1.1.2 Market research, segmentation, positioning

product orientation definition

the business develops products based on what it is good at making or doing, rather than what the customer wants

market orientation definition

a business reacts to what customers want – the decisions taken are based around information about customer's needs and wants ather than what the business thinks is right for the customer 

marketing definition

marketing is the process of identifying, anticipating, and satisfying customer needs profitably 

market research definition

market research is the systematic collection, analysis and interpretation of information about customers, competitors, and the market 

why is market research important for businesses?

Helps businesses reduce risk and uncertainty as it helps businesses to:

• Understand customer needs and wants so they can design products that will sell 

• Identify target markets and the best ways to reach them 

• Analyse competitors and spot opportunities and threats 

• Test ideas before launch, saving money if the demand is low 

• Making better decisions about pricing, promotion and distribution

primary market research definition

obtaining data first hand by the business to match the specific needs of the business

primary market research examples

Surveys, interviews, focus groups, test marketing

secondary market research definition

Data that already exists and has been collected by someone else for another purpose (internal or external to the business)

secondary market research examples

internet research, government data, market reports, company records

primary research advantage

directly focused to research objectives

primary research disadvantage

time consuming and expensive

secondary research advantage

free and easy to obtain/access

secondary research disadvantage

can quickly become out of date and may not be tailored to business needs

qualitative data definition + examples

Data that is descriptive and non-numerical, focusing on opinions, attitudes, and motivations e.g. customer opinions from interviews, focus groups

quantitative data definition + examples

Data that is numerical and can be measured or statistically analysed e.g. sales figures, percentages, survey results with number

advantages of quantitative data

• Straight-forwards analysis 

• Numerical data provides insights to relevant trends 

• Can be easily compared to other data sources

advantages of qualitative data

• Offers rich insights - more flexible in terms of answers 

• Essential for new product development and launches 

• Can highlight issues that need addressing 

disadvantages of quantitative data

• Limited in depth + lack detail 

• Does not capture motivations or emotions 

disadvantages of quantitative data

• May be bias and therefore more inaccurate 

• Expensive to collect and analyse – requires specialist research skills 

two key decisions made by businesses to create value for customers  

Decision 1: Choose which customers to serve 

• Market segmentation (analysing the different parts of a market) 

• Targeting (deciding with market segments to enter) 

 

Decision 2: Choose how to serve those customers 

• Product differentiation (what makes it different from the competition) 

• Marketing positioning (how customers perceive the product)