ASSIGNMENT

Course Code : MS - 06
Course Title : Marketing for Managers
Assignment Code : MS-06/TMA/SEM - II/2016
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment on or before 31st October, 2016
to the coordinator of your study centre.
1. (a) What do you understand by the term “Marketing”? Discuss the scope and importance of
marketing function in the current Indian Business Environment.
(b) Effective Marketing is the result of proper blending of marketing mix elements. Elaborate
the above statement with two suitable examples by taking one each from an FMCG and a
consumer durable product/Brand of your choice.
2. (a) What are the major reason that marketers undertake segmenting their markets
periodically? Explain with suitable example of your choice.
(b) Explain briefly the concept of Product Life Cycle (PLC). To what extent monitoring PLC
helps enable in accomplishing the marketing objectives of the firm in the following
situations:
i) Mobile Hand Set .
ii) Fresh fruit juice.
3. (a) As a Manager, briefly discuss the various considerations involved in the design of
marketing organization in the following scenario:
i) Large scale cement manufacturing company
ii) North based woolen garments manufacturer.
(b) Discuss the key steps involved in the selling process. Explain with a suitable example.
4. (a) What is Marketing Research? How do the outcome/results of research help in decision
making process? Elaborate by taking an example.
(b) Briefly explain how marketing research helps in New Product Development
process/strategy. Discuss the key steps that you would consider in such a development
process for the brand extension of a premium toilet soap.

Answer
1. (a) What do you understand by the term “Marketing”? Discuss the scope and importance of
marketing function in the current Indian Business Environment.
Ans.: Marketing are activities of a company associated with buying and selling a product or
service. It includes advertising, selling and delivering products to people. People who work in

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marketing departments of companies try to get the attention of target audiences by using
slogans, packaging design, celebrity endorsements and general media exposure.
Marketing is everything a company does to acquire customers and maintain a relationship
with them. Even the small tasks like writing thank-you letters, playing golf with a prospective
client, returning calls promptly and meeting with a past client for coffee can be thought of as
marketing. The ultimate goal of marketing is to match a company's products and services to
the people who need and want them, thereby ensuring profitability.
In today's world of marketing, everywhere you go you are being marketed to in one form or
another. Marketing is with you each second of your walking life. From morning to night you
are exposed to thousands of marketing messages everyday. Marketing is something that
affects you even though you may not necessarily be conscious of it.
Today’s economic environment is tough. Consumer spending is low and at the same time
consumers have become very knowledgeable and selective about the product they buy.
Decision making is happening mainly based on word of mouth, though advertising is also
playing a crucial role in decision making.
To understand the relationship between marketing and today’s environment, we need to
define some of the traits of current economic environment.
Competition – Every brand and product is being affected by competition. There are ‘N’
numbers of products and brands present in any category. Each product has a USP of its own
and each brand is targeting one particular niche. Thus the choices for consumers have
increased a lot which causes loss of brand loyalty. Due to lessening of brand loyalty,
customers can be lost to competition much faster than was previously possible.
The way to fight against competition is to offer better products and build a better process
such that the customer is thoroughly satisfied and sticks with your product / brand. Thus, as
you want to stand tall against competition, the importance of marketing is increasing.
Internet / word of mouth – Due to the advent and large spread usage of internet, customers
are aware about your product in depth even before entering the store. Furthermore, there is a
lot of reference selling wherein a customer buys a product because their friends have
recommended it. For example – if 10 of your friends recommend 1 movie as very good, you
will definitely check out the movie as early as possible.
Thus, internet marketing and digital campaigns have become an important part of marketing
strategy. If a business is offering services, than they will need to have a higher budget for
internet marketing as their potential consumers search for services through google or through
online classifieds today rather than recalling TV ads or outdoor media. In India, Justdial is a
perfect example of how consumers are searching for products and services online.
Consumer decision making – With so much competition already present in the market, and
with a powerful medium like internet being used, there is too much noise for the customer to
make a sound decision. Thus, today the focus is equally on the complete marketing mix as
well as on manufacturing products which are unique.

