Market Research—Keep It Current
No market is ever static. So for optimum sales and profit performance, market research can’t simply be a one-time effort; it needs to be an all-the-time endeavor.
When sales aren’t where you need them to be, there’s something out of sync with one or more of the five P’s: place (location), price (out of whack with the market and competition), product (not positioned for your market needs and demand), promotion (ads, website, social media not targeted and appropriately focused), or presentation (sales personnel not skilled in the fundamentals of new-home sales, follow through, or customer satisfaction).
This article—third in a series about the Marketing Circle—focuses on assessing your position in the marketplace and relative to your competition, and doing so frequently, systematically, and diligently.
My guest contributor again this month is Dr. Joey Von Nessen, who is both a research economist at RESH Marketing, specializing in economic and marketing research in the home building industry and overseeing the company’s research activities, as well as a consultant with the Division of Research in the Moore School of Business at the University of South Carolina.
According to Dr. Von Nessen:
The unfortunate reality of any new venture is that we operate in a dynamic environment. Things change—often more rapidly than we anticipate. The timing of new developments rarely accounts for all of these changes, and so new communities come on-line that were stimulated by research compiled several years ago. Even when research is revised over time, the environment in which communities come on-line can significantly differ from what was expected. What then?
Regular Tactical Research
While recognizing the strategic value of research to identify opportunities and minimize risks, your company should also regularly compile tactical research that provides actionable information for fine-tuning your marketing.
When planning for a new project, first establish those characteristics that are more difficult to modify, working forward to those that are more easily changed: place first, followed by product, price, and then promotion.
When a functioning project fails to achieve planned objectives, the process is reversed, first dealing with the more flexible of those components, starting with promotion—though several simultaneous actions may actually be needed to address the shortcomings.
Start by defining the cause of the problem. A lack of sales is cause for concern, but by understanding why sales are lacking, you can take action to address the cause, not the effect. Accurately defining the problem is the key to success.
Revisiting and updating your research can provide insight into environmental changes that weren’t anticipated and that may have a detrimental effect on the project. Understanding these changes will provide the information you need to make modifications to your marketing mix.
Promotional opportunities become the first line of defense. Reevaluating your target demographic to ensure that your communications match is an important first step. Next, adjust any efforts that are currently out of phase with your target. Remember: You are attempting to establish a unique communications channel. Make sure that what you are saying has relevance to your target demographic and that its members have an opportunity to receive your message.
Though you could adjust your communication methods and, as a last resort, increase expenditures, remember that modifying pricing and the products you offer can be a financial burden. While reducing prices, incorporating additional incentives, and increasing promotional expenditures may generate positive results—these activities also reduce margin. Tactical research can limit the need for margin-reducing activities, but too often it’s undertaken after the problem has become acute.
Competitive Advantage
One of the most powerful research tools available to you is your salesforce. To update your research data, have your sales team regularly engage in competitive shopping. They can then identify the specific advantages your product offers and, just as importantly, specific weaknesses.
By identifying your competitive advantage, your salesforce is in the position of increasing the perceived value of your product and justifying a price differential to customers. Communicating the increased value of the products included in your home can also differentiate your product from the competition. But this can only be done through a process of market scanning to determine the competitive situation you face and the competitive advantages you have. This is basic tactical research that seeks unanticipated opportunities as they become available.
From a strategic perspective, research can identify opportunities for success that are based upon the current realities of the marketplace, your company’s capabilities, and the competitive situation confronting you. For the most part, these are dynamic components that change over time. The realities of your current situation can be far different from those projected at the start of the process.
Regular tactical research can provide the information you need to take corrective action and put you back on the path to financial success.
Dr. Von Nessen can be reached at [email protected].
Read all the articles in the Marketing Circle series:
1] Begin With the End in Mind
2] Market Research: the Foundation of Your Marketing Circle
3] Market Research—Keep It Current
