chapter 11 Flashcards
define product orientated business
businesses that produce the product first and then tries to find a market for it
define market orientated business
businesses that conduct market research to see what consumers want and then produce goods and services to satisfy them
define market research
process of gathering, analyzing, and interpreting information about a market
why is market research important?
1.helps business identify customer taste and preferences->reduces the risk of failure when developing and launching a new product
2.helps business identify the main competitors->business knows the strengths and weaknesses of other competitors, so new product can have a competitive advantage
3.discover the current and future market size->helps business identify future growth opportunities
types of market research
1.primary research
2.secondary research
advantages of primary research
1.data is up to date
2.specific
3.not available for other businesses-competitive advantage
disadvantages of primary research
1.expensive
2.time consuming
3.contain bias
advantages of secondary research
1.cheap
2.easy to obtain
disadvantages of secondary research
1.not up to date
2.not specific
define primary research
collection of original data via direct contact with customers
types of primary research
1.qualitative research
2.quantitative research
define qualitative research
collecting information about consumer buying behaviour
define quantitative research
collection of numerical data that can be analyzed using statistical techniques
methods of primary research
1.questionnaires
2.interviews
3.focus groups
4.observation
advantages of questionnaires
1.detailed information can be gathered
2.can be carried out online->cheap
disadvantages of questionnaires
1.questions can be misleading
2.time consuming to design and carry out and analyze the results
3.can be expensive to design and carry out
advantages of interviews
1.interviewer can explain any questions that the interviewee doesn’t understand->accurate answers->accurate data and market research
2.can gather detailed information
disadvantages of interviews
1.the interviewer can influence the interviewee into answering in a certain way->inaccurate results, as interviewer bias
2.very time-consuming and expensive to carry out
define focus groups
group of people who are representatives of the target market
advantages of focus groups
1.provide detailed and specific information
disadvantages of focus group
1.time consuming and expensive
2.can include bias if consumer is influenced by the opinion of others
methods of observation are
1.recording
2.watching
3.audits
advantages of observation
inexpensive
disadvantages of observation
1.information gives basic figures,Does not tell the firm why consumer buys them.
2.requires observers that are well trained to analyze consumer behavior
define samples
group of people who are selected to respond to a market research exercise
types of sampling
1.random sampling
2.quota sampling
what is random sampling
when people are selected randomly as a source of information for market research
what is quota sampling
when people are selected based on certain characteristics as a source of information for market research
reasons for sampling
1.very time consuming and inapplicable to ask the whole population- so a sample should be chosen
2.very costly to conduct market research with the whole population
what is secondary research
information that has already been collected and is available for use by others
internal sources of information
1.Opinions of distributors
2.Finance department
3.Customer Services department
external sources of information
1.internet
2.government statistics
3.newspaper and magazines
4.market research agencies
reasons for market research data inaccuracy
1.sample chosen may be too small or not representative of the population
2.wrong type of method to collect data
3.people attending to market research exercise may not answer truthfully
4.interviewer bias
5.data maybe recorded incorrectly
6.secondary data may be out of date or collected for other purposes
define primary research
collecting original data via direct contact with customers
