Market Research Case History

Market Research Case History

Market research Case History

Senior management in many medium-sized and small industrial firms remain largely unaware of the uses of research surveys. It may, therefore, be helpful if we take a look at a brief case history of a fairly simple market research exercise. It is hoped that this will illustrate bow the use of a market research survey can highlight shortcomings in the ONLINE MARKETING effort which a company is making and of which it may be unaware until the true facts are established. It is intended, also, to show how such faults may be corrected with relatively little effort and early benefits can be derived from the operation.

In the situation under review the firm in question, which we shall call the Elephantine Company, has a suspicion that although its annual sales turnover is rising at the rate of about 5 per cent it is losing business to its competitors. Elephantine is engaged in the manufacture of specialized metal components and its annual home sales are currently �2,860,000. These components are sold into two distinct markets. The first of these is mainly comprised of electrical appliance manufacturers where its product range is used as components in the production of electrical apparatus of various kinds. In the second market the products are purchased for replacement purposes and this consists of a very wide spectrum of user industries.

Elephantine's sales are conducted by its own sales force selling to major customers and also through distributors dealing with smaller customers. An examination of the breakdown of its home sales shows that 51 per cent of its product range is sold into the electrical industry as components in the manufacture of new equipment, 28 per cent is sold to miscellaneous industries and 20 per cent is distributed through agents and wholesalers.

Elephantine's directors could, of course, institute a market research programme to assess the company's position using internal resources only. There are, however, certain advantages to be gained by employing an independent firm of market research specialists to undertake this kind of survey. In the first place, knowledge and experience of the necessary techniques are not available within the company. Secondly, because the company's management personnel are already fully engaged in their current work, it is felt that the survey can be carried out, and its findings produced, very much more quickly if it is undertaken by outside SEO consultants. Finally, there is the question of anonymity. Elephantine's directors do not wish to advertise to their customers and competitors that this survey is being under-taken. Furthermore, they believe that the views of customers should be canvassed and respondents are likely to co-operate more freely if they do not know the identity of the company which has commissioned the survey.

In view of these considerations, Elephantine has, therefore, instructed an independent market research agency to undertake the survey and to provide a report with recommendations. The company has agreed with the agency terms of reference to establish certain specific information. Firstly, an estimate is necessary of the current home market for Elephantine's product range. From this it will be possible to assess the company's current and past share. Secondly, the various segments of the market will have to be considered to establish whether there is a tendency for certain segments to be neglected. Thirdly, an investigation is required into the channels of distribution currently prevailing to form some assessment of Elephantine's competitive position.

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