What is market research?
The process of collecting, recording and analyzing data about customers, competitors and the market
What does market research help determine?
Opinions, beliefs and feelings of existing and potential customers
Why preform market research?
-Reduce risks associated with new product launches (successful market entry)
-Predict future demand and market trends
-Explain patterns in sales of existing products
-Assess the most favored designs ect
Ethical considerations of market research?
-Confidentiality of data.
-Consent of subjects
-Bias in research methods and presentation of findings.
Primary data
Primary research collects ‘first-hand’ data that are directly related to the firm’s needs
What is secondary data?
Secondary research: Collection of data from second-hand sources
Qualitative research
Research into the in-depth motivations behind consumer buying behavior or opinions
Quantitative research
Research that leads to numerical results
Methods of primary research
-Interviews- Face to face
-Focus Groups
-Observations of consumer behaviour
(Cookies on computers)
Types of secondary sources of market research
-Market intelligence reports/market analysis
-Academic journals
-Government publications/ offices
-Trade organisations
Advantages of secondary resources
Often cheaper
Identifies general nature of the market
Obtained quickly
Allows comparison
Disadvantages of secondary resources
May not be updated frequently
Collected for other purposes
Data accuracy/ methods unknown
Not available for completely new developments
Three most commonly used sampling methods
Quota sampling (Specific numbers of demographics)
Random sampling (Give everyone a number)
Convenience sampling (First 100 you find)
What are the two major constraints of sampling
Cost and Time
Difference between mean, median and mode
Mean: obtained by adding all results and dividing by number of results
Median: the middle number in a data collection set when in chronological order
Mode: the most frequently occurring result
Four stages of a product life cycle and what is happening.
Introduction/Launch stage: Low sales. There is a R&D phase prior to launch.
Growth stage: Rapid growth in sales & profits.
Maturity stage: Tough competition, or demand is exhausted means sales begin to level off.
Decline stage: Shrinking market, sales decline.
Potential strategies to avoid the decline stage.
-Reduce prices
Spending more on advertising to make the product more popular
Trying to get more people to buy the product
Try to get people to buy the product on more occasions (Xmas Turkey)
Trying to find new customers/new audience (e.g. selling abroad/online)
Re-package the product/re-branding
What does the cash flow look like throughout a product launch?
Negative in development, turns around and goes up and stays parallel to lifecycle
4 major aspects of branding
Brand awareness
Brand development
Brand loyalty
Brand value
What is the demand curve?
It is price graphed against quantity sold. IE as something goes up in price, the number of people buying it will decrease (probably)
How does price impact marketing objectives and brand?
It must match marketing objectives and help create a psychological identity
Competitive Pricing
Setting prices at the same or similar level as competitors
Contribution pricing
Each unit must at least cover variable cost and contribute something.
Cost-plus pricing
Adding a fixed amount or percentage onto the unit cost
