1.1.2 Market Research

Question 1

What is product orientation

Answer 1

• product orientation is an approach to marketing that focuses on the characteristics of the product rather than the needs of the customer
• The emphasis is on creating a product first and then finding a market
• The business has a belief that the product is superior
• One problem with being two product orientated is the overtime your business may move further and further away from what the market is looking for which increases the risk of business failure

Question 2

What is market orientation

Answer 2

• market orientation is an approach to marketing that focuses on the needs of the consumers and use this information to design products that meet customer needs
• Consumers are at the centre of marketing decisions and the products will be developed in response to customer needs

Question 3

What is market research?

Answer 3

Market research is the objective collection, compilation and analysis of information about a market

Question 4

Examples of primary research methods

Answer 4

• surveys
• Observation
• Interview
• Test marketing
• Focus groups

Question 5

Advantages and disadvantages of primary market research

Answer 5

Advantages:
- 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 respondent for example reasons behind certain behaviour
- Primary market research is more up-to-date and can be used to ask specific questions so will therefore be more relevant
Disadvantages:
- The sample size may be too small and unrepresentative of all of the customers leading to unreliable results
- Bias may mean that researchers can guide respondent to answer questions in a particular way. Similarly respondents may be influenced by the responses of others or not provide accurate information.
- A business may need to hire a specialist market research agency to help and the process can be expensive and time-consuming

Question 6

Advantages and disadvantages of secondary market research

Answer 6

Advantages:
- Information is already available and so as quicker to collect them primary research, thereby saving time
- Information is often free and is cheaper to collect leading to lower costs compared to primary research
- Suitable for a small business that lacks a large marketing budget and/or expertise
Disadvantages:
- Information has been collected for other purposes and so may lack relevance or may not be factually correct e.g. Wikipedia
- Can be expensive to purchase market specific secondary data from specialist companies e.g. Mintel reports
- Information may be out of date, especially in dynamic markets

Question 7

What are the uses of ICT to support market research?

Answer 7

ICT refers information and communications technology and can be used to support market research in the following ways:
1. Company websites:
- Websites allow businesses to collect primary data cheaply
-pop-ups used on websites can also be an effective way of gathering information
2. Databases:
- These can be used to store large amounts of customer information
- Database is also effective in collating custom email addresses so that targeted customers can be surveyed later via email
3. Social networking:
- Focuses on gathering information about consumers via online social channel such as Twitter and Facebook
- It is also a useful method of running quick poles and surveys or tracking opinions about brands

Question 8

What is market segmentation?

Answer 8

• market segmentation is the process in which a single market is divided into submarkets or segment where each segment represents a slightly different set of customer characteristics
• Firms often segment and market according to factors such as income, geographical location, religion, gender, or lifestyle

Question 9

Advantages and disadvantages of market segmentation

Answer 9

Advantages:
- Recognises that consumers are not all identical, consumer groups do not share the same taste 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 waste than marketing products at wide market segments
- May increase loyalty if the consumer feels that there needs are being met, which can lead to repeat purchases
Disadvantages:
- 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 but beneficial to the business
- A segment may be identified but it may be too small and unprofitable to cater for