Valery Bondarenko - Marketing and Pricing

MIS transforms data from internal and external sources into information necessary for managers and professionals’ marketing services. MIS distributes information to managers and specialists of marketing services, taking appropriate decisions. In addition, ISI, interacting with other automated systems in the enterprise, delivers the right information managers of other services enterprises. Internal information contains data on orders for products, sales, shipment of goods, the level of reserves, the payment of shipped products. Data from external sources are obtained on the basis of market intelligence and market research.

Marketing intelligence is a constant effort to collect the current information about changing marketing environment necessary for the development and adjustment of marketing plans. While inside information focuses on the results obtained, maketing intelligence explores what might happen in the environment.

The sources of the current external information can be of different nature, for her collection formal and informal procedures are used. Such information is obtained through the study of books, magazines, trade publications, reports of competing firms, as a result of conversations with customers, suppliers, distributors and other external to the organization of parties, which should be effectively motivated on the collection and provision of the necessary information; based on conversations with other managers and employees, for example, employees of marketing services of the organization, through industrial and commercial espionage (although in many foreign books written about the ethical issues of marketing research).

Primary information is generated in the process of data collection methods to address a specific problem. It is necessary when secondary data are insufficient in terms of their completeness and values.

Secondary information is the data obtained from the accounting and statistical reporting, special publications, directories, i.e. information collected for another purpose.

Market research presupposes the collection and analysis of data on specific marketing situations with which the company has faced in the market. Such activities are carried out periodically, rather than continuously, as soon as certain problems on the basis of the use of special methods for collecting and processing the data collected.

Depending on the nature and purpose of market research three relevant areas are identified (exploratory, descriptive and casual). Any such direction includes certain methods of collecting and analyzing marketing information.

Exploratory research is a marketing research conducted to gather preliminary information needed for a better definition of the problems and put forward suggestions (hypotheses), in which implementation of marketing activities, as well as clarifying the terminology and setting priorities among the tasks of research is expected.

Descriptive research is a marketing research aimed to describe marketing problems, situations, markets, for example, the demographic situation, consumers’ attitudes toward the company’s products.

Causal research is a market research conducted to test hypotheses about cause-and-effect relationships.

Under the experimental research is meant collecting primary data by selecting the same type of groups surveyed, the issuance of different tasks, monitor the factors that affect the results and comparison of the differences in group responses.

Marketing research process includes the following steps and procedures:

1. Defining the problem and research purposes.

1.1. Determining the need for market research.

1.2. Problem definition and formulation of marketing research purposes.

2. The development of the research plan.

2.1. The choice of methods of marketing research.

2.2. Determining the type of information required and the sources of its receipt.

2.3. Determination of methods of collecting the necessary data.

2.4. Development of a questionnaire to collect data.

2.5. Development of sampling plan and determination of sample size.

3. The implementation of the research plan.

3.1. Data collection.

3.2. The analysis of the data.

4. Interpretation of the results and bring them to the leadership (preparation and presentation of the final report).

Marketing research involves, as a rule, all the elements of the outer and internal business environment of a business entity. However, very often all sorts of circumstances hamper the comprehensive study of marketing, but there are a number of positions, which in any situation should be transparent to the manufacturer. Among them, first of all, can be distinguished: market demand, capacity and market share, especially of consumer preferences and market segments for consumer goods and industrial goods. In this regard, we will try to consider them in details.

When an organization or company decides for itself the choice of the target segment, target market, it is based, first of all, on market demand.

Market demand is the total amount of sales in a particular market and particular brand product for a certain period of time.

Market demand can be classified on the basis of the dependence of demand and marketing efforts:

primary or unstimulated demand is the total demand for all brands, under which a particular product is sold in a particular market without use with any marketing efforts;

market potential is the maximum amount seeking by the market demand at the approach of marketing costs in the industry, productivity certain product, to a value at which its further growth does not lead to an increase in demand for the product. The magnitude of this type of demand has significant impact environmental factors marketing organization or company;

current market demand is sales volume of a particular product for a certain period of time under certain environmental conditions, and at a certain level of use of marketing tools.

