market research Flashcards
what is market research
the process of gathering
primary and secondary data on the buying
habits, lifestyles, usage and attitudes of actual and potential customers.
benefits of market research
Efficient Resource Allocation
Product Development
Sales Forecasting
Competitive Advantage
Identifying Customer Needs
negatives of market research
- Research does not guarantee success.
- It is costly in time.
- Often all that is needed is good intuition or a hunch.
- Costs money.
- Research can be unreliable.
why carry out market research?
- An aid to decision making
- To find out about customer wants and expectations.
- To suggest the introduction of new products, and modification of existing products.
- To find out how much customers are willing to pay/develop pricing strategies.
- To gain competitive advantage/keep pace with competitors/find out what they are doing.
- Predictive reasons – what is likely to happen in the future.
- Explanatory reasons – for example, to find out why have sales fallen in the last six months.
- Reduces risk – without market research a business may spend large sums of money developing and launching unsuccessful products
reasons against carrying out market research
Costly and time-consuming
Risk of inaccurate data
Rapid market changes
Not always necessary
what is primary market research
collecting primary data and information that does not already exist. It is collected for a specific purpose. e.g. surveys
what are the benefits of primary market research
- The research carried out is only available
to that business - It is up-to-date information
- It can be targeted for specific needs that the business may have identified.
what are the negatives of primary market research
- Can be very expensive to collect
- Can be very time-consuming to collect
- Can have problems of bias.
what is secondary market research
identifies, collects and collates information that is already in existence. This can be collected internally or externally.
what are the advantages of secondary MR
- It is inexpensive to collect and quick to
obtain. - Enables cost-effective analysis of several data sources.
what are the negatives of secondary market research
- Often out of date.
- Might not be available.
- Little control over quality.
- Problems of interpretation.
what is a sample
a group of respondents to a market
research exercise who are selected to be
representative of the views of the target market as a whole
what is quantitative research
Involves the collection of data that
can be measured. This means the collection of statistical data such as sales figures and market share.
what is qualitative research
Involves collection of data about
attitudes, beliefs and intentions.
what is quota sampling
the population is segmented
into several groups that share specific
characteristics
