Question

Introduction

Deciding to conduct formal market research is a significant decision for a firm. The following is an excerpt from a meeting, where the participants are discussing the for/against of whether to conduct more market research prior to the full launch of their new product.

As you read through the excerpt, identify the for/against reasons. Given these arguments, would you recommend that the firm go ahead and do the research?

Activity/Task

Jane:                OK team, we’re getting near the end of the project, time to discuss the merits of a market test. Personally, I’m keen on a market test as the successful launch and fast adoption of our product is a key success factor.

Bruce:             I’m going to disagree. I’m a ‘speed-to-market’ sort of guy. Look it’s a good product. It’s got success written all over it. Let’s just get it out there and the product will do the rest.

Mike:               Sure Bruce, it’s a good product. But unless it’s well promoted, widely available, and the consumers clearly understand its benefits – it just won’t sell well. A market test will give us valuable information so we can market it more effectively.

Harry:              But do we really need that information? We're professional managers and we've all been through major product launches before. I'm sure that between all of us we can work out the best way to strategy without extra information.

Simon:            Well I'm not so sure Harry. I’ve said it before, and I’ll keep saying it. This product is so critical – it’s just too important – we must test it and get it right.

Mary:              To add to this discussion, I’m going to put my finance hat on. We’re talking a big expense. This product already has a big investment to recover and adding another few hundred thousand dollar more is a big ask!

Lyn:                 Personally, I think that undertaking more research sends a bad signal to the executive team that we’re really not confident in the product’s likely success.

Darcy:             That could be true. But I’ve heard rumors that a few of our competitors are in development of a similar product. We need to go now or we’ll possibly lose our “first-to-market” advantage. I think that the executive team would be very disappointed if a competitor beat us to the marketplace.

Anna:              I'm sure that some of you feel like I do. We've been working on this project for over two years and it would be good to skip the research and just push the product out now.

But we’re professional. We’re paid to make the right decisions. So let’s weigh up the pros and con and make the right decision for the firm.

Reasons 'for' conducting the market research
Reasons 'against' conducting the market research
Would you go ahead and conduct the research? Why/why not?

Answer 1

Reasons for conducting the Market research	Market research helps in understanding the tastes and preferences of the customers well, so helpful in successful launch and fast adoption of the product by the customers. Helps in marketing of the product well. High level of promotion, availability factor and customers understanding the benefits of the product can be done well using market research Can be helpful in getting the initial responses of the target customers towards the product. Get to know about the competitors moves and what is happening in the market by conducting market research
Reasons against conducting the Market Research	Market research is time consuming, so conducting market research delays the product launch Requires additional funds to collect the information Sometimes the researcher gets the misleading information due to market research if the respondents give biased responses. Large amount of finances is involved in conducting market research Undertaking more research creates a negative reaction in the market that the manufacturers are not confident about the product features and its success The obsession and zeal of the marketer to launch the product soon goes off if much time is spent in conducting market research
Would you go ahead and conduct the research? Why/Why not?	As it is very important to know the customer's preferences and tastes before launching the product and to make them well aware about the product features, market research is very important. Customer is the king of the market and without customer's support we cannot be assured of the product success, so it is important to conduct the research so as to make the customer aware about the availability of the product, features and promotion of the product. Moreover, the competitor's moves can also be predicted by conducting market research. So it is necessary to conduct the market research. The time consumed in the research and funds required to conduct the research would be compensated once the product is successful and generate higher revenues for the company. It is better to go ahead with the research, because it is always better to launch the product with full preparation so that we can be assured of its success. Moreover, after launching the product with incomplete preparation and if it fails , the marketers are not left with any option than just having repentance on their decision. Thus the product should be launched with complete preparation and after conducting thorough research so that the chances of product's success would be very high. Hence we should go ahead and conduct the research.