences between these groups. The method also makes it possible to assign a new object to a certain group on the basis of its characteristics.
- Factor analysis is designed to investigate relations between variables in order to reduce the number of factors of influence to the most significant ones.
- Cluster analysis allows to divide an aggregate of objects into separate relatively homogeneous groups.
- Multidimensional scaling makes it possible to obtain a spatial representation of the relations that exist between objects.
The possibility of applying this kind of analysis or any other one depends on the level of scaling of independent and dependent variables. The choice of a certain method is determined not only by nature and direction of the connections between variables and the level of scaling but mainly by the solved problem.
The Need for Research
Under the conditions of the market it is unrealistic to achieve sustainable business success if you do not research and plan its development effectively, do not constantly accumulate information about your prospects and opportunities, the state of the target markets, the position of competitors on them, etc.
It is necessary to accurately represent the needs for the future not only in material, labor and intellectual but also in financial resources, which is especially important in a market economy. It is important to provide sources of their receipt, be able to identify the effectiveness of the use of resources in the process of work. Hence, ensuring economic activities of the firm, carried out on the basis of a plan, is the most important task of any manager. The extensive experience proves that underestimation of research and planning of entrepreneurial activity in market conditions, ignorance or its incompetent implementation lead to huge economic losses and, ultimately, bankruptcy.
The main goal pursued by a company is to achieve maximum profit with minimum expenses. The study of the company's activities and their plan contribute to the solution, determining the most profitable sources of financing and rational directions of spending, ensuring a strong position of a company on the market.
Individual enterprises are able to achieve some success without spending a lot of time on planning. Planning itself does not guarantee success. But it can provide many important and favorable factors for a firm.
The current rate of change and increase in the volume of knowledge is so great that research and planning are the only ways to really predict future problems and opportunities. This also provides the basis for making effective decisions. When a company knows what it wants to achieve, it is easier to take the most appropriate actions.
Planning helps reduce risks in decision-making. By making reasonable planning decisions, a CEO reduce the risk of errors caused by erroneous or unreliable information about the capabilities of an enterprise or about an external situation. Planning serves to formulate and achieve company’s key objectives.
In a market economy entrepreneurs will not be able to achieve sustainable success unless they clearly and effectively explore and plan their activities, constantly collect and accumulate information about the state of the target markets, the position of their competitors, and their own prospects and opportunities.
With all diversity of forms of entrepreneurship, there are key points that are applicable in almost all areas of commercial activity and for different firms, and necessary to timely prepare and circumvent potential difficulties and dangers, thereby reducing the risk of failure to achieve the goals.
An important task is the attraction of investments, including foreign ones, to existing and developing enterprises. To do this, you need to argue and justify the design of projects (proposals) that require investment. For these and some other purposes, a business plan is applied.
Each task can be solved only in conjunction with the others. The main focus of a business plan is the concentration of financial resources. It is an important means to increase the company's capital. The process of drawing up a plan allows to carefully analyze business started in all details. It serves as the basis for a proposal in negotiations with future partners, it plays an important role in employing the right specialists. Thus, it is not only an internal document of a firm but it can also be used to attract investors. Before risking some capital, investors should be sure of the thoroughness of a project and aware of its effectiveness.
Almost at every stage of analysis, implementation and monitoring of marketing activities, information about forces operating in the market is needed.
A study aims to identify the most effective means of stimulating the sale of goods, increasing the image of a firm in the market, increasing the effectiveness of advertising. The objects of research are motivations of behavior of suppliers and buyers, a reaction of a consumer community, effectiveness of advertising, relations with customers.
The result of research is the possibility of developing relations with public, buyers, intermediaries, formation of a positive attitude towards a company, its products, improvement of methods of generating consumer demand, impact on suppliers, better use of possibilities of the communication system, including advertising.
Of course, the study of objects of the market should be closely linked with the study of a company's internal situation with the aim of determining the real potential of its competitiveness by comparing relevant factors (objects of study) of external and internal environment. Only in this way we can determine what needs to be done to adjust an enterprise to external conditions more fully.