Business Unit 4 IGSCE

Primary Research

Involves gathering new data that hasn't been gathered before otherwise known as 'Field' Research.

Secondary Research

Involves gathering existing data that has been already gathered also known as 'desk' research

Open Question

allows the interviewee to respond in-depth

Close Question

focused and seeks a particular answer

purpose of market research

To identify and understand customer needs

To identify gaps in the market

To reduce risk

To inform business decisions

Primary Research Benefits

Up to date

Not available to other businesses

More detailed insights

Secondary Research Benefits

Often free and easy to obtain

Good source of market insights

Quick to access and use

Primary Research Drawbacks

-time consuming

-costly

-risk of survey bias

-sampling may not be representative

Secondary Research Drawbacks

• Can quickly become out of date

• Not tailored to business needs

• Specialist reports often quite expensive

Marketing

the activity or business of promoting and selling products or services, including market research and advertising.

Consumer goods markets

Where products such as food, cosmetics and magazines are sold

Markets for services

This can include services for individuals, such as hairdressing, or business services such as auditing

The housing market

The buying and selling of residential property.

Commodity Markets

market where producers can go to sell and trade raw goods

What is the main goal of marketing?

To convert wants of an individual into a need

Product Orientation

a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace

Marketing Orientation

an approach that considers the needs of customers when developing a marketing mix.

Ways to keep customers loyal:

-Reward Cards

-Free Gifts

-Charitable Donations

-Partnership deals

Market Share

Shows the percentage of an industry or a market's sales, that is earned by a business over a specific time period

Market Share Equation

Market share % = company sales/total market sales x 100

Mass Market

this a market that is aimed at the general population

Niche Market

A smaller part of a larger market in which customers have more specific needs and wants

Mass Market Pros

-Marketing is very straightforward due to everyone being targeted

-Large volume of sales means high revenue

-Opportunity for growth due to large potential sales

Mass Market Cons

• Lots of competition

-Being price competitive can lower profit margins

-Products need to be marketed very well which can be expensive

Niche Market Pros

• Charge premium price

• Easier to target customers

• Small scale production can be flexible and follow trends

• Less competition than in the mass markets

Niche Market Cons

• Very risky as demand may not be constant

• Higher unit costs so no economies of scale

Market Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing programs

Name the Market segments

-Age

-Demographics

-Lifestyle

-Income

-Location

Benefits of market segmentation

-Better serves the customers needs

-Improve the company's competitive position

-Increased sales, Improved market-share, enhanced image

Good marketing strategy meets the customers needs by

-Designing and producing high-quality products

-Charging an acceptable price to the customer

-letting the customers know about the product through promotion

-Making products available to the customer in the right place at the right time

5 stages of development

1)Generating ideas

2)Analysis

3)Development

4)Test Marketing

5)Commercialisation and launch

What is analysis in the stages of development

Decision on whether they are marketable or not

What is development in the stages of development

Can be done by carrying out experiments, simulations, building models, producing samples and initial testing. Frequent Changes are likely to happen here

What is Test Marketing in the stages of development

Testing the performance of the product in a small section of the market. Used to gather information on what the customers think of the product

What is commercialisation and launch in the stages of development

Minor flaws of the product can be resolved and marketing strategy and launch of the procut to follow

Good

a physical item that is produced and can be weighed or measured

Service

Any activity that fulfills a human want or need and returns money to those who provide it.

Importance of packaging:

• Protection, convenience, information, reduces security risks, adds promotion,

Stages of product life cycle

R&D, introduction, growth, maturity & saturation, decline

What can be done to stop or delay the decline of the product after maturity

An extension strategy can be deployed

Extention Strategies examples

-updating packaging

-adding different features

-changing target market

• increased advertising

-lowering price

-re branding

-re positioning

What is the Boston Matrix

It is a matrix that places products into one of four categories based on market share and market growth.

What can the Boston Matrix be used for

-Carrying out portfolio analysis

-Suitable for most businesses that have a relatively large number of products

-Enables businesses to consider its range of products and assess its position

What are stars in the Boston Matrix

Stars are high growth products competing in markets where they are strong compared with the competition. Often Stars need heavy investment to sustain growth. Eventually growth will slow and, assuming they keep their market share, Stars will become Cash Cows

What are cash cows in the boston matrix

Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for its Stars

What are question marks in the boston matrix

low market share, high market growth and as the name suggests are question marks on whether to invest in or not

What are dogs in the Boston matrix?

Products with a low market share of a low growth market. They hold little appeal for a firm unless they can be revived.

What are the factors that affect price

-Marketing Mix - Price has to fit in with the mix

-Objectives

-Taxes - taxes can influence how high or low you price the product

-Costs - have to cover costs for profit

-Competition - a lot of competition can lead to less control over price

-Consumers' perceptions - consumers want value for money so your product must reflect this

What is cost-plus pricing

Adding a markup percentage to the cost of the product to get the price

Cost-plus pricing benefits

-Easy to apply

-Different profit markups could be used in different markets