1.1.2 Market Research Flashcards
Define product orientation
When a business only focuses on the product/production process
A business is product orientated when…
- there is little competition in the market
- there is little consumer knowledge
- customers have limited funds
Define market orientation
When the business focuses on the customer when providing products. Usually gives the customer more control, allowing them to make choices.
What are the benefits of market research
- reduced risk
- quantify demand (forecast sales)
- idea of pricing
- identify competitors
- understand consumer behaviour
Define primary market research
Collection of NEW first hand data that is SPECIFIC to the needs of the business
Identify 5 primary research methods
Questionnaires / surveys Observation Interviews Test marketing Focus group
Advantages of primary research
- addresses the specific issues you are interested in
- data is up to date
- can help to understand consumer psychology
- valuable information that can be used to gain a competitive edge isn’t available for competitors
Disadvantages of primary research
- expensive costing thousands of pounds to do properly
- risk of bias from questionnaires or interviewers
- may need to compare with other information to understand the meaning of the findings
- costly
Explain why sample size and sample bias may make market research unreliable
Sample size - if the sample size is too small then the data will lack statistical validity and it will be difficult to apply the findings to the whole market
Sample bias- the way respondents are selected may over-represent certain types of people which may skew the results
Define secondary research
Gathering data that already exists
Identify 5 secondary research methods
Government sources Trade publications Reports Internet sources Media (newspapers/magazines/TV/radio)
Define qualitative research and how it is gathered
Seeks to gather and explore FEELINGS and THOUGHTS about a product from consumers Gathered by - focus groups - interviews - observations
Define quantitative research and how it is gathered
Involves gathering data and MEASURING responses usually displayed in charts/graphs
Gathered by
- questionnaires
NOTE: quantitative research requires a LARGE sample
3 ways IT supports market research
- Websites can gather information about online shoppers’ or browsers’ interests
- Social media can offer information about consumer attitudes to a product or service + allows for relationship building for business and customer
- Business databases can be used to get info on consumer behaviour
Define market segmentation
Discovering useful ways to split up a market into different groups of consumers who share similar characteristics and needs.
Benefits of segmenting a market
- Products and services can be designed to suit specific consumers
- meeting customers’ needs precisely allows a higher price to be charged
- promotional activity is easier to target
- brand loyalty
Identify some ways a market could be segmented
- by location e.g. target rural or urban
- by lifestyle e.g. target parents
- by income e.g. target lower income groups
- by age e.g. targeting over 60s
- by gender e.g. targeting women
advantages of secondary research
- quick and instant
- less costly to gather
disadvantages of secondary research
- may be too broad and not specific enough for the businesses needs
- could be out of date
- information is accessible to competitors so there’s no competitive edge
evaluate the use of quantitative data
+ easier and quicker to gather
+ easier and quicker to analyse
+ easier to use large sample sizes which are more representative
+ easier to make decisions on
- closed or narrow questions don’t give an explanation or lack depth
evaluate the use of qualitative data
+ creates more depth, and may make it easier to draw conclusions from the data
- slower to gather
- harder to analyse and display the data
- harder to make decisions based on it as it is subjective
drawbacks of Market segmentation
- costly, research and development, marketing and changes to production
- trying to appeal to multiple market segments may broaden the product range a business offers making it more difficult for them to exploit economies of scale
