Market research and segmentation Flashcards
Define the term ‘market’
A place where buyers and sellers meet
Name the 4 types of market
Local, global, niche, mass
What are the two advantages of a local market?
1) Good relationship with customers
2) Easy travel and communication
What are the two disadvantages of a local market?
1) Customer are limited
2) Demand is smaller
What are the two advantages of a global market?
1) Variety of customers
2) More demand
What are the two disadvantages of a global market?
1) Slow spread of reputation
2) More competition
Define the term ‘niche market’
A specific product or service targeted at specific customers.
What is an advantage of niche markets?
Can charge at premium prices
Define the term ‘mass market’
Larger market having general advertisements
What is an advantage of mass markets?
More volume of sales
What is ‘market segmentation’?
Grouping customers based on similar interests and characteristics
What does demographic segmentation base off of?
Characteristics
What does psychographic segmentation base off of?
Hobbies and interests
What does geographic segmentation base off of?
Location: in regards to business or if they live rurally or urban.
What are the advantages of market segmentation?
1) Minimises unnecessary interaction with unworthy customers
2) Allows for more personal/effective market approaches
Define the term ‘targeting’
Process of deciding which segment should be focused on during advertisement
What is market size?
Volume or value of sales in that market
What is market share?
Proportion of sales compared to all sales in that market
What is the formula for market share?
(Sale of 1 / Sale of all) x 100
What influences market growth?
1) New or change in demand
2) More competition
3) The economy
Define the term ‘extrapolation’
Extracting data from past graphs to predict the future
What are the advantages of extrapolation?
1) Can prepare
2) Is easy to carry out
What are the disadvantages of extrapolation?
1) Could be inaccurate
2) Ignores qualitative info
Define the term ‘primary research’
First hand research carried out by the individual who needs it, so that it is specific to them
Give the 5 types of primary research
Observation, surveys, interviews, experiments, focal groups
What are the two advantages of primary research?
Specific and first hand
What are the two disadvantages of primary research?
Time consuming and expensive
Define the term ‘secondary research’
Using existing info done by other sources, and adapting to your needs
Give 3 types of secondary research
Internet, libraries, government statistics
What are the two advantages of secondary research?
Cheap and pre-done
What are the two disadvantages of secondary research?
Not specific and is accessible to competitors
What is random sampling?
Each member has an equal chance of being chosen
What is quota sampling?
Use proportions for equal representation of all groups in population
