Market Research Began
Market research began with the intention of finding the numbers and kinds of people (by age, sex, income, area, etc.) who bought a product or were influenced by advertising. It has more recently tried to discover, by 'motivational research', the reasons why people buy some commodities, services or brands rather than others.
In so far as market research can anticipate consumer preferences it can make advertising more effective and avoid waste in producing goods that do not meet consumer requirements. An increase in such marketing costs can thus reduce factory costs so that total costs may be lower.
Marketing, broadly the processes required to move goods in space or time from producer to consumer. In economics there is strictly no distinction between 'production and 'marketing'; both are productive if they make goods and services more capable of yielding satisfaction or satisfying wants by being changed in form, or being made more easily available. Goods serve little purpose unless they are made available to the consumer in the form, at the time, and at the place he is prepared to pay for.
In practice marketing is taken to include market research to discover what consumers want. 'test marketing' to learn if what has been produced has accurately interpreted their wants, advertising to inform them it is available and to persuade them to try it, the distribution of samples, demonstrations in local centres or the consumer's home, wholesaling to hold supplies in bulk for distribution to retailers, retailing to hold supplies in smaller lots for sale to the final consumer. In different commodities these processes are elaborated or telescoped. Thus in many 'producer goods' such as plant and equipment, marketing requires sales direct from producer to consumer. In others, especially in exports, there may be several kinds of intermediaries such as shipping agents, import agents, merchant of various kinds, some holding stock, others not, and so on.
There has been much change in the structure of marketing in Britain since the end of World War II. Some of the changes follow experience in the U.S.A. and other countries. There has been a decline in the various forms of wholesaling in favour of more direct selling by producers by direct mail, in which a catalogue replaces wholesaler and retailer, and by advertising goods supplied direct from the factory to the consumer in his home. Small shops have lost ground to self-service stores, supermarkets and discount houses, which offer lower prices to shoppers prepared to do without personal service, delivery and credit. Small shopkeepers have tried to make themselves competitive by associating, with some success, in 'voluntary chains' in which they are assisted in display, advertising, accounting, staff training and so on in return for buying goods from a common wholesaler whose assured outlets enable him to reduce costs. Large retailers have developed 'house' brands to compete with manufacturers' brands.
The structure of marketing is also being affected by developments in resale price maintenance, stamp trading, the efforts of the cooperative movement to modernize its wholesaling and retailing methods, the success of multiple and chain stores in combining low prices with high quality by arranging for manufacturers to make goods to sated standards so that the resulting 'long runs' reduce costs.
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