Marketing Research Flashcards
What is marketing research?
Involves gathering and analysis of research to help support the implementation of marketing strategy
What important insights can market research provide that aid decision making and marketing strategy?
- dimensions of the market (size, structure, growth)
- competitor strategies (market share, positioning, USPS)
- needs, wants and expectations of customers (how they’re changing)
- market segments (existing and potential opportunities for new segments)
What is product orientation?
Business develops products based on what it is good at doing
What is market orientation?
Business responds to customer needs and wants- designs products accordingly
Why is market orientation linked to marketing success?
- markets are much more dynamic
- customers are becoming much more demanding
- barriers to market entry getting lower
What is primary research?
Data collected first hand for a specific research purpose
What is secondary research?
Data that already exists and which has been collected for a different purpose
Primary research benefits
- up to date
- directly focused to research objectives
- more detailed insights
- rivals do not have access to this data
Secondary research benefits
- often free and easy to obtain
- quick and available immediately
Primary research drawbacks
- time consuming and costly to obtain
- expensive
- some methods e.g focus group requires certain skills
- sampling may not be representative
Secondary research drawbacks
- can quickly become out of date
- rivals can access data
- not tailored to business needs
Market orientation benefits
- meeting customer needs
- less risk
- increase sales
- may be easier to charge a higher price
Market orientation drawbacks
- costly
- time consuming
- difficult to keep up with dynamic market
- don’t focus on innovation
Product orientation benefits
- less likely to conduct market research
- harder for rivals to copy
- high quality
Product orientation drawbacks
- can lead to unsuccessful products
- costly
Main formats for primary research
Focus groups Observation Surveys Telephone interviews Experiments
Secondary research main formats
Published market research reports Google Internal transactional data Media reports Competitor materials
Observations- primary research
- watching how consumers behave
- works well in retail markets ( sit outside a shop and watch how many people walk by and look at display)
Telephone interviews- primary research
- allows quicker feedback than a postal survey
- however potential customers are often warty of being called and may be reluctant to give anything other than short answers
Postal surveys- primary research
- sent to address of potential customers who complete form and send back in pre paid envelope
- cheap, covers a wide geographical area
- avoids the potential for interviewer bias
- however, response rates are low and can take a long time for customers to respond
Face to face- primary research
- personal interviews conducted face to face
- costly but good way to get detailed insights from an individual
Focus groups- primary research
- groups of potential customers are brought together to discuss their feelings about a product or market
- good way of getting detailed info about customer tastes and preferences
Test marketing- primary research
- involves selling a new product in a small section of the market in order to asses customer reaction
- food predictor of how a new product or service will be received by the larger market
Quantitative data
Numerical data, produces statistical data
- based on larger samples- more statistically valid
Qualitative data
Based upon opinions, attitudes, beliefs and intentions
- aims to understand why customers behave in a certain way or how they may respond to a new product or service
Qualitative data advantages
- can get customers needs and wants
- understand why
- can highlight issues that need addressing (why customers don’t buy)
Qualitative data drawbacks
- expensive to collect and analyse- requires specialist research skills
- based around opinions- always a risk that sample is not representative
- time consuming
Quantitative data advantages
- data is easier to analyse
- provides insights into trends
- can be compared with data from other sources (competitors, history)
Quantitative data drawbacks
- focuses on data rather than explaining why things happen
- doesn’t explain the reasons behind numerical trends
- may lack reliability if sample size and method is not valid
What is sampling?
Gathering of data from a sample of respondents, the results of which should be representative of the population (e.g target market) as a whole
Why is sampling important?
provides statistically valid insights into the profile of the overall population (e.g market) being analysed
Sampling benefits
- representative of target market
- can provide useful research insights
- flexible and relatively quick
- using sampling before making marketing decisions can reduce risks and costs
Sampling drawbacks
- biggest risk: sample is unrepresentative of population- leading to incorrect conclusions
- risk of bias in research questions
- less useful in market segments where customer tastes and preferences are changing frequently
Why is the use of IT common and essential in market research?
- the capabilities of modern business IT has transformed market research
- now relative easy to learn about consumer preferences and buying habits by mining massive sets of quantitative data
- complex algorithms can uncover patterns and correlations that enable more effective marketing
What is data minding?
- example of secondary research
- relies on data that is already there
- key benefits: quick and automated, huge data sets can be analysed = reduced need for sampling, data can be linked
How does social media support market research?
- software can quickly highlight what customers are saying about the product or brand
- surveys easy to set up and analyse results in real time
- wide range of powerful software applications to manage social media research and integrate with other business systems
Websites (ICT in market research)
Invite feedback through blogs, the number of times and timings of visitors, online polls, surveys and cookies
Social networking (ICT in market research)
Revised, blogs, likes/dislikes, viral marketing and customer feedback
Benefits of marketing segmentation
- advertising can be targeted at specific segments so that advertising spend is more effective
- the most profitable and least profitable customers can be identified
- least profitable markets can be avoided
- becomes easier to identify products
