1.1.2 Market Research and 1.13 market positioning Flashcards
What is marketing research?
involves the gathering and analysis of research to help support the implementation of marketing stratergy
What can market research provide? (4 things)
- dimensions of the market
- competitor strategies
- needs, wants and expectations of customers
- market segments
What is product orientation?
business develops products based on what it is good at doing
What is market orientation?
business responds to customer needs and wants - designs products accordingly
What is primary research?
data collected first-hand for a specific research purpose
What is secondary research?
data that already exists and which has been collected for a different purpose
What are the benifits of primary research?
- directly focused to research objectives
- kept private - not public
- more detailed insights ( customer views)
What are the drawbacks of primary research?
- time consuming and costly to obtain
- risk of survey bias
- sampling may not be representative
What are the benefits of secondary research?
- often freee and easy to obtain
- good source of market insights
- quick to access and use
Drawbacks of secondary research
- can quickly be out of date
- not tailored to business needs
- specialist reports often quite expensive
What is a market segment?
is a subsection of a larger market in which consumers share similar needs and wants
WHat is a niche market?
small segment of a larger market for a paticular product or service which meets certain cusotmer needs
What is a mass market?
selling to the whole market
Benefits of mass marketing?
- high potential customers
- higher production levels allow for economies of scale
- can use mass media advertising
Drawbacks of mass markets?
lower profit per unit sold
Benefits of niche marketing?
- meeting customer needs more precisely
- higher profit margins
- easier to enter firms with limited financial resources
drawbacks of niche marketing?
- lower economies of scale
- smaller customer base
What are dynamic markets?
markets that are constantly changing and adapting to customer needs and wants
What is market size?
measure of the total available demand for competitors in a market
What is market growth?
measures the rate of change of market size
What is market share?
explains how the overall market is split between existing competitors
What is online retailing?
selling products via the internet
What are the beifits of online retailing?
- business costs are lower as as it doesnt need to have a physical shop or hire staff
- customers can easily compare prices between different firms
What are the drawbacks of online retailing?
- businesses face more competition as customers can shop around
- consumers are unable to physically see products
How does competition effect the market?
- battle for market share
- pricing
- battle for competative advantage
What is competative advantage?
the ability of a business to add more value for its customers than its rivals and attain a position of relative advantage
where a business has an advantage over its competitors by being able to offer better value, quality and/ or services
What is a risk?
The possibility that things will go wrong
What is an uncertainty?
the unpredictable and uncontrollable events that effect a business
What is sales volume?
quantity of goods and services produced by a particular business over a period of time
What is sales value?
total sales revenue of a particular business over a period of time
How do you work out market growth in a year?
change in size of market between year 1 and year X / size of market in year 1
How do you work out sales growth in year?
change of sales in a business between year 1 and X / sales of product in year 1
What is marketing research?
involves the gathering and analysis of research to help support the implementation of marketing statergy
What are 4 types of market researcg?
- dimensions of the market ( size, structure, growth)
- competitor stratergies
- needs wants and expectations of customers
- market segments (existing and potential opportunites)
What is product orientation?
Business develops products based on what it is good at doing
What is market orientation?
business responds to customer needs and wants - designs products accordingly
Why is market orientation linked to marketing success?
- markets are much more dynamic
- customers are becoming much more demanding
- barriers to market entry getting lower
What are the two types of market reseach>
primary and secondary
What is primary research?
data collected first-hand for a specific research purpose
What is secondary research?
data that already exists and which has been collected for a differant purpose
What are the benefits of primary research?
- directly focused to research objectives
- kept private - not publicly available
- more detailed insights- particularly into customer views
What are the benefits of secondary research?
- often free and easy to obtain
- good source of market insights
- quick to access and use
What are the drawbacks of primary research?
- time consuming and costly to obtain
- risk of survey bias
- sampling may not be representative
What are the drawbacks of secondary research?
- can quickly become out of date
- not tailored to business needs
- specialist reports often quite expensive
What are the main formats of primary reseacrh?
- focus groups
- observation
- surveys
- telephone interviews
- test marketing
- experiments
What are the main formats of secondary research?
- published market research reports
- internal transactional data
- official statistics
- Trade associations
- media reports
- competitor materials
What is quantitative research?
research based on numerical data
based on larger samples, ‘how many?’ ‘how often?’ ‘who?’
What is qualitative research?
research based on opinions, attitudes, beliefs and intentions
‘why?’ how?’ ‘would?’
benefits of qualitative research?
- essential for important new products development and launches
- focused on understanding customer needs, wants and expectations
- can highlight issues that need addressing
- effective way of testing elements of the marketing mix
Drawbacks of qualitative research?
- expensive to collect analyse - requires specialist research skills
- based on opinions - always a risk that sample is not representative
Benefits of quantitative research?
- data relatively easy to analyse
- numerical data provides insights into relevant trends
- can compared with the data from other sources
Drawbacks of quantitative research?
- focuses on data rather than explaining why things happen
- doesn’t explain the reasons behind numerical trends
- may lack reliability if sample size and method is not valid
What is sampling in marketing research?
gathering of data from a sample of respondents, the results of which should be representative of the population
How is sampling used?
in marketing research and it can provide statistically valid insights into the profile of the overall population
What are benefits of sampling?
- even small sample sizes can provide useful research
- using sampling before making marketing decisions can reduce risk and costs
- sampling is flexible and relatively quick
Drawbacks of sampling?
- biggest risk = sample is unrepresentative of population
- risk of bias in research questions
- less useful in market segments where customer tastes and preferences are changing frequently
What is data mining?
relies on data that is already there
What is market segmentation?
the practice of dividing your target market into approachable groups.
What are the two things marketing is used for?
- choosing which customers to serve
- choosing how to serve these customers
What does choosing which customers to serve involve?
market segmentation and targeting
What is targeting?
deciding which market segments to enter
What does choosing how to serve these customers involve?
- product differentiation
- marketing positioning
What is marketing positioning?
how customers perceive the product
What is value proposition?
deciding how to compete in a segment
What is a positioning map?
illustrates a range of positions a product can take in a market based on two dimensions that are imprtant to a customer
Name 4 dimensions that could be used in a positionign map?
- low price, high price
- basic quality, high quality
- low volume, high volume
- necessity, luxury
- light heavy
- simple, complex
- unhealthy, healthy
- low tech, high tech
Advantages of positioning maps?
- helps spot gaps in the market
- useful for analysing customers
- encourages use of market reseach
disadvantages of positioning maps?
- just because there is a gap doesnt mean there is demand
- not a guarantee of success
- how reliable is market research
What is product differentiation?
arises when customers percieve a distinct differance between your product and the alternatives provided by competitors
What does effective product differentiation allow a product to do?
- compete effectively
- protect and build a brand
add more value
What is a unique selling point?
somethign that sets a product apart from its competitors
What is adding value?
the process of adding value to the cost of inputs into and through the transformational process
What is the transformational process?
describes what happens inside a business.
input -> transformational process -> output
What is product differentiation?
when customers percieve a distinct differance between your product and the alternatives provided by competitors
What does effective differentiation allow a business to do?
- compete effectively
- protect and build a brand
- add more value
what are the key requirements for effective product differentiation ?
- capable of delivering what is important to customers
- distinctive
- communicated and visible to customers
- not easily copied by competitors
- afforable by the target customers
- profitable
What is a unique selling point?
something that sets a product apart from its competitors in the eyes of customers
What process allows businesses to add value?
transformational process
What is the transformational process?
describes what happens within a business
