Business 4.4-5

market research + why done

Market research is the process of gathering, analyzing, and interpreting data about a target market, consumers, and competitors to inform business decisions.

• identify consumer needs wants

• reduce risk of product failures

• measure effectiveness of market actions

• keep up w trends to find opportunties to be first

primary market research/field research + types

new data no one has access to

• very fullfilling

• but expensive + time consuming

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surveys

interviews

focus groups

observations

primary market research/field research: surveys

advantages:

collect large data quantity

quickly compelte

disadvantages:

response rates low

need enough care for valuable questions

primary market research/field research: interviews

advantages:

easy to ask in depth questions

high response rate

disadvantages:

time consuming for analyzing results

very expensive

primary market research/field research: focus groups

small groups representing particular product or idea, consumer base of business

advantages:

in depth questions

detailed info gained directly from target market

disadvantges:

might get ungeneralizable data if only 1 person expreses bias

very expensive

primary market research/field research: observations

ex. how long it takes people to notice a display in-store

advantages: cost effective

not dependent on respondents

no interview bias

disadvantages:

cant get hard, written data

ethics in market research

coercing volunteers to alter answers

conducting research without informed consent

secondary market research/desk research

already exists, quick and cheap

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market analysis

academic journals

gov publications

media articles

online content

secondary market research/desk research: market analysis

in depth reports about markets, trends, business issues

advantages: carried out by professionals + detailed

disadvantages: very costly

secondary market research/desk research: academic journals

scholarly publications, well referenced by professors, field experts

advantages: highly reliable due to peer review, quick publication

disadvantages: very specific, technical

secondary market research/desk research: gov publications

provide info on demogrpahics, econ, social trends

advantages: free, large range of topics

disadvantages: difficult to access sometimes

secondary market research/desk research: media articles

advantages: widely available, many sources free + easy to use

disadvantages: most have some bias

secondary market research/desk research:online content

advantages: large vareity, easily accessible

disadvantages: info can be inaccurate, biased

Sampling: Qouta

segmenting targets on quantity,

ex. 23 freshman, 12 seniors, 1 junior

quick and easy when segments are known,

disadvantages: not representative bc not random

7 ps of marketing

people, product, place, price, promotion, processes, physical evidence

product lifecycle

stages of a product going from r&d to decline and removal

5 stages: development, introduction, growth, maturation, decline

product lifecycle: development

idea is tested, expensive bc no income generated

product lifecycle: introduction

product launched, and on sale, lots of promotion, no profit bc high cash flow out

product lifecycle: growth

making profit, product well known $$$$

product lifecycle: maturity

sales slow, but high profit, likely many comeptitor’s and changing trends

product lifecycle: decline

sales fall, price cuts and more promotion to stay relevant

Product Portfolio: BCG Matrix

analyzes product based on market share + growth of whole market

helps makes decisions on new products, promotion, removal

BCG Matrix: star

high market growth, share

most succesful and $$ product, typically in growth PLC stage

BCG Matrix: Cash cows

high market share, low market growth

very profitable, well-established with customer loyality

typically in PLC maturity stage,

BCG Matrix: Question mark

low market share, high growth: wishy washy bc can be star but also flop eventually

requires lots of investment to differntiate in comeptitive market, growth stage

BCG Matrix: Dog

low share, low growth

operates in slow declining marketws, little $, needs to be rplaced or removed, decline stage

BCG Matrix Extension Strategies

prolong life cycle of product:

raise prices

change packaging

more promotion

change target market

4 aspects of branding:

Branding is a clear iamge of what business is about, valued at

1. brand awareness: abiltiy of customers to remember brand, differentiate from competition

2. Brand development: brand power, increase sales and relevance through CSR or free samples

3. Brand loyalty: comitted customers choosing this over competitors

4. brand value: worth in terms of reputation, market value (highest price consumers will buy product)

Pricing Strategies: Cost-plus pricing

NO EXTERNAL FACTORS CONSIDERED

divide total number of product costs/# of units produced, then markup

Pricing Strategies: Penetration pricing

setting low initial price with aim of getting customer loyalty and market share quickly

..needs lots of promotion

best work in mass market

short -term, slowly bring price up

Pricing Strategies: Loss- leader pricing

long-term in comparison to penetration pricing

in hopes of attracting large number of customers towards their brand, set prices usually below average costs

EX. helps keep relevance, idea is that consumers will buy other items to compliment loss leader which makes up for loss

Pricing Strategies: Predatory pricing

when a business sets very low pricing to drive out competition

once comeptition leaves market, business raises prices

Pricing Strategies: premium pricing

business sets high price over competitors to give impression of quality