Week 2

This week we talked about the market that affects a business and the importance of marketing research. There are many factors in the market that need to be analyzed by marketers and managers to determine the company's position. It is the job of the marketers to create a value that delivers customer satisfaction and loyalty. Marketers use a variety market reports to forecast their sales. The Lehmann and Winer text talks about the difference between the market potential and the forecast. The market potential is the maximum sales reasonably attainable under a given set of conditions within a specified period. The forecast is the amount of sales expected to be achieved under a set of conditions within a specified period. Potential forecasts have a wider range of uses. They are used to determine a market, make long term decision, set objects and have an input to the forecasts. The forecasts are more defined and based on who the end user is, how many end users are in the market and estimate the purchase rate. Most of this research is bases in statistical data.

Looking at data is one thing, knowing what to do with it is another. I heard this statement in an IBM commercial as I was getting ready to write this post. It caught my attention as I felt it related to Drucker's theory of market research and the introduction to chapter 15. IBM's research about the personal computer caused them to miss a major new market. Steve Jobs enter the person computer industry without any market research and built a very successful company. Drucker preferred to use knowledge, instinct and gut feelings to make marketing decisions.  The problem with IBM researching the personal computer industry was that there was no current market to research. There was no data on who the end users would be or past sales data from competing businesses. Not all factors are quantifiable and they can not be measured. When entering a new market, one of the best marketing research tests is the reality test. A company puts a limited number of products into a confined market and studies the sales habits and user feedback. Marketing research is important to every business but there is more to it than just analyzing the numerical data. The marketer understand the existing and potential customers. Businesses need to both analyze the data and work with their gut instincts and knowledge of the market to make a final decision.