1.1.2 Market reasearch

Question 1

what is product orientation?

Answer 1

the product is the most important factor when it’s designed and created

Question 2

product orientation is appropriate when…?

Answer 2

-little competition
(business can make what suits its production capacity)
-limited consumer knowledge
(braces)
-low disposable income
(customers will buy what is available when funds are limited)

Question 3

what is market orientation?

Answer 3

the business responds to customer wants and needs and designs products accordingly

Question 4

benefits of product orientation…?

Answer 4

-encourages innovation
-improves labour workforce skills
-focus on quality

Question 5

benefits of market orientation…?

Answer 5

-improves customer loyalty
-responds quickly to the market because of its use of market information
-allows for continual investment in customer feedback

Question 6

what are drawbacks of product orientation?

Answer 6

-potentially limits market opportunities
-product can become obsolete
-disregards customer needs

Question 7

what are drawbacks of market orientation?

Answer 7

-reactive approach
-not always innovative
-hard to adapt if market is changing

Question 8

what is market research?

Answer 8

when a business collects and analyses data to be informed about its market

Question 9

why is market research used?

Answer 9

-identify and anticipate customer needs and wants
-quantify likely demand
-gain insight into consumer behaviour

Question 10

what are the two types of market research?

Answer 10

-primary research
-secondary research

Question 11

what is primary research?

Answer 11

first hand data that the business has conducted on their own

Question 12

what is secondary research?

Answer 12

research that has already been undertaken by another organisation
(already exists)

Question 13

primary research methods include…?

Answer 13

-questionnaires
-interviews
-loyalty cards

Question 14

secondary research methods include…?

Answer 14

-government sources
(ONS)
-trade publications
(trade journals)
-internet sources
(social media)

Question 15

why are government sources useful?

Answer 15

-ONS has useful demographic info about the industry the business is in
-info can be used to make decisions (expansion overseas)

Question 16

why are trade publications useful

Answer 16

-trade journals cater to a very specialist market
-info about competitor activity
(promotions)
-news specific to the industry
-helps small businesses stay in touch with the trends in the market

Question 17

why are internet sources useful?

Answer 17

-can research competitor websites, annual accounts, articles etc
-can quickly gain industry info
-social media can inform a business about their customer’s likes and dislikes

Question 18

what are benefits of primary research?

Answer 18

-catered/original to the business
-kept private
-detailed insights from customers

Question 19

drawbacks of primary research are…?

Answer 19

-time consuming
-risk of survey bias
-may not be representative

Question 20

what are the benefits of secondary research?

Answer 20

-often free/easy to obtain
-wider pool of info
-quick to access

Question 21

drawbacks of secondary research are…?

Answer 21

-research can be outdated quickly
-not tailored to the business
-specialist reports are expensive

Question 22

benefits of market research…?

Answer 22

-reduces risk and cost of poor decision making
-can develop a market plan based on data
-can stay on top of trends

Question 23

drawbacks of market research…?

Answer 23

-limited sample size
(not representative)
-time consuming
-costly
-interpretation bias
(misleading conclusions)

Question 24

what is quantitative data?

Answer 24

numerical information that can be counted or measured, and is used in business to help make decisions

Question 25

what is qualitative data?

Answer 25

non-numerical information that helps businesses understand customers and their preferences

Question 26

benefits of quantitative data…?

Answer 26

-easy to analyse -can see trends -can be compared with historical data

Question 27

what are drawbacks of qualitative data…?

Answer 27

-expensive -smaller sample size

Question 28

benefits of qualitative data…?

Answer 28

-more detailed -highlights issues -important for new products

Question 29

use of ICT to support market research...?

Answer 29

-websites -social networking -databases

Question 30

what are drawbacks of quantitative data…?

Answer 30

-numbers aren’t explained -lacks reliability

Question 31

benefits of ICT in market research...?

Answer 31

-computers speeds up analysis/gathering stage -gathering data online is very cost effective -customers can fill it in their own time so it's more reliable

Question 32

drawbacks of ICT in market research...?

Answer 32

-requires more staff -information overload (abundance of information) -privacy concerns (gathering large amounts of customer data)

Question 33

how are websites used for market research?

Answer 33

-pop ups can ask customers about what they have bought or will buy -can also gather emails so targeted customers can be surveyed later -some sites have useful quantitative data about the industry

Question 34

how is social networking used for market research?

Answer 34

-social media (twitter) can searching trending hashtags to see emerging trends -can search business name/brand name to see quantitative info about customer perception

Question 35

how are databases used for market research?

Answer 35

-large supermarkets use data from their loyalty schemes to build customer database -info can be used to target customers likely to buy at the shop

Question 36

what segments can a market be divide into?

Answer 36

-demographics -geographical -behavioural -income

Question 37

what is market segmentation?

Answer 37

when a business divides their target market into an identifiable group of individuals where consumers share one or more characteristics or needs

Question 38

benefits of market segmentation...?

Answer 38

-advertising can be targeted so it's more effective -easier to identify new products -most & least profitable customers can be identified

Question 39

what is geographical segmentation?

Answer 39

-defines market categories based on where people live -people in display different characteristics and needs

Question 40

what is income segmentation?

Answer 40

identifying subgroups of the market based on their level of income and profession

Question 41

what is behavioural segmentation?

Answer 41

-based on the behavioural patterns rather than characteristics -reasons for making purchases -frequency -time

Question 42

what is demographic segmentation?

Answer 42

-age -gender -religion -race