Market Research 1.2 Flashcards by Alejandra Garcia-Cordero Pascua

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

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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

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Cash flow forecstaing

Estimate of cash low

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Market segmentaion

Your public

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Sales forecasting

Estimate of sales

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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

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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

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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

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Primary VS secondary research: primary

The process of gathering information directly from consumers in the target market using field research methods eg surveys

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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

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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

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Primary VS secondary research: secondary

Involves the collection and analysis of data that already exists eg purchasing market reports

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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

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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

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Secondary research sources

. Google/ safari
. Institutions
. Public admin
. Social media
. Trade press
. Magazines
. Academic research
. Competitors website

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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