1.1.2 Market Research

Product orientation definition

A business that only looks at the product or production process when deciding what to make next

When is product orientation appropriate

Little competition in the market

Limited consumer knowledge

Low disposable income of consumers

Market orientation definition

A business where the focus is on identifying what the customer wants or needs and meeting them - satisfy the customer

When is market orientation appropriate

High competition - differentiates products

Dynamic markets - respond quicker to preferences

Definition for primary market research

When you gather new information directly from the source instead of relying on information collected by other people

5 types of primary research

Survey

interviews

test marketing

observation

focus group

Example of test marketing

Fast food chain testing a new menu item in select locations to get feedback

Definition for secondary market research

Data collected by another business or organisation but used by the business to make decisions from

4 types of secondary research

Government sources

Market reports

Internet sources

Newspapers / TV / Radio

3 limitations of market research

Human behaviour

Sample size

Bias

3 uses of IT to support market research

Websites - pop ups for surveys

Social networking - up to date information

Databases - loyalty schemes

Definition of market segmentation

An identifiable group or part of a market where consumers share one or more characteristics or needs

5 market segments

Location

Lifestyle

Income

Age

Gender