Meaning of Data and Information | Importance of Data and Information

Time to time market research should be conducted in order to achieve success in marketing. Data and information should be collected for this. Data and information should be collected for this. Data and information are interrelated. Updates, sufficient and accurate data are needed for effective information.

Data become useful or meaningful only after they have been changed into information. The data which are not changed into information remain only in the form of raw information. Such data can be made useful only after changing them into information.

I. Data           

At first data should be collected for market research. Data are the primary form of information. So, they are called as raw information. Data can be collected from two sources i.e. primary and secondary sources. The data collected for the first time are primary data. Secondary data are not originated by the investigator himself/herself, but which he/she obtains from someone else records. Thus, if instead of obtaining data ourselves, we get from the records of chamber of commerce, trade union, government bodies and from other sources, the data are called secondary data. Data includes figure, table, graph, word, letters, symbol, audio, visual, etc. They all can be data. Data can be also be defined as the integrated form of facts, estimate and opinion, because data can be in the form of fact, in the form of estimation and in the form of estimate.

1. Facts: The recorded data of works done are called facts data. Such data shows the actual performance. For example, sales data, production data, purchase data etc.
2. Estimates: The data made in the form of plan or standard is called estimate data. This is prepared with estimates but it is not actual. For example, estimated sales data, estimated income statement, estimated balance sheet etc.
3. Opinion: The data collected as a result of personal experience, knowledge, desire, trend, thought, attitude etc. is called opinion data. This type of data cannot be uniform, because the status and attitude of data collector and data provider affect the data. Opinion data can be collected through mutual talks and observation. Reliability of such data depends on the person and the collection process.

In conclusion, the primary stage or input of information is called data. This is raw information. It is useless unless it is processed. Data is the integrated form of facts, estimates and opinion. In other word, data can be found in the forms of facts, estimates and opinions. Whatever form of the data may be, they should be changed into useful form by scrutinizing, classifying, reviewing and analyzing them.

II. Information           

After the data have been made useful by scrutinizing, classifying, analyzing, and reviewing, they become information. So, the processed data is called information. Information is the important raw material for marketing decision. It has an important role in market research.

Marketing decisions are not taken in vacuum. Marketing decisions should be taken being fully informed about the condition of market, competition, demand, supply etc. This needs reliable, sufficient and updated information. If the information is complete, clear, reliable, sufficient and updated and on right time, it becomes easy to take rational and quick decision. Information includes facts, estimates and opinions. Mainly, marketing experts want to get the following information in updated form:-

• Characteristics of goods:- size, type, color, quality, design etc.
• Quantity of demand,
• Price of the goods expected by consumers,
• Consumers’ priority in distribution channel,
• Buying motives:- rational motive, emotional motive and patronage motive,
• Dealers’ behavior, tendency and special need,
• Degree of competition,
• Demand, supply and price, and
• Government policies.

Success can be achieved by minimizing the risk and uncertainty if reliable, sufficient and updated information are available about the above mentioned particulars. Regular information is needed at each stage of marketing management cycle (planning and decision making, organizing and staffing, directing and controlling).

In conclusion, the data or facts that can be used are called information. Reliable, updated and adequate information is needed for taking quick and rational decision avoiding risk and uncertainty. As information is obtained by selecting, classifying, analyzing and evaluating data, it can be directly used. Reliability of the information depends on the correctness of data.

Importance of Data and Information        

As the information and data are the bases for analysis of strength, weakness, opportunity and threat (SWOT) of a firm, it can be taken as the basic resources. Information and data resources are also compulsory as the financial resource, physical resource and human resource. Its importance in marketing can be expressed in the following points:

1. Helps in decision making

Reliable, complete and updated information is needed for taking rational and quick decision on marketing. Without information proper decision cannot be taken by developing alternatives and evaluating them.

2. Helps in planning, implementing and controlling

Preparing a frame-work of the activity to be done in future is called planning. It works as the standard of measurement of the performance. So, plan should be prepared on the basis of reliable, updated and complete information. Without information no effective plan can be made.

Information is also necessary for implementation of marketing plans and programs. Information helps to take decision about goods, price, distribution and promotion and also to know competitors’ strategies. The objectives of marketing can be achieved only through successful implementation.

