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Choice
Giving customers options and increasing the chance that the product will be perfect for the tastes/habits of one type of customer.
Customer needs
The products or services people need to make life comfortable
Convenience
Making life easier for customers, e.g having a great location
Identifying customers
Finding out who they are: their age, gender, incomes, where they live and what they want.
Quality
To a customer quality means getting what they want, or perhaps even better than expected - some companies use the term 'customer delight'.
Understanding customers
Learning why customers do what they do, making it easier to see how to make a product that better suits them.
Focus group
A group discussion among people selected from the target market. It draws upon psychology to provide qualitative insights into customer attitudes.
Primary research
Research conducted first-hand tailored to a company's specific needs, for example, a quantitative sales estimate for a brand new chocolate bar.
Qualitative data
In-depth research into a small group of potential or actual customers - to provide insight into why customers buy what they buy.
Quantitative data
Results from research among a large enough sample of people to provide statistically reliable results, for example a survey of 500 15-24 year-olds.
Secondary research
When a company taps into research that has already been carried out for general purposes, for example, using a document like 'Trends in the UK market for chocolate.
What is the purpose of market research?
To identify and understand customer needs
To identify gaps in the market
To reduce risk
To inform business decisions
How does market research reduce risk?
reduces the chance of the market not accepting the new product
tells businesses if the demand exists but if it is not worth the costs of development and launching
What are the main methods of primary market research?
online survey
questionnaire
focus group
observation
What are the main methods of secondary market research?
internet
market reports
government reports
Give the negatives of qualitative data.
time consuming as hard to interpret
generally more expensive
small sample size
leading questions
Give the negatives of quantitative data.
does not provide reasons for choice so business does not know if the customers do not like it or if if something were added they would
can be expensive if bought
small sample size
leading questions
Name the five different market segments.
Location
Age
Lifestyle
Demographics (e.g. gender, race, ethnicity)
Income
What is a market map? What are they used for?
Measuring where existing brands sit on a two-factor grid, for example young/old compared with high price/low price. It attempts to identify a gap in the market.
Define competition.
Companies operating in your market or market sector.
Define location.
The extent to which consumers identify with the place where they were born or grew up.
Define lifestyle.
Grouping people by common characteristics in how they live, from their participation in sports and leisure to their views on the environment, taste in music.
Define gap in the market.
An area on a market map where few or no existing brands operate, implying a business opportunity to fill an unmet consumer need.
Define demographics.
The study of statistical differences that exist within a population, both now and in the future. E.g. gender, race, religion.
What are the strengths and weaknesses of competitors based on?
price
quality
product range (gap in this makes room for copycats)
location
customer service
What are the positive effects of competition on businesses?
offer better products and services
lower prices
have new, innovative products/services
What are the negative effects of competition on businesses?
cut staff, bad for employment
cut costs, worse quality
adopt unethical practices
What are the effects of competition on business decisions?
They become more risky, and businesses take short-term action.
