Market Research Flashcards
Define Market Research
Gathering information about consumers’ needs or preferences in a market
What are the roles of market research
Identify demand for the product and how much they are willing to pay.
Identifying the target audience is the most effective way to promote to these customers.
To measure the competitiveness of the market and the best way to compete with it.
Define Product Oriented Buisness
a business that focuses mainly on the product, disregarding market needs and wants.
Define Market Oriented
A market-oriented business is a business that focuses on market research and finding out what the customer wants BEFORE a product, such as clothing or electronic devices, is developed.
Define Primary Research
The collection of original data. It involves directly collecting information from existing or potential customers
Advantages of Questionnaire
Detailed information can be collected
Customer’s opinions about the product can be obtained
Online surveys will be cheaper and easier to collate and analyse
Can be linked to prize draws and prize draw websites to encourage customers to fill out surveys
Disadvantages of Questionnaire
If questions are not clear or are misleading, then unreliable answers will be given
Time-consuming and expensive to carry out research, collate and analyse them.
Advantages of interview
Interviewer is able to explain questions that the interviewee doesn’t understand and can also ask follow-up questions
Can gather detailed responses and interpret body-language, allowing interviewer to come to accurate conclusions about the customer’s opinions.
Disadvantages of interview
The interviewer could lead and influence the interviewee to answer a certain way. For example, by rephrasing a question such as ‘Would you buy this product’ to ‘But, you would definitely buy this product, right?’ to which the customer in order to appear polite would say yes when in actuality they wouldn’t buy the product.
Time-consuming and expensive to interview everyone in the sample
Describe the Product Life Cycle
Product life cycle: describes the stages a product will pass through from its introduction, though its growth until it is mature, and then finally its decline.
Development: First, the product is developed. The prototype will be tested in the market before its launch. There are no sales during this time.
Introduction: Then it is introduced or launched in the market. Sales are often slow. No profit made as development costs are not yet covered.
Growth: The product gains more sales. Advertising is changed to persuade and encourage customer loyalty. Prices reduced due to competitors and profit starts to be made.
Maturity: sales increase slowly. Competition intense and advertising is used to maintain sales growth and profit is at its highest.
Saturation: sales have stabilised at their highest point. Competition and advertising is high and stable, but profit starts to fall as sales static and prices are reduced to be competitive.
Decline: sale of product starts to decline as new products enter, or it has lost its appeal. Product is withdrawn from market and sales, prices and advertising low until it stopped.
