Importance of Market Research: the case of the home improvement industry in St. Lucia (Business Focus magazine, Dec 2010)

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Garvin James, the fictional marketing manager of make-believe Company X, a hardware and home furnishings company, has determined his plan of action for Christmas 2010. The 2009 Christmas season was not as lucrative for Company X, and to improve performance, Garvin plans to request a larger advertising budget at his impending executive meeting. In his estimation, increasing advertising, both print and electronic, is the only surefire way of surpassing the previous year’s sales performance.

I extend my fabrication into that executive meeting when Garvin presents his solution. I can see the accountant shaking his head, the CEO scratching his head, while Garvin sits there with no clue that he is in fact in over his head. His request could have been given greater consideration had he walked in with more than a hunch, a belief, a gut feeling. Maybe a dossier bursting with customer feedback and market analysis could have saved him from the accountant’s scathing remarks about ‘these marketing people’.

Notwithstanding the fictive nature of the above, I conducted an actual survey of 258 St. Lucians to demonstrate the importance of market research and additionally question the basis of Garvin’s proposal.

 

  1. 55% of the sample deemed home improvements during the Christmas season of some importance to them; women made up the majority.
  2. Painting, minor repairs and new furniture/décor were the most popular home improvement projects mentioned.
  3. 60% of the respondents reported no intentions of undertaking home improvements this year, and of the remaining 40%, three-quarters maintained a budget of less than $3000.
  4. Limited time, shortage/unavailability of supplies, late access to funds and unreliable contractors/workers were the four major problems encountered in completing home improvement projects, according to respondents.
  5. The recommendations to improve were fairly consistent. Respondents wanted companies in that industry to ensure higher stock levels and more variety, better customer service, additional sales promotions, more accommodative opening hours and better facilities eg. credit, delivery.
  6. M&C Home Depot and Sunbilt were named top favorites in the industry, based on product availability and pricing.

 

Therefore, Garvin’s proposal of more advertising as the only way to better 2009’s sales performance, may not be the most appropriate course of action if the above findings are taken into consideration. Such findings could have helped Garvin identify his competitors, their strengths and weaknesses; discover opportunities to improve, expand or provide new products and services; take a more targeted marketing approach.

 

In short, market research can help companies (even fictional Company X) get the most out of their marketing dollars.

 

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