Limitations of Marketing Research

Explain the limitations of marketing research used to contribute to the development of Nivea. No matter how small or large a market research project may be, any type of research performed poorly will not give relevant results. In fact, all research, no matter how well controlled, carries the potential to be wrong. There are many reasons why research may not give good results but a common problem is deciding whether the research is really measuring what it claims to be measuring.

There are 3 types of limitations of market research. These are Cost effectiveness, reliability and validity of data collected. Reliability is chiefly concerned with making sure the method of data gathering leads to consistent results. For example; Nivea need to make sure that in their market research that they were asking the same questions asked of each person, was the sample big enough and reflective of the people who will use/buy the product would the same results be obtained from a different set of people.

Reliability estimates the degree to which a product is measures in contrast to validity which involves the degree of accuracy. In research, Nivea will want to use measurement tools that are both reliable and valid. They will want to create questions that offer consistent responses when asked multiple times as this shows reliability. Validity asks whether the research measured what it intended to. Validity implies reliability: a valid measure must be reliable.

But reliability does not necessarily imply validity: a reliable measure need not be valid. Validity is usually considered more important than reliability, because if an instrument does not accurately measure what it is supposed to, there is no reason to use it even if it measures reliably. Nivea needs to consider when carrying out their market research for a product is does the product measure what it claims to measure and is it accurate, this reduces the chances of the business making the wrong decision.

If they so happen to make the wrong decision this will affect one of its marketing objectives which is to retain customers and gain new ones, if the validity of their data is not correct then they will not reach this marketing objectives as customers opinions of the company will differ. Costs are also an important consideration in market research, Nivea need to consider whether or not the product they’re promoting is cost effective. Their market research has to weigh up the cost of undertaking the research against the potential benefits that may result.

You could spend a lot of time and effort in trying to solve a problem through market research, only to find that the solution may not be worth implementing. Also, marketing is one of the few areas of a budget that can be reigned in without hurting Nivea too much as they are a very successful business however, one of their marketing plans is to continue producing successful skin products and boost sales yearly. To do this they have a few cost-effective ways that a company can market its products.

Search Engine Optimization- Nivea’s customers are no longer waiting for direct mail pieces to arrive before ordering–they are finding products when they want them through Internet searches. In fact, almost 90% of new visitors to a web site originate from major search engines. And clearly, a top ranking on Google can translate into hundreds or thousands of visitors– and orders–a month. As web pages proliferate, increasingly more aggressive search engine optimization strategies are needed to remain visible to Nivea’s customers. Permission-based Email Marketing.

Permission is the difference between legitimate email marketing and spam, turning email marketing into a highly cost effective marketing strategy. The idea is simple and time tested: Nivea deliver highly relevant, timely, and personalized email messages to their customers and prospects at a fraction of the cost of direct mail to avoid any cost limitations. 3. Public Relations- News releases, white papers, case studies, awards, and sponsorships of educational events are just a few of the relatively inexpensive ways Nivea keep their brand name in front of other competitors.

Although these methods have succeeded so far for them in the near future they will have to alter their methods as well as their approach to the types of market research they decide to carry out, otherwise poor market research will increase the chances of Nivea making a wrong decision. D2) Make and justify three recommendations for improving the validity (the extent to which a test measures what it claims to measure) of the marketing research used to contribute to the development of your chosen organisation’s marketing plans.

In this assignment I will be explaining how Nivea uses marketing research for its marketing planning by applying a Marketing Planning Process Model, a SWOT analysis on Nivea – giving at least 3 factors for each box) and their SMART objectives (stating what their business objectives are/might be) Marketing planning is concerned with establishing objectives and goals, allocating resources to meet these and setting out a clear plan of action. It also involves setting out ways of evaluating performance against marketing targets.

