Industrial Marketing Research (RLE Marketing)

Management and Technique

Nicholas Stacey, Aubrey Wilson

• Publisher: Routledge
• Year: 2014
• eBook ISBN: 9781317649021
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

The book provides a comprehensive analysis of the techniques and mechanics of the research process, and the management implications of industrial marketing research. It reveals not only how to do marketing research, but also the full range of its profitable applications, and shows how to develop an internal department and how to buy industrial marketing research.

When originally published, this was the first book to be published in the UK or USA devoted solely to the important modern management tool of industrial marketing research.

PART ONE

Management Aspects of Industrial Marketing Research

CHAPTER 1

MARKETING RESEARCH—ASPECTS IN INTERPRETATION

CORPORATE ASPECTS

MARKETING research is a management aid to ensure the viability of business enterprise; if skilfully interpreted and intelligently applied, it provides for firms the continuity between today and tomorrow. Marketing research is often called upon to investigate short-term market prospects for products currently passing through the production shop and the assembly line; its utility for product research, consumer tests, media research and packaging design is proven. Another of its tasks is looking further ahead to the future by estimating likely demand for goods and services, either within the narrower context of the firm or in the wider context of the economy. In fact, the determination of the type, quantity and price of goods to be produced, in a sense, the creation of demand for them and devising their current distributive system are the constituents of marketing research.

Moreover, for marketing research to be successful, it must express more than just bare value judgements about suitable alternative lines of action. As an integral part of the marketing function it should, in the end, guide the management of the firm to take wise decisions on the evidence available. That is, the responsibility of marketing research does not cease with submission of reports; the marketing researcher must ensure that the recommendations are so fully explained and so well supported that the appropriate decisions flow naturally from them. It should be made amply clear that marketing research, in all its aspects, should not be the ‘plaything’ of management but an integral part of it, ranking pari-passu with the other management functions. Within the total marketing concept, marketing research is not a minor art but a major skill in the chain of management’s decision-making. Thus, marketing research is intended to supply the information, as well as the evidence for making the right decision and judgement for marketing—an activity which can be defined in this context as the integration of all functions necessary to determine the kinds of goods to be made and to move them from producer to final user.

To look upon marketing research as a peripheral function is to relegate an important management tool to limbo. Of all the things that management should avoid, it is to take those marketing research recommendations which it finds easy and convenient to implement and leave the more radical measures to take care of themselves. Hence, it follows that to ensure the proper functioning of marketing research in the firm, its practitioner must have not only the confidence of management, but, if it is an internal department, the marketing researcher must be a part of management itself. But such an acknowledgement of the vital role of marketing research is still somewhat reluctant, and far from general. For it is idle to pretend that marketing research has become an orthodoxy in British industry—except in a handful of large or medium-sized firms. Many pay lip service to the need for marketing research, and many more exhort others to use it. There are several good reasons why this should be so.

Whether marketing research is accepted in business as a tool of management depends partly on the size of the firm and partly on the predilections of its management. Furthermore, it is also a matter of terminology. To take the case of the small firm; the gathering of marketing intelligence, the decision of what to make, in what quantities, for which market and at what price—to mention some of the major management decisions in the firm—are decisions taken by the owner-manager. Thus, he performs elementary marketing research probably without being aware of it. If the firm is successful and grows, management functions will be shared and divided; and by the time the firm has become substantial, a pattern of responsibility will have been evolved which invariably embraces the sales function by definition, the marketing function by default, and seldom admits the marketing research function as a necessary and allied activity in its own right. By the time a still further stage of development has taken place in the life of a business enterprise, that is when it has become a large firm, the management is often sufficiently experienced to realise that the evaluation of markets and the examination of demand for new products cannot be left as a subsidiary activity of the manager of technical research, sales or production.

Thus, in most small and in many medium-sized firms, the task of marketing research is performed, unconsciously or consciously, by the owner. He works immensely hard, has great single-mindedness and, invariably, a feeling for commerce and an intelligent as well as intuitive appreciation of the demands of the market place. More often than not the entrepreneur has limited knowledge of technicalities and only a rough and ready appreciation of administration. But, he makes a narrow range of products, he understands their behaviour in the market and appreciates the shifts in demand which take place over a period.

