Market research.

Question 1

What is product orientation?

Answer 1

When a business makes production and marketing decisions focussed on the design, quality and performance of their product as opposed to what consumers want.
- Based on using innovation to create the best products that they assume consumers will want - they put products out and hope to persuade them with the quality. (Apple.)

Question 2

What is market orientation?

Answer 2

When a business focuses making and selling products that match consumer preferences. It invests lots into market research to understand what consumers want. It is considered the best option as it is specifically tailored to consumer wants and can charge higher prices as a result.

Question 3

Why is market orientation lower risk.

Answer 3

It is based on consumer feedback so firms can predict demand for a product to a better degree.

Question 4

What is market research?

Answer 4

The collection and analysis of market information.

Question 5

5 reasons effective market research is important.

Answer 5

1) Can predict demand for a product, thus can ascertain the correct level of supply needed which can reduce waste. Also means they can react to likely falls and surges of demand and can react accordingly.
2) Can help businesses understand how consumers purchase products - can be useful with marketing eg what they are attracted to so know where to place products.
3) Can work out what consumers are willing to pay for products - can help with pricing.
4) Can see what their competitors are doing - see how they can improve.
5) May be able to gain perspective into the business environment (PESTLE analysis.)
Overall helps to make informed decisions which reduces risk of failure.

Question 6

What is quantitative and qualitative data?

Answer 6

Quantitative can be quantified (numerical stats.) Often involves questionnaires with closed question and quantifiable answers.

Qualitative data is opinion based and can’t be quantified - uses open questions.

Question 7

Briefly assess quan and qual research.

Answer 7

Quantitative is often easier and quicker to interpret and analyse.

Qualitative is more informative and flexible - both in tandem are most useful.

Question 8

What is primary research?

Answer 8

Where a business gathers new data.

Question 9

What is secondary research?

Answer 9

When a business uses readily available data.

Question 10

Give some methods of primary data collection.

Answer 10

Questionnaires/surveys, observations, interviews and focus groups are common methods.

Businesses may do test marketing where they release a small proportion of their proposed product and assess how successful it is before a full scale operation.

Question 11

Why is primary data useful to a business?

Answer 11

It helps a business ascertain what consumer think about a new product or ad.

It’s specific and built around a purpose - this is great in niche markets where understanding key demands is imperative.

It’s exclusive to the firm that completed it.

Question 12

Drawbacks of primary research.

Answer 12

Can be labour and capital intensive and habits and opinions it is based on can change quickly.
Also slow to complete.

Question 13

Give methods of secondary research.

Answer 13

Info from gov publications, reliable internet sources e.g. statista, and MINTEL market reports.

Question 14

Assess secondary data.

Answer 14

Quicker, cheaper and easier to ascertain.
However not specific - to a business. May also have errors or be obsolete.

Often good for an initial understanding of a market, should be used as a start but not really reliable enough without any primary research at all.

Question 15

Why is a representative sample important.

Answer 15

When primary research is completed, a business will only consider a small proportion of the overall market as it is not possible to do otherwise.

It must represent the market and have similar proportions of people regarding segments like age, gender etc - women’s products should consider more women in research - more representative = more accurate.

The bigger the sample, the larger the chance of a representative sample - but will never be 100% representative.

Sample size will depend on capital available and market size. Limited capital means less representation and less accurate results. A business will often have their priorities regarding the amount spent on research contextually.

Question 16

Why does MR have to avoid bias?

Answer 16

To increase accuracy of results.
Primary research involving questions should avoid biased Qs/ leading questions as they are more likely to produce inaccurate answers.

Both interviewers and ees can cause bias. Interviewers opinions may influence interviewees, who can also lie when they do not want to answer truthfully.

Question 17

How can technology be used to support MR? What are specific examples of technology used?

Answer 17

Many businesses use ICT to help them with market research, making the process easier, quicker and cheaper; you can obtain a lot more information than traditional research methods and it’s easier to reach a wider sample of consumers. Ie. Websites, social media pages and online databases.

Question 18

The majority of businesses have a website, how do they use their websites to enhance their market research?

Answer 18

Businesses very often use the website as a platform to conduct short surveys or analyse the activities of people using the site.

Question 19

What specifics would the business analyse regarding what visitors to their site are doing?

Answer 19

The times they are using the website. (What time in the day as well as year.)
What visitors are clicking on when they use the website.
How likely visitors are to buy products via the site and how much their likely to spend.
- A useful aspect of websites is a business can read online reviews to gain a better understanding of what people think about their products.
- Businesses can use cookies to obtain data about customers - they can then segment them to a certain extent and know who to target ads at, especially where they know it will be more successful.

Question 20

What are the limitations to website analysis? And the use of websites as a whole.

Answer 20

A business is limited in understanding the rational behind actions - they can see that many people are visiting the website without making a purchase, but cannot ascertain why.
- A competitor could gain information about a businesses new products and prices.
- Reviews can be misleading as people are less likely to leave a good review than a bad one, which could give the business the wrong impression.

Question 21

What is the use of social media, how does it benefit businesses?

Answer 21

This is the use of internet based platforms to connect with people. Businesses use platforms such as twitter and tiktok to connect with their customers.
- They could also use more niche websites such as Ravelry to connect with people who like arts and crafts.

• Businesses can post content on these websites and monitor the responses they receive as well as monitoring competitors - cheap MR.
• Given the large amounts of social media traffic, businesses can gain a lot of useful information, most sites have tools which allow businesses to analyse demographics of a businesses followers to ascertian who is looking at their content - businesses can also pay to put surveys out to potential customers for MR purposes; businesses can help to build customer profiles.

Target algorithms.
- Track current trends.

Question 22

Limitations of social media.

Answer 22

Not everyone uses the same social media - tiktok is generally younger, facebook older - can skew results.

Question 23

What are business databases?

Answer 23

Businesses can collect their own data to form databases about their products and consumers.

Question 24

How do businesses obtain the information for databases (examples)? Include secondary research.

Answer 24

Many supermarkets use loyalty card systems which give customers deals and opportunities to save money, simultaneously allowing them to track data on consumer habits. This allows businesses to form databases on specific customers and see their habits. They could target specific ads based on a customers habits.

Businesses can pay for other databases online which can provide crucial information about a market - quick and cheap but not very specific.

Question 25

What is market segmentation?

Answer 25

This is the process of dividing a market into groups of buyers where the consumers in each group share similar characteristics.

Question 26

How does MR help with segmentation?

Answer 26

It reveals the different types of consumers in a market.

Question 27

How segmentation help businesses?

Answer 27

It allows businesses to target their marketing at specific groups to ensure they are efficiently using their marketing. It can also help businesses to identify segments of a market whose needs and wants are not being met which could lead to new products (finding new niches.)

Question 28

What are four types of segmenting the market.

Answer 28

Segmentation through demographics, geographic segments, income segments and behavioural segments.

Question 29

What are demographic segments?

Answer 29

Splitting people by: Age, gender, socioeconomic class (not income) but jobs.

Question 30

What are geographic segments?

Answer 30

Dividing the market by location - could be neighbourhood, city, county, country or part of the world - mostly used by TNCs as their consumers have a variety of cultures and lifestyles so the same products/ads will not appeal to everyone.

Question 31

Income segments

Answer 31

Segmenting people on income.

Question 32

Behavioural segments

Answer 32

Amount of use, lifestyles and hobbies and interests.