Deciding whether to undertake a research study

Whether marketing research makes organisations more profitable is open to question for there are other factors to consider. Profits are associated not just with increased revenues but also result from controlling or even cutting costs - to name but two sources! Many of these factors may have nothing to do with marketing research. However, in theory decision making based on good information should be better than decision making made on the basis of no information or poor information. Of course, in practice, this may not hold true. Even information that is thought to be good may not necessarily be useful. People's attitudes and opinions do not always match with their actions so that information collected can sometimes be misleading. For example, people may say that they will buy a new car in the next year and that they will buy a specific model. Many factors can then intervene in the meanwhile that will mean that the intended actions are not followed through.

The above, however, is a negative picture and it is argued that in many instances, hopefully the majority, marketing research will lead to better information that will, in turn, lead to better decisions. The better decisions may, in turn, lead to increased revenues or lower costs and hence to more profits. For example, group discussions may indicate the need for additional features that can be built into a product. The additional features will enhance the product's competitive advantage in the marketplace which, in turn, will enhance its sales. The additional cost of including the features may involve a price increase to the customer but the overall effect is an increase in profits associated with the product.

It is arguably better to make decisions based on objective data than purely subjective feelings - and better still to use both in decision making. Better research and better management judgment, for example, might have prevented the disaster when the Sinclair C5 car was introduced in the UK some years ago.4 Similar comments also apply in the case of the Swiss watch industry and its failure to exploit the opportunities presented by the quartz movement.

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