Market Research Flashcards
Market growth formula:
(Current market size - original market size) / original market size * 100
Market share formula:
Firm’s sales revenue / total market revenue * 100%
Purpose of marketing:
To identify, anticipate, and satisfy customer needs and wants.
The management process involved in identifying, anticipating, and satisfying consumer requirements profitably.
Compare and contrast market orientation and product orientation.
Market orientation: looks to the market to see what customers want or need (outward looking)
Product orientation: looks at what they can make in hopes that the market will want it (inward looking)
How to increase market share? Why?
- Good promotion
- Good employees
- Good distribution
- Good products
Become a market leader who can charge premium prices, experience economies of scale, extend product life cycles, gain brand loyalty, attract new customers, etc.
What is marketing planning?
The process of creating a firm’s marketing objectives and strategies used to achieve the objectives. Reviews the current status, sets new goals, implements strategies, and reflects on success.
What is a niche market? How does it compare to a mass market?
Niche marketing targets a specific and well defined market segment. Mass marketing targets multiple market segments to maximize sales.
Benefits of niche marketing? Detriments of niche marketing?
Better marketing focus (knowing exactly what people want)
Able to charge higher prices due to less competition
Highly specialized in meeting needs and wants
Limited customer base
Few opportunities to exploit economies of scale
Successful niche markets can attract new entrants into the industry, leading to more competition
Benefits of mass marketing? Detriments of mas marketing?
Exploitation of economies of scale
Able to use a single marketing campaign to address the entire market
Large customer base
High barriers to entry
Heavy competition
Lacks focus and may not satisfy individual needs and wants
What is sales forecasting?
A quantitative management technique used to predict a firm’s level of sales over a given time period
Three sales forecasting techniques:
Extrapolation
Uses past data to predict future sales by extending past trends
Draw a line of best fit, helping to anticipate future money
Market research
Identifying and forecasting the buying habits of consumers
(can be vital to a firm’s prosperity and survival)
Times series analysis
Attempts to predict sales levels by identifying the underlying trend from a sequence of actual sales figures
Seasonal, random, and cyclical variations from economic booms and slumps
Floating vs. central interest rates?
Floating interest rates: (whatever interest rate the government/society has) can lead to too-high interest rates
Central interest rate: central bank chooses the interest rate (slower, but deals with all of the loans/COVID that would increase inflation)
Benefits of sales forecasting? Detriments?
Benefits of sales forecasting:
- Improved working capital and cash flow
- Improved stock control
- Improved productive efficiency (how well you are using everyone in the business)
- Helps to secure external sources of finance (how much you need based on how much you’re going to get)
- Improved budgeting
Limitations of sales forecasting:
- Limited information
- Over-optimism
- Inaccuracy of predictions
- Garbage in garbage out (GIGO) (if the quality of your data is low, then your results may be worse)
- External influences
Ad hoc vs continuous market research?
Ad hoc market research: occurs on an ‘as and when necessary’ or one-off basis
Continuous market research: occurs on an ongoing basis
Types of primary market research?
Interviews, focus groups, surveys, observations