Information also helps in controlling. Information is compulsory for monitoring, evaluating and taking corrective steps.

3. Helps to scan marketing environment

Economic, political-legal, socio-cultural and technological components are the uncontrollable components of marketing environment. These components do not remain under the control of marketers. They are dynamic. Information is needed to scan such components for making proper strategy.

4. Helps to reduce risk and uncertainty

Quick and rational decision can be taken by using reliable, updated and complete information. Effectiveness comes in planning, implementation and controlling. As a result, risk and uncertainty get reduced. So, data and information have an important role in marketing.

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Market segmentation Practices in Nepal | Systematic Segmentation and Non-systematic Segmentation

Nepal is a developing country advancing towards industrialization. It has completed tenth long-term plans and the eleventh has been undergoing. Business, agricultural industry and other industries have been affected by unstable politics, ever-changing economic policies, corruption etc. The labor oriented industries have also reached a condition of

adopting existence strategy and the capital oriented industries also have not been able to compete in the global market. Only some assembly industries also have not been able to compete in the global market. Only some assembly industries and multinational companies have been doing well in Nepal. Nepal should encourage the small and agro-based industries.

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Meaning of Market Segmentation

In the background of such industrial condition, Nepal has become a member of SAFTA and World Trade Organization (WTO). The pace of development of transport and communication has become fast. This affects the Nepalese market. So, the Nepalese entrepreneurs and businessmen have become conscious about market segmentation. The practice of market segmentation in Nepal can be studied under two heading: non-systematic segmentation and systematic segmentation.

1. Non-systematic segmentation           

Market research should be carried out for systematic segmentation of market. It needs a lot of expenses. Such kind of expense is supposed as extravagance in Nepal. The Nepalese entrepreneurs and businessman use non-systematic practices of market segment.

• Competitors’ strategy: This is mostly used in Nepal. If the strategy what the competitors’ adopt is used, neither risk nor cost for market research is needed to bear. Although such strategy and practices are not original, the success can be achieved in competitors’ market share. The Nepal’s noodle companies have adopted this strategy.
• Past experience: The Nepalese entrepreneurs and businessmen cannot adopt changes easily. They like to maintain their traditional experiences. The market segments are the same as they were in the past. They segment total market in the same methods even today.
• Hunches: The other much practiced strategy of non-systematic segmentation is hunches strategy. Market can be segmented on the basis of knowledge, experience and background or imitation. This strategy may become successful or failure, it has no surety.
• Indian product’s strategy: The flow of Indian products is much in Nepal. The Nepalese organizations adopt the same market segmentation strategy what the Indian business organizations adopt. Most of the Nepalese entrepreneurs and business organizations have practiced this strategy of market segmentation.

2. Systematic segmentation           

In Nepal, not only non-systematic but also the market is segmented in systematic way on the basis of market research. Big business houses and multinational companies are found more mindful in market segmentation. They have adopted this (systematic segmentation) strategy in marketing their products. Mostly, systematic segmentation of market is made on the following bases in Nepal:-

• Geographic segmentation: Geographic segmentation is based on the area, size of city, population density, climate etc. Geographic segmentation is found very popular in Nepal. It is also very simple.
• Demographic segmentation: In Nepal, markets are segmented on the basis of population. Age, gender, family size, family life cycle, occupation, education, religion, etc. are the main bases of this segmentation. This is also very popular and much practiced in market segmentation.
• Psychographic segmentation: In Nepal, markets are also segmented on the basis of customer’s psychology. The business organizations divide market on the basis of consumers’ social classes (lower, middle, or upper), life style (achievers, believers, or strivers), personality or status (compulsive, gregarious, authoritarian, or ambitious) etc.
• Behavioral segmentation: In Nepal, behavioral segmentation of market is also in practice. The main bases of this segmentation are purchasing time, (regular or special), benefit, (quality, service, economy), consumers level (regular consumer, ex-consumer, future consumer), rate of consumption, (less, general, much), level of loyalty (full, high, low, middle), tendency towards products (indifference, positive, negative) etc.

