1.1.2 - Market Research Flashcards
Def of product orientation
An inward looking approach to new product development where the key focus in what products can be made and the production process
Def of market orientation
Is an outward looking approach to new product development where the key focus is on what products the consumer wants
Benefits of market orientation
- gives competitive advantage
- brand loyalty more likely to be increased
- work of mouth marketing
Weaknesses of market orientation
- can be time consuming and costly
- changing customer trends
Benefits of product orientation
- 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
Weaknesses of product orientation
- no demand for product
- can lead to unsuccessfully products in sell established markets
Def of market research
Collection and analysis of data and information to inform a business about its market
Def of primary market research
Involves the collection of first hand data that didn’t exist before and is therefore original
Def of secondary market research
Research that has already been undertaken for some other purpose
Def of quantitative research
Based upon numerical data, measures things and produces statistical data
Def of qualitative data
Based upon feelings, attitudes or opinions, tries to identify why customers behave the way they do
Does primary research have to be carried out by individual business?
The business can hire a market research company to do the research for them. If it’s new research, it’s still primary
Advantages of secondary research
- often free
- provides good market overview
- usually based on large-scale, reliably produced research
Advantages of primary research
- able to address the specific issues you are interested in
- up to date data
- can help understand consumer psychology
Disadvantage of secondary research
- information may be outdated
- not tailored to suit particular needs
- can be expensive
Disadvantage of primary research
- expensive, costing thousands to do property
- risk of bias from questionnaire and interviewer
- some methods eg focus groups require certain skills
Do firms usually use secondary or primary research?
Most firms use a combination of both starting of with secondary followed by primary lowering costs
Primary and secondary market research data are used to? (3)
- identify and anticipate customer needs and wants
- quantify likely demand
- gain insight into consumer behaviour
4 examples of secondary research methods
Internet, trade press, government statistics, past internal sales figures
Examples of primary research methods
Surveys, retailer research, observation, group or individual statistics
Limitations to market research
Sample size too small - isn’t representative
Sample bias - the way respondents are selected may over represent certain views
The three main ways ICT can support market research
- 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
What is the main purpose of loyalty schemes
To gather information about consumers buying habits
Def of market segmentation
Occurs when market is split into subgroups of consumers with similar characteristics
