1.1.2 - Market Research

Question 1

What is product orientation

Answer 1

• A business is product orientated when it only looks at the product or the production process when deciding what to make next

Question 2

When is product orientation appropriate

Answer 2

• There is little competition in the market, the business can make what suits its production capacity
• When there is limited consumer knowledge e.g. dental fixtures, braces etc.
• When there is low disposable income of consumers, when funds are limited customers will buy what is available

Question 3

What is an example of product orientation

Answer 3

• An example of product orientation is when Apple create iPhones and iPads and create innovative products, but they create and make what they can, not what consumers want
• This is because consumers may not know what they want from technology that has not yet been invented

Question 4

What is market orientation

Answer 4

• A business is market orientated when The consumer is the most important factor when providing products for the market, the business has a sensitivity to customers requirements

Question 5

What is an example of market orientation

Answer 5

• An example of market orientation is ASDAS chosen by you range Each Chosen By You product was tested by a minimum of 50 consumers in a single location The Chosen By You range is made up of more than 3,500 own brand food products, 500 of which are entirely new and another 1,000 of which have been reformulated

Question 6

What is primary research

Answer 6

• Primary research is collecting data first hand
• This means NEW data is gathered for the benefit of the business
• This data will be specific to the needs of the business

Question 7

What is survey primary research

Answer 7

• Primary research may also include a survey of customers who use the business. Work out what questions you want to ask first
• A business can gather quantitative (numbers) and qualitative data in this method
• It can also be used to measure customer satisfaction – giving the business a clear idea of where to improve

Question 8

What is observation primary research

Answer 8

• A business may choose to gather data from observation of buyer behavior :

Do customers shop alone or in groups?
Do customers notice carefully placed promotions?
What route do customers take when they walk round a store?
How many items do customers try on?

Question 9

What is interview primary research

Answer 9

• A primary research team may carry out interviews, these can be face-to-face or on the telephone :

This will measure reactions to new tastes or ideas that the business is having
This is a good way to gather qualitative data
As it is primary research this will be very specific to the needs of the company

Question 10

What is test marketing primary research

Answer 10

• A business may invent or produce a new product or service
• All staff in the business may agree that these are good products or services, but they need to know if the wider public will buy them in the quantity they need to break even and make a profit.
• Therefore the product is offered to a carefully chosen sample, and based on the sample’s reactions the product will either be launched full scale or scrapped

Question 11

What is focus group primary research

Answer 11

• A group of target market demographic respondents are chosen to take part in a product trial
• They may use the product over time and then get together in a group to discuss their thoughts about the product
• This gives the business very specific qualitative information about how customers relate and “feel” about the product

Question 12

What is secondary research

Answer 12

• Secondary research is gathering data which already exists
• It is also known as desk research

Question 13

What is government sources Secondary research

Answer 13

-Office of national statistics (ONS) is very useful demographic information and data on the market or industry that the business is in
- Information can be used to make decisions about expanding overseas for example
- Department for Business, Energy & Industrial Strategy is also a good source of information

Question 14

What is trade publication Secondary research

Answer 14

• Trade journals cater to a very specialist market
• Information on competitor activity such as promotions
• News specific to the industry
• Helps small businesses stay in touch with trends in the market

Question 15

What is report Secondary research

Answer 15

• Marketing departments of smaller companies may have smaller budgets
• Buying a report about an industry may be the most cost effective way for them to achieve their marketing objectives
• Mintel trends and reports – Mintel has a global team of trend analysts constantly assessing change in culture, economy and society.
• Reports cost £1,000 - £3,000
• Have a look through their site at the samples

Question 16

What is internet sources Secondary research

Answer 16

• The Internet is an ideal way to research competitor websites, articles, publications, annual accounts etc.
• The Internet is a useful method of quickly gaining industry information
• Social networks, blogs, and other forms of social media have emerged as forums where consumers discuss their likes and dislikes, and customers can be particularly vocal about companies and products

