understanding markets and customers Flashcards

1
Q

what is market research

A

the systematic and objective collation, analysis and evaluation of information that is intended to assist in the marketing process

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2
Q

what is primary market research

A

the collection of first hand data that did not exist before and therefore it is original data
- fills gaps that secondary research cannot

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3
Q

what are some examples of primary research

A
  • Focus groups
  • Interviews (online & in-person)
  • Surveys & questionnaires
  • Mystery shoppers
  • Product testing and product trial
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4
Q

what are some advantages of primary research

A
  • Directly focused on research objectives = fit for purpose
  • Tends to be more up-to-date than secondary research
  • Provides more detailed insights – particularly into customer view
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5
Q

what are some disadvantages of market research?

A
  • Time-consuming and often costly to obtain
  • Risk of survey bias – research samples may not be representative of the population
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6
Q

what is secondary market research

A

research that has already been undertaken by another organisation and therefore already exists

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7
Q

give some examples of secondary research

A
  • Government publications
  • Newspaper
  • Magazines
  • Company records
  • Competitors - Market research organisation
  • Loyalty cards
  • Internet
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8
Q

what are some advantages of secondary research?

A
  • Already gathered so may be quicker to collect
  • May be gathered on a much larger scale than possible for the firm
  • In some cases it can be very cheap or free to access
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9
Q

what are some disadvantages of secondary research

A
  • Information may be outdated, therefore inaccurate
  • The data may be biased and it is hard to know if the information was collected is accurate
  • The data was not gathered for the specific purpose the firm needs or is not relevant to the original context
  • In some cases it can be costly (e.g. marketing firm reports)
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10
Q

what is market mapping

A
  • A market map illustrates the range of positions that a product can take in a market based on two dimensions that are important to customers
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11
Q

what are some dimensions for the axes in a market map

A
  • Low price v high price
  • Basic quality v high quality
  • Low volume v high volume
  • Necessity v luxury
  • Light v heavy
  • Simple v complex
  • Unhealthy v healthy
  • Low-tech v hi-tech
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12
Q

What are some advantages of market mapping

A
  • Help spot gaps in the market- Useful for analysing competitors
    – where are their products positioned?
  • Encourages use of market research
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13
Q

what are some disadvantages of market mapping

A
  • Just because there is a gap in the market doesn’t mean there is demand for the product
  • Not a guarantee of success
  • How reliable is the market research that maps the position of existing products based on the chosen dimensions?
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14
Q

what is sampling

A

involves gathering data from respondents whose views or behaviours are representative of the target market as a whole

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15
Q

what is random sampling

A

member of target population has an equal chance of being chosen

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16
Q

what is stratified sampling

A

based on obtaining a sample that reflects the types of consumers from whom the business wished to gain information (e.g. gender, age)

17
Q

what are some advantages of sampling?

A
  • Provides a good indication - Helps avoid expensive errors
  • Can be used flexibly
  • Reliable information
  • Helps firms learn about the market quickly
18
Q

what are some disadvantages of sampling

A
  • May be unrepresentative
  • Bias
  • Difficult to locate suitable correspondents
  • May not have an accurate profile of customers
  • Can be out of date due to time taken to collate
19
Q

what are confidence intervals

A

they measure the probability that a population parameter will fall between two set value.

20
Q

what are some factors that affect confidence intervals

A
  • Sampling size – the larger the sample, the better the reflection of opinion of the whole population, so confidence levels fall
  • Population size – the target market for the product has a minor effect on confidence intervals
  • % of sampling choosing a particular answer – if high or low % of sample expresses the same opinion, then confidence intervals are likely to be low
21
Q

what is extrapolation

A
  • it is like an educated guess or a hypothesis
  • When you make an extrapolation, you take facts and observations about a present or known situation and use them to make a prediction about what might eventually happen
22
Q

what are some disadvantages of extrapolation

A
  • Less reliable if fluctuations occur (e.g. weather is unpredictable)
  • Assumes past changes will continue
  • Ignores qualitative factors (e.g. changes in tastes and fashion)
  • Ignores the product life cycle
23
Q

what are correlations

A

another method of sales forecasting that looks at the strength of a relationship between two variables

24
Q

what is big data

A

the process of collecting and analysing large data sets from traditional and digital sources to identify trends and patterns that can be used in decision-making

25
Q

what are the ways that data is generated

A
  • Retail e-commerce databases
  • User-interactions with websites and mobile apps
  • Usage of logistics, transportation systems, financial and health care
  • Social media data
  • Location data (e.g. GPS-generated)
  • Internet of Things (IoT) data generated
  • New forms of scientific data (e.g. human genome analysis
26
Q

how does analytics and customer insights enable more effective marketing decisions

A

this help businesses track how users and customers use their online products and services

27
Q

how does dynamic pricing enable more effective marketing decisions

A

the technology behind dynamic pricing enables a business to adopt a pricing strategy where prices are set flexibly for products or services based on current market demands

28
Q

how does audience reach and segmentation enable more effective marketing decisions

A

the widespread use of social media marketing is an example of how technology is enabling businesses to more effective reach their target audience and communicate with them

29
Q

how does customer relationship management enable more effective marketing decisions

A
  • this is a technology used to manage interactions with customers and potential customers.
  • A CRM system helps businesses build customer relationships and streamline processes so they can increase sales, improve customer service, and increase profitability
30
Q

How does campaign testing enable more effective marketing decisions

A
  • this is a key feature of digital marketing technology.
  • It allows a business to set up more than one (and in some cases many thousands) of different marketing campaigns to test which is most effective.
31
Q

how does competitor analysis enable more effective marketing decisions

A

software is available to monitor what competitors are doing

32
Q

define what price elasticity of demand is (PED)

A

measures the responsiveness of quantity demanded for a product to a change in price

33
Q

what is the formula for PED

A

% change in quantity demanded/% change in price

34
Q

what does inelastic mean

A

demand does not change at all when the price changes (the demand curve will be drawn as vertical)