Page 97 - DMGT547_INTERNATIONAL_MARKETING

International Marketing

Notes Self Assessment

State whether the following statements are true or false:
1. The main purpose international market research is to know about company’s assets and
its shareholders.

2. The marketing researcher is mainly concerned with the details regarding consumers.

Caselet Get a Taste of the New Coke

lthough the reason for Coke’s early’80s loss of market share was originally
thought by both companies and all observers to be Pepsi’s sweeter taste, later
Aresearch has suggested otherwise.
The real culprit, according to this, turned out to be the 1965 merger between Pepsi and
Frito-Lay that created PepsiCo. The new company was able to take advantage of Frito-
Lay’s highly developed retail distribution system to leverage more shelf space at
supermarkets and other food retailers. With more shelf space available, sale specials were
common for Pepsi products. Price, not loyalty, was the motivating factor for most retail
consumers, and Pepsi gained substantial market share as a result.
In talks, and his book Blink, author Malcolm Gladwell puts most of the blame for the
failure of New Coke on the flawed nature of taste tests. First, most taste tests are subject to
systemic biases, such as the drinks being tasted in the same order in each administration
of the test.

Second, a person cannot tell if he really likes something from the small amounts used in
taste tests. In very small portions, people will show a preference for the sweeter drink. But
in the volumes people actually drink colas, many people will find that the sweet drink
they had selected in the taste test to be overly cloying. When the same people who rated
New Coke very highly in taste tests claim to like the original formula better outside of
taste test, then, there is no reason to think them fickle or irrational. The only sure way to
tell what drink a person prefers is to let him drink larger amounts over a longer period of
time.
Source: http://www.experiencefestival.com/a/New_Coke_-_Was_it_really_necessary/id/17973490.

5.2 Need for Marketing Research

There is no use of manufacturing a product where there is no demand and market research is the
main instrument to analyse the size, character and trend of demand. The need for market research
not only arises before the manufacturing decision but it also has a greater role to play even
when the demand potential is well established. Further, research is required as to the requirement
of actualising the potential. It implies that the market research data are to be collected on the
method of distribution, promotion systems, and alternative price strategies and so on. The need
for market research, therefore, arises to provide a sound database, which will help the
management in taking the decisions under the following circumstances:

When a new product is to be introduced in the market.
When the sale of the product is showing a downward trend and the reason(s) for the fall
could not be established.

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