Customer Knowledge And Company Sale Marketing Essay

Market research is the systematic identification, collection, analysis and distribution of information for the purpose of knowledge development and decision making. Companies carry out market research for different purposes and they use different methods in doing so depending on the situation or circumstances at a given period. The methods of market research are primary research and secondary research. Primary research is further of two types that are quantitative and qualitative and the methods are interviews, questionnaires etc. Secondary research is also known as second hand research and the methods could use of government reports, reports of marketing agencies etc. Customers occupy the central role in the marketing research process. They could be existing customers, attracting new customers or lost members. The process of market research includes first identifying the problem or reason for the research needs to be carried out. The next step is to develop different strategies to deal with that problem and after that choose the most suited strategy and then implement it. Once the research is carried out, the data is then collected of the findings and then analyzed deeply. In the last the findings are compiled in the report and presented to the top management of the company.

Customer knowledge refers to knowing your customers, what their needs and wants are. It is essential for a business which wants to make products and provide services according to its customer preferences so that it can build real customer relationships. Many companies do have knowledge of their customers, but frequently this is in a fragmented form and difficult to share or analyze and often it is incomplete. It can be approached in two ways. Firstly the information and viewpoints organizations have about their customers. In this case the data must be shared throughout the organization. Secondly the information and insight the company needs to have in order to build strong customer relationship. In this case the firm believes that the information it already has me not be sufficient enough to know its customers so more information is gathered through the introduction of various processes. It helps to answer questions like what do customers think etc.

Company sales mean the turnover of a company. The turnover refers to the sales volume for a specific period of time like quarterly, semi annually or annually. It can be measured with sales volume figure or number of days taken. Companies earn revenue through turn over which is used to pay expenses they have incurred to make that sale possible and earn profit. Every company sells good to earn profit. It is the main motive behind setting of many companies except government agencies.

Background of market research and customer knowledge:

The idea of marketing research was developed in the late 1920’s by a man named Daniel Starch. At that time ads were published and hoped to act upon the limited information provided. During the early 1930’s Daniel Starch developed a research company on the bases of a theory he had developed that in order of advertising to be effective, it should be seen, read, believed, remembered and then acted upon. The purpose of the company was to ask people in the streets if they remembered any publication which they had seen. If they did, his researchers would show them the magazines and ask if they recognized or remembered any of the ads found in them. After collecting the data, he then compared the number of people he interviewed with the circulation of the magazine to figure out how effective those ads were in reaching their readers. Thus marketing research was born. With the passage of time many marketing companies emerged following starch’s example and worked to improve his techniques. A man by the name of George Gallup developed a rival system that was known as the “aided recall” which prompted people interviewed to recall the ads seen in a publication, without actually showing them the ads. This rival system was later used to measure the effectiveness of radio and television advertising. Over the last five to ten years marketing research has taken another great leap in terms of how it is collected.

Customer Knowledge Management or Customer Relationship Management is a concept that became very popular during the 1990s. It offered long term changes and benefits to businesses that chose to use it. The reason for this is because it allowed companies to interact with their customers on a whole new level. One of the reasons for this is because it was difficult to effectively track customers and their purchases. It is also important to realize that large companies were responsible for processing tremendous amounts of data. This data needed to be updated on a consistent basis. Customer relationship management is the system that is responsible for introducing things such as frequent flyer gifts and credit card points. Before CRM, this was rarely done. Customers would simply buy from the company, and little was done to maintain their relationship. Today companies want to sustain a strong relationship with their customer because it leads to an increase in sale.

Importance of study:

This study focuses on how strong is the relationship between market research, customer knowledge and company sales. It shows which factors affect each component and how it affects other component. Different factors are examined in which there is a strong relationship. The importance has increased over the years for instance traditionally companies were product oriented which means that they would make the product first and then sell it without knowing what the customers actually wanted. They did not put any emphasis on knowing their customers and building a strong relationship with them. They also did not know the importance customer satisfaction and how it leads to an increase in company sales. With the passage of time companies spent more and more on market research to know about the buying behavior of customers and they found out that there were many factors which influence consumer buying behavior such as demographic and geographic. Today almost all companies have adopted a customer oriented approach. In this the companies carry out market research first which means they identify what their customers actually want and then make a product accordingly. After that proper marketing is done in which customer is made aware of the product and four marketing P’s (product, price, place and promotion) are taken into consideration. Customer knowledge is given preference and companies spend a lot in knowing customers preferences and what their brand image is in their mind. After sale services provision is one way of making a good brand image. Concern shown for environment can also have a positive impact on any firm’s image. These are some ways in which customer knowledge has been utilized to improve the brand image. It all results in customer satisfaction and once customers are satisfied the company sales increase.

Research Question:

What factors affect the relationship between market research, customer knowledge and company sales?

