1.1.2 Market research Flashcards
What is product orientation?
An approach to marketing that focuses on the characteristics of the product rather than the needs of the customer.
The emphasis will be on creating a product first and then finding a market.
What is one problem with being too product orientated?
Over time your business may move further and further away from what the market is looking for, thus increasing the risk of business failure.
What are the tools of product orientation?
- Product research
- Product testing
- Product focus
What is market orientation?
An approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs.
Consumers are at the centre of marketing decisions.
What is the benefit of market orientation?
The firm will benefit from increased demand, increased profits, and a valued brand image as its products become more desirable.
What are the tools of market orientation?
- Market research
- Market testing
- Customer focus
What is market research?
The collection, compilation and analysis of information about a market.
How will effective market research help a business?
- It will reduce risk when launching new products or entering new markets.
- It will anticipate future needs and wants of consumers.
- It will help to understand consumer behaviour.
- It will help identify potential consumer demand.
- It will help identify how much consumers are prepared to pay.
- It will help to identify competitors and gauge their potential strengths and weaknesses.
What are the two forms of market research data?
- Quantitative
- Qualitative
What is primary research?
The process of gathering information directly from consumers in the target market using field research methods such as surveys, interviews, etc.
What are the primary research methods?
- Surveys
- Observation
- Interviews
- Test marketing
- Focus groups
What is test marketing?
Free samples are provided for a limited period to the target market to gauge their response to the product.
What are the advantages of primary market research?
- Information gathering is focused on the needs of the business and will not be available to its rivals.
- The business can get in-depth information from respondents.
- Primary market research is more up-to-date and can be used to ask specific questions, so will be more relevant.
What are the disadvantages of primary market research?
- The sample size may be too small and unrepresentative of all the customers leading to unreliable results.
- Bias may mean that researchers can guide respondents to answer questions in a particular way.
- A business may need to hire a specialist market research agency to help and the process can be expensive and time-consuming.
What is secondary market research?
It involves the collection, compilation, and analysis of data that already exists.
What are the advantages of secondary market research?
- Information is already available and so is quicker to collect than primary research, thereby saving time.
- Information is often free and is cheaper to collect, leading to lower costs.
- Suitable for a small business that lacks a large marketing budget and expertise.
What are the disadvantages of secondary market research?
- Information has been collected for other purposes and so may lack relevance or may not be factually correct.
- It can be expensive to purchase market specific secondary data from specialist companies.
- Information may be out-of-date, especially in dynamic markets.
In which ways can ICT support market research?
- Websites (allow businesses to collect primary data cheaply).
- Databases (can be used to store large amounts of customer information).
- Social networking (focuses on gathering information about consumers via online social channels).
What is market segmentation?
The process in which a single market is divided into submarkets, or segments.
Each segment represents a slightly different set of consumer characteristics.
What are the advantages of market segmentation?
- Recognises that consumers are not all identical and that consumer groups do not all share the same tastes and preferences.
- Products and marketing activities can be altered to meet different needs of different groups of consumers and targeted more precisely.
- Less expensive and wasteful than marketing products at wide segments.
- May increase loyalty if the consumer feels that their needs are being met, which can lead to repeat purchases.
What are the disadvantages of market segmentation?
- Not everyone within a segment will behave in the same way.
- It may be difficult to identify a segment and consumers can belong to multiple segments at the same time.
- Segmentation requires more detailed market research which can prove costly.
- A segment may be identified but it may be too small and unprofitable to cater for.
