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Does Marketing Research Lead to Better Decisions?
When a company that has been marketing its wares for 50 years (and sitting on static revenue of about $2 million for 10 of those years) suddenly lifts its sales by a multiple of five, there has to be a reason. This is the scenario that has unfolded for a confectionery company called Sunrise Confectioners. The company has gone from producing three products in a single factory to producing 18 products from two factories since 1993. The company produced Binka brand jelly snakes and jelly babies using natural flavorings from 1991 to 1997, but failed to make inroads against its bigger competitors Cadbury Schweppes and Mars. Not having the funds to gain a consumer franchise, it failed to gain distribution. In short, the company faced a vicious cycle made all the worse by early quality problems associated with the short shelf life of the preservative-free versions of the products.
Acting on the suggestion of an advertising agency-the Ross Partnership-Sunrise spent $10,000 on consumer research into the likes and dislikes of the primary target market. Mothers with young children loved the taste and chew of Binka jelly products. However, they were unaware that the brand featured natural flavors. This was hardly surprising, since there was little media communication and the poor packaging was unable to do the job required of it. Based on the research findings, the agency’s advice was “to be number one in [the] category or find a different category.” The research also provided an insight into the market itself, because women who supposedly were purchasing the product for their children also ate the product. Sunrise Confectionery set about making a number of changes to its marketing mix elements based on the aforementioned marketing research. The Binka brand was reduced in prominence, and the words ‘The Natural Confectionery Company” were added to the packs. Pack colors changed from red and green-the colors of artificial colorings and flavorings-to plain white. The biggest change of all was that the company increased its expenditure on television advertising. The first $150,000 they spent (over two months in late 1997) led to a 20 percent increase in sales. In 1998 and 1999, they spent $300,000, and in 2000 they spent $450,000 and $1.4 million in the first nine months of 2001. Over this period, sales increased as distribution was gained. Research had shown that women 16 to 35 ate the jelly sweets themselves, and so the TV advertising targeted them. Two parts of the marketing communication strategy helped sales increase in the target market. First, the commercials featured a female Olympic runner, Lauren Hewitt, and second, the company co-sponsored the reality TV show Big Brother that also helped lift Ten Network’s fortunes in the same period.
Please respond to the following questions on the Sunrise ….
1. Describe what marketing research is.
2. Does Sunrise Confectionery use primary data or secondary data in their research? Explain.
3. Does the use of marketing research lead to measurable outcomes? Explain