In some medium-sized firms, the founder’s—the entrepreneur’s— business ideas have been successful, his appreciation of market demand proved correct; what is now required is to find the funds for further expansion and the technical skill to continue making sound products. Curiously, it is at this stage of business development that all the functions of management are reinforced—though it is rare that much attention is paid to marketing research in its broadest sense. Nonetheless, the built-in momentum of the firm, and the founder’s continuing proximity to the market ensure further progress. What does happen is that the continuing success of the firm is more frequently ascribed to technicians and administrators brought in just below the founder’s level. Indisputably, there is often a large element of truth in this assumption. However, the moment the medium-sized firm is fully fledged is the critical time when the organisational pattern is firmly moulded. This means that subsequently the admission of new skills, such as marketing research, is made more difficult.

As the firm is successful, the main preoccupation is production, paring the costs of production, reducing the overheads and increasing output which, in turn, ensures greater profitability. At this point in time there is usually too much talk about productivity and not enough about novelty, innovation and new markets. Not that these factors are considered, necessarily, as secondary matters. The facts are that even if such ideas are uppermost in the minds of the management team, as a rule inadequate attention is focused on them. There is no time for the existing members of the management team—and by this stage the founder is slackening off—to take any profound interest in marketing and marketing research, as distinct from sales. Managers are more than fully engaged in their respective specialist functions of research, production, sales, finance or personnel to devote more than passing interest to the marketing research aspect. This does not apply to the large firm. In such business organisms specialist functions are not only more fully recognised but their utility is also appreciated. The result is that marketing research has found the large firm as its foremost patron. Whether marketing research makes its full contribution to management thinking in the large firm does not depend solely upon the recognition of its importance—that has been more or less vouchsafed—but also upon the talents and character of the marketing researcher.

There is also an ‘attitude’ of management to marketing research which often inhibits a deeper and more protracted consideration of the issues involved. Few examples show better the god-like qualities assumed by some human beings than the insistence of many entrepreneurs and managers upon their own ultimate wisdom in economic or, arising from it, marketing research matters, in the daily running of their firms. Perhaps it is a universal phenomenon that every man, having reached the age of discretion and of the vote, should assume, as of right, that he is a consummate politician, brilliant strategist and, easiest of all, competent economist. The reason for these curious assumptions must lie in the eminence of some of the leaders in these occupations without the apparent benefit of formal training. Few would join issue with the metallurgist or the gynaecologist if he passed a professional opinion. Adapting the phrase of an Edwardian Prime Minister, ‘we are all economists now’. The facts remain that irrespective of whether or not the manager of a firm has been trained in, or has experience of, economics or marketing research—which is a type of applied economics at its best—he will be prepared to pass judgement upon its most abstruse concepts. On account of his propensity to do so, the application of marketing research, or of economic intelligence services of any kind, in business, has been lamentably delayed.

There is, of course, the other side of the coin, the marketing researcher offering his services to business. Whether he is working within the firm— as an employee—or without—as a consultant—if he is a successful marketing researcher he must be by definition, also something of an entrepreneur. Such a man often has ideas which could be helpful to business in many ways, but he may not wish to start off in business on his own account. If he does, more often than not he becomes a consultant and, here is the key quality—dynamism—which is a categorical imperative for the marketing researcher to make good in the world of business. Allied to it, the second most important quality which the marketing researcher must possess is ability to create confidence in his judgement among his colleagues in the management team. After all, like other senior appointments in business—as ‘specialists’ or as ‘generalists’—the marketing research advisory function is a personal function; if the management has confidence in that particular marketing researcher then his views are seriously considered.

Confidence in the marketing researcher—or indeed in any management function—is a prerequisite of success. This trust must be based upon a recognition of the importance of the function, upon the competence of the person discharging it, and upon an understanding that he is no ‘universal genius’. Ultimately, marketing research recommendations are value judgements upon the facts as they are available. No marketing researcher, however well endowed with common sense, however well qualified in the subjects of economics and statistics and however well acquainted with the variables of his firm’s business can offer flawless advice on every occasion. What can be expected of him is that he should be a successful interpreter of the trends and forces that make for good business most of the time. It is possible to go wrong in marketing research in the same way as it is in medicine, by giving the wrong diagnosis, in law, by arguing a case on a faulty assumption, or in the physical sciences by not being aware of hidden factors. In the established professions its practitioners can go wrong perhaps with greater impunity than in a developing, new profession such as marketing research. ‘When half a dozen economists are present, there are seven opinions’, and ‘statistics can be turned around to show what you want’—are comments in current use, invariably based, not upon practical experience, but upon the curious lore of conventional wisdom.

