1.1.2 Market research/ Segmentation/ Product and Market orientation

Question 1

market research

Answer 1

the gathering and analysis of research to help support the implementation of marketing strategy

Question 2

product orientation

Answer 2

an approach to marketing that focuses on the characteristics of the product rather than the needs of the consumer

Question 3

what are the tools of product orientation?

Answer 3

product research
product testing
product focus

Question 4

market orientation

Answer 4

an approach to marketing that focuses on the needs of consumers and uses this information to design products that meet customer needs

Question 5

factors of market orientation

Answer 5

-consumers are at the centre of marketing decisions
-products will be developed which respond to consumer needs

Question 6

what are the tools of market orientation?

Answer 6

market research
market testing
customer focus

Question 7

why is market orientation linked to marketing success?

Answer 7

markets are more dynamic
customers are becoming more specific and demanding
barriers to market entry are getting lower

Question 8

advantages of market orientation

Answer 8

-close fit with customer expectations
-greater responsiveness to changes in customer needs

Question 9

disadvantages of market orientation

Answer 9

-regular changes in the appearance of function of a product may leave customers confused about what the brand really stands for
-may struggle to compete against product orientated businesses that invest heavily in new product features and advanced technologies

Question 10

advantages of product orientation

Answer 10

-allows the business to focus on product quality and innovation
-they can spend most of their efforts and money on doing this

Question 11

disadvantages of product orientation

Answer 11

-by ignoring customer priorities, the product may not sell very well

Question 12

what are the two types of market research

Answer 12

primary and secondary

Question 13

primary research

Answer 13

data collected first hand for a specific research purpose

Question 14

advantages of primary research

Answer 14

• information gathered is focused on the needs of the business
  -can get in depth information form respondents
  -more up to date data, can be used to ask specific questions- increasing relevance

Question 15

disadvantages of primary research

Answer 15

-sample size may be too small and unrepresentative of all customers- unreliable results
-researcher bias may cause respondents to answer questions in a particular way
-business may have to hire a specialist market research agency to help, this can be expensive and time consuming

Question 16

how does observation work?
(primary research method)

Answer 16

watching how consumers behave, this provides insights but can not answer all questions.
-works well in retail markets

Question 17

how do surveys work?
(primary research method)

Answer 17

ask a series of questions to a certain number of people, the result from the sample are used to represent a larger audience
-a wider range of responses can be achieved using online survey tools

Question 18

how do online surveys work?
(primary research method)

Answer 18

low cost and more popular, they are used by smaller businesses as a way of capturing the views of existing and potential customers

Question 19

how do face-to-face surveys work?
(primary research method)

Answer 19

personal interviews in person are conducted, can be costly but good to gain detailed insights

Question 20

how do focus groups work?
(primary research method)

Answer 20

these are groups of potential customers that are brought together to discuss their feelings about the product or market, good to gain insights into customer tastes and preferences

Question 21

how does test marketing work?
(primary research method)

Answer 21

free samples are provided for a limited period of time to the target market to gauge their response to the product

Question 22

secondary research

Answer 22

data that already exists and which has been collected for a different purpose

Question 23

advantages of secondary research

Answer 23

-information is already available and is quicker to collect
-information is often free, lower costs
-more suitable for smaller businesses that lacks a large marketing budget/ research expertise

Question 24

disadvantages of secondary research

Answer 24

-information has been collected for another purpose- lacks relevance
-can be expensive to purchase market specific secondary research from specialist companies
-information may be out of data (especially in dynamic markets)

Question 25

what is quantitative data?

Answer 25

numerical data, based on larger samples so is more statistically valid

Question 26

benefits of quantitative data

Answer 26

-is easy to analyse
-numerical data provides insights into relevant trends
-can be compared with data from other sources

Question 27

drawbacks of quantitative data

Answer 27

-focuses on data rather than opinions and details
-does not explain reasons behind numerical trends
-may lack reliability if sample size and method is not valid

Question 28

what is qualitative data?

Answer 28

data based on opinions, attitudes, beliefs and intentions
-it aims to understand why customers behave in a certain way or how they may respond to a new product or service

Question 29

benefits of qualitative data

Answer 29

-essential for important new product developments and launches
-understands customer needs, wants and expectations- useful insights for businesses
-highlights issues
-effective way of testing elements of the marketing mix

Question 30

drawbacks of qualitative data

Answer 30

-expensive to collect and analyse- need specialist research skills
-based around opinions, so it is not necessarily representative

Question 31

sampling

Answer 31

the gathering of data from a sample of respondents, the results of which should be representative of the population as a whole.

Question 32

benefits of sampling

Answer 32

-a small sample size can still provide useful research insights
-using this before making business decisions can reduce risks and costs
-sampling is flexible and relatively quick

Question 33

drawbacks of sampling

Answer 33

-a risk posed is the sample being unrepresentative of population, leading to invalid conclusions
-risk of bias in research questions
-less useful in market segments where customer tastes and preferences are changing frequently (dynamic markets)

Question 34

how can ICT be used to support market research?

Answer 34

company websites
-allow businesses to collect primary data more cheaply e.g. tracking searchers.

databases
-used to store large amounts of customer information, they are effective in collating email addresses for example.

social networking
-gathers information about consumers via social media, for example Twitter and Instagram, useful method to run polls and surveys or tracking opinions about brands.

Question 35

what is market segmentation

Answer 35

the process in which a single market is divided into sub markets or segments
-each segment represents a slightly different set of consumer characteristics

Question 36

why is it important for businesses to segment their markets carefully?

Answer 36

-better matching of customer needs
-better opportunities for growth (builds sales)
-more effective promotion (target customers are reached)
-gain a higher market share

Question 37

what are the 4 segmentation factors

Answer 37

demographic
geographic
behaviouristic
psychographic

Question 38

briefly describe demographic segmentation and its factors

Answer 38

factors such as age, income, gender and social class

Question 39

geographic segmentation

Answer 39

divides markets using regions, countries, city/ town size and population density

Question 40

behaviouristic segmentation

Answer 40

how products/ services make customers feel, builds customer loyalty

Question 41

psychographic segmentation

Answer 41

specific lifestyles and personalities

Question 42

advantages of market segmentation

Answer 42

-recognises that consumers are not all identical- different tastes and preferences
-products and marketing can be altered to meet different needs of different group of consumers and targeted more precisely
-less expensive and wasteful
-may increase customer loyalty, if they feel needs are being met, leading to repeat purchases

Question 43

disadvantages of market segmentation

Answer 43

-not everyone in segment will behave in same way
-may be difficult to identify a segment
-this requires more detailed market research which can be more costly
-a segment may be identified, but too small and unprofitable to cater for

Question 43

market research

Answer 43

collection of data to obtain an insight and knowledge into the needs and wants of customers, structure and dynamics of a market