research and data Flashcards
what is market research?
gathering information on how consumers purchase goods and services. Finding out what their wants and needs are and if they are currently satisfied
what is primary research?
new data collected by a business which is specific to the business
what is secondary research?
research already collected by someone else for a different purpose
what is qualitative data?
data presented in word form. it tends to be more in depth
what is quantitative data?
data presented in numerical or statistical form
LOA- benefit of primary market research
- primary market research is when a business collects new data
- which is up to date and specific to the business
- e.g focus groups and questionnaires
- allows the business to effectively identify customer wants and needs
- create a profit which meets these needs
- build customer loyalty
- increase selling price
- without significant fall in demand
- increased profit margins
- more retained profit to reinvest
what is the drawback of primary market research?
- primary research can be expensive.
- May need to hire specialist researchers
to conduct research - Eg. questionnaires and focus groups using a large sample size
- in order to find out customer wants and needs
- increased outflows on wages
- Reduced cash reserves
- May be unable to pay day-to-day bills *
- Forced to sell non-current assets in order to cover payments
- Lower net cash flow
- Business unable to operate
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LOA- benefit of secondary research
- the research is presented in report format
- has already been completed
- therefore does not require researchers to be recruited
- as there will not be a requirement to do focus groups for example
- this significantly reduces outflows ( wages)
- improving net cash flow
- leading to increased current assets
- ability to pay debt and avoid failure
LOA- drawback of using secondary research
- the research has been completed in the past and for a different purpose
- may not be time or business relevant
- therefore making invalid suggestions on how the business can improve
- leading to inappropriate product portfolio
- leading to low sales
- lower gross profit
- risking an operating loss
- forcing the business to use cash reserves to pay expenses
- less attractive to banks or investors
- as suggests the business may struggle to pay bills
- struggle to raise capital for future expansion
LOA- benefit of quantitative data
- Data collected in statistical form
-using closed questions - these can be completed independently
-and easily analysed
-therefore specialist researchers are unlikely to be needed
-reducing the costs of wages for conducting the research
-Cash can instead of being invested into using a larger sample size
-leading to more reliable data collected
-more likely to produce a product which meets a customer wants and needs
-increased revenue and increased gross and operating profit
LOA- drawback of quantitative data
- the data is presented in statistical form
- resulting in limited depth
- respondents can’t explain why they made certain choices
- making it difficult to develop new ideas
- limiting innovation
- less likely to develop unique and competitive products
LOA- benefit of qualitative data
- it invites the participant to give a more detailed response
- this can lead to a deeper understanding of customer wants and needs
- resulting in the business being able to provide a product to more effectively meet their needs
- increasing customer loyalty
- able to increase selling price without a significant fall in demand
- increased revenue
- increased profit margins
- more retained to reinvest
LOA- drawback of using qualitative data
- gathering a large volume of detailed responses will require a significant number of researchers
- this will significantly increase fixed costs
- this may mean that a lower volume of data is collected as a business may not have the cash to pay for the researchers
- resulting in unreliable results as less people are asked
- resulting in the wrong product being produced or the wrong price being charged
what is product orientation?
when a business focuses on developing the product through r&d
what is market orientation?
when a business focuses on understanding customer wants and needs through market research
LOA- benefit of product orientation
- product orientation involves focusing on developing the product
- lots of investment into r&d of the function of the product
- improved innovation by having unique features
- differentiate from competitors
- customers willing to pay high prices
- increase prices without significant fall in demand
- increased revenue
- higher gross profit margins
- increased retained profit
- able to reinvest in further r&d to continue innovating
LOA- drawback of product orientation
- however product orientation can be expensive
- lots of investment into r&d in order to innovate
- increased fixed costs
- e.g paying high wages of engineers
- leads to lower operating profit margins
- reducing retained profit
- less capital to reinvest into further r&d
- may be unable to effectively differentiate
- lower sales in the long term
LOA- benefit of market orientation
- market orientation focuses on customer wants and needs
- this allows the business to create products based on customer trends
- and use market research to quantify demand
- allowing them to produce products likely to have a high sales volume
- increasing sales revenue
- increase gross and operating profit
- increasing retained profit
- able to reinvest into conducting further market research
LOA- drawback of market orientation
- however market research is needed to find out customer wants and needs
- high amount of investment needed into market research
- e.g questionnaires and focus groups using a large sample size
- in order to find out customer wants and needs
- leads to increased cash outflows on wages and specialist researchers
- lower net cash flow
- reduced cash reserves
- may be unable to pay day to day bills
- forced to sell non current assets to cover payments
- business unable to operate
what is market mapping?
a visual illustration of how current businesses are perceived in the market. This is from a customers POV
what do market maps help businesses do?
help to spot a gap in the market. if the business appropriately exploits this gap it could lead to differentiation
LOA- benefit of using a market map
- market maps help business identify gaps in the market
- once identified businesses can conduct r&d
- and design a product that matches the characteristics of
- product is likely to be unique
- lack of direct competition
- business can increase selling price and not experience significant fall in demand
- increased sales revenue and gross profit
LOA- drawback of using a market map
- market maps are based on consumer opinions
- to ensure decisions based on opinions are valid
- business needs to collect data from a large sample
- this may require a large number of researchers
- to collect and analyse data and display in a market map
- if business recruits researchers jg will significantly increase cash outflows
- if cash outflows are greater than inflows
- it may lead to a negative net cash flow
what are the 4 elements of the marketing mix?
product, price, promotion, place
