1.1.2 market research Flashcards
Product orientation
Business develops products based on what it is good at doing
Market orientation
Business responds to customer needs and wants - designs products accordingly
Primary market research
Involves the collection of first hand data by the business and is gathered for a specific purpose snd to match the exact needs for the business
Benefits of primary market research
~ directly focused on research objectives
~ not publicly available and can therefore be a source of competitive advantage
~ provides more detailed insights, especially into customers views
Drawbacks of primary market research
~ time-consuming and costly to obtain
~ risk of potential bias
~ sampling may not be representative
Methods of primary research
~ surveys
~ observations
~ test marketing
~ interviews
~ focus groups and consumer panels
Secondary market research
Involves the collection of second-hand data/data that already exists
Benefits of secondary market research
~ often free and easy to obtain
~ good source of overall market insights
~ quick to access and easy to use
Drawbacks of secondary market research
~ not specific to the needs of the business
~ often out of date
~ available to other businesses
Methods of secondary research
~ market research reports such as MINTEL
~ online sources such as Statista
~ government data from the Office of National Statistics
~ trade publications
Quantitative market research
Concerned with and based on data
Benefits of quantitative market research
~ data is relatively easy to analyse
~ numerical data can provide insights into trends
~ can be compared with data from other sources
Drawbacks of quantitative market research
~ focuses on data as opposed to why something happened and therefore doesn’t explain the reasoning behind trends
~ may lack reliability if sample size and method is not valid
Qualitative market research
Based on opinions, attitudes , beliefs and intentions
Benefits of qualitative market research
~ essential for important new product development and launches
~ provides crucial insights into consumer behaviour
~ an effective way for testing elements of marketing mix
Drawbacks of qualitative market research
~ expensive to collect and analyse often requiring specialist research skills
~ based around opinions and there is always a risk that the sample is not representative
Sampling
Involves the gathering of data from a selection of respondents, the results of which should be representative of the population as a whole
Benefits of sampling
~ provide useful research insights if it is representative
~ can reduce risk and costs before a decision
~ flexible + relatively quick
Drawbacks of sampling
~ incorrect conclusions and decisions can happen if unrepresentative of the population
~ risk of interviewer, question and respondent bias
~ less useful in dynamic markets
Use of ICT to support market research
~ websites
~ social networking
~ databases
Market segment
Involves dividing a market into different groups that reflect different customer needs snd wants
Traditional ways of segmenting
~ age
~ gender
~ income
~ hobbies + interests
~ location
~ culture + ethnic origin
~ occupation
~ lifestyle
Benefits of market segmentation
~ focuses resources on parts of a market where the business can succeed
~ allows a business to grow share in markets
~ helps with new product development
~ helps make the marketing mix more efficient
Drawbacks of market segmentation
~ data about each market segment is not always available, up to date or reliable
~ just because you can identify a segment doesn’t mean you can reach the customers in it
~ markets are increasingly dynamic and fast-changing + so are the segments
