Market Research 1.1.2 Flashcards
What is market research?
Gathering and analysing research to aid a marketing strategy
How is market research useful
It can provide insight that can aid marketing strategies and decision making
what is product orientation
focuses on the characteristics of the product, rather than consumer needs
disadvantages of being too product orientated
business may move further away from what the market is looking for over time, thus increasing the risk of business failure
advantages of being product orientated
- allows business to focus on the product’s quality
- can innovate the product to make it stand out
what is market orientation
a marketing approach which focuses on customer wants and needs
advantages of market orientation
- fits customer expectations (therefore builds a loyal fanbase)
- consistent new/improved products to entice new customers
disadvantages of being too market orientated
- regularly changing the product may leave original customers confused about what the brand stands for
- may struggle to keep up with the technology of product-orientated businesses
- if customers care more about cutting edge products and innovation, this approach may be lacking
what is primary research
data collected first-hand for a specific purpose
what is secondary research
data that already exists because it was collected for another purpose
advantages of primary research
- the information gathered will be focused on the purpose of the research
- research isn’t available to rivals
- in-depth information
- up-to-date and relevant information (specific questions)
disadvantages of primary research
- sample size may be too small
- may be some bias if respondents answer in a certain way
- respondent’s answers may be influenced by others or not be accurate
- expensive + time-consuming because specialist market research teams need to be hired
main methods of primary research (4)
- observation
- surveys (most common)
- focus groups
- test marketing
advantages of secondary research
- quicker to collect because the information is already available
- cheaper because most information is free to collect
disadvantages of secondary research
- may lack relevance to the specific question because it has been collected for other purposes
- may not be factually correct (Wikipedia)
- you can purchase specialist data such as MINTEL reports, but this is expensive
- information may be out of date, especially for dynamic markets
outline quantitative research
- based on/focused on data
- questions such as ‘how many?’ ‘how often’ etc.
- based on large samples (more statistically valid)
advantages of quantitive research
- data is easy to analyse
- numerical data is easy to compare
disadvantages of quantitative research
- doesn’t explain why things happen
- doesn’t show the reason behind the statistics
outline qualitative research
- based on opinions and beliefs
- questions such as ‘why?’ and ‘how?’ etc.
- aims to understand customer behaviour
advantages of qualitative research
- useful in product development (based on customers’ opinions)
- allows business to adapt products based on customer needs
- easy to highlight issues
disadvantages of qualitative research
- expensive to collect and analyse because specialist research skills are needed
- may not be representative or valid because data is based on opinions (could be a bias)
3 ways in which ICT can support market research
- make company websites to track customer searches etc.
- make databases to store customer information
- helpful in gathering information about consumer online through social networks
what are the 4 market segmentations
- geographic
- demographic
- behavioural
- psychographic
examples of geographic segmentation
- customer location
- region
- rural/urban landscape
examples of demographic segmentation
- age
- gender
- occupation
- social class
examples of behavioural segmentation
- usage (of product)
- benefits from the product
- loyalty status
- eagerness to purchase
examples of psychographic segmentation
- personality
- lifestyle
- attitudes
why is it important for businesses to segment their markets
- to match specific customer needs
- opportunity for growth
- effective/different promotion based on segment
- possibilities of gaining a higher share of the market
advantages of market segmentation
- recognises that consumers are not identical
- allows products to be altered in a way that will attract more customers
- less expensive and wasteful than wasting marketing to the wrong audience
- may increase loyalty if consumers feel as though they’re being heard
disadvantages of market segmentation
- not everyone within a segment behaves the same
- hard to identify segments since consumers can fall into many
- requires detailed market research which takes time and costs money
- the identified segment may be too small and unprofitable to work for, meaning the time taken was useless
why is market research important
- so identical products aren’t created
- meets customer needs
- avoids wasting funds