Typically, the marketing planning process involves: a PESTLE audit, a SWOT analysis, setting SMART objectives, determining strategy and tactics, implementing strategy and tactics and evaluating effectiveness of marketing activity. A Marketing planning process model involves a PESTLE and SWOT As part of the marketing planning process, Nivea has to analyse its external environment. One useful way of analysing the external environment is by grouping external forces into six areas using a PESTLE analysis. PESTLE stands for political, economic, social, technological, legal and environmental influences.

Political factors that affect a business are usually beyond the control of the organisation. However, the business needs to anticipate changes and identify the action it needs to take to either make the most of an opportunity or mitigate a threat. For example, a political factor that Nivea need to consider is that during a recession, any banks or financial services providers would have to consider the likely government scrutiny of any of their business decisions. Economic factors can affect the performance of a business.

These relate to he national – or international economy. A economic factor that can affect Nivea are the periods of prosperity that they go through. This can happen in three ways for example’ when high employment and income drives demand within the organisation. It can also happen in the form of recession when demand falls, leading to lower income and employment within their organisation. Furthermore, in the form of recovery, when demand, income and employment gradually rise within the business. Social factors relate to the values and beliefs of society.

This includes the population’s demographics (for example, size, gender, ethnicity, income, education, occupation). These social factors provide useful information for Nivea as it allows them to target their services at broad segments of the population, such as newspapers and magazines. Technological developments can affect businesses in a range of ways. For example, the development of e-commerce benefited business such Amazon. co. uk. Due to the rise in e-commerce Nivea had to produce a e-commerce website which eventually took business away from traditional shops..

Legal developments affect businesses in a range of ways. For example, if there was a change to the Data Protection Act it would affect Nivea and all other businesses that hold customer data. For example If a change in the act occurred then Nivea may not be able to expressly agree to the use of personal data for advertising or marketing purposes any more. Environmental factors can relate to the social, political and legal aspects affecting a business. For example, if Nivea decide to package their cream products in recyclable packaging.

This may prove to be popular with consumers if there is a growing level of concern over waste. Similarly, the government may put pressure on businesses to increase the amount of recycling. SWOT analysis A useful approach to examining the relationship between a business and its marketing environment is by conducting a SWOT analysis. SWOT stands for: • Strengths • Weaknesses • Opportunities and Threats. Strengths and weaknesses are internal to the business and can include issues such as the buildings, quality of the staff, IT systems and so on.

The external element looks at the opportunities and threats present in the environment in which the organisation operates. Carrying out a SWOT analysis requires research into an organisation’s current and future position. The idea is to match an organisation’s strengths and weaknesses with the external forces (opportunities and threats). SWOT analysis draws together all the evidence from the various analytical techniques used. It is a way of producing a summary, which then provides the basis for developing marketing objectives or aims and ultimately strategies or plans.

Strengths refer to the internal features of Nivea, which provide a competitive advantage. An example could be a highly efficient IT system which they use to design their products. The company also has a sound financial base, so it had the resources to put together a strong marketing campaign. Also, Nivea has staff with relevant skills – researchers with the scientific skills to develop products that men want and marketing staff with the skills to help promote these products effectively. Weaknesses are internal aspects of the organisation, which may not stand comparison with competition or are not performing effectively.

An example might be major concerns and questions that Nivea have when launching a product For example; Was the product range still relevant for the target audience? Did it have the right sales and distribution outlets? Was its market research up-to-date? Opportunities focus on events and developments external to an organisation. This might include new territories for a product or service. Opportunities that Nivea will want to undertake is to open a new segment of a market. Also, NIVEA FOR MEN had seen an increase in the sales of male skincare products and it wants a greater share of this market, Nivea might might consider this.

Furthermore, the company wants to take advantage of changing social attitudes such as men becoming more open, or certainly less resistant, to facial skincare products. Threats are developments external to the organisations, which could damage overall performance. These threats can originate from governmental policy, such as an increase in corporation tax or new laws. Threats to Nivea are consumers who are becoming more knowledgeable and price conscious. They often expect sales promotions such as discounts and offers. Also, the risk of competitors entering the market.