1.1.2 - Market Research

Question 1

Def of product orientation

Answer 1

An inward looking approach to new product development where the key focus in what products can be made and the production process

Question 2

Def of market orientation

Answer 2

Is an outward looking approach to new product development where the key focus is on what products the consumer wants

Question 3

Benefits of market orientation

Answer 3

• gives competitive advantage
• brand loyalty more likely to be increased
• work of mouth marketing

Question 4

Weaknesses of market orientation

Answer 4

• can be time consuming and costly

- changing customer trends

Question 5

Benefits of product orientation

Answer 5

• less likely to have to conduct market research
• can instead spend money on r and d
• can be more innovative, that rivals can’t copy

Question 6

Weaknesses of product orientation

Answer 6

• no demand for product

- can lead to unsuccessfully products in sell established markets

Question 7

Def of market research

Answer 7

Collection and analysis of data and information to inform a business about its market

Question 8

Def of primary market research

Answer 8

Involves the collection of first hand data that didn’t exist before and is therefore original

Question 9

Def of secondary market research

Answer 9

Research that has already been undertaken for some other purpose

Question 10

Def of quantitative research

Answer 10

Based upon numerical data, measures things and produces statistical data

Question 11

Def of qualitative data

Answer 11

Based upon feelings, attitudes or opinions, tries to identify why customers behave the way they do

Question 12

Does primary research have to be carried out by individual business?

Answer 12

The business can hire a market research company to do the research for them. If it’s new research, it’s still primary

Question 13

Advantages of secondary research

Answer 13

• often free
• provides good market overview
• usually based on large-scale, reliably produced research

Question 14

Advantages of primary research

Answer 14

• able to address the specific issues you are interested in
• up to date data
• can help understand consumer psychology

Question 15

Disadvantage of secondary research

Answer 15

• information may be outdated
• not tailored to suit particular needs
• can be expensive

Question 16

Disadvantage of primary research

Answer 16

• expensive, costing thousands to do property
• risk of bias from questionnaire and interviewer
• some methods eg focus groups require certain skills

Question 17

Do firms usually use secondary or primary research?

Answer 17

Most firms use a combination of both starting of with secondary followed by primary lowering costs

Question 18

Primary and secondary market research data are used to? (3)

Answer 18

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

Question 19

4 examples of secondary research methods

Answer 19

Internet, trade press, government statistics, past internal sales figures

Question 20

Examples of primary research methods

Answer 20

Surveys, retailer research, observation, group or individual statistics

Question 21

Limitations to market research

Answer 21

Sample size too small - isn’t representative

Sample bias - the way respondents are selected may over represent certain views

Question 22

The three main ways ICT can support market research

Answer 22

• company websites can gather data on consumers interests
• social media can offer information on consumer attitudes, sometimes allow for relationship building
• database technology, identifying patterns to explain how consumers will actually behave

Question 23

What is the main purpose of loyalty schemes

Answer 23

To gather information about consumers buying habits

Question 24

Def of market segmentation

Answer 24

Occurs when market is split into subgroups of consumers with similar characteristics

Question 25

Why is market segmentation useful

Answer 25

• Products and services can be designed to suit specific customers
• meeting customers needs precisely allows a higher price to be charged
• promotional activity is easier to target

Question 26

4 types of market segmentation

Answer 26

Demographic, geographic, income and behavioural

Question 27

Def of demographic segmentation

Answer 27

Identifies subgroups of the population based on their demographic profile or characteristics eg age and gender

Question 28

Def of geographic segmentation

Answer 28

Defines market categories based on where people live (cities and neighbourhoods)

Question 29

Def of income segmentation

Answer 29

Identifying subgroups of the market based on their levels of income and profession eg high income - luxury goods

Question 30

Def of behavioural segmentation

Answer 30

Characterises subgroups based on the behavioural pattern of the consumer rather than the characteristics eg reasons for making purchase and frequency of purchase