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The recent success of Micromax against Samsung is an example of how penetrative pricing
can be used along with product development. Unlike Samsung, Micromax had not used much
marketing communications. Rather it relied on solid product development, a penetration
pricing and word of mouth as well as a digital marketing strategy. The result was that
Micromax canvas phones are taking away a chunk of market share from Samsung smart
phones.
So, the importance of marketing is rising because consumers are open to influencing today.
They are so confused with the noise, that they think companies which are not making noise
are not worth it. Marketing plays a pivotal role in consumer decision making in such cases.
Niche markets rising up – Today there is huge market for cell phone accessories, automobile
accessories as well as home decoration. These markets are niche markets but they are on the
rise and many of the SME’s have made it big by bulk supplying their products to OEM’s. In
such niche companies, the importance of marketing is rising as communications and
distribution plays a critical role.
For example – In ear phones and tablet covers, packaging and design is most important,
whereas in spare parts of white goods and automobiles, distribution and marketing strategy is
essential. Thus even in niche product, the company cannot survive without a proper
marketing plan and strategy.
Combine the above four traits of a business environment and the environment becomes
complex, dynamic, multi faceted and consumer driven. In such a market, the marketing mix
is ever changing and hence the need arises of smart marketing managers and smarter
marketing strategies.
(b) Effective Marketing is the result of proper blending of marketing mix elements. Elaborate
the above statement with two suitable examples by taking one each from an FMCG and a
consumer durable product/Brand of your choice.
Ans.: Marketers use different tools in order to get the desired response from the customers or
best satisfy their needs. These tools are known as The Marketing Mix. Marketing Mix is
probably the most famous term in marketing.
Marketing Mix is a combination of marketing tools that a company uses to satisfy their target
customers and achieving organizational goals. McCarthy classified all these marketing tools
under four broad categories:
 Product
 Price
 Place
 Promotion
These four elements are the basic components of a marketing plan and are collectively called
4 P’s of marketing. 4 P’s pertain more to physical products than services. Below is an
illustration for marketing mix.
The important thing to note is that all these four P’s (variable) are controllable, subject to
internal and external constraints of marketing environment. Marketers, using different blends

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of these variables, can target different group of customers having different needs. So, a
customer may call marketing mix “the offering”.
Marketing mix (4 P’s) was more useful in early 19’s when production concept ws in and
physical products were in larger proportion. Today, with latest marketing concepts, marketing
environment has become more intergrated. So, in order to extend the usefulness of marketing
mix, some authors introduced a fifth P and then seven P’s (People, Packaging, Process). But
the foundation of Marketing Mix still stands on the basic 4P’s.
Marketing mix is an imperative concept in modern marketing and academically it is referred
to as the set of controllable tools that the firm blends to produce the response it wants in the
target market, so it consists of everything the firm can do to influence the demand for its
product (Kotler and Armstrong, 2004). It is important to realise that marketing mix strategy
of any company can have one major function, that is, strategic communication of the
organisation with its customers (Proctor, 2000). It was further argued that marketing mix
provides multiple paths as such communication can be achieved either in spoken form and
written communications (advertising, selling, etc.) or in more symbolic forms of
communication (the image conveyed in the quality of the product, its price and the type of
distribution outlet chosen). However, the key element is that the main aspects of marketing
mix that will be discussed below "should not be seen as individual entities, but as a set of
interrelated entities which have to be set in conjunction with one another"
2. (a) What are the major reason that marketers undertake segmenting their markets
periodically? Explain with suitable example of your choice.
Ans.: In general, customers are willing to pay a premium for a product that meets their needs
more specifically than does a competing product. Thus marketers who successfully carry out
market segmentation and adapt their products to the needs of one or more smaller segments
stand to gain in terms of increased profit margins and reduced competitive pressures. There
are several important reasons why market segmentation needs to be done carefully.
In order to better manage the marketing effort and to satisfy the needs and wants of
customers, many firms place consumers into groups, a process called market segmentation. In
this process, potential customers are categorized based on different needs, characteristics, or
behaviors. Market segments are evaluated as to their attractiveness or potential for generating
revenue for the firm. Four factors are generally reviewed to determine the potential of a
particular market segment. Effective segments are measurable, accessible, substantial, and
actionable. Measurability is the degree to which a market segment's size and purchasing
power can be measured. Accessibility refers to the degree to which a market segment can be
reached and served. Substantiality refers to the size of the segment in terms of profitability
for the firm. Action ability refers to the degree to which a firm can design or develop a
product to serve a particular market segment.
Consumer characteristics are used to segment markets into workable groups. Common
characteristics used for consumer categorizations include demographic, geographic,
psychographic, and behavioral segmentation. Demographic segmentation categorizes
consumers based on such characteristics as age, ethnicity, gender, income level, and

