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Customer Needs + market Research Flashcards

(49 cards)

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1
Q

What does understanding customer needs allow a business to do

A

make sales early on to help secure the survival of the business, market research will influence the business’ decisions, surrounding price.

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2
Q

Purpose of market research

A

Identify gaps in the market
Reduce risk
Inform business decisions
Identify and understand customer needs

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3
Q

Useful insights from market research

A

The market (size, trends, structure etc)
Competition (who, USP, market research etc)
Customers (who, needs, wants, expectations)
Market segments (existing or new)
Offering opportunities

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4
Q

Describe using social media for market research

A

Source of both primary and secondary research
Software can quickly highlight what customers are saying about the product or brand (secondary research)

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5
Q

Benefits of social media market research

A

Quick and easy to set up
Free tools available
Provides market insight
Engaged users in comments interact with business + each other

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6
Q

Benefits of primary research

A

Directly focused to research objectives
Kept private -not publicly available
More detailed insights particularly into customer views

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7
Q

Problems with primary research

A

Time-consuming and costly to obtain
Risk of survey bias
Sampling may not be representative of the whole population

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8
Q

Benefits of secondary research

A

Often free and easy to obtain
Good source of market insights
Quick to access and use

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9
Q

Problems with secondary research

A

Can quickly become out of date
Not tailored to business needs
Specialist reports are often quite expensive

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10
Q

Benefits of quantitative market research

A

Data is relatively easy to analyse
Numerical data provides insights into relevant trends
Can be compared with data from other sources eg competitors, history

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11
Q

Problems with quantitative market research

A

Focused on data rather than explaining why things happen
Does not explain the reasons behind numerical trends
May lack reliability of sample size and method is not valid

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12
Q

Benefits of qualitative market research

A

Essential for important new product development and launches
Can highlight issues that need addressing eg why customers don’t buy it
Effective way of testing elements of the marketing mix eg new branding/promotional campaigns
Focused on understanding customer needs, wants, expectations that provide very useful insights for a business to base its decision making

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13
Q

Problems with qualitative market research

A

expensive to collect and analyse; requires specialist research skills

based around opinions; there is always a risk that the sample chosen is not representative of others

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14
Q

Secondary market research:
What is government information?

A
  • provides detailed insights on the economy and on many industry sectors
  • there is also population data published by the government based on the census
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15
Q

Secondary market research:
Competitors websites

A
  • valuable information on marketing activities of competitors including their products, prices and promotional activities and materials
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16
Q

Secondary market research:
Customer reviews

A
  • the internet provides data from product users who give ratings and feedback about a particular product
  • in some cases these are independent sites eg trip advisor, in other cases they are provided by the business itself eg Amazon
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17
Q

Secondary market research:
Market research reports

A
  • organisations such as keynote produce a wide range of expensive reports that analyse particular markets
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18
Q

Secondary market research:
Trade associations

A
  • trade press and magazine
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19
Q

Secondary market research:
Newspapers (printed press)

A
  • financial and economic informations provided daily
  • local/national/international + up to date
  • case studies of other local businesses
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20
Q

7 types of primary market research

Study These Flashcards
A

Observation
Internet
Market reports
Focus group
Questionnaire
Survey
government reports

21
Q

Primary market research:
Questionnaires (-+)

Study These Flashcards
A

-> a set of questions with a choice of answers

+ can collect large amounts of data easily

  • not everyone will want to complete it
  • must be carefully planned to produce useful insights
22
Q

Primary market research:
Surveys/interviews (+-)

Study These Flashcards
A

-> a face to face or online method of finding out what customers think
-> interviews can include more open questions with more in depth feedback
-> find trends or opinions of the target market

+ online, people may prefer, cheap, quick

  • Make sure questions are clear and easy to understand and answer
  • low reply rates
  • can be expensive to conduct
  • interviewer has to get the person to be honest
23
Q

Primary market research
Focus groups (-+)

Study These Flashcards
A

~> a group of people who are asked about their views, opinions, beliefs or attitudes towards a product, service, advertisement or idea.
~> usually around 90mins with 10ppl

  • the group size may affect the flow of discussion if people feel outspoken or uncomfortable
  • can be costly for the business

