Economic conditions are not static. Often competitive action could not have been anticipated and given consideration in the initial plan. For either of these two reasons, sales results may not be in accordance with the goals or estimated sales performance. But in a complex market such as ours, management must have marketing plans with specific goals and budgets and operational controls with frequent and regular evaluations of sales results.
If marketing conditions are changed, either because of a general change in our economy or because of the action of competition, the predetermined plan has to be changed on the basis of the new conditions. Whether conditions have changed sufficiently to revise the original plan or whether a special effort should be made to reach the original goal to meet a marketing threat is in the realm of management judgment and decision.
Some executives, particularly heads of small businesses, take this position: “What’s the use of making an elaborate marketing plan, if it has to be changed every three months?” The answer, of course, is that if you don’t have a plan of operations, if you don’t have an operating budget, you are not equipped to make quick changes in the marketing operation to meet the new conditions. You can compare the new marketing conditions with the old ones, if you have a map, a chart or a clear picture of the old conditions. You can have no accurate evaluation of new marketing conditions without having an evaluation of the market for which you originally prepared yourself.
Management can manage efficiently only if it has a clear picture of the interdependent operations of planning and checking, evaluation and control. Management has to provide the initiative and guidance for the planning. It has to evaluate the sales results in the light of the original plan and to control the adjustment to new marketing conditions.
Big business has to operate in this scientific manner. Small businesses have a much greater chance of success or of becoming bigger businesses by using scientific planning and operation. To meet the conditions of a highly competitive market, management has to use a scientific approach to the marketing problems, as well as to the manufacturing operations.
Management’s function is qualitative in each area and in each role. A business will be most successful if the planning is based not merely on any marketing information, but on the most reliable kind of marketing facts. It is management that has to decide which of the available fact gathering methods or agencies have validity and are the most reliable.
There are many market research organizations whose main activities consist of auditing markets, geographic areas, size, character, income level and educational backgrounds of potential consumers. Not all organizations providing this type of information use the same methods of auditing. Some are more reliable than others. Management has to decide which of the available market auditing organizations will provide the best information for market planning.
In the field of predetermining how consumers will react to a new product or to an improvement of an old one, executive judgment is put to a great test. This is because the techniques used in determining consumer attitudes and measuring consumer behavior in relation to the product are very complex. Some of the consumer reaction measuring methods are totally foreign to the business world.
Research techniques for measuring what motivates shoppers were developed outside of the marketing field. Purchase behavior is psychological. Motivations of shoppers are not totally or even basically rational and, therefore, the normal, direct procedures for measuring objective factors are not valid.
Often, the rational aspects of a product have no appeal to consumers. The functional or practical character does not always motivate consumers to buy the product. Management must find devices that will appeal to the potential consumers or users of the product. Emotional appeals, not rational ones, have to be used. Management must find the kind of appeals that will motivate people to buy the product. For this, executives have to go outside of the traditional marketing area.
Special types of research have shown executives of insurance companies that they can sell much more insurance by selling “security in old age” and “security of family’’ instead of an insurance policy. Cosmetics manufacturers have learned from research, directly or indirectly, that they can increase their volume of sales greatly by selling “beauty,’’ instead of cold cream, lipstick or face powder. A well known soap manufacturing company found that it had increased sales greatly by selling “purity,” instead of just plain soap.
Emotional appeals did not originate in the production plant. The behavioral sciences are the source of such sales appeals. Because the behavioral sciences are new and are not in tune with traditional concepts, management has to be very careful in making decisions on which of the techniques or procedures are valid for solving a particular consumer appeal problem.
In a complex and highly competitive marketing situation as exists today, a mere announcement of a new product is not sufficient. Persuasion must be used. A great variety of appeals are devised by marketing and advertising specialists. Special methods and techniques have to be used for determining which of these appeals is the most effective in motivating people to buy the product. Executive judgment comes into play in making a choice of an agency, or techniques that are to be used, for measuring the relative effectiveness of several appeals to consumers.
Traditionally, entire marketing programs have been based on the personal judgment of the executive. Executive decision is still here. It is still the guiding hand of every marketing program. Now the decision is on which of the research techniques should be used, in order to have maximum scientific control in marketing as well as in production.
Consumers make decisions in the market place, sometimes consciously and frequently unconsciously. Consumers are generally not aware of what motivates them to buy one brand instead of another. However, executives have to make their decisions consciously when they are confronted with diverse avenues of action. The decisions of executives or managers have an effect on the behavior or actions of their subordinates. In other words, the decisions of executives have an effect not only on their own behavior, but also on the actions of others. Such decisions cannot be made unconsciously or subjectively in a functioning business.
In making a decision, the executive must be aware of action alternatives. He must evaluate them before he can make a decision. In evaluating the alternatives he may rely on his personal experience. He may depend on sketchy information that he had once received and which still lingers in his memory. He may consult his subordinates, each of whom also has a slight knowledge about the problem, or he may rely on information derived from thorough research of one or more kinds, from one or more sources. There is evidence that executives in successful business organizations generally make their marketing decisions on the basis of reliable research.
For most modem, up-to-date executives, market research provides support in each phase of market planning. One type of market research is designed for the purpose of evaluating the potential market and predicting the rate of development of the market. A second is used for predicting consumer attitudes toward a specific product design or product character. A third is employed to determine the best marketing theme or the most effective selling strategy. A fourth is used for measuring the production capacity of the organization. And research is also used for determining what will motivate personnel—sales personnel, production personnel, shipping personnel, office personnel, etc.
Qualitative research is used where it is necessary to learn about the kind of action or kind of product. Purely quantitative research is used to get a measure of how much action or how much of a product there should be in a given time or place.
The modern executive uses “scientific” methods as a guide in making decisions. Modern, up-to-date management is “scientific management.” Modern, up-to-date executives practice “scientific marketing.” This means that business decisions are made by managers on what is considered to be factual support.
“Scientific management,” say some, is not as exact as “true” science. It is not based on absolute principles. However, this should not make us hesitate to use the term “scientific” in relation to business. Modern physicists do not consider physics absolute. Classical physics is as obsolete now as is nineteenth century industry. Einstein, Bohr, Planck, Heisenberg and others have discovered elements in nature