Market Research 1.2 Flashcards
Market research is importante because customers differ in terms of…
. benefits they want
. amount they are able to or willing to pay
. media they see
. quantities they buy
. time and place they buy
Insights provided by effective market research
. dimensions of the market (size, structure, growth, trends)
. competitor strategies (market share, positioning, USPs) EG. Audi and Volkswagen
. needs, wants and expectations of customers VIA surveys or INE
. market segments- existing and potential opportunities for new segments
Cash flow forecstaing
Estimate of cash low
Market segmentaion
Your public
Sales forecasting
Estimate of sales
Product VS market orientation: product
An approach to marketing that focuses on the characteristics of the product rather than the needs of consumer, business develops products based on what it is good at doing
. The emphasis will be creating the product firsts and then finding market
. Problem of being too product orientated is over time your business may move further and further away from the market its looking for, thus increasing g risk of business failure
Eg. Apple
Product VS market orientation: marketing orientation
. Business responds to customer needs and wants - designs products accordingly
. Consumers at centre of marketing decisions
. Products Developed in respond to customer need
. Benefit from: increased demand, profits and a valued brand image
Eg. Zara
Why is marketing orientation crucial
. Markets are much more dynamic (shortening product life cycles)
. Customers are becoming much more demanding (eg higher expectations of customer service and able to share experiences via social media)
. Barriers to market entry getting lower
Primary VS secondary research: primary
The process of gathering information directly from consumers in the target market using field research methods eg surveys
Primary VS secondary research: advantages of primary research
. Information focused on needs of business
. Business can get in depth info
. More up to date
. Customised to your needs
. Not shared with competitors
. Reliable
Primary VS secondary research: primary disadvantages
. Sample may be to small and unrepresentative
. Bias, researchers can guide respondents to answer in a particular way
. Expensive and time consuming
Primary VS secondary research: secondary
Involves the collection and analysis of data that already exists eg purchasing market reports
Primary VS secondary research: secondary advantages
. Info already available so quicker and easier to access
. Info is often free and cheaper to collect leading to lower costs than primary research
. Suitable for small businesses that lacks large marketing budget
. More representative
Primary VS secondary research: secondary disadvantages
. Info has been collected for other purposes so may lack relevance or may not be factually correct, not customised
. Can be expensive to purchase market specific secondary data from specialist companies eg MINTEL reports
. Info may be out of date
. Biased info
Secondary research sources
. Google/ safari
. Institutions
. Public admin
. Social media
. Trade press
. Magazines
. Academic research
. Competitors website
Primary research sources
. Surveys
. Questionnaire
. Interviews
. Focus group (you choose group of people for your market and they test your product)
. Experiment
Effective market research will help business..
. Reduce risk when launching new products or entering new markets
. Anticipate future needs and wants of consumers
. To understand consumer behaviour
. To identify potential consumer demand
. Tho identify how much consumers are prepared to pay
. To identify competitors and identify they potential strengths and weaknesses
Quantitative VS qualitative data: qualitative
Why? How? Aim to understand how customers behave, based on opinions and attitudes (ie focus groups, interviews etc)
Quantitative VS qualitative data: qualitative benefits
. Wider info
. Detailed
. Focus groups/face to face
. Highlight issues to addressed to cover needs and wants
Quantitative VS qualitative data: qualitative disadvantages
. Honesty of people?
. Increased cost
. It depends on people opinion
. Difficult to analyse
Quantitative VS qualitative data: quantitative
How often? How many? When? Where? Based on larger samples, therefore more statistically valid. Obtained by various forms of survey (ie telephone, postal etc)
Quantitative VS qualitative data: quantitative benefits
. Accurate and specific information
. Statistics
. Easy to understand and manage
. Surveys/interviews
. Competitive advantage
Quantitative VS qualitative data: quantitative disadvantages
. Not broad enough
. Close ended question
. Too specific
The use of ICT to support market research: company websites
Allow business to collect primary data more cheaply eg tracking consumer searches and analysing customer reviews as well as collecting secondary data about rivals -> learning about customers and rivals
Eg. Prices and special offers
The use of ICT to support market research: databases
. These can be used to store large amounts of customer info
. file searching
. file sorting
. calculations
> data protection office
. Easy to access and manage, better organisation
The use of ICT to support market research: social networking
Focuses on gathering info about consumer via online social channels such as twitter and facebook. Also a useful method of running poles and surveys or tracking opinions about brands
Sampling
Gathering data from a sample of respondents -> representative
-> target market
Sampling advantages
representative (useful)
forecasts risks (production)
reduce cost of production
Sampling disadvantages
difficult to predict
biased (maybe)
sample unrepresentative
change in market in this case can cause failure
Market segmentation
-> which customers to serve
-> targeting, selecting segment to enter
. Each segment represents a slightly different set of consumer characteristics
Geographical and demographic segmentation
Age, income, social class, ethnicity, religion, place
Physcographic segmentation
Eg chocolate
-> eaten when sad/depressed
-> energy
-> preference
. Attitude to life
. Thoughts beliefs, likes, political aspects
Behavioural segmentations
- usage rate
- loyalty
- Time/ date consumption
Advantages and disadvantages of market segmentation: advantages
. Recognises that consumers are not all identical - consumer groups do not share all the same tests and conferences
. Products are marketing activities can be altered to meet different needs of different groups of consumers and targeted more precisely
. Less expensive and wasteful than marketing products at wide market segments
. May increase loyalty if the consumer feels that their needs are being met which can lead to repeat purchases
Advantages and disadvantages of market segmentation: disadvantages
. Not everyone whithin a segment will behave in the same way
. May be difficult to identify a segment and consumers can be belong to multiple segments at the same time
. Segmentation requires more detailed market research which can prove costly (but beneficial) to a business
. A segment may be identified but it may be too small and unprofitable
