P2 M1D1 - Unit 10,13,19 PDF

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Unit 10,13,19...

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P2 – Explain how different market research methods have been used to make a marketing decision within a selected situation or business M1 – Explain, with examples, how different market research methods are appropriate to assist different marketing situations D1 – Evaluate the market research method used by a selected organisation

Introduction In this task, I will be explaining about the objectives of Kellogg’s use of different market research methods to make a marketing decision. Objectives of Kellogg’s in the Market research The objective of the Kellogg’s in conducting the market research is to 

Inform the business about consumer needs

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Identifying what consumers might want in the future

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Reduces the risk for any New Product Development (NPD)

Kellogg’s is market oriented. This shows that the whole organisation focuses on the needs of the consumers. Kellogg’s use market research to add value to the business by identifying the consumer needs which helps the Kellogg’s to plan their future. Designing new products is a good way of increasing the overall sales in the market. Conducting a Market research can help Kellogg’s to plan ahead and focusing the business on the needs of its consumers. This can help Kellogg’s to improve the competitive advantage. Market research of Kellogg’s Market research add value to the business like Kellogg to identify consumer needs. Which can help Kellogg’s for the products or brand extension. It mainly focuses the business on the needs of the consumers which can improve its competitive advantage. Launching a new product can be a risky business. To reduce risk for the new product development, which also increases the likelihood that the products will be well received by the consumers when they are launched. Primary research of Kellogg’s Kellogg’s conducted primary research for a new product called Crunchy Nut brand extension. The primary research is gathered first hand to answer the questions for the promotion of

Kellogg’s new product. However, primary research is time consuming and expensive which is measured as the reliable source of information since it is directly from the customers. Primary research will help Kellogg’s to meet their objectives. Kellogg’s conducted primary research to launch a brand extension. Brand extension include market, competitor and consumer research. Kellogg’s can’t take a risk in assuming that consumers will accept the product that they launched with the parent brand on it. Research of brand extension requires the complete understanding of the brand fit. If the consumer doesn’t accept that a brand will fit in a new category, then Kellogg’s need to reposition the brand. Moreover, it will be highly competitive as there is a lot of extensive market launching a new product. Brand to a competitive market is risk and more expensive. However, launching a product under a parent brand, name or reputation can increase the revenue and market share of Kellogg’s. To develop the crunchy nut bites, Kellogg’s use different methods to collect the primary data. Primary market research includes qualitative and quantitative research methods. Theses can help Kellogg’s to understand what customer needs or want. Qualitative data Qualitative data is concerned about the opinion, feelings and attitudes. The purpose of qualitative research is to gain an understanding the reasons and motivation and to provide insights into the setting of a problem by generating ideas. The benefits of using qualitative data is that it provides depth and detail information about the Kellogg’s, while the interviewer is interviewing they can see the attitudes, feelings and the behaviours when they ask different questions and they can also understand certain ways and the feelings about the actions. Interviewer even can ask more questions to know about the opinion of customers about Kellogg’s launching a new product The limitations of using the qualitative research methods is it can’t be generalised to the population and it is more time consuming and cost effective, as the Kellogg’s has to pay to the staff who is doing the research. As well as it is difficult to compare the opinion of the customers. Qualitative methods are based on the skills of the researcher who are conducting interviews, focus groups and observation. Quantitative research methods

Quantitative research establishes a conversation with the consumers. Quantitative research may use the questionnaires to the large numbers of the respondents which allows the statistical analysis such as the calculation of a mean or percentage. It is the number of figures that can be used to calculate mathematically or presenting as a graph. Kellogg’s can use this figures to decide whether to launch a product or not. The strength of using the quantitative research is that it will be more accurate and can be generalised to the population. Quantitative research involves variables and many case studies to ensure the validity and reliability. Unlike Qualitative, quantitative can avoid personal bias by keeping distance from whom they are observing. The limitations of using the quantitative research is that the research is done in unnatural and artificial environment. Therefore, the interviewer can control them. The development of the standard question can lead to structural bias and false representation in which the data actually reflects the view of the participating subject Secondary research of Kellogg’s It involves the summary of the existing research rather than primary research. It is finding information from the third-party sources such as marketing research reports, company websites, magazine articles and other sources. One of the benefit using the secondary research in the Kellogg is that it is east to access and the use of the secondary research has allowed researchers access to valuable information for the little or no cost to acquire. Therefore, this information is much less expensive for Kellogg. However, the limitations of using the secondary research is the quality of research needs to take sufficient steps to critically asses the validity and reliability of the information provided. It can also be incomplete information as in some cases researcher find the information that appears valuable and promising.

