3 Market Research & Interpreting Market Data

Question 1

Definition of Marketing

Answer 1

the management process of identifying, anticipating and satisfying customer requirements profitably

Question 2

Role of Marketing

Answer 2

analysing customer needs
advertisements to target market
pricing strategies
brand awareness
increasing market share

Question 3

Customer-Centric Company

Answer 3

focuses on the key interests of the customers
providing a wide range of goods/availability/high quality/low costs

Question 4

What is a Market?

Answer 4

a place where buyers and sellers come together and exchange goods/services/money

Question 5

High Market Share

Answer 5

high sales - high profits (depending on costs)
high outputs - giving the business power over suppliers to negotiate better deals (lower prices higher quality)
high prominence in the market raising profile and strengthening brand (makes launching new goods easier)

Question 6

What is Market Research used for?

Answer 6

analyse exisiting position of the business
set marketing objectives
asses how effective marketing decisions are
identify possible actions and how to implement

Question 7

Marketing Analysis Process

Answer 7

Planning (define objectives/develop research plan) → Implementation (implement and collect data) → Control & Review Success (interpret data and report analysis)

Question 8

Market Research Factors

Answer 8

what/where/when/who/what factors influence their decision/who do they ask

Question 9

Factors that Influence Customers

Answer 9

POLITICAL self-image, ethics, personal links (emotional)
ECONOMIC price, value for money, running costs
SOCIAL status, social norms, fashion trends
TECHNOLOGICAL reliability, duration, performance, features and specification

Question 10

Competitiveness Definition

Answer 10

measures the extent to which a business offers good value for money relative to competitors - better customer service, availability of goods, quality, lower price.

Question 11

Secondary Research Definition & Examples

Answer 11

research conducted by external sources
existing data, census, newspaper, annual reports, government data

Question 12

Benefits of Secondary Research

Answer 12

less time consuming & costly to conduct
large amounts of data globally (international markets)
time efficient

Question 13

Drawbacks of Secondary Research

Answer 13

may contain bias
may not be any for new industries
unfocused and not specific to your business
not necessarily legitimate
competitors have access to the same information

Question 14

Primary Research Definition & Examples

Answer 14

research a data collection conducted first-hand by the business

interviews
surveys
questionnaires

Question 15

Primary Research Benefits

Answer 15

competitive advantage
specific and focused to your industry/business
useful to analyse customer needs
builds brand loyalty
up to date

Question 16

Primary Research Drawbacks

Answer 16

time-consuming and costly to conduct
only as good as the person conducting the research
bias potential
low response rates

Question 17

Target Population

Answer 17

people relevant to the market research being undertaken

Question 18

Sample

Answer 18

a group that is selected to represent the target population

Question 19

Sampling Benefits

Answer 19

practical vs asking every member of a populationvalid if carried out correctly

Question 20

Drawbacks of Sampling

Answer 20

difficult to properly represent a population
invalid if done incorrectly

Question 21

Random Sampling

Answer 21

every single member of the population has an equal chance of being selected, limits bias potential

Question 22

Stratified Sampling

Answer 22

researcher divides the population into smaller groups of certain characteristics that don’t overlap (mutually exclusive) to represent the population

Question 23

Quota Sampling

Answer 23

member selected on a pre-set standard/specific attributes

Question 24

Quantitative Data (numerical form) Benefits

Answer 24

precise and accurate
often more straightforward to collect/analyse
easily comparable
anonymity

Question 25

Quantitative Data (numerical form) Drawbacks

Answer 25

does not reveal underlying reasons may not be accurate limited by set answers

Question 26

Qualitative Data (descriptive) Benefits

Answer 26

provides sense/feeling explanation of numbers captures changing attributes encourages discussion

Question 27

Qualitative Data (descriptive) Drawbacks

Answer 27

subjective (opinions) harder to analyse lack of responses sample bias

Question 28

Marketing Objectives

Answer 28

Sales Volume - quantity of items sold Sales Value - value of items sold (revenue) Sales Growth - rate of growth of the value of items sold Market Share - share of the market for the items Brand Loyalty - customers likelihood to buy the items

Question 29

As value of sales of a product rise, but the volume of sales fall - what happens to the price?

Answer 29

The price of each unit increases - depending on PED.

Question 30

Sales Growth Targets

Answer 30

Managers will want to measure how much the sales volume/value are increasing. The rate of growth will depend on factors such as overall growth of the market (contracting/shrinking/growing).

Question 31

% Growth in Sales

Answer 31

( change / original ) x 100

Question 32

Market Share

Answer 32

( sales of the product / total market sales ) x 100 the amount the business sells as a percentage of the total market

Question 33

Brand Loyalty Importance

Answer 33

repeat custom costly to retain customers creates a valuable competitive advantage creates barrier to entry for new competitors brands are valuable as they can be sold later

Question 34

When will you gain more Market Share?

Answer 34

if the market is contracting competitor leaves the market sales increases organically

Question 35

Market Mapping

Answer 35

used to understand how a brand is perceived in relation to competitors analyses market conditions (two factors) to identify the position of a product relative

Question 36

Benefits of Market Mapping

Answer 36

used to help spot a gap in the market

Question 37

Drawbacks of Market Mapping

Answer 37

entirely subjective gap in the market may not be appropriate (expensive, low quality)

Question 38

Examples of market Mapping Axis

Answer 38

low vs high price/quality/volume necessity vs luxury light vs heavy healthy vs unhealthy simple vs complex

Question 39

What is Correlation (Interpreting Market data)

Answer 39

correlation occurs when there is an apparent relationship between two factors

Question 40

Why do sales increase as customer income increases?

Answer 40

Positive correlation as when income increases, disposable income increases and sales will increase.

Question 41

Example of Negative Correlation

Answer 41

sales vs price

Question 42

Strength of Correlation 0

Answer 42

no correlation

Question 43

Strength of Correlation -0.3

Answer 43

weak negative correlation

Question 44

Strength of Correlation +0.8

Answer 44

strong positive correlation

Question 45

Strength of Correlation -1

Answer 45

strongest weak correlation

Question 46

Strength of Correlation +1

Answer 46

strongest positive correlation

Question 47

Benefits of Correlation

Answer 47

predict future sales competitive advantage considers investment of resources (increase capacity, employ more)

Question 48

Drawbacks of Correlation

Answer 48

subjective overconfidence with results may contain bias based on past data doesn't consider external factors

Question 49

Extrapolation

Answer 49

Forecasting data by looking at what has happened in the past and that they will continue in the future. ASSUMES that conditions and external factors do not change.

Question 50

Confidence Level

Answer 50

the probability that the research findings are correct - the % possibility that an estimated range of possible values includes the actual value being estimated (how confident the primary research is representative of customers)

Question 51

Confidence Interval

Answer 51

the possible range of outcomes for a given confidence level 95% confidence level that sales will be ebtween £500,000 and £700,000