+ participants may be more willing to take part as they are usually paid

24
Q

Primary market research
Observation (+-)

Study These Flashcards
A

~> watching how customers naturally behave, when they don’t think they are being watched

+ observations can be carried out in person or using technology such as CCTV or webcams, results tend to be less biased

  • time consuming
  • can be inconclusive due to a variety of different results
25
What is quantitative data
Data that is usually numerical. There are various methods of obtaining data in the form of a a survey eg face to face, online or postal
26
What is qualitative data
Data that is based on opinions, beliefs and attitudes. Focus groups and interviews are common methods used to collect this data.
27
what do market maps illustrate
the range of 'positions' that a product can take in a market based on two dimensions that are important to customers
28
what are the 4 common dimensions on a market map
price quality volume health
29
advantages of market maps
- help spot gaps in the market - useful for analysing competitors - encourages use of market research
30
disadvantages of market maps
- just because there is a gap doesn't mean there is a demand - not a guarantee of success - how reliable is the market research?
31
what is the competitive market
when a business operates in a market where there are other businesses producing the same or similar goods and services
32
what does strong competition entail
large number of businesses providing similar goods and services
33
what does weak/no competition give the business
gives the business considerable market power when a single business dominates the market and has no competition it is known as a monopoly
34
3 reasons for little/no competition
- being (one of) the only seller(s) of a particular good or service - develops a unique or innovative product - offers much better value for money than competitors
35
4 effects of weak competition
- customers have no alternatives to buy - can charge higher prices and make good profit - profit may be reinvested into the business to make it more effective or can be distributed to owners - quality may suffer as business may become lazy
36
benefits of competition
- encourages a business to make its product different or better than its competitors - will focus on one area of the market and their market strengths - research to improve product and reduce costs - better customer service to retain existing customers - see what competitors are doing well and improve their own product
37
effect of price competition, quality, location, product range and customer service
1. prices may decrease 2. quality may decrease to save costs, or increase to differentiate from competitors 3. locate close to competitor to steal customer away or locate away to avoid direct competition 4. range focused to specialise in one particular product or widen to prevent the spread or risk of competition 5. service improves to encourage customer loyalty and a strong reputation in marketplace
38
what is market segmentation
dividing a market into parts that reflect different customer needs and wants
39
3 main categories of market segmentation
location/geographic (nations, regions etc) demographics (age, gender etc) income (socio-economic grouping)
40
benefits of market segmentation
- better matching of product to specific customer needs - helps with new product development - allows business to grow market share - helps make marketing mix more effective
41
disadvantages of market segmentation
- imprecise - identifying a specific market segment doesn't guarantee success - markets are increasingly dynamic and fast moving
42
Impacts and effects of competition on a business
Profit may fall due to a loss of customers to competition, therefore less sales. Less money to invest in expansion of the business. Increased costs of keeping business open with fewer customers. Attract customers by promoting business through advertising (expensive). Prices decrease in order to compete (or offer deals). Staffing levels fall, more choice of businesses to work in so any leave to work in a larger chain that may offer higher wages or better chances of promotion.
43
Ways to compete
- advertising, promote USP - make brand stand out from rivals - be customer orientated - new packaging or products - lower prices
44
Why promote?
- inform current and potential customers about existing and new products - explain potential benefits of using the products - persuade customers to buy the product - compete with other businesses, show why a product is different or better - encourage growth through more sales - change or improve brand image
45
What does place refer to in terms of the marketing mix
Where a product is sold and how a business gets its products to the customers
46
Describe distribution channels
Moves a product through the stages from production to final consumer Producer supplies the goods and services. Wholesaler buys in large quantities from producers, sells in smaller quantities to retailers. Retailers are shops that sell the goods and services to the customer, this may be through a physical and or an online outlet.
47
What is each part of the distribution channel called
An intermediary
48
Positives of a business using wholesalers
- allows smaller businesses to get bulk buying cost advantages - reduce transport costs - increases customer choice
49
Negatives of businesses using wholesalers
Wholesalers need to make a profit so it can increase costs compared to a direct model For larger retails, having a third party intermediary reduces control and can increase costs

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