The stages of market research process There are main 4 stages of market research process in Kellogg’s Discovery – stage 1

The main factor of discovery is that they can aim in identifying a set of new food ideas, which is suitable for developing a new Crunchy Nut product. Secondary research from Mintel and Data monitor is used to find the innovation trends in the current cereal market, which was also used to find new products, flavours and foods. This information can help the food developers of the Kellogg’s to come up with a number of new food ideas. Focus group provide qualitative research which is a group of people assembled to participate in a discussion about a product before it is launched or to provide feedback on a political campaign, television series. A focus group is a useful method that can be used to measure the reaction of customers to a company’s new product or to the company’s strategies. In addition, focus groups provide insights on the current position of the company’s competitors in the mind of the customers, as well as measuring the reaction of customers to a product’s design, packaging, price and message. This primary research can help Kellogg’s to find how new product should be developed and fit in the Crunchy Nut Brand. At the end stage, Kellogg’s will have a number of new food ideas which appeal to the consumers. questionnaires because each participant has to be paid. In focus group people will not be honest and express their personal opinion about Kellogg’s. Selecting the best idea – stage 2 Through stage 1 research Kellogg’s use the ideas from the focus groups. This can help Kellogg’s to identify the idea of product that is best or least sales potential. Kellogg’s use the idea of focus groups on boards which had a picture showing the product ideas and its description of how new product would be like. Then, this is showed to the large group of consumers in quantitative survey. And they ask the consumers to rate the ideas on a number of scales. This indicate that the New Crunchy Nut Bites idea was seeming as the most appealing between all the ideas tested. Quantitative data will provide a statistical information which can help Crunchy Nut Bites is appealing to the customers. Crafting idea into product – stage 3 The purpose of crafting the idea into a new product is that the business can understand what customer prefer and how it can attract the customers. Crafting the ideas can be done through quantitative and qualitative research. The qualitative research can help the Kellogg’s to understand the eating experience of the consumers and quantitative survey of the

finalised recipes will enable the Kellogg’s to select the best one. Moreover, developing a pack design and testing it on the consumers to select the final packaging design for the Crunchy Nut Bites. Kellogg’s can refine the product using the feedback from qualitative and quantitative survey. The qualitative research help Kellogg’s food technologist to explore the taste and texture of the new food idea. Kellogg’s need to understand what customer prefer to develop the product. Kellogg’s made four main recipes to test with the consumers in the quantitative survey to know what customer likes which allow Kellogg’s to select the best ones. The pack design for the new Crunchy Nut Bites was developed to look like other Crunchy Nut family. The packing was also tested by the customers to decide the final packing design for the Crunchy Nut Bites. Forecasting sales – stage 4 Before launching a new product Kellogg’s undergo to the final test. This is known as ‘In Home Usage Test’. Kellogg’s give the product to the customers for several days which allow Kellogg’s to capture the product for the first time. Finally, consumers will complete a report on what went well and what they think about the food. The report is in the form of questionnaires. Data that is collected form the customers which is quantitative can help Kellogg’s to forecast sale for the new product in the coming 2 years. The finance department of Kellogg’s will set budgets in order to organise the supply chain to plan food production. The collected data then analysed and the product idea is tested. Evaluation Overall, Kellogg’s has used 4 stages of market research in the development process of new product Crunchy Nut range. In stages of research, the consumer’s response can help Kellogg’s to have different ideas in an open way. These ideas are specified in more detailed and tested with the consumers to select the best one which have highest appeal. The idea of new product become real when Kellogg’s test it by different recipes, refining the food prototypes and design of packaging. When the product and packaging is decided they test it with the consumers to see whether it meet the needs of the consumers. The four stage have provided Kellogg’s with sufficient information which allows Kellogg’s to make decision. However, the four stages of market research will not allow Kellogg’s to make final decision because it only provide the information that the people like the product. Therefore, Kellogg’s

has to choose alternative method to identify how often they choose the Kellogg’s product than other cereal products. In order to identify whether customer do repeat purchase is by focusing on the people than on the product. One of the strategy to identify whether people do repeat purchase is by observing the real family. This strategy can take a week or 2 months. But extending it to 6 months of a year will allow Kellogg’s to make a better decision in whether to launch a product. this can benefit the business as it can help Kellogg’s to get feedback about what went well and how they can improve the product to make it better. However, 6 months of the year will delay the time in making decision because no decision can be made till 6 months. Therefore, 3 months will be preferable for Kellogg’s. Moreover, increasing the sample size is a better indication and it is accurate indicator it is as it is expected to mirror the behaviour of the whole population. However, the increase in the sample size can be expensive. The second strategy to access information is by questionnaires and interviews. Questionnaire is more practical as Kellogg’s can collect large number of information from large number of people in short period of time and it is less expensive. Questionnaires are set of printed or written questions with a choice of answers devised for the purposes of a survey or statistical study. The advantages of questionnaires are the response are gathered in a standardised way, so questionnaires are more objective. Kellogg’s can use this information as they can use the questionnaire to help them. But if the people don’t answer it can be an impact for the business. However, the feedback of the questionnaire can easily be analysed statistically. Therefore, questionnaire can help Kellogg’s to make better decision The third strategy to access information is through interviews. Interviews has always been a popular way to learn people’s opinions by interacting directly with respondents, interviewer can capture more detailed thoughts on specific subjects from adverts, about new products. Face-to -face interviews help with more accurate screening. If the individual being interviewed he/she is unable to provide false information during screening questions such as gender, age, or race. In interviews Kellogg’s can ask many question about their products. It’s a first-hand information for Kellogg’s which allow them to see how people react to their product and how many of them like it. However, interview is more time consuming but Kellogg’s will gain more information about the product, the feedback of the customers can

be used to make the product better. They can also use this method to employees or staff who are working in that store to see how they can improve their product and how to attract the customers. These strategies can help Kellogg’s to have a sufficient information to decide in whether to launch Crunchy Nut range....