1 Flashcards
(20 cards)
Advantages & Disadvantages of Primary Market Research
Observations
The customer doesn’t have to fill in anything.
It is cheap for the company. You need someone to collect the data.
Questionnaires
Give appropriate information, the company asks the questions.
Lots of people are needed to fill in the questions. For it to be effective.
Personal Survey
Gives information about different people who like or dislike the company’s product/ service.
It is based on the customers opinions. The company might need facts.
Postal Survey
It gives everyone easy access to take the survey.
It can be expensive for companies to send out surveys to thousands of people.
Goods
Tangible items that can be used and stored. E.g a bakery, a food shop and a butcher
Services
Services are intangible actions that cannot be stored. E.g. a hairdressers, a bank, a doctor
Market
The term Market refers to a whole group of buyers for a good or service.
Target market
A particular group of consumers at which a product or service is aimed
Customer Segmentation
Segmentation is about breaking up a large market into small, more manageable chunks.
What is market Research?
Market research is the actions of a business to gather information about customers’ needs and wants
Advantages and Disadvantages of Market research
Is a vital part of any business success
Involves finding out information about the market in which the business operates
Is vital to research the potential market when setting up a business
Market research should be used throughout the life of a business
Customers and a market change over time so regular market research is vital
Market Research Can be used to Assess…
Whether new products should be introduced
Existing products phased out
Expansion plans should take place
The business has a long term future
Market Research Involves…
Collection,
Presentation,
Analysis,
Of information about customers, competitors and market trends
PRIMARY (field) research -
gathering data and information that has not been collected before,
Interviews
Observations
Questionnaires
Surveys
Focus Groups
Consumer Trials
SECONDARY (desk) research -
gathering data and information that has already been collected before,
Books
Published company reports
Internal Data
Competitors data
Government Publications and statistics
Purchased research material ( eg mintel)
Qualitative Data -
data based on the opinions of those being asked.
Quantitative -
data collected that is based on facts and numbers; it is usually easier to analyse than qualitative data.
Advantages of Primary Market Research
Telephone Survey
The survey is anonymous because the caller’s face can’t be seen.
You need lots of people to be on the company’s phone lines.
Internet Surveys
It is a cheap and environmentally friendly way of sending out a survey and doesn’t cost the company much money.
Not everyone has access to the internet.
Focus Groups
There is a variety of people’s opinions.
If the variety of people is biased the company could find it hard to make improvements.
Consumer Trials
It lets a customer try out the product themselves.
Customers could not like a product and therefore cost the company money.
Total Costs
These are calculated by adding together both fixed and variable costs
For example when the clothing factory produces 100 items of clothing, the total costs would be the factory’s fixed costs plus its variable costs for producing the 100 items of clothing
Variable costs
These costs vary with the number of sales made this means that these costs are totally dependent on output
For example in a clothing factory if demand for a dress doubles then the variable costs to make it doubles
Fixed costs
These costs remain unchanged regardless of the number of sales made or output
For example, the rental costs of a factory will not change regardless of them making 10 or 100 dresses even when the factory is closed the rental cost has to be paid and it remains the same
Example of packaging
Some products are aimed at men and some at women. Some businesses will target a particular gender while others will adapt their products to appeal to both genders to increase sales. For example, clothes retailers will often have different sections for men and women.
Some retailers, such as Dorothy Perkins, will concentrate on one gender only.
Adapting successful brands to appeal to men and women is an effective way to increase sales. Sometimes this may just involve a slight change to the product, using different packaging and a different brand name.
Total Costs Equation
total costs = fixed + variable