CHAPTER 2

LITERATURE REVIEW

Micheal Gilbert, Mariums Leibold, Gilber Probst (2002) conducted a research on customer knowledge and how companies can manage it in different ways. The purpose of the research was to find out the importance on customer knowledge management (CKM) i.e. the knowledge within the customers. Five ways of CKM are proposed with examples of different corporate implying them. The method used to gather the information was joint case writings in which more than 2 dozen companies were studied. The results showed that companies can use one or more ways of CKM to its different customer segments in order to get competitive advantage and work efficiently.

Alice H.W. Yeung, Victor H.Y. Lo, Andy C.L. Yeung, T.C. Edwin Cheng (2008) conducted a research on Specific customer knowledge and operational performance in apparel manufacturing. The purpose of the research was to find it out how customer knowledge can be used to improve operational performance under a supply chain environment in the clothing industry. The information was gathered by making several hypotheses linking customer knowledge to with operational performance. These hypotheses were tested through questionnaires and regression analysis. The results showed that there is a relationship with specific customer knowledge and operational performance and companies can use this information to improve their efficiency and increase in sales volume. Managers should try allocating resources to the important attributes of customer knowledge in order to improve the operation performance and also it highlighted the importance of quality as being the core element of efficiency.

Peter C. Verhoef , Katherine N. Lemon, (2012) conducted a research on Successful customer value management. The purpose of the research was to find out how customer value management can help businesses to achieve six through six different lessons. The methods used vary for each lesson but secondary data Is used for all. Companies can implement any of the six lessons mentioned in the article by using extensive information they can avail through different mediums in today’s era and in order to outperform competing they must focus on customer centric strategies. It also showed that by implementing this metric, firms can improve their performance.

Hanna Salojärvi, Liisa-Maija Sainio, Anssi Tarkiainen (2010) conducted a research Organizational factors enhancing customer knowledge utilization in the management of key account relationships. The reason for carrying out this research was to have better understanding of the relationship between various intra-organizational factors and customer knowledge utilization in the context of key account management. The methods used were sample & data collection and hypothesis testing. The results of the study showed that customer knowledge utalization can be enhanced through different ways in the management of customers. It also showed that key account management (KAM) , top management involvement and team forming are key elements for making decisions regarding what information to be required. It also showed how problems such as wide customer-integrated knowledge can be resolved by understanding the different factors.

Alexandra J. Campbell ,Robert G. Cooper (1999) conducted a research on whether Customer Partnerships Improve New Product Success Rates or not. The purpose of the research was to find out the success rate of new product developed with the help of customers and success rate of a new product developed by the company itself. Mostly secondary data was used regarding the topic. Firstly the results showed not much of a difference between the two rates. Secondly by there is not automatic guarantee of product even it is developed with customers partnership. However there are certain benefits that a firm can enjoy through this such as positive brand image because it allowed customers participation in product development.

M Garcia-Murillo, H Annabi (2002) conducted a research on the importance of customer knowledge management. The purpose of the research was to find out how customer knowledge can be used to help organization in making important decision. It also focuses on transfer of knowledge from employees to customers and vice versa. The results showed that information regarding competitors can be gained from direct interaction with customers. It can also help in product development. It also highlighted the importance of customer knowledge sharing within the organization which management can use for future developments.

Christine Moorman, Rohit Deshpande, & Gerald Zaltman conducted a research on factors affecting trust in market research relationships. The purpose of the study was to find out what factors are most important and why to the customers which determine their trust in the researcher. These factors could be individual interpersonal, organizational, interdepartmental, and project factors. A sample size of 799 was tested on this theory. The method used was questionnaire and case studies. Secondary data was also collected but not much information was available to use. A lot of people were unable to interpret the real meaning behind the case studies. The result showed that interpersonal factors are the most important to the customer when it comes to trust and within interpersonal, sincerity etc are important. Other factors also affect the trust. The results also showed that some users are vulnerable as they are not able to interpret the research findings so they have to trust the researcher. Also trust depends on the quality of information provided by the researcher to customers.

Eugene W. Anderson, Claes Fornell, & Donald R. Lehmann(1994) conducted a study to find a relationship between Customer Satisfaction, Market Share, and Profitability. The research also focuses on economic benefits if there is a positive relationship between these. The purpose of the study was to find out the link between customer satisfaction and how it affects the profitability and market share of any company. They discuss how customer’s perception about the product affects the profitability. A set of hypothesis was developed and tested using customer satisfaction index and traditional accounting measures of economic return such as return on investment. The authors also discuss why increase in market share may lower customer satisfaction. Another set of hypothesis was made to test this theory. The results showed that customers are more satisfied if a firm is serving a market niche. As market segments grow more customers are served by the firm so customer satisfaction falls while market share and profitability increases. Expectations of customers have positive impact in the long run for customer satisfaction as they would have gathered information about different quality of products in the short run.

