1.1.2-Market research Flashcards
(23 cards)
What is product orientation? Why would businesses use it?
Developing products based on what it is good at doing focusing more on design performance and quality when making production decisions
-Can lead to increased economies of scale
-The business can focus on what it does best
What is market orientation?
Why do businesses use it?
Responds to customers needs and wants,focus on meeting customer preferences when making marketing and production decisions
-Higher chance of success
-Increased customer loyalty and satisfaction
What is primary market research?
The collection of first hand data by the business and is gathered for a specific purpose and to match the exact needs of the business
Advantages of primary market research
-directly focused on research objectives
-not publically available so can be a source of competitive advantage
-provides more detailed insights especially into customers views
disadvantages of primary market research
-time consuming
-costly to obtain
-sampling may not be representative
methods of primary market research
surveys
interviews
focus groups/customer panels
what is secondary market research?
the collection of second hand data/data that already exists
advantages of secondary market research
-relatively cheap
-easy to obtain
-quick to access/easy to use
-good source of overall market insights
disadvantages of secondary market research
-not specific to business needs
-often outdated
-available to other businesses
methods of secondary research
-online sources
-government data
why is market research important for a business?
allows a business to understand the needs of its potential customers to establish the level of demand in the market and assess the competition from other businesses
what type of market research would be appropriate for start up businesses?
Secondary
Relatively cheap as start ups rarely have the money to invest in market research.
However it’s important for new businesses to clearly understand the market they’re entering so focus groups and sampling may also be needed
What is quantitative market research?
-concerned with/based on data
-addresses questions such as “how many”,”how often”,”when”
-based on larger samples so more statistically valid
-done through various survey forms eg.telephone,postal,online
advantages and disadvantages of quantitative market research
-Relatively easy to analyse
-Numerical data can provide trends
-Can compare to data from other sources
-Doesn’t explain why a trend has happened
-May lack reliability if sample size/method isn’t valid
What is qualitative market research?
-based on opinion,attitudes,beliefs and intentions
-Answers question such as “why”,”how”,”would”
-Aims to understand why or how customers may respond to a new product
-Focus groups and interviews are common methods
Advantages and disadvantages of qualitative market research
-provide crucial insight to customer behaviour
-an effective way for testing elements of marketing mix
-Expensive to collect and analyse
-often requires specialist research skills
-Risk of sample not being representative due to opinion bases
What is sampling in market research?
Gathering data from a sample of respondents, the results of which should be representative of the target market as a whole
Advantages and disadvantages of sampling?
-Even a small sample size can provide useful insights (if representative)
-Using sampling before making decision can reduce risk and costs
-Flexible and relatively quick
-Unrepresentative sample can lead to incorrect conclusions and decision
-Risk of bias from respondents and interviewers
-Less useful in dynamic market where customer tastes constantly change
Uses of ICT in supporting market research
Websites:
Small businesses can look at competitors websites for indication on pricing,prouducts sold.Can be used to gather info via online questionnaires
Social networking:
Social networking and social media are useful as software can quickly highlight what customers are saying abt products.Surveys can be easily set up and results can be analysed in real time
Limitations of ICT in market research
Websites house secondary research so do noot meet the exact requirements of a business.
Surveys and questionnaires via websites and social networking are a useful primary research but subject to bias
What is market segmentation?
Dividing a market into parts that reflect different customer needs and wants
eg.by age,gender,income,lifestyle
Benefits and drawbacks of market segmentation
Benefits:
Advantages and disadvantages of market segmentation
Advantages:
-focus resources on parts of a market where the business can succeed
-Helps with new product development as they can focus on the needs of customers in the segment
-Makes marketing mix more effective eg. Better targeting of promotion
Disadvantages:
-Imprecise as data about each segment isn’t always available, reliable or up to date
-cant always reach the customers in the segment identified
-markets are dynamic and fast changing and so are the segments
