chapter 11 - market research Flashcards
definition of:
market research
the process of gathering, analysing & interpreting info about a market
role of market research
find out:
- whether customers would buy
- what price would they buy
- what type of product
- what type of promotion is effective
- who are the main competing business
- where would they buy
- who would buy
- what feature do customers like/ dislike
- how strong is the competition
definition of:
product-oriented
business is one whose main focus of activity is on product itself; find out product first, find a market for it later
e.g. basic necessities
definition of:
market-oriented
business carries our market research to find out consumer wants before a product is developed and produced; can take advantage of new market opportunities (new products launched with confidence)
e.g. business whose markets are international/ national, business who needs to have a marketing budget
definition of:
marketing budget
a financial plan for the marketing of a product or product range for some specified period of time
types of market research methods
- primary research
- secondary research
definition of:
primary research
collection & collation of original data via direct contact with potential/ existing customers
advantages of primary research
- up- to-date and relevant to business undertaking it
- planned and carried out by people who want to use the data; first hand
- effective when used to gather info that helps business with a specific problem
- unavailable to other business
disadvantages of primary research
- can be expensive; interviewing
- not available immediately; takes time
types of primary research
- focus group
- interviews
- online surveys
- questionnaire
definition of:
questionnaire
a set of ques to be answered as a means of collecting data for market research
definition of:
focus groups
a group of people who are representative of the target market
definition of:
interviews
involve asking individuals a series of questions, face to face or over phone
definition of:
online surveys
require the target sample to answer a series of ques over the internet
advantages of questionnaire
- detailed qualitative info gathered
- can be carried out online
- vouchers offered to encourage people to participate
- obtain customer’s opinion
disadvantages of questionnaire
- if ques not well thought, answ can be inaccurate and misleading
- takes lot of time & money collating and analysing
advantages of online surveys
- quicker response
- cheap
- easy to complete for participants
- data collected can be quickly presented & analyses
disadvantages of online surveys
- absence of interviewer to explain open- ended ques
- cannot reach potential respondents (don’t have access)
- scope for fraud (dishonesty, complete carelessly, gain incentives offered)
advantages of interviews
- interviewer can explain ques not understood
- detailed infos gathered abt what customers like/ dislike
disadvantages of interview
- interviewer can lead interviewee into answering certain way; inaccurate results due to interviewer bias
- time consuming and expensive
advantages of focus groups
- provide detailed infos abt consumers taste and preferences
- interaction between members of group helps business understand the reasons for their opinions
- quick and cheap
disadvantages of focus groups
-time consuming and expensive if carried out by a specialist market research
agency
-discussion can be bias
-can be dominated by just few people; researcher needs to be experienced
definition of:
sample
group of people who’re selected to respond to a market research exercise
definition of:
random sample
when people are selected at random as a source of info for market research
-everyone has even chance of being picked but not all are a consumer of the product investigated
definition of:
quota sample
when people are selected on the basis of certain characteristic (income, age, gender) as a source of info for market research
definition of:
secondary research
uses info that has alrd been collected and is available all for us by others
advantages of secondary research
- cheaper way to gather info
- quicker than primary research
- help assess total size of a market (population and age structure)
- newspaper carry vital economic forecasts (when does recession happen?)
limitations of secondary research
- data out of date
- data available to all business
- data may be irrelevant
examples of internal source of data
- sales department records, pricing data, customer records, sales reports
- financial department
- customer service department
- opinions of distribution and public relations personnel
examples of external source of data
- gov statistics (population size and structure)
- newspapers (general state of economy - customer spending pattern in future)
- trade association (provide information for business in that industry)
- market research agencies
- online sources
