What’s up with Pasta?
...equires that pasta be made only out of durum wheat semolina and drinking water and restricts the use of additives Alternatives: Option 1: Focus on marketing strategy implementation This strategy utilizes a limited budget for marketing research in order to allow higher spending on marketing campaign. To be cost efficient, the research focuses on available internal sources of secondary data (industry association) and additional external sources, including AC Nielsen, internet search engines and other public sources. Primary quantitative research will be based on secondary data and be conducted using inexpensive survey methods (i.e. phone, mail and internet). Pros Cons Minimized research cost in order to maximize marketing campaign spending Possible misdirection of surveys due to limits of secondary research and low level of current information Use of cost effective secondary data to focus target audience and direct survey questions Risk of low response rate for surveys and low reliability Wide reach of surveys due to mass communication channels Low reliability of market research results on which marketing campaign is based Time efficient due to rapid collection of secondary data and through fairly quick survey creation and results Option 2: Experimental market research Vary different elements of the marketing mix in some specific target markets and record customers’ reactions towards these changes. Focus on low cost variations which could be related to all parts of the marketing mix, for example: sell package of pasta and instant sauce (product), use different distribution channels like gas stations (place) or end of aisle displays (promotion). The choice of the test markets and the aspects to be tested should be based on existing information and hypotheses about consumer behavior. Pros Cons Allows testing of specific characteristics of our marketing mix for selected target markets Lack of information concerning consumer preferences prohibits focused and well directed variations of marketing mix Experiments provide direct results concerning influences on customer behavior in the test markets (e.g. from scanner data or other observation) Results of the experiments give only limited information about very specific measures and not much insight into the underlying behavioral patterns which could be applied to the whole marketing strategy Limited exposure to risk (e.g. financial losses, image damage) because variations are done in contained market segments and areas Needs collaboration and support of current and/or not yet developed distribution channels Low investments necessary due to several inexpensive ways to alter marketing mix Recommendation: Based on the situation analysis and the evaluation of the different alternatives for conducting marketing research projects, we recommend that a comprehensive scientific market research approach be followed. The available internal secondary data and additional external secondary data sources will provide the basis for further research. This would begin with primary explanatory qualitative research (small sample of interviews and focus groups) to establish first hypotheses about customer behavior. The next step would be a quantitative research plan to verify these assumptions (confirmatory research). Questions and target group would be selected according to results of prior research data. Such an extensive and detailed research is necessary as the situation analysis shows a clear lack of information about customer behavior and describes mostly sales figures which are only the symptoms of customer attitudes and perceptions. Therefore market research should focus on increasing insight in this topic. Additionally, such an investment would be adequate in order to benefit form the good business opportunity which is expected (app. 35M € additional turnover). Furthermore, as the pasta/starch market is fairly stable and does not undergo dramatic evolutions, sufficient time is available for adequate research. Pros Cons Extensive use of already available internal data (e.g. company information and customer data) and external secondary data, for example existing reports concerning competition and context, to better understand market variables. Time consuming inductive research process involving several steps from secondary to primary resp. explanatory to confirmatory research High research efficiency in terms of cost due to use of secondary data resources to focus more expensive primary research activities Despite efficient use of existing resources this qualitative research tends to be costly Focus on customer behavior research which is the driver of pasta sales Due to high customer focus there is limited direct research performed on other market variables (e.g. competition or contex) Qualitative primary research allows insight in customer preferences, beliefs and attitudes and gives immediate feedback through personal interviews (explanatory research) Risk that small sample for qualitative research might lead to wrong assumptions and consequently mislead quantitative research Qualitative research data can be used to build hypotheses about consumer habits and narrow target profile for quantitative research Quantitative research produces wider reach and therefore provides more reliable sample results Quantitative research can confirm or deny early hypotheses (confirmatory research) Provides reliable results and good data foundation for focused marketing campaign Implementation Plan: Market Research Step Budget Timeline Objectives Comments Review of existing internal data sources 1,000 € 2 weeks Information about companies and sales figures ...