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occupation. It is one of the most popular methods of segmenting potential customers because
it makes it relatively easy to identify potential customers.
Categorizing consumers according to their locations is called geographic segmentation.
Consumers can be segmented geographically according to the nations, states, regions, cities,
or neighborhoods in which they live, shop, and/or work. Psychographic segmentation uses
consumers' activities, interests, and opinions to sort them into groups. Social class, lifestyle,
or personality characteristics are psychographic variables used to categorize consumers into
different groups. In behavioral segmentation, marketers divide consumers into groups based
on their knowledge, attitudes, uses, or responses to a product.
Once the potential market has been segmented, firms need to station their products relative to
similar products of other producers, a process called product positioning. Market positioning
is the process of arranging a product so as to engage the minds of target consumers. Firm
managers position their products in such a way as to distinguish them from those of
competitors in order to gain a competitive advantage in the marketplace. The position of a
product in the marketplace must be clear, distinctive, and desirable relative to those of its
competitors in order for it to be effective.
(b) Explain briefly the concept of Product Life Cycle (PLC). To what extent monitoring PLC
helps enable in accomplishing the marketing objectives of the firm in the following
situations:
i) Mobile Hand Set .
ii) Fresh fruit juice.
Ans.: First referenced in the 1920s, the product life cycle applies biological knowledge to
products. In nature, a seed is planted, begins to sprout, becomes an adult then eventually
withers away and dies. The product life cycle focuses on introduction (seed), growth (sprout),
maturity (tree) and decline (death) phases. Each phase has its own marketing mix strategy
and implications regarding product, price, distribution and promotion.
Sometimes, the life cycle concept applies to a brand or category of product. Fad items have a
cycle of a few months, but some categories, such as the gasoline automobile, will be around
for at least a century. During its incubation period, the product is developed and perfected.
There are no sales during this preparatory period, but the manufacturer prepares for the
product’s introduction into the marketplace.
Introduction Stage: You can expect sales to be low while you perform introductory
marketing to create awareness. Your primary goal during this stage is not to make a profit.
Instead, you want to let customers know what your product does, and why it is special.
Typically, you will introduce one product at a time, keeping the price either high for skim
pricing--the most common--or low for penetration pricing. Initial distribution is selective, but
broadens gradually based on your distribution plan. Early efforts focus on promotion and
recognition. Until customers know about the product, they will not buy it.
Growth Stage: The growth stage is all about increasing sales and gaining consumer loyalty.
Competitors usually appear during the end of the growth phase. Increased advertising builds

