Marketing Flashcards
What is primary market research?
This is often called “field research” and involves gathering information for the first time such as conducting a survey of potential customers
What is secondary market research?
This involves using data that already exists such as information published in a newspaper or on a website
Describe the two types of market research
Primary and secondary market research
What are the reasons for conducting market research?
They enable the entrepreneur to lean more about:
- MARKET OPPORTUNITY -identify any trends in the market
- MARKET SIZE - This measures either the value of sales (how much is spent) or the volume of sales (the number of items sold)
- MARKET GROWTH - this is the rate that the market is growing (market for online streaming will provide greater market growth than VHS sales)
- MARKET SHARE - the percentage of total sales of firms already in the market
- MARKET SEGMENTS - where the market has different parts - eg ice cream market could be where people ear straight away and the take home market.
- LEARN ABOUT COMPETITORS - and identity their strengths and weaknesses
- LEARN MORE ABOUT CUSTOMER NEEDS - entrepreneur can get a better insight into their customers and their rivals and identify how to best serve the customers.
What are the advantages of secondary market research?
- It can be obtained quickly and cheaply - can get info from newspapers, journals, books, magazines, Internet and government statistics.
- It can provide information on large sections of the population which a small business could never afford to do.
What are the disadvantages of secondary market research?
- The existing data may not be exactly what the start up business wants - burger sales for the UK may be available but you just want burger sales for Northampton.
- The existing data may be out of date - if market is fast moving this data may have little real value.
How is Primary data gathered?
By OBSERVING (eg watching people walking around a supermarket), EXPERIMENTING (trying out a new advertising campaign) and SURVEYING (interviewing people).
What are the advantages and disadvantages of primary research?
Primary research can be targeted and tailored to the needs of a business so it is up to date.
However, it can also be very expensive.
What methods can be used to gather primary data?
- TELEPHONE SURVEYS - ringing up customers is quick and inexpensive - however, people tend to be suspicious of cold callers.
- QUESTIONNAIRES - questionnaires can be posted but response rate is very low. People not completing the survey may not be representative. Also untrained people may influence survey results.
- CUSTOMER/SUPPLIER feedback - useful but only focuses on existing customers and not new customers.
- FOCUS GROUPS - small groups of people selected to give their views on a particular business issue or product or brand name or image. May not be representative of a large market but may help to in entity potential issues.
- INTERNET RESEARCH - Possible to track the number of visitors to a website, how they found the site and what search engine they used.
What are the difficulties and problems of start-up research?
Entrepreneurs are often short of money when setting up a business. They assume if they like a new product then everyone else will too.
One reason for high failure of start up businesses is they fail to understand what the customer needs and the market.
What are the 4 Ps in marketing mix?
Product, Promotion, Price, Place
Explain the 4 Ps
PRODUCT - this refers to all factors relating to the design, specifications and the features of the product. Think of products that are distinctive such as Dyson, Apple, Toyota and McDonalds.
PROMOTION - promoting a product means communicating something about it. There are many ways of communicating such as advertising in newspapers, putting posters up around town or sponsoring an event. It’s important to have the right promotion for the right product.
PRICE - price is important as is whether they offer payment terms and offer discount for bulk buys. How is the price compared to competitors and whether price will be higher (with less sales) or lower price (with higher sales). New products with no track record will normally charge less.
PLACE - how are the products are distributed. Will it be direct to customers, do they come from the factory to the shop or are they bought by a wholesaler.
Define marketing mix
The marketing mix refers to all the activities influencing whether or not a customer buys a product.
How do you chose the correct marketing mix
PRODUCT - is it distinctive? How long does a customer expect it to last? How long will it last?
COMPETITION - what do they offer and how does it compare with what you have?
TARGET CUSTOMERS - who are your target customers? Why will they buy your product? How much do they need? Compare posh hotel with travel lodge.
BUSINESS APPROACH - Are you trying to match what your competitors do? Is your product going to be cheaper? Is your product different?
