Limitations of QUANTITATIVE DATA
Numerical data may be out-of-date, especially in dynamic markets
Data analysis and interpretation is a complex skill that is likely to be lacking in smaller businesses
Looking at a small amount of data and then extrapolating results can provide wrong assumptions on which to base decisions
Numerical data does not provide reasons for outcomes e.g. data may reveal sales volumes are falling, but not the reason for the decline
Limitations of QUALITATIVE DATA
Bias may mean that analysts can interpret responses in a particular way
Respondents may lack awareness or language skills to explain preferences accurately
Respondents in focus groups may be influenced by the responses of others, or not provide accurate information
Qualitative data is difficult to present in graphs and charts so may not be easily understood
Advantages of USING SOCIAL MEDIA IN COLLECTING DATA
Cheaper than organising a focus group
Real-time and more up-to-date than other methods which can take months to gather data
Access to a much larger audience for responses
Can track trends by searching for popular hashtags/channels/platforms and posts see the website here for today’s trending tweets
Importance of MARKETING
Satisfying customer needs
Building customer relationships
Keeping customer loyalty
Market orientation and product orientation
Market share and analysis
Niche and mass marketing
Importance of the RELIABILITY OF MARKET RESEARCH DATA
A business may hire a market research company to carry out the survey
The business then needs to decide if the data can reliably be applied to a wider audience. For example they may have had 40 responses to a survey but have thousands of customers
Must be careful of invalid data
Define market segmentation strategies business can use
By location
By age
By demographics
By lifestyle
By income
By developing new products the business can :
sell more to existing customers (making the most of existing relationships is cheaper than finding new customers)
spread fixed costs like premises or machinery across a range of products
diversify the products on offer (Wider range) so the business is less reliant on certain customers or markets
Benefits of DEVELOPING NEW PRODUCTS
Gives the customers something fresh and new which stimulates demand
Competitive advantage
fills a gap in the market
gains new customers
develops the reputation of the business as an innovator and an industry leader
Drawbacks of DEVELOPING NEW PRODUCTS
Very expensive to develop completely new products, which is why so many are adapted from old ideas like the football shirts
It may take a long time for the business to recover the investment in the new product
Very risky ( no guarantee of success) customers may not like the product
R&D stage of a PRODUCT
Where a product is designed and market research is analysed to produce a product
This is a very expensive phase and at this point the product is not making any revenue and therefore no profit
All capital at this point will just be an investment, there is always a risk of the product not being a success
Importance of PACKAGING
It makes storage easier (think about cornflakes without boxes)
impacts buying decisions
Promotes brand image
Helps products to stand out on the shelves
Gives information to the customers (on the box)
GROWTH PHASE
Growth phase products are enjoying rapid growth in sales and profits
At this stage the customers are aware of the product and demand is high
A business may advertise the product to take advantage of the high demand
Introduction of PRODUCT
The introduction phase will involve high costs in research and development and the product may have been test marketed before launching, so profits may be negative
Sales will be low as customers may not yet be aware of the products
Advertising will be informative to let customers know that the product has been launched
MATURITY PHASE
Maturity phase products face intense competition now all the suppliers have joined the market
Market is starting to be saturated – everyone has bought the product who is likely to buy
Sales are high but profits are starting to fall
Products have to be discounted to keep sales high – so prices may be lowered or the product may be put on sale
PRODUCT LIFECYCLE EXTENSION STRATEGIES
updating packaging
adding more or different features
changing target market
advertising
DECLINE PHASE
Decline phase products may be limited in production
At this stage profits and sales have fallen and the product may be withdrawn from sale
The business may decide to heavily discount to get any last sales before the product becomes obsolete
There is a trend towards more disposable items rather than products that can be fixed or repair – they are simply replaced with new ones, therefore repairable goods are in decline phase
Boston matrix - STAR
Star products:
Have high market share
Are in a high growth market
Star products need to maintain their current marketing spend to keep sales high
Stars should become cash cows in time, if the marketing is managed correctly