In determining the amount consumed, sold goods in a particular period of time of production one must consider this situation not only with terms of consumer behavior, but also the point of view of the manufacturer. In the latter case, often use the term «the real size of the market,» or simply «the capacitance of the market», which is defined the potential annual sales of a certain kind of product at a certain price level.

Speaking directly about the method of determining the capacity of the market, you should immediately call attention to the fact that this measure can be carried out on the basis of statistical information on the volume of production and sales in a particular period of time, taking into account the share of imported from abroad and exported abroad goods of this type.

C = P + R-E + I + D-M-E0 + I0,

where C – the capacity of this market;

P – domestic production of the commodity in the country;

R-remnant inventory in warehouses in the country;

E – exports of goods;

I – volume of imports of the product;

D – reduction of inventory from the seller;

M – an increase in inventory from the seller;

E0 – indirect exports;

I0 – indirect imports.

However, this method has a large proportion of errors due to the imperfections of the existing statistical reporting system. Especially this applies to those commodity markets where a large amount of wholesale and retail intermediaries operate who often distorts to conceal income, the data on the volume of production, sales and revenue.

Among other approaches to determining the capacity of the market we would like to stay on the normative. It is based on the use of consumption norms of certain goods, the sales data, the number of customers and frequency of purchases etc.

In general, the definition of the current market demand (real capacitance of the market) in monetary terms is as follows:

Q = n * q * p,

where Q – the current market demand in terms of money;

n – number of buyers of this type of product in the market;

q – the number of purchases of goods, accounting for one customer in the monitoring period;

p – the average price of this product.

Naturally market capacity calculation by using this method also has a certain degree of error. In this regard, for a more accurate calculation can be implemented in phases, breaking the totality of consumers buying into smaller segments, having more specific characteristics. For example, conducting research market of meat products, consumers can be divided into several segments according to age, believing that the average rate of consumption of meat products vary depending on the age of the consumer. This specification will provide more accurate indicators of the separate to customer segments that have a positive impact on the results of the determination of the total market volume. Natural disadvantage of this method is the difficulty with the definition of the relevant regulations and partitioning on consumer segments. In addition, all the errors that occur in the calculation of interim standards and indicators are reflected in the final result. To avoid this problem, one must use a few different techniques and then find the average value.

To have a more detailed approach to the problem of the study of market demand, it is necessary to study the impact on sales and consumption of such factors as: price, income, consumption patterns, etc. The above approach can also be used to predict the demand.

Purchasing behavior (concumer buying) is the buying behavior of individuals or families who acquire goods and services for personal consumption.

Every day consumers make a lot of decisions what to buy. Most large companies explore the process of making decisions about the purchase, to find out what, where, how and how much, when and why consumers are purchasing. Marketers are also studying this process, but they are interested in the answers to the questions what, where and how much.

However, to reveal all the secrets of buying behavior is very difficult, because the reasons for decisions are often hidden away deep in the consumers subconscious.

The main issue of marketing is how different buyers react to marketing techniques? The company who really understands how consumers react to the different qualities of the product, its price and advertising, gets a significant advantage over competitors. The starting point is a model of consumer behavior «motivation – reaction». It is clear that marketing and other incentives penetration-cabins in the «black box» of the consumer and generate a response. Marketers need to find out what is hidden in the «black box.»

Consumer market are individuals and families who purchase goods and services for personal consumption.

Marketing stimuli consist of the four elements, the so-called «Four P»: product, price, place and promotion. Other factors depend on the environment surrounding the buyer: the economy, technology, politics and culture. All of these components fall into the «black box» of the consumer and are converted into an aggregate of the observed reactions: product selection, trademark, trade an intermediary, the time of purchase and the purchase volume

The buyer’s choice is heavily influenced by cultural, social, personal and psychological factors. Although the marketer cannot affect on many of them, but by using them, it can determine the interested buyers and simulate product to meet their needs better. Marketers need to approach the process of analyzing user behavior with extreme caution.