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brand preferences. Continuing to roll out new product features, improvements or upgrades
keeps your customers wanting more. If demand for your product remains high, you can
respond by keeping the price at a high level or reducing the price to broaden your market
share. Distribution should be intensive during this phase to get the product out to your entire
consumer base.
Maturity Stage: If your product survives the first two stages, it will spend the most time in
this phase. During the maturity stage, you will seek to maintain market share and extend your
product's life cycle. Tweaking your product to make it unique helps it stand out from
competitors. Keeping an eye on the competition and pricing your product accordingly
conserves market share, while avoiding price wars. Widen distribution and offer incentives to
sellers to keep your product on the shelf. Finally, promoting brand loyalty and offering
consumer incentives spurs customers to switch to your brand.
Decline Stage: During the decline stage, demand for your product decreases along with both
price and profit margin. Now, you have three choices: maintain the product and hope
competitors do not, harvest the product and continue making profit as long as possible, or
discontinue the product. Reducing the number of products, and refreshing the packaging can
make them look new again. Lowering prices helps liquidate inventory, but if your product
continues to serve a niche market, maintaining prices keeps profits coming in. Phasing out
less successful distribution channels and focusing promotions on brand image for future
products is a good strategy.
A long slow period of introduction from 1985 to 1997. I remember in this time that a mobile
phone was considered to be the preserve of fancy ‘yuppies’ (Young upwardly mobile people)
e.g. city financiers.
When I was at university in the 1990s, if you wanted to meet up with a friend, you would
generally go and knock on their door. There was no mobile phones, (no one ever answered
the telephone shared by the whole corridor) There was definitely no facebook and very few
had email. If you did have email, you probably only checked it in the computer room once a
day. (Goodness me, this is making me feel nostalgic for the good old days!)
How fruit juice went from health food to junk food For decades fruit juice has been seen as a
healthy option. Then this week a primary school banned it after claims that it's as bad for you
as Coca-Cola. But how big a health risk does it pose? 'Fruit juice isn’t the same as intact fruit
and it has as much sugar as many classical sugar drinks,' says medical researcher Susan Jebb.
3. (a) As a Manager, briefly discuss the various considerations involved in the design of
marketing organization in the following scenario:
i) Large scale cement manufacturing company
ii) North based woolen garments manufacturer.
Ans.: Among the characteristics of a company that shape corporate and therefore
manufacturing strategy are its dominant orientation (market or product), pattern of
diversification (product, market, or process), attitude toward growth (acceptance of low
growth rate), and choice between competitive strategies (high profit margins versus high

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output volumes). Once the basic attitudes or priorities are established, the manufacturing arm
of a company must arrange its structure and management so as to reinforce these corporate
aims. Examining the extremes of “product-focused” and “process-focused” organizations, the
authors illustrate the development of a “manufacturing mission” whereby the organization of
manufacturing supports management’s needs.
Manufacturing organizations tend to attract the attention of general managers the way airlines
do: one only notices them when they’re late, when ticket prices rise, or when there’s a crash.
When they are operating smoothly, they are almost invisible. But manufacturing is getting
increasing attention from business managers who, only a few years ago, were preoccupied
with marketing or financial matters.
The fact is that in most companies the great bulk of the assets used—the capital invested, the
people employed, and management time—are in the operations side of the business. This is
true of both manufacturing and service organizations, in both the private and public sectors of
our economy. These resources have to be deployed, coordinated, and managed in such a way
that they strengthen the institution’s purpose; if not, they will almost certainly cripple it.
The problems and pressures facing manufacturing companies ultimately find their way to the
factory floor, where managers have to deal with them through some sort of organizational
structure. Unfortunately, this structure often is itself part of the problem. Moreover, problems
in a corporation’s manufacturing organization frequently surface at about the same time as
problems in the rest of the company, and they surface in a variety of ways. For example:
A fast-growing, high-technology company had quadrupled in size in a ten-year period. Its
manufacturing organization was essentially the same at the end of that period as before,
dominated by a powerful vice president for manufacturing and a strong central staff, despite
the fact that its product line had broadened considerably, that the company was beginning to
make many more of the components it formerly purchased, and that the number of plants had
both increased and spread into four countries. A sluggishness and sense of lost direction
began to afflict the manufacturing organization, as overhead and logistics costs soared.
A conglomerate had put together a group of four major divisions that made sense in terms of
their financial and marketing synergy. But these divisions’ manufacturing organizations had
little in common, little internal direction, and no overall coordination. The parent company
was confronted with a series of major capital appropriation requests and had little
understanding of either their absolute merits or the priorities that should be attached to them.
A fast-growing company in a new industry had for a number of years operated in a seller’s
market, where competition was based on quality and service rather than price. Its
manufacturing organization was highly decentralized and adept at new product introduction
and fast product mix changes. In the 1970s severe industry overcapacity and price
competition caused corporate sales to level off and profit to decline for the first time in its
history. Manufacturing efficiency and dependability clearly had to be improved, but there
was fear of “upsetting the corporate culture” and “crippling the golden goose.”
Why did these companies’ manufacturing arms get into trouble? And to what extent were
these problems the outgrowth of poorly designed organizational structures? In attempting an