BARTON A. WEITZ (1993) conducted a research on relationship between salesperson performance and understanding of customer decision making. The purpose of this study was to find out how salesperson influences the decision making of a customer which increases sales volume of a firm. The research was carried out on different factors such as what do companies think their brand image is and what their actual brand image is. What are the attributes of their brand that customers prefer etc are covered in this study. A sample of 58 salespeople was selected in which they were asked to give names of seven customers by each. Customers were then randomly selected from the list given by them. A questionnaire was sent to the customers and a hypothesis was developed whether salespeople would give names of familiar customers or not. Salespeople who were secure about their jobs gave name of unfamiliar customers. Also interviews were held with different managers of top companies. The results showed that salespeople should better have a better idea about their impression to the customer and that they perform well within their comfort territory that is the area where know some customers.

Ashwin W. Joshi & Sanjay Sharma (2004) conducted a study on customer knowledge development. The purpose of the study was to find out the importance of customer knowledge i.e. what customer prefers, in selling existing products or developing new ones. The outcome on implementation of customer knowledge development was also taken into consideration. The method used to collect data was case studies as empirical data was not of sufficient quality. The results showed that companies can effectively have customer knowledge when developing new products if it has access to resources, strategic flexibility and management of members’ motivation. New products should be developed with the help of all departments and cross functional teams should be formed. In selling existing products, companies should develop strategies in accordance with customers’ preferences and if required, make changes to the existing product.

Enrique Ortega, Ladislao Gonzalez (2005) conducted a research on market research in different settings. The purpose of the study was to find out the relationship between marketing and sales, the satisfaction of participants at sporting events, the graphic representation of multi-attribute models, the influence of the country of origin on consumer behavior, etc. Only secondary data was used for this study and ten papers on different market research topics were selected from different journals. The results showed that different markets required different techniques of market research and all the above mentioned factors play significant role in deciding those techniques. Example European market would be different from Asian market.

SHARON E. BEATTY and MORRIS MAYER, JAMES E. COLEMAN, KRISTY ELLIS REYNOLDS, JUNGKI LEE (1996) conducted a research on customer-sales associate retail partnership. The purpose for this study was to find out the relationship between sales associates and customers. Qualitative research approach was used. Interviews and observation was used to gather information. Interviews of salespeople were carried out in which they were asked to name few customers. The focus was emerged on how much top management is willing to provide customer service, coordination among employees, how many times a customer would meet sales associate and the loyalty of customers to that salesperson or company. The results showed that relationship between customers and sales associates can be of two types. Functional and social relationship, depending on what customers want. Some customers prefer to have a professional rather than social and some prefer both. Relationship can be enhanced under with three elements that are trust, functionality and friendship.

Mehmet Pasa, Steven M. Shugan (1996) conducted a study on the value of marketing expertise. The purpose of the research was to find out the importance of market expertise with respect to consumers and other factors such as resources available. The data of 529 firms was assessed which means secondary research method was used. The hypothesis was developed under each factor influencing marketing decision such as market stability. This paper provides help to firms in knowing where they stand in market expertise and whether they should increase or decrease their marketing budget. The results showed that instability of market, the profit impact of marketing decisions and the potential loss from making marketing mistakes influence the expected value of marketing expertise. Also greater market instability means that value of marketing expertise is also greater to the company. It could also be the most important expertise for all firms in all industries.

METHODOLOGY

Research Type

The research type is quantitative in nature. The core aim of the quantitative research is to find out the relationship between the dependent variable and the independent variable.

Data type and research period

The data used would mainly be secondary data. It will be collected from mainly from online published journals and other literature available online. The data on factors affecting each component will be collected and analyzed. Since market research is given importance since early 20th century and customer relationship management or customer knowledge was introduced in early 90’s so data was collected from last 20 years.

Sources of data

In order to collect data different online published journal such as J-store were consulted. Articles on market research, customer knowledge and company sales were used to know the factors which affect them.

Population, Working population and planned sample

A sample of 100 working population would be taken. They would belong to different industries such as textile and banking. The questionnaire would consist of minimum of 10 questions. The sample will be from Karachi, Lahore and Faisalabad Pakistan.

Research hypothesis

Ho: there is a significant relationship between market research, customer knowledge and company sales.

H1: there is no significant relationship between market research, customer knowledge and company sales.

Techniques

After gathering the data cross tabulations test will be conducted.

Data analysis

The research is about the relationship between market research, customer knowledge and company sales. The data collected from online journals or questionnaires filled by working class will be compiled at this stage and a decision would be reached.

Data interpretation

Graphs will be used to interpret the data which would be made by using different statistical software’s. MS Excel can also be used to enter all the entries of questionnaires.

Theoretical framework and variables under consideration