1.1.2 Market Research

Product orientation

A business only looks at the product or production process when deciding what to make next I.e apple iPhones

Market orientation

A business focuses on the needs of the consumer

Market research benefits

Reduces risks and costs of masking bad decisions

Help business react to and prepare for changes in the market

Understand consumer behaviour

Identify potential competitors

Primary research

Collecting data first hand

Specific to needs of business

Surveys

Gathers quantitative and qualitative data

Used to measure customer satisfaction to help improve

Observation

Observing buyers behaviour

Interview

Measures reactions to new tastes that the business is having

Gathers qualitative data

Face to face or on the phone

Test marketing

Product is offered to a chosen sample and reactions of product are evaluated

Focus group

Target market demographic respondents are chosen to take part in a product trial

Specific qualitative info

Gathers thoughts about product

Secondary research

Gathering data that already exists

Government sources

ONS is very useful demographic info and data on the market that the business is in

Info can be used to make decisions about expanding overseas

Trade publications

Trade journals cater to a very specialist market

Info on competitor activity such as promotions

Helps small businesses stay in touch with trends in the market

Reports

Marketing departments of smaller companies may have smaller budgets so buying a report about an industry may be most cost effective way to achieve marketing objectives

I.e Mintel

Internet sources

Researches competitor websites, articles, publications, annual accounts

Quick way of gaining industry info

Newspapers/TV

Contain demographic profiles of their audiences

Can have info about economic trends in their local area

Qualitative research

Seeks to gather feeling and thoughts about a product for consumers I.e via focus groups, interviews, observations

Quantitative research

Gathering numerical data and measuring responses shown in graphs or stats

Used for large samples

Sampling

Process of choosing the right people to be part of research

Sample size

Number of people who are interviewed during the research

Needs to be large enough that data has statistical validity and can be useful for decision making

Bias

When findings cannot be trusted because of the way they have been carried out

Can be through interviewer or respondents bias

Websites for research

Can be used to ask customers about products they have bought or may buy

Can be used to gather emails to target customers

Market segmentation

Dividing market into segments of individuals where consumers share one or more characteristics or needs

Segmentation by location

Business may sell its product to one country, region or area

segmentation via demographics

Statistical data relating to population and particular groups within it

Segmentation by lifestyle

Consumers can be groupes by the way they lead their lives and attitudes they share

Segmentation by income

population can be segmented by annual salary or disposable income

Segmentation by age

Each age groups has different needs and wants in terms on products and services

Segmentation by gender

A business may produce or adapt its product to ensure they can be marketed efficiently to men or women