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business theme 1 > market research > Flashcards

market research Flashcards

1
Q

if a business is product oriented:

A

then when making production and marketing decisions it focuses most heavily on the design, quality or performance of its products, rather than what consumers actually want

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2
Q

product oriented businesses might use:

A

advances in technology to develop new products and functions that they think customers will like

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3
Q

they often create:

A

new and innovative products and then put them on the market and hope that they can persuade consumers to buy them. for example, Apple continuously develops the design and quality of its iPhones and focuses on innovative new functions to capture its market - it can be classed as a product orientated business

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4
Q

market orientation is when:

A

a business focuses most heavily on selling products that match customer preferences

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5
Q

it invests lots in:

A

market research to find out what consumers want and will be willing to buy

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6
Q

a market orientated business is considered to be a:

A

more modern and successful approach than a product orientated one

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7
Q

it provides products:

A

tailored to what consumers want, so it can often charge higher prices

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8
Q

market orientation could be viewed as:

A

a more low-risk strategy compared to product orientation - its based on consumer feedback so firms can predict more accurately how much demand there’ll be for the product

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9
Q

market research is the:

A

collection and analysis of market information. it can include looking at the market as a whole, the competitors in the market and their products, and the consumers in the market. effective market research is important to a business for many reasons

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10
Q

market research finds out what:

A

customers want and need

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11
Q

needs are:

A

essential things such as food and water

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12
Q

whereas wants are:

A

things that customers can choose whether they buy, like jewellery and holidays

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13
Q

as well as identifying the current needs and wants of customers, market research tries to:

A

anticipate what the needs and wants will be in the future so that the business can get one step ahead of the market

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14
Q

market research allows a business to predict:

A

how much demand there will be for its products

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15
Q

researching the level of demand can help a business to know:

A

how much of the product it will need to supply

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16
Q

if research shows that demand for an existing product is likely to fall:

A

it can take action, e.g. it can promote the product to increase demand

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17
Q

market research allows a business to learn:

A

more about how consumers behave in relation to a product. e.g. it could learn how consumers buy the product (e.g. in store or online) and how they use the product

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18
Q

this could help the business to understand how:

A

best to market its product

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19
Q

businesses use market research to work out:

A

how much consumers would be prepared to pay for a product - they usually want to charge enough to make a profit, but not so much that customers won’t buy it

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20
Q

identifying competitors is a:

A

big part of market research - businesses need to research what their competitors may be doing better than them, to see where they can improve their own business

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21
Q

as part of market research, a business may:

A

gain insight into aspects of the business environment that could affect the market - these are called SLEPT (social, legal, economic, political and technological) factors

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22
Q

overall, market research helps businesses to make:

A

informed decisions about business operations, which helps to reduce risks involved in such decisions

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23
Q

quantitative research produces:

A

numerical statistics - facts and figures. it often uses multiple choice questionnaires that ask questions like: “when did you last buy the product? a: within the last day, b: within the last week, c: within the last month, d: within the last year, e: longer ago, f: never” these are called close questions because they have fixed, predetermined answers

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24
Q

qualitative research is based on:

A

the opinions of consumers, and doesn’t produce numerical or quantitative results. it often involves questions like: “how does this product make you feel?” these are called open questions. the answer isn’t restricted to multiple-choice questions

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25
Q

quantitative research and closed questions give data that can be:

A

statistically analysed, which makes analysis quicker and easier

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26
Q

qualitative research may be more:

A

informative as the responses can be more flexible

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27
Q

the most effective type of market research:

A

combines both qualitative and quantitative research

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28
Q

primary market research is where:

A

a business gathers new data (or employs someone to do it on their behalf)

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29
Q

secondary market research involves:

A

using data that’s already available

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30
Q

primary data can be collected in:

A

a number of ways. methods include: questionnaires or surveys, observations, interviews and focus groups

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31
Q

questionnaires/surveys:

A

these ask lots of questions and can be done via post, phone, internet or in person

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32
Q

observations:

A

where consumers are watched in a normal shopping environment to get an insight into their behaviours