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answer to these questions, we will begin with a review of the concepts of “manufacturing
mission” and “manufacturing focus” that were first defined and explored in a series of articles
by Wickham Skinner beginning in 1969.1 These concepts, and the conclusions that flow
logically from them, have since been polished, elaborated, and tested by him and a number of
his colleagues in conjunction with various manufacturing companies over the past several
years.
(b) Discuss the key steps involved in the selling process. Explain with a suitable example.
Ans.: Selling is a process involving the interaction between a potential buyer and a person
hired by a company to sell its products to potential buyers. Sales is a recognized business
profession, and ranges from a shoe salesman to an investment banker who manages company
stock with billions of dollars at stake.
Professional selling involves a series of seven distinct steps. Let's take a look at each:
 Prospecting is finding and qualifying potential customers. Qualifying is the process of
determining whether a potential customer has a need or want that the company can
fulfill, and whether the potential client can afford the product.
 Preparation involves preparing for the initial contact with a potential customer. You
will need to collect and study relevant information such as product descriptions,
prices, and competitor information. You will also need to develop your initial sales
presentation.
 Approach is the first face-to-face interaction you will have with the potential
customer. In the premium approach, you give your prospect a gift at the beginning of
the interaction. It may be a pen, a novelty item or company calendar, for example.
Another method is the question approach, in which you ask a question to get the
prospect interested. For example, 'would you have a problem making a 15% annual
return on an investment?' You may also use the product approach, in which you give
the prospect a sample to review. The idea behind all of these approaches is to get the
prospect involved in the interaction quickly.
 Presentation is actively listening to the needs and wants of the potential customer and
demonstrating how your product can meet those needs and wants.
 Handling objections is an important part of the process. Objections can be useful
because they tell the salesperson what to focus upon in addressing a prospect's
concerns. Successful salespeople learn how to overcome objections through
preparation and having the right information at hand to address them.
 Closing involves identifying closing signals from the prospect that indicate it's
decision time. There are different approaches to closing. In the alternative choice
close, you assume the sale and offer the prospect a choice such as, 'Will this be a cash
or credit transaction?' An extra inducement close involves you offering something
extra to get the buyer to agree, such as a discount or a free product. In the standing
room only close, you inform the prospect that time is of the essence because some
impending event, such as a price increase, will change the terms of the offer.
 Follow-up is building a long-term relationship with your customer for purposes of
repeat sales. For example, you make contact with the customer sometime after the

