Unit 3.2- Understanding markets and customers notes Flashcards
What is market research?
Market research involves gathering and analysing data relevant to the marketing process.
How can market research be used by managers?
- Analyse the existing position of the business
- Decide on possible objectives
- Identify possible actions that could be taken
- Decide what would be the best action and how they can be implemented
- Assess how effective marketing decisions have been
What are the 4 stages in the market research process?
- Define problems
- Develop research plan
- implement the plan
- Interpret data and report findings
How would they find out more about customers?
Who buys What they are buying When are they buying Why are they buying Who do they ask for information before buying Where are they buying
What is the price elasticity of demand equation?
%age change in qd / %age change in price
If the price elasticity of demand is more than 1 what does this mean?
Elastic
If the price elasticity of demand is lower than 1 what does this mean?
Inelastic
What affects the price elasticity of demand?
Time How expensive it currently is Who is paying - company Branding of a product USP Patent or trademark Expensive or difficult to switch to another supplier Amount of available substitutes
What is the income elasticity of demand?
%age change in qd/ %age change in income
If income elasticity of demand if greater than 1 ?
The product is luxury
If income elasticity of demand is between 0 and 1 ?
The product is normal
If income elasticity of demand is below 1 ?
The product is inferior
What other types of plans and decisions throughout the business will a sales forecast affect?
- Cashflow forecast
- Production levels
- Marketing budgets
- Staffing levels
What areas of a business does sales forecasting affect?
- HR
- Finance
- Operations
When can market research go wrong?
- There changes in markets
- The way information is gathered
- Lack of information from not spending enough