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33
Q

interviews:

A

usually done one-on-one with a researcher

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34
Q

focus groups:

A

where a group of around 8 people discuss their opinions, e.g. about a product

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35
Q

businesses do:

A

test marketing - e.g. they launch a product in one region and measure sales and customer response before launching it across the country

36
Q

sampling might be used to:

A

make predictions about the whole market based on a sample

37
Q

primary data is needed to find out:

A

what consumers think of a new product or advert. you can’t use secondary data because, erm, there won’t be any secondary data on a brand new product

38
Q

primary data is:

A

specific to the purpose it’s needed for. this is great for niche markets - secondary data might be too broad or too mainstream to tell you anything useful

39
Q

primary data is (2):

A

exclusive to the business who researched it, so competitors can’t benefit from it

40
Q

however, primary research is:

A

labour-intensive, expensive and slow

41
Q

secondary data includes:

A

information from Government publications, reliable internet sources such as Statista (a website that gives access to statistics), trade magazines and market reports such as those by MINTEL

42
Q

secondary data is much:

A

easier, faster and cheaper to get hold of than primary data

43
Q

secondary data collected for a different reason may be:

A

unsuitable. it may have errors or be out of date

44
Q

secondary data is often used to get:

A

an initial understanding of a market. a firm may then do more specific primary research to investigate any issues or problems that are shown by the secondary data

45
Q

when primary market research is done:

A

samples of people are used rather than the whole market - this is valuable as it keeps costs down and saves a lot of time and resources

46
Q

the sample needs to:

A

represent the market. it must have similar proportions of people in terms of things like age, income, gender, etc.

47
Q

a more representative sample will be:

A

more likely to give accurate results

48
Q

a big sample has a:

A

better chance of being representative than a small sample - but even a big sample won’t necessarily be 100% representative. there’s always a margin of error

49
Q

the size of the sample may depend on:

A

how many people a firm can afford to ask

50
Q

if the money available for research is limited:

A

the risk of the information being inaccurate increases

51
Q

whether a firm prioritises cost or accuracy often depends on:

A

the type of market, the size of the business and the business context

52
Q

a new business launching a product in a niche market is:

A

risky. it will benefit from accurate research to find out what consumers really want, so may prioritise accuracy over cost

53
Q

a business launching a product in a competitive market which is similar to products already on the market is:

A

likely to prioritise cost over accuracy - it might not need to spend much on the market research because it is already clear that the product is in demand

54
Q

to increase the accuracy of market research:

A

researchers have to be careful to avoid any possible bias

55
Q

questionnaires, surveys and interviews should:

A

avoid biased questions - e.g. questions that are phrased in a way that leads the respondent to give a particular answer, e.g. “you do like chocolate, don’t you?”

56
Q

both interviewers and respondents can:

A

cause bias

57
Q

interviewer bias can be caused by:

A

the personality of the interviewer - their opinions can influence the interviewee

58
Q

respondents can give:

A

biased answers - this is when their response isn’t the true answer, often because they don’t think their true answers are socially acceptable (like saying they eat 3 chocolate bars in a week, when it’s really 23)

59
Q

many firms now use:

A

ICT (information and communication technology) to help them with market research

60
Q

using technology makes market research:

A

easier, cheaper and quicker. it can be used to get a lot more information than traditional research methods and it’s easier to reach a wider sample of consumers

61
Q

examples of ICT that firms can use:

A

websites, social networking and databases

62
Q

a business can use its own:

A

website for market research. this could be done by using the website as a platform to conduct short surveys or by analysing the activities of people using the site

63
Q

they could analyse information about:

A
  • what times of day/year the website is used the most
  • what visitors are clicking on when they use the website
  • how likely it is that visitors will buy products via the site and how much they’re likely to spend, etc.
64
Q

there are limitations to the data that can be gathered from a business’s website

A

e.g. a business might discover that many people visiting its site don’t end up buying products, but it still won’t know why

65
Q

a business can look at:

A

competitor websites to gather information about their new products, prices, etc.