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 sale and make sure the product was received and is in good condition. Again, the idea
is not to sell at this stage, but to create a solid relationship for future sales.
4. (a) What is Marketing Research? How do the outcome/results of research help in decision
making process? Elaborate by taking an example.
Ans.: The process of gathering, analyzing and interpreting information about a market, about
a product or service to be offered for sale in that market, and about the past, present and
potential customers for the product or service; research into the characteristics, spending
habits, location and needs of your business's target market, the industry as a whole, and the
particular competitors you face .
Accurate and thorough information is the foundation of all successful business ventures
because it provides a wealth of information about prospective and existing customers, the
competition, and the industry in general. It allows business owners to determine the
feasibility of a business before committing substantial resources to the venture.
Market research provides relevant data to help solve marketing challenges that a business will
most likely face--an integral part of the business planning process. In fact, strategies such as
market segmentation (identifying specific groups within a market) and product differentiation
(creating an identity for a product or service that separates it from those of the competitors)
are impossible to develop without market research.
Market research involves two types of data:
 Primary information: This is research you compile yourself or hire someone to
gather for you.
 Secondary information: This type of research is already compiled and organized for
you. Examples of secondary information include reports and studies by government
agencies, trade associations or other businesses within your industry. Most of the
research you gather will most likely be secondary.
When conducting primary research, you can gather two basic types of information:
exploratory or specific. Exploratory research is open-ended, helps you define a specific
problem, and usually involves detailed, unstructured interviews in which lengthy answers are
solicited from a small group of respondents. Specific research, on the other hand, is precise in
scope and is used to solve a problem that exploratory research has identified. Interviews are
structured and formal in approach. Of the two, specific research is the more expensive.
When conducting primary research using your own resources, first decide how you'll
question your targeted group: by direct mail, telephone, or personal interviews.
If you choose a direct-mail questionnaire, the following guidelines will increase your
response rate:
 Questions that are short and to the point
 A questionnaire that is addressed to specific individuals and is of interest to the
respondent
 A questionnaire of no more than two pages

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  A professionally-prepared cover letter that adequately explains why you're doing this
questionnaire
 A postage-paid, self-addressed envelope to return the questionnaire in. Postage-paid
envelopes are available from the post office
 An incentive, such as "10 percent off your next purchase," to complete the
questionnaire
Even following these guidelines, mail response is typically low. A return rate of 3 percent is
typical; 5 percent is considered very good. Phone surveys are generally the most cost-
effective. Here are some telephone survey guidelines:
 Have a script and memorize it--don't read it.
 Confirm the name of the respondent at the beginning of the conversation.
 Avoid pauses because respondent interest can quickly drop.
 Ask if a follow-up call is possible in case you require additional information.
In addition to being cost-effective, speed is another advantage of telephone interviews. A rate
of five or six interviews per hour is typical, but experienced interviewers may be able to
conduct more. Phone interviews also can cover a wide geographic range relatively
inexpensively. Phone costs can be reduced by taking advantage of less expensive rates during
certain hours.
(b) Briefly explain how marketing research helps in New Product Development
process/strategy. Discuss the key steps that you would consider in such a development
process for the brand extension of a premium toilet soap.
Ans.: "New" is one of the strongest words in marketing. "New" invokes the belief that
something is moving forward, that it is different, modern or improved. People are attracted to
new products like a magnet. Introducing new products on a constant basis is the best way to
get attention and is invaluable publicity for a business. "New" positions a company as being
dynamic and forward looking. Companies such as 3M and Sony have held this slot for
periods of time but it is difficult to stay there. Innovation is hard work and the road is paved
with failures.
The word "new" is sometimes over-played in marketing because it is so frequently used for
everything from conceptually new products through to old wine in new bottles. The main
types of product development are as follows:
 New concepts – completely new products that have arisen as a result of innovation
and which can sometimes create new markets.
 Additions to existing product lines – new products that supplement established
product lines. For example, a supplier of industrial gases may introduce a new,
smaller cylinder to include in an existing product line, aimed at serving customers
who require smaller amounts of gas.
 Modifications of existing products – existing products that are modified in order to
better meet customer needs, such as improved performance.

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90% of new product research is focused on product 'additions' and 'modifications' rather than
on the concepts. There is nothing wrong with this. Product improvements are obvious
developments and are much more easily accepted than conceptually new products.
In fact, the more conceptually new the product, the riskier it can be. FedEx lost $340 million
on its new Zap mail and DuPont lost an estimated $100 million on a new synthetic leather
product called Corfam. With this in mind, many companies turn to disciplined market
research as a form of insurance, i.e. as a means of reducing business risk. The next section
looks at how market research is used in product development – not only as insurance, but also
as a tool to establish needs and to obtain intelligence on market potential.
Market research can be used at all stages in the product life cycle and explained in the
following sections on applications for market research.
Many companies recognize the importance of "new" and for this reason they allocate
substantial sums to research and development. Electronics companies may have an R&D
budget equal to 15% of their sales, but this is required in order to cope with the rapid pace of
change in their sector. For most companies, the expenditure on R&D is somewhere between
2% and 5% of sales – still huge sums for the likes of Boeing, Honda or Siemens.

