BTEC Business - Marketing: Learning Aim B1, B2, & B3

Purposes of market research

1. To identify target markets

2. To identify size, structure, and trends in the market

3. To identify competition

Primary market research

First hand research which is original to the organisation, e.g., questionnaires, interviews, surveys and focus groups.

Internal primary market research

Sales figures, customer data, etc

External primary market research

Questionnaires, feedback forms, interviews, focus groups, mystery shoppers, observations

Advantages & Disadvantages of Primary market research

Advantages

- Can increase the level of relevance to the business

- Data is up-to-date to the business

Disadvantages

- Could be biased if they carry out the research with people they know

- Could pressure people into giving specific answers, therefore unreliable

Secondary market research

- Research/data that has come from another source

- It is information which has been previously collected, e.g., newspapers, internet books, ONS

Internal secondary market research

Report from sales, previous market research

External secondary market research

Journals, websites, books, newspapers, statistics, public records, census data

Advantages & Disadvantages of secondary market research

Advantages

- Cost effective as you wouldn't need to buy resources to carry out research

- Easily accessible & can be conducted quickly

Disadvantages

- May be old or outdated

- Data could be biased to promote a cause

- Data could be non-specific to the business

Validity

- Refers to how valid/accurate or how factual the information/data.

- Ensuring data is valid by using original sources or tracing sources back to the original point, e.g., can't assume Wikipedia is valid, it needs to be checked via citations

Reliability

Refers to conditions such as: 'if you were to do the research again under the exact some conditions with the same subjects [people], would you get the same result?'

Appropriateness

Asking for consent to do research, making people know they are participants within research - ethical considerations must be taken when carrying out research

Currency

'Is the research current? Is it up to date?'

- Does not mean that you can't use research in the past as it may be needed to show trends, but it needs to be valid in regard to the purpose of the research

Cost

- The cost is not only people's times but also the potential loss of any revenue whilst the research is undertaken

- Any form of research has a cost involved; time, effort, materials, subjects, travel, etc

Qualitative data

- This is subjective data [personal to the personal involved] that involves thoughts, feelings, emotions and opinions

- Gained through the use of open questions, e.g., 'why do you use this brand over the other?'

Advantages & Disadvantages of Qualitative data

Advantages

- In depth information is gained from data

Disadvantages

- It isn't measurable

Qualitative data

- Involves numerical information that can be counted, analysed, and interpreted into graphs

- Can be collected from closed questions in questionnaires [easy to interpret]

Advantages & Disadvantages of Qualitative data

Advantages

- Easily measured

Disadvantages

- Less in depth as it gives an overview of the data collected

Objective

- Overall view to things/overview

- Used to describe Quantitative data

Subjective

- Particular to that specific individual

- Used to describe Qualitative data

Sufficiency & Focus of the Research

- The types of data gathered, or the methods used can skew the market research results

- Data collected should be sufficient to the claim from the research results

E.g., Wrinkle cream adverts may state a percentage of success rates using the cream, but this could be based on a small sample e.g., '50% of people said it worked', but only 2 people were interviewed

Selection & Extraction

- Once data has been collected it is important to assess what elements to leave out and why

- Some areas are not necessary to the purpose of the research and can become too data heavy

- Extraction refers to the key information extracted from data collected.

Rationale

- A rationale for market research is your reasoning for why you're doing the market research and is used to seek opinions about consumer preferences, the product , or services they value and why, etc.

What should a rationale include?

- Focus

- Methods and means for conducting the study and the outcome being sought

- Well thought out plan which supports the reason for conducting any form of research

Making valid marketing decisions

- For a business to make valid marketing decisions, they must do the following:

- Interpretation of data

- Analysis of data

- Use of data and other information

Interpretation of data [marketing decisions]

- To analyse the data, it must be interpreted to find its meaning

- Interpreting data is subjective, therefore rigorous steps for checking the validity, etc, must be planned and implemented

- E.g., a customer may say they like the flavour of a new instant noodle but enough to buy it

Rigorous

Detailed and careful, e.g., the selection process was extremely rigorous

Analysis of data

- Involves breaking information/data into smaller chunks to find meaning and patterns/trends

- Requires a detailed examination of the data in preparation for interpretation; data is classed as numbers, images, observations, audio & video clips, reports & case studies

- E.g., to analyse numbers, spreadsheets may be used

Use of data

- The use of data must inform the rationale for the research

- E.g., when town planners are considering ways to develop shopping centres, they may seek the views of the public businesses and the local community

Other information

- To support the market research and validate its results, the market research may require additional information

- Some other sources may include:

- Government statistics

- National economic from the ONS

- Academic research articles and journals with current information

Evaluation of the reliability & validity of the information obtained

- Information obtained should be evaluated to check its reliability and validity

- A thorough evaluation aims to find holes in the research by rigorously testing it

- Can be evaluated by:

- Questioning its sufficiency

- Asking others to critique findings

- Assessing what works well and what needs improving

- Questioning what the information does not tell you

Product Life Cycle

- Reflects the theory that products go through a cycle the same as people

- It's important concept in marketing that describes the stages that a product goes through

5 Stages of the Product Life Cycle

- Research and Development

- Introduction

- Growth

- Maturity and Saturation

- Decline

Research and Development

- Ideas are created and tested

- Various changes to product before introduction to market

- Can be particularly expensive at this stage

Introduction

- Beginning stages of the product being produced & initial stages of it reaching the target audience

Growth

- Sales are increasing at their fastest rate

- Sales are closely monitored and there is increased consumer awareness

Maturity and Saturation

- Sales have reached their highest point

- Growth is beginning to slow down [maturity]

- Sales & profit is falling [saturation]

- Extension strategy implemented

Decline

- Final stage of the cycle where the sales have completely fallen

- A decision Is made as to whether the product should be withdrawn from the market

Extension strategies

- May be brought in at the maturity and saturation stage

- They are used to extend the life of a product

- They use marketing techniques to improve sales

Examples of Extension strategies

Advertising:

- Trying to gain a new audience

Price reduction:

- Make it more attractive to old customers & maybe new

Explore new markets:

- Wider range of products, selling abroad

New packaging:

- Changing colours of packages

Diversification:

- Introduce new flavours of styles