Question 17

What is Newspapers / Magazines / TV / Radio Secondary research

Answer 17

• Local newspapers, journals, magazines, and radio and TV stations are some of the most useful commercial information outlets
• They are useful because they contain demographic profiles of their audiences (their income, age, gender, amount of disposable income, and types of products and services purchased, what they read, and so on)
• They can also have information about economic trends in their local areas that could be significant to the business

Question 18

What is qualitative research

Answer 18

• Seeks to gather and explore feelings and thoughts about a product from consumers
• This can help a business to identify; buyers moods, the decisions behind a purchase and other invaluable data

Question 19

What is quantitative research

Answer 19

• Involves gathering data and measuring responses
• Data displayed in charts, graphs, as statistics and percentages
• Questionnaires written to gather numerical data – e.g. number of respondents who bought 4 pints of milk twice a week
  -Quantitative research asks questions to a large sample – to provide valid useful data for the business

Question 20

How is sampling a limitation of market research

Answer 20

• Sampling is the process of choosing the right people to be part of the research
• For example: Whiskers is a pet food manufacturer, they would only want to sample pet owners in their research

Question 21

how is sample size a limitation of market research

Answer 21

• A sample size is the number of people who are interviewed during the research
• The sample size needs to be large enough that the data has statistical validity and can be useful to the business for decision making

Question 22

how is bias a limitation of market research

Answer 22

• Bias is when research findings cannot be trusted because of the way the research has been carried out
• This can be through :
• Interviewer bias e.g. see video
• Biased questions e.g. “You really like shopping at the co-op don’t you?”
• Respondent bias e.g. They already use a different product or work for a marketing company

Question 23

How are websites used to support market research

Answer 23

• Pop-ups on websites can be used to ask customers about products they have bought or may buy
• These may also be used to gather e-mail addresses so that targeted customers can be surveyed later via e-mail
• Some sites (Like the Grocer, see video) have lots of useful quantitative data about the industry

Question 24

How is social networking used to support market research

Answer 24

• Twitter can be used to support marketing research – by searching for trending hashtags to see emerging trends
• It can also search a business name or a brand name to find out quantitative information about customer perceptions

Question 25

How are databases used to support market research

Answer 25

• Large supermarkets use all the data from their loyalty schemes to build huge customer databases
• This information can be used to target customers likely to buy at the store e.g. customer satisfaction with bakery products at Morrison’s
• Other databases such as Experian can also be a valuable source of customer information e.g. credit scores, incomes

Question 26

What is market segmentation

Answer 26

• A market segment is an identifiable group of individuals or part of a market where consumers share one or more characteristics or needs

Question 27

What is segmentation by location

Answer 27

• A business may decide to sell its product in just one country, one region (like the Midlands), or in an even smaller area
• A business may target its product at rural rather than urban areas
• A business may target its products depending if the market area is hot or cold

Question 28

What is segmentation by demographic

Answer 28

• Statistical data relating to the population and particular groups within it
• For example market segmentation helps book publishers target customers as we won’t all read the same books (not everyone wants to read Harry Potter)

Question 29

What is segmentation by lifestyle

Answer 29

• Customers can be grouped according to the way they lead their lives and the attitudes they share
• For example, young professionals may drive a sports car because of the image they want to project
• Parents might want the same things, but have to provide for their children, which is a large extra cost. They will need a family car to suit their lifestyle

Question 30

What is segmentation by income

Answer 30

• The population can be segmented according to annual salary (e.g. £15,000, £30,000 etc.) or type of job and social class
• The population can also be divided into; low income, middle income and high income
• Establishing a group’s disposable income is important so that products can be targeted to the relevant income group

Question 31

What is segmentation by age

Answer 31

• Each age group will have different needs and wants in terms of products and services and the business can develop a targeted marketing strategy to appeal to that age group

Question 32

What is segmentation by gender

Answer 32

• Many products are aimed at either men or women
• A business may produce or adapt its products to ensure they can be marketed effectively
• For example these razors made originally for men now adapted for women