(PAPER 1) 1.1.2 market research Flashcards
weather you do product or market orientation depends on…
- cost to do it
- objectives of business
- how quickly you want to get the product out
- competitors
- type of product e.g. tech/mass market
market research definition
the collection and analysis of market information
bias definition
where the findings do not give a true reflection of the views of the target audience on the product or service
reliability definition
the degree of which the research method produces stable and consistent results
validity definition
how accurately a method measures what it is intended to measure
product orientation definition
an approach to business which places the emphasis upon the production process and the product itself
market orientation definition
an approach to business which places the needs of consumers at the centre of the decision making process
primary research definition
the gathering of ‘new’ information which does not already exist
secondary research definition
uses pre-existing data that has been gathered for another purpose
quantitative research definition
the collection of data that can be quantified
qualitative research definition
the collection of data about attitudes, beliefs and intentions
sample definition
a small group of people who must represent a proportion of a total market when carrying out market research
primary research methods:
- survey/questionnaire
- focus groups
- observation
- test marketing
secondary research methods
- internet
- government data
- published reports
- internal data
advantages and disadvantages of primary market research
+ specific to the business
+ up to date
- expensive to conduct
- time consuming
advantages and disadvantages of secondary market research
+ fast access to information- quick and easy to gather
+ can gain valuable industry information
- may need to spend time finding the correct information
- could be out of date
internet data
- secondary data
- coverage: high
- cost: very low
- time: very low
- quantitative research: high
- qualitative research:low
- overall effectiveness:high-doesn’t take time to access & don’t pay for it
social networking definition
the use of internet based platforms to make connections with people
database definition
an organised collection of data stored electronically with instant access, searching and storing facilities
market segmentation definition
dividing a market into smaller sets of customers with similar needs and interests
different ways to segment the the market
- age: older people- fragrances, younger people- toys
- income: e.g. fragrances- what fragrances people can afford
- lifestyle: e.g. grouping them on their attitudes, opinions and lifestyles
- location: e.g. fast food- may not deliver/base themselves in some places
- demographics: fast food-Muslims don’t eat pork… clothing- cater for different age groups, genders & religions
- behaviour: e.g. cars- the reason why your driving it e.g. got a family, collect cars
advantages of market segmentation
- you can target your market more effectively and accurately
- you can encourage customer loyalty so you can afford to charge higher prices
- helps with your market research- if you know who your customers are, you’ll have a clearer idea of customer needs
disadvantages of market segmentation
- you narrow the target market-small group of customers you can target
- meeting a very specific customer need e.g. quality would increase cost for business
Disadvantages of product orientation
Can be risky for firms because this approach means that they don’t do market research meaning that they are not familiar with customer needs so they are likely to fail
Advantage of product orientation
Makes the business more competitive because they can release products quicker without doing research therefore they beat competitors
Disadvantages of market orientation
- continuous consultation (market research) may be costly and time consuming
Advantages of market orientation
+ The business understands customer needs- more likely to attract customers to their business- satisfied customers- customer loyalty
+ able to anticipate market changes
limitations of market research: sample size and bias
sample size: the amount of people who are asked to take part in the research
if the sample is TOO SMALL= there is more chance that respondents who do not reflect the overall views of the market are over-represented e.g. only 20 people are asked about a mass market product.
Sample bias- the way that respondents are selected may over-represent certain types of people who’s views may skew the overall findings away from the views of the total population being researched
reasons why businesses may carry out market research
- identify and anticipate customer needs and wants
- quantify likely demand
limitations of market research
- can be out of date quickly
- prone to bias/ sample size
why might a business use quantitative research rather than qualitative
- speedier to analyse and easier to spot patterns
- black and white data e.g. 60% say yes
3 uses of ICT to support market research
- websites- competitor research, cookie data
- social networking- polls on Instagram
- databases- Tesco loyalty cards
