Marketing Research plays a significant role in helping the Government to perform some of its crucial regulatory functions. It provides up-to-date market-related data to the government and helps it to monitor, plan, coordinate, and regulate the entire economy of its area of jurisdiction.
The government studies information provided by MR and uses it to understand the market forces, formulating policies, fixing critical priorities, allocating resources, providing social welfare benefits, regulating a market, stabilizing an economy, so on.
There are some top Importance of Marketing Research to Government.
Importance of Marketing Research to Government is as follows:
- Decide and provide different social services.
- Plan a systematic allocation of limited resources.
- Regulate the market and stabilize the economy.
- Estimate Cost-Benefit Analysis of government-run programmes.
- Know the money and capital market for drafting a better fiscal policy.
Now let's discuss each of the above-listed points highlighting principal benefits of marketing research to the government.
1. Social Services
Social services include a broad range of different public services mainly directed towards the welfare of society. The marketing research helps the government in deciding about such social services as follows:
- MR helps the government to decide on the number of public universities, hospitals, colleges, schools, libraries, etc., that are required to serve the current population of a society.
- It also helps to decide on the number of funds that are needed to establish, operate, manage, and expand the functioning of such public welfare institutions.
- It even aids the governmental authorities to provide other facilities like opening public gardens, sports' playgrounds, operating family welfare programmes, running recreational centres, etc.
2. Allocation of Resources
The availability of essential resources is getting scarce and expensive day by day. Because of population explosion and rising standard of living, the demand for such limited resources has grown a lot in the past few years.
There is an urgent need to allocate such precious resources strictly on a priority basis and also utilize them optimally. Hence, the government has to step in, take full control and plan optimum allocation of resources to avoid their haphazard exploitation, non-prioritized usage and non-productive wastage.
The marketing research helps the government to allocate resources systematically and optimally as follows:
- MR provides crucial data to the government about the production, distribution, consumption, income pattern of the population, etc.
- After doing a thorough analysis and study of such data, the government evaluates and decides on the current priorities of its people and accordingly plans out a procedure to systematically allocate resources to meet social interests.
- It determines which sector like defence, energy, health, industry, education, transportation, tourism, agriculture, etc., should get preference in the allocation of a particular resource.
3. Market Regulation
The market is a hub of economic activities. Fair, safe and optimum functioning of it is essential for maintaining the economic and financial stability of a country. An unregulated market possesses a high risk to destabilize the economy. Therefore, it must be regulated by the government.
Regulatory agencies of the government must keep the right balance in maintaining market freedom as well as retaining a firm market control. The control on the market should neither be easy nor strict and rigid.
The control must be such that it not only helps in facilitating market growth but also aids in protecting the overall interests of all entities that are participating and contributing to the growth of the market.
The government needs a constant supply of updated market data to analyze and regulate it properly. It is one of the chief responsibility of the government to ensure that there remains a continuous supply of goods in the market for consumption.
The government must prevent illegal hoarding or stocking of goods done deliberately to create an artificial shortage and inflate their market prices. It must also stop flourishing of an illegal black market. It must take care to see that normal market activity functions smoothly.
Without regulation, unscrupulous entities may proliferate and hinder the healthy growth and competitive nature of the market. Therefore, the regulation provides an essential backbone to maintain a stable economy.
The marketing research provides vital data about the market to the government and helps it to and also help to the Importance of Marketing Research to Government:
- Assess the present and future demand for goods,
- Check out the export potential of certain commodities,
- Decide on the amount of stock to be maintained,
- Identify and resolve problems arising out of the shortage or scarcity of essential goods, etc.
4. Cost-Benefit Analysis (CBA)
Cost-Benefit Analysis (CBA) is done to find out (judge or evaluate) whether the amount of money spent (e.g. cost incurred in carrying out any proposed project or running a programme) is worth investing or not in comparison to the overall benefits it provides.
CBA is an analytical tool and a yardstick to measure the feasibility of any action plan. It helps to decide whether to go ahead with a plan or to withdraw it. Marketing Research helps the government to estimate cost-benefit analysis of a project, scheme or programme as follows:
- It finds out whether the money invested by the government in running various social welfare projects, plans and programmes were worth making an investment in return for the benefits it provided to the people.
- If the government invested less money in any social welfare scheme and was successful in providing maximum benefit to the people, then we can say that the government is efficient in its working and vice versa.
- MR through a tool like CBA helps to judge the success and failure rates of the government programmes.
5. Money and Capital Market
Marketing Research helps the government to understand different aspects of the money market and the capital market:
- Understanding of the financial markets equips the government with adequate data and knowledge to formulate a better monetary and fiscal policy.
- Market-driven economic policies promote investments, develops infrastructure and encourages the growth of various sectors of the economy. Such positive market changes ultimately help a nation to build its economic power and strengthen its influence on the world.
Thus, the above discussion proves the significance of the Importance of Marketing Research to Government.