Over 90% of all innovations that are successful start in the wrong direction, and are not the
outcome of good market research. In fact, many new and successful products arise by
accident and not as a result of hours and hours of focused R&D or significant financial
investment. Indeed the telephone, X-rays, bubble gum, Velcro, Viagra and Post-it notes – to
name but a few examples – were all invented by accident. In the case of Post-it notes, for
instance, a researcher at 3M was eager to create the world's best glue, but actually ended up
creating one of the worst glues ever – one that didn't stick – which nevertheless ended up as
one of 3M's most successful products: that of the ubiquitous Post-it notes.
Not all new products arise by accident, however, and market research can play a role in
determining the need for most new products. Drucker (1993) tells the story of William
Conner, a medical salesman, who decided he wanted to set up his own company. Conner
sought new product opportunities by visiting surgeons and asking them about the challenges
they faced in their work. In these interviews, Conner learned that the process for cataract
surgery involved a difficult task for physicians, in that they had to cut a ligament which was
an unpleasant and risky move. Conner then discovered an enzyme which could dissolve this
ligament (thus eliminating the requirement to cut the ligament), as well as a means through
which the enzyme could be preserved until it was required in surgery. The innovation was a
success, which led to Conner patenting his compound and meeting an unmet need in the
industry – all thanks to market research which played an instrumental role in discovering and
unleashing the market opportunity.
In the case of the cataract surgery, market research provided invaluable insights into unmet
needs and a thorough understanding of the environment in which the new product would be
sold. However, caution should be taken in terms of the expectations of market research, for it
cannot be assumed that conducting research with the market will uncover sizeable

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opportunities and lead to the conception and launch of new products. It is the role and
responsibility of the researcher to use the understanding of the needs of the market to find
applications for new products that will satisfy these needs. The market cannot be expected to
announce what the new product should be, and market research respondents cannot play the
role of R&D Director!
Furthermore, it cannot be assumed that market research is an exact science, as it would be
unrealistic and unreasonable to expect market researchers to predict the precise demand for a
new concept, given that there are numerous variables that can impact demand outside of the
market researchers' remit. It takes years to get a product to the commercialization stage, let
alone to get it well established in a marketplace.
Market research should be regarded as an experiment which may fail if it is not conducted in
the right conditions. For example, Xerox commissioned three independent consultants to
explore the opportunity for a copier. Two consultants advised against the launch and the
third consultant forecast sales of 8,000 units over 6 years. Xerox chose to ignore the
recommendations of the consultants, launched the copier and installed 80,000 machines
within just 3 years. The market research had underestimated demand as respondents were
unable to provide their views on a new product that they had never experienced.
Indeed, innovations that require potential users to try something new (which is likely to
involve a change in mental attitudes) are difficult to research, given that potential buyers or
users – when asked in an interview or focus group – cannot be expected to imagine using a
product and to then state how likely they would be to buy it, or to state how much they would
pay for it, without sufficient time to fully consider the product, or possibly trial it in the
environment in which the product would be used. Imagine asking people prior to the launch
of the Sony Walkman what they thought of the concept of a transportable music player that
they could listen to on the move. Since people would have difficulty conceiving the notion, it
could have received the thumbs down.
Nevertheless, market research can explore the underlying needs of the market and make a
judgement as to how well a new product meets these needs. Hence it is the researcher, and
not necessarily the potential buyer or user, who makes the connection between the unmet
needs and the new product development opportunities.

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