Whether in the day-to-day tasks of management the marketing researcher can make the kind of contribution for which he is qualified and capable, depends both upon himself as well as upon the business enterprise utilising his services. He must, of course, have available, all the facts of a given situation affecting the firm and not only those facts which operating managers in search of information find easy to communicate or convenient to explain. To have no information is often preferable to having only a part of the story, because on the basis of inadequate facts erroneous assumptions are often derived. To reiterate, management must have confidence in the person entrusted with the marketing research task. But successful marketing research is largely vested in the researcher himself. Too many are satisfied with the presentation of neat rows of figures, of statistical bravura, of imposing charts and of elegant essay-writing. All these are a part of the marketing researcher’s job, but are not the substance. Two considerations must prevail in the presentation of marketing research reports to management: first, on the basis of accumulated information, clear cut recommendations must be made, from which management action can easily flow; and second, the marketing research findings, which in essence, are a call for action, must take into consideration the position and problems of the firm. It is more than useless for the marketing researcher to recommend spending large sums on a research study when the firm’s resources are inadequate. It is useless to suggest the establishment of an overseas network of agents when the product does not comply with foreign test-house requirements or, without thoroughly testing the ground first, advise expanding the distribution of products into alternative channels which run counter to successful distribution in allied products. If politics is the art of the possible, then marketing research is the art of business realism where the end result is neither impressive turnover nor nebulous prestige, but profit.

SOCIAL AND ECONOMIC ASPECTS

Organised, systematic research into markets for products and services by manufacturers, traders or marketing research agencies has been a post-second world war phenomenon in Britain. Little marketing research work was carried out in the 1930s. Since 1945, and more particularly since the mid-1950s, the appreciation of the benefits of marketing research has widened. In other industrially mature economies such as Germany, France, Sweden and Switzerland the use of marketing research in trade and industry is even more recent. Interest in and use of marketing research in the United States can, however, be traced back to the 1910s.¹ The revealing fact emerges, therefore, that by contrast with all other countries, except the United States, the development of marketing research skills and the use of marketing research in Britain has been comparatively rapid.

The development of a technique is, of course, the prerequisite of its successful application. In the United Kingdom such techniques are now available, some of them having been imported from the United States. Thus, the present situation is that the skill of marketing research in its several aspects—consumer or industrial research—is available for industry, trade and commerce, but its use is limited in greater part, to sizeable firms, and even then only to certain groups in manufacturing or trading. This is a remarkable state of affairs since it takes little effort to appreciate that, in the contemporary context of economic growth and commercial success, no other major industrial country needs the skills of marketing research as urgently as Great Britain.

Economic history books remind their readers how maladjusted the United Kingdom’s industrial structure was even before the first world war. The manufacture of iron and steel, textiles and coal mining, continued to be the staples of industrial activity and were responsible for over two-thirds of all exports. These were products which other countries increasingly began to make or mine for themselves; hence the gradual loss of existing markets for such products was predictable. Nor, it seems, was it adequate to insist, as manufacturers were often wont to do, that British industry excelled in the manufacture of these goods, therefore anyone not buying them must, perforce, be satisfied with the second rate. The conscious voluntary choice of overseas buyers to prefer domestic production to imports—especially when local manufacture enjoyed significant protection—in an age of secondary industrialisation, could not be counterbalanced by insistence that ‘British is best’. The logical way out of the eclipse in the marketability of staple industrial products would have been the rapid, perhaps accelerated, development of newer industrial products. But because this development was tardy, Britain’s competitors often took her place in world marke...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Original Title Page
• Original Copyright Page
• Table of Contents
• Introduction
• Acknowledgements
• Part One. Management Aspects of Industrial Marketing Research
• Part Two. The Techniques of Industrial Marketing Research
• Conclusion
• Appendix I. Advertising Copy Development
• II. Industrial Marketing Researcher's Check List
• III. Postal Questionnaires
• IV. Social Accounting Matrix
• V. Qualitative Screening Process
• Bibliography
• Glossary
• Index