3.2 Understanding markets and customers Flashcards
What is a market?
A market is a place where buyers and sellers come together to purchase and sell products.
Market research
Market research is the process of gathering data on potential customers.
Primary market research
- Surveys
- Observations
- Focus groups
- Test marketing
Secondary market research
- Published reports
- Internet
- Government and other agencies
Qualitative market research
Qualitative market research is research into the attitudes and opinions of consumers that influence their purchasing behaviour.
Quantitative market research
Quantitative market research is the collection of information on consumer views and behavior that can be analyzed statistically.
Pros and cons of qualitative market research
Pros:
- In depth data
Cons:
- Slower to collect
- Difficult to analyse
Pros and cons of quantitative market research
Pros:
- Easier and faster to collect
- Faster to analyse
- Easier decision making
Cons:
- Unhelpful if you require understanding of the issue in depth
Market mapping
Market mapping is using a diagram to identify all the products in the market using two key features e.g. price and quality.
Sampling
Sampling is the selection of a representative group of consumers from a larger population.
How samples can be collected
- Random sampling
- Stratified random sampling
- Quota sampling
Factors influencing the choice of sampling methods
- Amount of finance available
- Pricing policies
- Product design
- Types of promotion
- Target customers
Correlation
Correlation is a statistical technique used to establish the extent of a relationship between two variables such as the level of sales and advertising.
Confidence interval (margin of error)
Confidence interval is the plus or minus figure used to show the accuracy of results arising from sampling.
Confidence level
Confidence level is the probability that research findings are correct.