           You may also like to read:           

• Meaning of Market Segmentation

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• Process of New Product Development | Development Process of New Product

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Demand Forecasting for the New Products

If a firm is planning to market a new product and does not have past data on which to rely to project sales, it will have to find out and use other means in an effort to predict probable sales.

The special problem of demand forecasting for new products is that since each new product is to varying degrees, different from existing products, there are no directly relevant data available from past sales on which a forecast may be based. The more the new product is likely to be, the greater the problem. In addition, since a considerable amount of money has to be invested in developing and marketing a new product, we have to consider its sales over an extended period to be more precise over the whole of its expected commercial lifetime. It means that we need to estimate:

(i) the number of years for which the product will be sold and

(ii) the level of sales in each of those years.

There are, of course, a number of techniques available for the purpose. However, the choice of a particular technique depends on the circumstances faced by the forecaster.

1. Market Research

The forecaster can carry out market research in various forms. The marketing people may be asked to make different inquiries from the prospective ultimate buyers of the product. On the basis of such inquiries, they may try to discover whether and in what quantities customers are likely to buy the product, using various assumptions as to how, it would be marketed and at what price it would be sold.

This approach is no doubt, direct and practical. It can be applied for forecasting the demand of industrial goods because the buyers’ criteria are more precisely formulated and more stable.

However, this method is highly impracticable in the case of new consumer goods. It is so because the consumer is, for various reasons, unlikely to be able to assess reliably his own buying behavior in the hypothetical situation presented to him.

2. Test Marketing or Sales Experience Approach

It takes the form of a trial run of the product in a part of the intended market in conditions as closely similar to those that are expected to prevail if and when the product is ultimately marketed as are possible.

Frequently, a new product such as soap, toothpaste, food-stuff, etc. is put through test marketing, i.e. tested in a sample market in a bid to determine the probable demand for the product. It may be tasted at a particular price or at several different prices by seeing one or more test markets. From the test market results, a projection can be made regarding regional or national sales. The sales experience usually will give green or a red signal for the product.

This approach has been used with success for a wide range of products. However, the success of this method depends on the availability of a representative product for test marketing. This method is not applicable to the earlier stages of product development.

3. Opinion Sampling Approach

This approach is to bring together in a systematic way the informal judgments of executives, sales people, retailers and perhaps friendly customers as to the product’s probable performance.

Through use of a mail questionnaire, or by making a door survey, one can get some indication of the acceptance of new product. In this case, sampling of the potential customers may be polled directly, or there may be a poll of sources that have a feel of the actual buyer, such as retailers, wholesalers, jobbers and manufacturer representatives. This pool is likely to give some idea of market acceptance and price range.

4. Evolutionary Approach

If the product is supposed to be an improvement or has evolved out of an existing product, it can be assumed that the new product may have the same type of experience as that of an existing product. Color television sets, evolved from black and white sets, the jet engine from the propeller engine in aircraft, are the examples. In this manner, one can easily imagine what the demand for work processors will be in the office equipment industry if they became a nearly completely replacement for the electric typewriter.

5. Substitute Approach

If a new product seems to be a close substitute for a well established product, one can estimate what share of the market the new product may get by replacing some of the existing products. A new textbook may be a substitute for one of the many existing textbooks being used. After knowing the total sales, the producer of the new book may be in a position to estimate.

6. Sales Growth Approach

In the absence of the information about a new product, one may reasonably assume that the sales of the new product will simply displace those of an existing product and continue along the growth of distinct established by it. This is likely to be so when the new product is distinct, improvement on the existing one but not so radically different that buyers have learn to accept it. In the case of industrial investment, we assume that now there need to make any substantial investment in hardware or restraining. Alternatively, for consumer products, no changes in domestic habits or social attitudes and values are required.

No doubt, demand forecasting represents one of the most challenging aspects of business analysis. Continuous research has been going on in this area. The techniques of forecasting are being retired and have been improved enormously in recent years by the advent of computers. However, the use of sophisticated techniques is not enough. It is essential to exercise judgment and experience while carrying out any forecasting exercise. Techniques can only complement judgment and experience.

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• Factors Determining Elasticity of Demand

• Uses of Price Elasticity of Demand in Managerial Decision-making