66
Q

a business can read:

A

reviews about their products that have been written on other websites, for example, they could read customer reviews on an online retailer’s website, such as Amazon. they could also look on specific review websites, such as TripAdvisor. however, consumers are more likely to leave a review if they have had a bad experience with a product, so reviews might not be representative of what all consumers think

67
Q

social networking is:

A

the use of internet-based platforms to make connections with people

68
Q

firms can:

A

connect with their customers through well-known social networking sites, such as Facebook or Twitter

69
Q

they could also use:

A

less well-known, niche social networking sites to connect with users that have certain interests, e.g. Ravelry is a social networking site for people that like crafts, such as knitting and crochet

70
Q

firms can (2):

A

post content on social networking sites and monitor the responses they get. this may allow them to find out what people are saying about their products and their competitor’s products, which is a quick and cheap way to carry out market research

71
Q

many social networking sites have:

A

tools that can be used for market research. for example, firms can pay social networking sites to post survey questions about products on consumers’ news feeds

72
Q

facebook also has:

A

tools that analyse the demographics of its followers, as well as which other pages a firm’s followers are interested in - so a firm can easily and cheaply build a profile of its followers

73
Q

social networking sites can be used to:

A

track current trends, for example businesses can search hashtags on Twitter to see what products and trends are popular

74
Q

a limitation of using social networking for market research is that:

A

not all consuers use the same social networks - for example, fewer older people use Twitter than Facebook. so market research could produce very different results, depending on the social networking site that’s used

75
Q

businesses can collect their own data to form a:

A

database about their products and consumers. for example, lots of supermarkets offer loyalty cards which give customers money back according to how much they spend - these allow supermarkets to form a database of customer names and addresses, and also their preferences based on what they buy. e.g. they could target an offer on pet insurance at people who bought pet food. this would make the campaign cheaper and more effective

76
Q

firms can also use other:

A

databases as a source of secondary research. these are usually accessed online for a fee and can provide information about the trends, businesses and consumers in a particular market

77
Q

these databases are:

A

a quick and cheap source of information but the data is mostly quantitative- it doesn’t give much information about consumer opinions and how they actually feel about the product

78
Q

segmentation means:

A

dividing a market into groups of buyers - consumers in each segment share one or more characteristic, e.g. age, income, hobbies, etc.

79
Q

market research helps a firm to:

A

segment a market by revealing more about the types of consumers in the market

80
Q

each segment of consumers has:

A

a different wants and needs, and so requires a different marketing mix

81
Q

segmenting a market allows businesses to:

A

target their marketing towards specific groups of buyers

82
Q

segmentation can also help to:

A

identify segments of a market whose needs and wants aren’t being met, which could lead to new products being developed

83
Q

some of the ways in which a market can be segmented:

A
  • demographic segments
  • geographic segments
  • income segments
  • behavioural segments
84
Q

demographic segments:

A
  • age, e.g. Saga Holidays are aimed specifically at the over-50s
  • gender, e.g. yoghurts are mainly marketed towards women
  • socio-economic class, e.g. businesses can segment their market based on the kind of jobs people have - e.g. modern one bedroom flats might be marketed at young professionals
85
Q

geographic segments:

A

the market can be divided according to neighbourhood, city, county, country, or world region, e.g. Asia. it’s a method mostly used by multinational companies as their customers have a range of cultures, lifestyles and climates and are likely to need different marketing mixes

86
Q

income segments:

A

e.g. Chanel makeup is aimed at customers with high incomes and Superdrug’s own-brand makeup is aimed at lower-income customers. luxury products are usually aimed at high income groups

87
Q

behavioural segments:

A
  • amount of use, e.g. mobile phone suppliers market differently to heavy users and light users
  • lifestyle, e.g. busy young workers might tend to buy lots of microwaveable ready-meals, so a business making ready-meals might target this market segment
  • hobbies and interests, e.g. snack foods with a high protein content might be mainly marketed towards people who like playing sports and going to the gym, and people who are interested in health

business theme 1 (19 decks)

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