What is a product-oriented business?
such firms produce the product first and then tries to find a market for it. Their concentration is on the product – its quality and price. Firms producing electrical and digital goods such as refrigerators and computers are examples of product-oriented businesses.
What is a market-oriented business?
such firms will conduct market research to see what consumers want and then produce goods and services to satisfy them. They will set a marketing budget and undertake the different methods of researching consumer tastes and spending patterns, as well as market conditions. Example, mobile phone markets.
What is market research?
the process of collecting, analysing and interpreting information about a product.
What is the importance of market research and what will happen if a business doesn’t carry out market research?
Importance: Firms need to conduct market research in order to ensure that they are producing goods and services that will sell successfully in the market and generate profits. Market research will answer a lot of the business’s questions prior to product development such as ‘will customers be willing to buy this product?’, ‘what is the biggest factor that influences customers’ buying preferences- price or quality?’, ‘what is the competition in the market like?’ and so on.
If they don’t: If they don’t, they could lose a lot of money and fail to survive.
What is quantitative data?
numerical e.g. what percentage of teenagers in the city have internet access
What is qualitative data?
opinion/ judgement- why do more women buy the company’s product than men?
What are the 2 methods market research can be categorised into?
- primary research
- secondary research
What is primary research?
The collection of original data. It involves directly collecting information from existing or potential customers. First-hand data is collected by people who want to use the data (i.e. the firm).
What are some examples of primary research?
Examples of primary market research methods include questionnaires, focus groups, interviews, observation, and online surveys and so on.
What is a sample?
Sample is a subset of a population that is used to represent the entire group as a whole.
Why is it important to use a sample?
When doing research, it is often impractical to survey every member of a particular population because the number of people is simply too large. Selecting a sample is called sampling. A random sampling occurs when people are selected at random for research, while quota sampling is when people are selected on the basis of certain characteristics (age, gender, location etc.) for research.
What are the advantages of using Questionnaires as primary research?
- Detailed information can be collected
- Customer’s opinions about the product can be obtained
- Online surveys will be cheaper and easier to collate and analyse
- Can be linked to prize draws and prize draw websites to encourage customers to fill out surveys
What are the disadvantages of using Questionnaires as primary research?
- If questions are not clear or are misleading, then unreliable answers will be given
- Time-consuming and expensive to carry out research, collate and analyse them.
What are advantages of interviews?
- Interviewer is able to explain questions that the interviewee doesn’t understand and can also ask follow-up questions
- Can gather detailed responses and interpret body-language, allowing interviewer to come to accurate conclusions about the customer’s opinions.
What are the disadvantages of interviews?
- The interviewer could lead and influence the interviewee to answer a certain way. For example, by rephrasing a question such as ‘Would you buy this product’ to ‘But, you would definitely buy this product, right?’ to which the customer in order to appear polite would say yes when in actuality they wouldn’t buy the product.
- Time-consuming and expensive to interview everyone in the sample
What are focus groups?
A group of people representative of the target market (a focus group) agree to provide information about a particular product or general spending patterns over time. They can also test the company’s products and give opinions on them.
What are the advantages of focus groups?
- They can provide detailed information about the consumer’s opinions
What are the disadvantages of focus groups?
- Time-consuming
- Expensive
- Opinions could be influenced by others in the group.
What are the advantages of observations?
- Inexpensive
What are the disadvantages of observations?
- Only gives basic figures. Does not tell the firm why consumer buys them.
What is secondary market research?
The collection of information that has already been made available by others. Second-hand data about consumers and markets is collected from already published sources.
How to internal collect secondary research?
- Sales department’s sales records, pricing data, customer records, sales reports
- Opinions of distributors and public relations officers
- Finance department
- Customer Services department
How to internal collect secondary research?
- Government statistics: will have information about populations and age structures in the economy.
- Newspapers: articles about economic conditions and forecast spending patterns.
- Trade associations: if there is a trade association for a particular industry, it will have several reports on that industry’s markets.
- Market research agencies: these agencies carry out market research on behalf of the company and provide detailed reports.
- Internet: will have a wide range of articles about companies, government statistics, newspapers and blogs.
Examples of secondary research:
Departmental records
Newspaper
Internet
Reports
Statistics
