The Disadvantages of Marketing Analysis
The Fournaise Marketing Group conducted a survey in 2011 that revealed that 70 percent of CEOs endlessly produce marketing data that means little for their companies. It also revealed that 72 percent of CEOs think marketers ask for a lot of money but cannot explain how the marketing investment will benefit the business. Although a market analysis can help you formulate an effective marketing campaign, it has several disadvantages.
A market analysis does not guarantee an accurate diagnosis of a market. It merely analyzes a fragment of the market covered in the research, which would not be a fair representation of the whole market. It may not also be possible to have a single market analysis covering all the parameters in the market such as price, demand and consumer preferences.
Data misinterpretation from a market analysis can be detrimental to your marketing campaign. It can lead to wrong marketing decisions or create unrealistic financial projections. Therefore, before making decisions based on the information gathered from a market analysis, you should seek the advice of a professional market analyst. The analyst can identify any pitfalls and help you avoid an inept marketing strategy based on a flawed analysis.
Inappropriate data collection methods can lead to inaccurate information. For example, using questionnaires to retrieve data can be unfruitful when you construct questions in the wrong way. The structure of the questions can influence the response from the respondents, which would make the market analysis invalid. Poor data collection also occurs when using interviews if an interviewer is biased. A respondent’s perception of the interviewer can also affect his responses toward the questions.
Market analysis is financially taxing because it involves expenses such as data collection, processing and hiring of market analysis experts or research agencies. Such costs can be discouraging and unnecessary. A small business may not have adequate resources to hire experts and conduct a comprehensive market survey. Therefore, small firms may opt to use secondary data, which is not customized to their marketing needs.