1.1.2 Market research

What is market orientation?

Finding out what customers in the market need / want then creating product based off that.

What is an advantage of market orientation?

The business is meeting customer needs which can lead to loyal and repeat customers.

What is a disadvantage of market orientation?

Market research can be expensive slow and biased which can lead to inaccurate not profitable decision making.

What is product orientation?

The philosophy of if you innovate the best possible product not based of the needs of the market the customers will come (eg. apples iPhones were visionary products, they innovated their products to have the best features possible without following market ideas) - good in dynamic market.

What are the advantages of product innovation?

Superior differentiated products can be created - this can lead to many customers who want the latest tech products - great In the phone market. (can charge premium prices)

What are the disadvantages of product innovation?

There is a potential risks that people won’t want the product due to customer needs not being considered- this could lead to large cash flow issues for the business due to R&D / production costs not being covered.

What is primary market research?

Research that is taken by the business.

What are the advantages of primary market research?

The research is specific to the business- more likely to find out what customers actually want / see if demand will be met allowing the business to make profitable decisions. can help them increase customers satisfaction.

What are the disadvantages of primary market research?

There can be a risk of bias in the research - you’re samples you gain from your market research may not represent the whole market - needs of a minority may be being met but not a majority / High costs to get a really high sample.

What are the advantages of qualitative data?

Qualitative data gives real customer opinions- can help analyse quantitative data

What are the disadvantages of qualitative data?

Hard to analyse a large sample size of different customers actual opinions (everyone is different) relying on this could mean that a minority of peoples needs are met but not a majority (could mean some customers are disappointed.

What are the advantages of quantitative data?

Quantitative data eg. a yes / no answer questionnaire is numerical - this means that a larger sample size can be analysed easier of what customers may want - more customer needs potentially met.

What are the disadvantages of quantitative data?

Numerical data doesn’t give the reasons behind things like bad reviews - hard for business to make specific decisions out of it.

What is secondary market research?

Market research that isn’t taken by the business eg. market reports/ competitors performance if they are a limited company. (external sources)

What are the advantages of secondary market research?

Business’ can cheaply get an insight into market eg. reviews of other competitors / performance data if they are an ltd / plc. - can make decisions based of that.

What are the disadvantages of secondary market research?

the data could be potentially out of date - not meeting current customer trends (demand could be low)

What Is market segmentation?

Dividing the potential customers in a market into different groups eg demographics like age income gender or interests like football or aviation.

What are the advantages of market segmentation?

Customer needs can be met for people in that segment leading to loyalty / recommendations to similar people.

What is a disadvantage of market segmentation?

There Is a wide range of products for different people in a market (cannot benefit from economies of scale)